TV Guide: Price Is Right for CBS

Rebranding and programming strategy for channel in the works

CBS Corp. took a look under the hood of TV Guide Network more than a year ago, but wasn’t impressed by what it saw.

(From the pages of the April 2 issue of Variety.)

The cabler had wide distribution in 80 million homes, but its carriage pacts were weak and coming up for renewal. Although the Eye has been eager to expand its holdings in cable, it passed on TV Guide even though the asset had the “Reduced for Quick Sale” sign hung over it by owners Lionsgate and JP Morgan’s One Equity investment arm.

But in a surprise move, CBS quietly came back into the picture with a steal of a deal unveiled March 26 to buy One Equity’s half of TV Guide Network and the TVGuide.com online operation for just under $100 million. The deal gives CBS the benefit of a general entertainment outlet to help it squeeze new coin out of its vast program library, as well as a new avenue for original fare. Perhaps most important, CBS will get some gold stars on Wall Street for acquiring something that further reduces the company’s exposure to advertising-reliant businesses (assuming the partners enhance what are said to be negligible carriage fees).

Undoubtedly, the friendship between CBS boss Leslie Moonves and Lionsgate topper Jon Feltheimer helped grease the wheels for the deal. Lionsgate bought TV Guide for $255 million in 2009, and sold One Equity a 49% stake later that year.

Lionsgate and CBS were mum about specific plans for the channel other than to say that a rebranding and programming strategy was in the works. Observers say that the TVGuide.com online service could be a natural fit with CBS’ TV.com website. (TV Guide magazine is a separate entity and is not part of the transaction.)

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