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NBC U Acquires Oxygen for $925 Million

Oct 9, 2007  •  Post A Comment

NBC Universal agreed to acquire Oxygen Media for $925 million, the companies said Tuesday.
Oxygen gives NBC Universal another cable network for its portfolio. The acquisition fits NBC U’s strategy to reach more young upscale women as a complement to its Bravo and iVillage businesses.
Oxygen founder Geraldine Laybourne said she will stay at the network until the end of the year to help with the transition to NBC U ownership. A new chief of the network will be named in the coming months.
“This acquisition increases our foothold in the advertiser-coveted young, upscale, female demographic, and perfectly complements our current roster of cable channels and plays to our strength of running and operating cable networks,” said Jeff Zucker, president and CEO of NBC U.
Mr. Zucker said Oxygen would be part of a “virtual network” that, combined with Bravo, iVillage and the “Today” show, would be able to sell large numbers of young affluent women to advertisers.
To pay for Oxygen, NBC said it would be selling two Telemundo stations, KWHY-TV in Los Angeles and WKAQ-TV in Puerto Rico.
Oxygen was started seven years ago by Ms. Laybourne, who’d previously been with Viacom’s Nickelodeon and the Walt Disney Co., with backing from Oprah Winfrey, Marcy Carsey, Tom Werner and Caryn Mandabach.
In July, word leaked that Oxygen was talking to NBC. Later that month, Oxygen said it was looking for private equity to replace funding from Clarity Partners, a Los Angeles-based private equity firm.
Other investors in Oxygen include Paul Allen’s Vulcan Ventures and Time Warner’s AOL.
Ms. Laybourne said all of the owners would be cashing out in the deal.
The big benefit of the sale for Oxygen is the cross-promotion that a large company like NBC can provide, she said. Mr. Zucker credited the success of Bravo hits “Project Runway” and “Top Chef” in part to the promotion they receive on NBC’s “Today.”
“This deal with NBC U is the best way for Oxygen to grow,” said Ms. Laybourne. “In seven years, we built a spectacular brand for women. We built Oxygen from scratch—we became profitable, grew from zero to 74 million subscribers and produced original programming that resonates with young women everywhere. I couldn’t be more proud of my team. Now, together with NBC U, Oxygen can become an even bigger brand.”
When NBC U completes the transaction, Oxygen will become part of NBC U’s Entertainment Cable division, which is managed by Jeff Gaspin, president and chief operating officer of the Universal Television Group.
NBC U expects to wring about $34 million in revenue and cost synergies from the acquisition in 2008. Some of that is likely to be achieved through staff reductions in areas where NBC already has staff, such as affiliate relations, human resources, business affairs and possibly ad sales. Other savings will come from the ability to use programming on more platforms and networks and through more advantageous supplier relationships.
(Editor: Horowitz)
Updated at 11:07 a.m.

2 Comments

  1. That leaves Hallmark Channel out there waiting to be bought. Except with a median age of around 65, what do you value it at?

  2. Something done well and consistantly for eight years gets a hand up.
    Cheers all around!
    May the future reflect the direction and intent of the past masters.

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