Posted by Wow on July 06, 2008 at 21:53:30:
The guys with money are the guys with money. Bain Capital Partners, LLC is also one of the buyers in the Clear Channel deal.
Weather Channel Is Sold to NBC and Equity Firms
By MICHAEL J. de la MERCED
Published: July 7, 2008
An investor group led by NBC Universal and two private equity firms clinched a deal for the Weather Channel on Sunday after three weeks of negotiations.
Though the parties did not disclose the price, the buyers, NBC and the private equity firms Bain Capital and the Blackstone Group, will pay just under $3.5 billion, people briefed on the matter said.
That is less than the $5 billion that the Weather Channel’s parent, Landmark Communications, sought when it put the basic cable channel and related properties like weather.com up for sale in January.
In a sign of the weaker debt markets that have clamped down on large private equity deals, more than half of the price will be paid in equity, to be divided roughly equally among the three buyers, these people said.
The deal was mostly wrapped up shortly after June 13, when Time Warner, the only other remaining bidder, dropped out.
Though not the flashiest property, the 26-year-old Weather Channel is the leading brand of weather information on television, reaching 96 million households on basic cable, according to Landmark.
Beyond the Weather Channel, the deal also includes the Weather.com Web site, which attracts nearly 40 million unique users a month. It also encompasses Weather Services International, a forecasting service with more than 5,500 clients.
Under the terms of the deal, the Weather Channel will be run as an independent operation, rather than being merged into NBC’s own meteorological offering, NBC Weather Plus. Built as a competitor to the Weather Channel, Weather Plus has long been seen as an also-ran, with fewer viewers and generally higher placement on the channel dial.
NBC will still provide management services. The buyers also intend to help expand the Weather Channel’s online and mobile services.
“This deal makes us the pre-eminent leader in news and information,” Jeffrey Zucker, NBC Universal’s chief executive, said, citing the company’s assets in NBC News, the business channel CNBC and the news channel MSNBC. “We’re No. 1 in business news, No. 1 in general broadcast news, and now we’re No. 1 in weather news too,” he said.
After the deal closes, viewers may see The Weather Channel storm expert Jim Cantore on MSNBC and the “Today” weatherman, Al Roker, on cable.
“The cross-promotional opportunities will work both ways,” Mr. Zucker said. “We’re very excited about it.”
Mr. Zucker said the future of Weather Plus was “undetermined at this point,” and said the company and its affiliate partners would evaluate it “in the next few months.”
NBC Weather Plus was built four years ago to be a competitor to The Weather Channel, using NBC’s local affiliates and the multicasting abilities of digital television. It is a name for a number of services, including a 24-hour network sponsored by local stations, a Web site, and short weather updates for NBC’s cable channels. The service has not yet turned a profit and is perceived to be faltering.
Other corporate bidders dropped out early in the process. Private equity firms, seen as the other possible bidders, have been largely sidelined by the yearlong dearth of cheap financing.
The deal is expected to close by the end of the year.
The sale of the Weather Channel is part of a larger breakup of Landmark, a privately held company controlled by the Batten family of Norfolk, Va. Landmark is seeking to sell its other holdings, like its daily newspapers. Among those are The Virginian-Pilot of Norfolk and The News & Record of Greensboro, N.C.
“While we are extremely proud of how far we’ve come, I know that as part of the NBC Universal consortium, The Weather Channel and its employees will have increased opportunities for growth,” Frank Batten Jr., Landmark’s chief executive, said in a statement.
Two of the biggest providers of the deal’s financing are two hedge funds that specialize in high-yield debt, Blackstone’s GSO Capital and Bain’s Sankaty Advisors. Others financing the deal are Deutsche Bank, which was also the buyers’ lead financial adviser, and General Electric’s GE Commercial Finance unit.