Viacom Out of Chase for Scripps Networks

Viacom Is Out of Chase for
Courtesy of Food Network

Viacom Inc. is no longer in the bidding for Scripps Networks Interactive, according to people familiar with the situation, leaving the owner of cable’s Food Network and HGTV to negotiate exclusively with Discovery Communications, the other media company pursuing a tie-up.

Viacom and Discovery declined to make executives available for comment. A Scripps spokesman said the company declined to comment. Even with Discovery and Scripps in close talks, a sale is not guaranteed, these people cautioned.

Viacom, the owner of MTV, Comedy Central, and Nickelodeon, had reportedly made an all-cash bid for Scripps, a move aimed at luring the Knoxville, Tenn., company’s sizable family ownership. But that raised a flag on Wall Street. “Essentially this means Viacom would very likely get downgraded to junk status from its current BBB- rating, something the company has been trying to avoid for the past few years,” noted Michael Nathanson, a media-industry analyst, in a recent research note. Viacom has been working to turn itself around as its networks suffer ratings declines and viewers migrate to new viewing venues.

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Viacom, Discovery Battle to Win Scripps – and a Place in Media’s Future

A Scripps purchase would also give Discovery more leverage in negotiating with traditional distributors, like Comcast, Charter Communications and Cox. And it could aid Discovery as the media industry places new emphasis on how programming is distributed in the future, with more consumers turning to streaming video , mobile devices and on-demand consumption. Adding the Scripps networks would give Discovery more heft if they were to launch a so-called “skinny bundle” of programming to audiences.

While Discovery networks like TLC and Investigation Discovery are no stranger to reality programming, the company’s main focus has been on shows centered on science, nature, and exploration. Its focus on non-fiction programming is seen as a good fit with Scripps, whose networks focus on food, travel, and home-improvement.

Scripps’ value could be worth as much as $10.6 billion. Wells Fargo analyst Marci Ryvicker estimates the controlling Scripps family would likely require at least $91 per share, and might even hold out for as much as $95, for a sale. A final decision in the matter is expected to come as soon as next week.

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  1. Well it did seem confusing, and it’d be clear if TV stations were involved.

    But all that money Scripps hopes to make from Discovery could be put into their ailing TV stations, which need a dire boost in this new media climate, where Google & Facebook now make all the ad dollars, according to Sinclair.

    And if Scripps’s TV stations turn a profit from there, they either buy more stations, or have someone like Nexstar buy out all their stations.

    This new ATSC 3.0 is supposedly the savior of broadcast TV according to the FCC & Sinclair, so Scripps and other stations groups want to get a jump on that since ATSC 3.0 is tied to online.

  2. Only the Scripps networks are for sale, not the TV station group.

  3. My guess is Viacom didn’t want a big headache with Scripps TV stations, though V would’ve had their own advantage in a bulk of Scripps stations.

    It was cable too that was attractive to Viacom, adding strong networks to their ailing portfolio.

    But now that V’s out the running, V can solely focus on their commitment to strengthen their cable brands.

    Or the price tag ended up being too high, and more than V was willing to chew.

    • The Scripps television stations are not part of the deal. Scripps-owned-and-operated TV stations are a separate division also owned by the Scripps family.

      The Scripps TV stations headquarters are in Cincinnati, Ohio, not Knoxville, Tennessee.

      You’re one of many people outside the industry who often confuse individual TV stations with networks.

  4. Tripp Fell says:

    Really? They’re doing so well with the channels they already own…..

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