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CBS and Lionsgate made official a plan for a 50-50 partnership stake in the TVGN television network and TVGuide.com, a deal that instantly gives CBS half ownership in a basic cable channel that reaches 80 million U.S. homes.
The terms of the deal call for CBS to purchase the 50 percent stake that is owned by One Equity Partners, a private equity firm run by JPMorgan Chase.
“The venture will combine CBS’s programming, production and marketing assets with Lionsgate’s resources in motion pictures, television and digitally delivered content,” the two partners said in a statement on Tuesday.
Financial terms of the deal were not disclosed, though sources tell The Hollywood Reporter that CBS is paying about $100 million for its 50 percent stake, which represents a bargain when compared with the $123 million that One Equity Partners paid Lionsgate to acquire a half interest. And prior to that, in 2009, Lionsgate got the whole thing for $250 million, implying the value of a half-stake was worth $125 million four years ago.
About five months ago, sources told The Hollywood Reporter that Lionsgate and One Equity Partners were seeking a buyer who would pay $350 million for the TVGN cable network and $20 million for the website. The sale of a half-interest to CBS, though, indicates that prospective buyers weren’t interested in the assets at such a price.
Lionsgate and CBS intend on rebranding and reprogramming their new joint venture, though details are to be revealed at a later date. In its statement released to the press on Tuesday, the pair boasted about some of their popular content, but they didn’t hint at whether or not any of it would show up at TVGN – or whatever it might be called in the future.
“The new ownership structure will be comprised of the company with the No. 1 broadcast network and many of the top first-run syndication series (Entertainment Tonight, OMG! Insider),” the companies said, “and the studio that distributes the blockbuster Hunger Games and Twilight franchises and produces such award-winning dramas as Mad Men.”
The TV Guide magazine is owned separately by Open Gate Capital and is not part of the transaction that was announced on Tuesday.
“This is a strategic way for CBS to use its content brands and gain access to a highly distributed basic cable network that has a lot of upside,” CBS chief executive Leslie Moonves said.
“We believe that the combination of our two brands and our complementary assets will elevate TVGN to the next level of performance and enable it to fulfill its promise as a significant branded entertainment channel,” Lionsgate CEO Jon Feltheimer and Vice Chairman Michael Burns said in a joint statement.
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