Negotiations with Time Warner fell through over valuation disagreement
The New York Times reports the conglom has stepped away from the negotiation table due to a disagreement over the irreverent upstart firm’s valuation. Financial Times has reported that A+E Networks has swooped in at a valuation of $2.5 billion, which would mean the stake would cost $250 million to the conglom, which is co-owned by Walt Disney Co. and Hearst Corp.
In addition, Re/Code reported late Friday that yet another 10% stake would be unloaded to Technology Crossover Ventures, also for $250 million.
FT , which quotes Vice CEO Shane Smith as saying the A+E pact is a “great deal,” suggests Vice will produce programming for the networks under the A+E umbrella, which include A&E, Lifetime and History, and could become a linear channel itself.
A+E hadn’t previously been noted to be a suitor of Vice, which has drawn notice since evolving from a music magazine to a multimedia juggernaut equally adept at critically acclaimed international news as it is branded content that sponsors pay big money to reach young auds.
In June, rumblings surfaced that Time Warner was prepared to plunk down over $1 billion for ownership of half of the company. There was even indications that the conglom was prepared to integrate Vice into HLN, CNN’s sibling news network.
Last August, 21st Century Fox invested $70 million in Vice, giving Fox a 5% ownership stake and valuing Vice at $1.4 billion.
This is the second close call on the deal front for Time Warner in as many months given the near-miss acquisition attempt by Fox for all of the conglom.
Vice already has a deal with Time Warner’s HBO for a newsmagazine series.
The pact is just the latest sign of Big Media’s intense interest in investing in or acquiring outright smaller media companies that are reaching viewers around the globe, including Disney-Maker Studios and Discovery-Revision 3. A+E hasn’t participated in the shopping spree until now but the company recently displayed its online savvy in the relaunch of one of its smaller cable nets, FYI, which borrowed heavily from online programming trends, including a TV adaptation of Collective Digital Studios’ “Epic Meal Time.”
Correction: An earlier draft of the story suggested Vice would not take over a linear channel operated by A+E Networks as part of their deal, but that is a possibility.