Scripps Networks to Buy Cox Travel StakeValuation process has begun, company says 2/23/2016 10:33:00 AM Eastern
Scripps Networks Interactive said it has notified Cox Communications that it plans to buy Cox’s 35% stake in Travel Channel.
Scripps CFO Lori Hickok on the company’s earnings call Tuesday told analysts that the valuation part of the process has begun.
Scripps Networks Interactive acquired a majority stake in Travel Channel in 2009 for $975 million.
Since then, the network has been a mediocre performer and Scripps is currently in the process of rebranding the network with new original programming. Courtney White was named to head Travel Channel in December.
Scripps Networks would also like to buy the minority stake in Food Network owned by Tribune, but no deal appears imminent.
During the call, Scripps Networks indicated that the advertising market remains strong in the first quarter, with scatter pricing up high single digits to low double digits from a year ago, and up in the teens to low 20s from the broadcast upfront.
Scripps said that for 2016 it is expecting revenue to rise 12%. Adjusted segments profit is expected to rise 7%, with strong growth in the first half of the year. Growth is expected to slow in the third quarter opposite the Olympics, then resume growth in the fourth quarter.
Hickok said the company expects affiliate fees to take a hit as rates get equalized as the consolidation of distributors takes effect, but that affiliate fee revenue growth should normalize mid- to high-single digit rate after that.