Oprah Winfrey gained great fame in 2004 for giving each member of her talk-show audience a brand-new Pontiac G6. Now she’s parting with something else – but not for free.
Discovery Communications said it paid $70 million to increase its stake in the cable-TV venture it operates with Winfrey, the OWN network. Discovery, which had owned 50% of the joint venture since it was established in 2008, will add another 24.5% under its aegis, allowing the company to claim the network’s results on its balance sheet. Winfrey’s Harpo, Inc. will retain a significant minority interest in the media property, and Winfrey will continue in her role as CEO. Her exclusivity commitment to the network has been extended through 2025.”
“This transaction allows Discovery and Oprah to unlock more value from our partnership; extends once more her commitment to the network; and lets us continue our strong work together to nourish OWN viewers with the content they love,” said David Zaslav, CEO of Discovery Communications, in a prepared statement. Over the years, Discovery has spent more than $200 million on the joint venture, putting in $189 million through 2010 and another $50 million in 2011.
The maneuver takes place as Discovery is working through the process to acquire Scripps Networks Interactive, the owner of HGTV and Food Network, for $11.9 billion in cash and stock, and $14.6 billion when debt is included. Like many other media companies, Discovery is seeking to gain scale as rivals grow in size. AT&T, which already purchased satellite distributor DirecTV in 2015 in a deal valued at approximately $48.5 billion, is hoping to close an $85.4 billion pact to snap up Time Warner, the owner of HBO, CNN, Warner Bros. and DC Comics. Charter Communications broadened its national footprint by acquiring Time Warner Cable in May 2016 for approximately $65 billion. Adding the OWN results to the Scripps purchase would lend Discovery more heft.
Once the transactions are complete, Discovery expects to be home to five of the top pay-TV networks for women, and represent 20% share of women watching primetime pay-TV in the U.S.
Launched in 2011, OWN has become cable’s top network for African-American women, led by series such as “Queen Sugar” and “Greenleaf.” OWN has recently unveiled expanded relationships with creative executives such as Ava DuVernay, Mara Brock Akil and Salim Akil, writer/producer Tarell Alvin McCraney and prolific filmmaker Will Packer.
The transaction marks the first time Winfrey has taken money out of the joint venture since forming it with Discovery nearly a decade ago.
“Creating OWN and seeing it flourish, supported by Discovery and a rapidly growing group of the finest storytellers in film and television, is one of my proudest achievements,” said Winfrey, in a statement. “I’m thrilled with the network’s success and excited about this next chapter in our partnership.”
Source: Variety Magazine
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