Discovery and Hasbro play nice

Duo to run, rebrand Discovery Kids as joint venture

Discovery Communications is rebranding another of its channels, partnering with toy giant Hasbro in a 50/50 venture to relaunch Discovery Kids Network.

As part of the deal, in which Discovery will receive $300 million, the venture will also take a minority interest in the U.S. version of, which will expand to offer video, games and other digital content.

The rebranded channel's name is yet to be finalized but won't include Hasbro. A search is under way for a CEO to head the network, eyed for a debut in late 2010 with content aimed at boys and girls ages 14 and under.

Last year, Discovery Communications -- which owns seven U.S. channels, led by flagship Discovery Channel and TLC -- formed a 50/50 partnership with Oprah Winfrey's Harpo to relauch Discovery Health as the Oprah Winfrey Network. And Discovery Home Channel was rebranded with the eco-moniker Planet Green and Discovery Times as Investigation Discovery.

"Discovery Kids is unusual as it's not squarely in our wheelhouse of nonfiction programming, and we felt we needed a great partner to take it to the next level as a brand that enlightens, empowers, educates and entertains," Discovery president and CEO David Zaslav said.

Hasbro, flying high on the success of its Paramount Pictures partnership with its Transformers and G.I. Joe franchises and on a six-year deal with Universal Pictures, was seeking ways to leverage some of its brands in television in a similar fashion.

The company previously worked with the Disney Channel on a "My Little Pony" animated series and has a "Transformers" series on Cartoon Network.

But looking into the three leaders in the kids TV space -- Nickelodeon, Disney and Cartoon -- the company realized that "it is very difficult to get a third party into their system and get into the proper (programming) real estate," said WMA's John Fogelman, who brokered the deal for Hasbro. " We couldn't do it without an ownership stake."

Hasbro approached Discovery in June, with the sides soon starting conversations.

The company's brands that will be developed as TV series for the new channel include Scrabble, Trivial Pursuit, Romper Room, Cranium, My Little Pony, G.I. Joe, Game of Life, Tonka and Transformers.

Hasbro plans "a new reimagined 'Transformers'" series, which would run simultaneously with "Transformers: Animated" on Cartoon, Hasbro president and CEO Brian Goldner said.

The new channel, whose program will be a mix of animation, game shows and live-action series and specials, will also tap into Discovery's library of children's educational programming, such as "Bindi the Jungle Girl," "Endurance," "HI-5" and "Peep and the Big Wide World."

Barclays Capital analyst Anthony DiClemente lauded the deal as a "strong" move for Discovery and said it helps the company accomplish two things: "(It) generates $300 million of incremental cash and allows them to leverage a network that has struggled to improve ratings."

Hasbro was advised by Bank of America/Merrill Lynch & Co. Discovery was advised by law firm Paul, Weiss, Rifkind, Wharton & Garrison.

Nellie Andreeva reported from Los Angeles; Georg Szalai reported from New York.
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