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NYT Plans to Sell Its Discovery Times Stake

Apr 13, 2006  •  Post A Comment

The New York Times Co. said Thursday that it is exercising its right to require Discovery Communications to buy the newspaper group’s 50 percent stake in digital cable channel Discovery Times. The move reflects the newspaper group’s desire to focus more on short-form video for the Web.

Officials at The New York Times said the terms of the joint venture peg the value of the stake at $80 million to $135 million, but the specific value, expected to be within that range, will be based on an independent appraisal, to be conducted soon. Based on the $104 million invested in the channel through the 2006 first quarter, the Times said the final appraisal price will determine whether the company books a gain or a loss on the sale of its stake.

Janet Robinson, New York Times Co.’s president and CEO, said Thursday that while the relationship with Discovery has been productive, a reconsideration of the company’s priorities and its interest in investing more in Internet video led the company to want to pull out of the 4-year-old joint venture.

“There is a strong demand for video streaming on our Web sites, and advertisers are really coveting that,” she said.

A person familiar with the situation said that because Discovery has held editorial control over the channel since its launch four years ago, little is expected to change even as The New York Times exits the joint venture. The channel will retain its name and will continue to work with editorial staff at The New York Times to “remain a key component of our ongoing effort to be a leader in producing the highest-quality long-form current affairs programming in the world,” Discovery said in a statement.

Also Wednesday, The New York Times posted a 69 percent decline in first-quarter profit to $35 million, following a year-earlier gain related to the sale of the company’s current headquarters. Revenue rose 3 percent to $831.8 million.

The company’s broadcast group, which includes nine network affiliates, reported a 2 percent increase in revenue driven largely by the addition last year of Oklahoma City UPN affiliate KAUT-TV. Excluding that station, the broadcast group would have recorded a 2 percent decline in revenue, as declines in automotive advertising and network compensation more than offset higher revenue tied to the Winter Olympics in February.