Speedvision shifts gears

May 28, 2001  •  Post A Comment

NASCAR, the motor sport that’s on the ratings fast track, is driving the complicated three-network deal that will put Speedvision Network in the Fox Cable Networks stable. But maximizing Fox’s race-car-telecast asset is not the only objective for the Fox executive who did the deal, Jeff Shell, president and CEO of the Fox Cable Networks Group.
He wants to get the checkered flag from Wall Street as well.
Analysts gave “no credit” to News Corp. for its original $90 million minority investment in Outdoor Life Network and Speedvision in the late 1990s, Mr. Shell said. Now in the wake of the deal, “Suddenly we have an asset worth just under a billion dollars,” he said. “This whole complicated transaction will finance itself.”
The deal will work like this:
Fox Cable, a division of the Fox Entertainment Group, is selling its 30.9 percent minority interest in The Golf Channel to Comcast Corp. for cash. The amount of that transaction has not been disclosed, but according to an informed official, the entire channel should be valued at approximately $1.2 billion, with the Fox stake itself representing around $365 million.
Separately, Fox is selling its interest in Outdoor Life to Comcast for what is called an “undisclosed consideration.” That transaction will take place after Fox acquires the parts of Outdoor Life now held by other partners, which include AT&T and Cox Communications. Outdoor Life will be valued at between $550 million and $650 million, according to the official.
The Speedvision acquisition, in which Fox will acquire the interests in the motor-sports niche network held by AT&T, Cox and others, will be financed by the other two parts of the deal, according to a Fox statement.
The deals will close later this summer after “fair market valuations” for the networks are agreed upon by the various parties. The deal is a “little bit bittersweet for us because we’d like to own all of these networks,” Mr. Shell said, adding that the company “didn’t want to write a big check for both Speedvision and Outdoor Life.”
It now appears that Fox will get Speedvision for just $140 million. “Four years ago, Fox invested $50 million in The Golf Channel,” Mr. Shell said. “Two years ago, we invested $90 million in Outdoor Life and Speedvision. When all the dust clears … we will end up owning 100 percent of Speedvision without any additional cash outlay.”