In a move that blind-sided front-running Court TV suitor Evercore Partners, Discovery Communications has bid $350 million for the legal cable network.
Evercore will not come back and try to top Discovery’s offer, said sources close to the deal.
Evercore’s effort to buy Court TV was being led by Tom Rogers, executive VP of NBC. Before linking with Evercore, Rogers had discussions with other investment houses about purchasing Court TV, but it was unknown whether Rogers would try to mount a competing bid with backing from another group.
Rogers and Evercore could not be reached for comment.
Decision within a week
Court TV’s owners — NBC, Liberty Media Corp. and Time Warner — will make a decision about Discovery’s bid within a week, said an inside source.
Until last week, Evercore was continuing its due diligence on the 33 million-subscriber cable network and the firm’s executives believed the deal to be on track to close in three weeks, said sources. Evercore’s bid was $300 million, sources said.
For that price, Evercore would have obtained the vast majority of Court TV with current owners Time Warner, NBC and Liberty each keeping a sliver of the cable network.
If Discovery succeeds in buying Court TV, it would be somewhat of an inside deal because Discovery is 49% owned by Liberty, which itself is a wholly owned subsid of TCI. However, no deal to acquire Court TV is a sure bet until the ink has dried on the contract.
Court TV has essentially been in limbo as its three owners have alternately tried to sell the channel to an outside party or restructure their ownership stakes so one of the companys becomes its managing partner.
Time Warner’s Turner Broadcasting looked at taking a larger ownership stake in Court TV but eventually passed. Industry pundits said it made sense for a company like Turner, which owns CNN, to run Court TV because it’s already in the news and information business and it could eliminate Court TV’s overhead costs because it has a well-oiled cable network infrastructure in place.
When Turner considered taking over Court TV, its employees feared the network would move to Turner’s Atlanta headquarters. Now, Court TV staffers are worried the Discovery will move the channel to its Bethesda, Md., base.
Sources close to the Discovery-Court TV negotiations said that Court TV would fit nicely into Discovery’s portfolio of cable channels. The company, headed by founder and chairman John Hendricks, operates informational channels such as Discovery Network, the Learning Channel, Animal Planet and a cadre of smaller digital networks.
Discovery first looked at buying Court TV last fall, said a source, but talks never advanced to a serious stage.
Discovery has a good track record of buying troubled networks, like the Learning Channel, and turning them into financial and editorial successes.
Representatives from Discovery, Court TV and Time Warner declined to comment.