The cable channel that sold for a bargain-basement price last month is suddenly the object of a tug-of-war between two prospective owners.
Lionsgate surprised the biz late Monday by announcing that it’s cut a deal to acquire the TV Guide Network cabler and TV Guide Online from Macrovision for $255 million. Just three weeks ago, Macrovision announced a deal to sell the channel and online biz to investor Allen Shapiro for the same price, but late Monday the tech firm announced it had “terminated” that agreement in favor of the deal with Lionsgate.
Lionsgate and Macrovision execs worked in secret through the holidays to complete the deal despite Macrovision’s announcement of its agreement with Shapiro on Dec. 18.
Shapiro, the biz vet who formerly headed Mosaic Media, indicated that he wasn’t inclined to give up on the deal he assembled with backing from JPMorgan’s One Equity Partners unit (Daily Variety, Dec. 19).
“It’s unclear whether the last chapter on this deal has been written yet,” Shapiro told Daily Variety.
Lionsgate is set to pay cash for the acquisition that’s expected to close by Feb. 28. Shapiro’s deal was also said to be for cash, but Macrovision execs said it was subject to other closing conditions that made it less attractive to Macrovision than the Lionsgate offer. Cory Ferengul, Macrovision’s exec veepee of marketing, said one of those conditions was the ability to close at the end of next month rather than April 1, as with the Shapiro deal.
Ferengul would not elaborate on the other conditions but said the company is confident that it will have no legal problems sealing the deal with Lionsgate. In a statement, Macrovision prexy Fred Amoroso said the terms of the deal with Shapiro permitted Macrovision “to solicit and enter into other agreements to sell the TV Guide Network and TV Guide Online properties. We believe this transaction improves the probability and the timing of closing the transaction.”
For Lionsgate, the acquisition promises to significantly boost the mini-major’s presence in the domestic cable TV biz. Lionsgate is already partnered with Sony Pictures and Comcast in the Fearnet video-on-demand channel, and it formed a partnership with MGM and Paramount Pictures last year for a pay TV channel. That channel, dubbed Epix, is skedded to bow in October.
But TV Guide Network would be the mini-major’s first wholly owned entity. The plan is to keep it a general entertainment outlet aimed at a young femme demo. Right out of the gate, Lionsgate’s film, TV and homevid library will provide ample programming opportunities for the channel, which has struggled to find a breakout original series among its many shows devoted to smallscreen fare.
“This really gives us the opportunities to use the resources and assets that we’ve got with tremendous flexibility,” Lionsgate co-chair and CEO Jon Feltheimer told Daily Variety.
TV Guide Network is available in 83 million cable and satellite homes. The channel fetched a very low price, as cable real estate goes, in part because of the overall economic climate and in part because TV Guide Network’s carriage agreements with cable operators are very low on the fee scale for nets of its size. Also, a number of the channel’s deals can be converted from basic to less desirable digital-tier carriage at the discretion of cable operators.
Still, for Lionsgate the chance to grab a hunk of established cable real estate at a fire-sale price was too good to pass up. Lionsgate had been in the bidding mix for TV Guide Network after Macrovision put the channel on the block last fall, but it was not seen as an aggressive bidder — until Monday. And it’s understood that Lionsgate is looking opportunistically for other channel acquisitions.
Feltheimer acknowledged that Lionsgate will face an uphill climb in running a single channel as it faces off against its larger biz rivals that own multiple outlets.
“With great upside comes a certain measure of risk,” he said. “We don’t think this is going to be easy, but what in our business right now is?”