CBS Circling to Acquire Half of TV Guide Network
UPDATED: The deal, which is in an advanced stage, will see Lionsgate partner with CBS to own and operate the channel recently rebranded TVGN.
As soon as next week, Lionsgate is expected to close a deal to sell about half of TVGN, formerly known as the TV Guide Network, to CBS. It marks a change in strategy for the mini-major, which set out more than a year ago to sell all of the cable network.
Lionsgate and CBS declined to comment on the transaction, but sources tell The Hollywood Reporter that the price CBS is paying for 50 percent – about $100 million -- is less than half of what Lionsgate paid for the entire TV Guide Network in early 2009 -- $250 million.
It's also less than the $123 million that Lionsgate later got from One Equity Partners for half of the network.
The deal also apparently includes TVGuide.com, which has shown growth by adding strong content and will fit with other CBS digital properties. The TV Guide magazine is owned separately by Open Gate Capital and will not be part of the deal with CBS.
In November, there were reports Lionsgate was valuing TV Guide and its website at about $370 million.
The TV Guide Network was rebranded as TVGN this year, around the time Mike Mahan stepped down as president and was replaced by Dennis Miller, a consultant to Lionsgate. The rebrand was meant to move the channel away from its image as a listing source. The reasoning was other channels have gone to just initials, such as AMC, TLC and GSN.
For CBS, it is seen as a reasonable way to acquire a cable channel, broadening a portfolio that already includes the top-rated TV broadcast network, a pay TV service, a growing digital presence, a sports channel and half of The CW network. Some of the money for the acquisition is expected to come from the recent sale by CBS of its outdoor billboard business.
What convinced Lionsgate to hold on to half of TV Guide was the opportunity to partner with CBS, say other sources, which they see as a strategic partner who brings content, experience and abundant resources to the venture. Lionsgate, in recent years, has supplied programming to CBS and its Showtime subsidiary (Weeds, Nurse Jackie), so the sides have a long relationship.
CBS is a better strategic fit for Lionsgate than is One Equity Partners, a division of JP Morgan Chase, the big investment bank. One Equity Partners is a financial entity and brought nothing to TV Guide in terms of content or experience running an entertainment business.
CBS took its time in evaluating the TVGN opportunity, which for the first time since the split from Viacom in 2009 gives it control of an advertiser-supported basic cable network that carries general entertainment programming. Discovery Networks also was reportedly interested in the acquisition, but sources say it ultimately decided that the channel was not the right fit for them.
CBS gets a network now seen in about 80 million American TV homes. It started out as a barker channel that was mostly a scroll of listings, with ads and infomercials playing on top. Now it carries older shows like Ugly Betty and Who’s the Boss as well as original series such as Celebrity Style Story.
As of January, only about 12 percent of the homes where it plays still had listings as well as video content on the screen. The rest see a full screen of content that includes movies, series, specials and some infomercials.