A&E Networks, Lifetime Merger CompletedHearst, Disney, NBCU become co-owners in venture 8/27/2009 06:09:00 PM Eastern
Disney-ABC, Hearst Corporation and NBC Universal said officially they are to become partners in a new venture which rolls womens oriented service Lifetime into their jointly owned A&E Networks stable.
A&E Television Networks board finalized the agreement, which was announced Thursday. A&E Television Networks is owned by the three partners, while Lifetime has been a separate 50:50 partnership of Disney-ABC and Hearst.
The biggest change to result from the merger is that NBC Universal which had 25% stake in A&E Television Networks - with the two other companies splitting the balance - will gain a 15% stake in the new bigger entity which will retain the A&E name. The deal is expected to be finalized in the next 30 days at which point the companies can begin to slim their staff and resources and add in other areas.
According to both the statement and Raven, there are certain mechanisms by which NBCU may elect or be required to exit AETN over a period of up to 15 years. The partners did not detail what those mechanisms were, though Disney and Hearst are no doubt eager to become 50:50 owners of the successful cable company which also includes channels such as History and Biography.
The news of the early negotiations were first reported by Broadcasting & Cable (June 4). The companies Thursday also confirmed that Abbe Raven, president and CEO of AETN will become head of the combined venture. In a statement to staff Thursday, Raven said: "We expect the deal to close end of September and we will make a further announcement when that happens. Following the closing we will be examining ways to enable both organizations to work together as one." Raven said she would be holding a series of town hall meetings to answer questions.
Speaking Thursday to B&C, Raven said: "We still have another several weeks till we close. We are very excited to work with the Lifetime brands, theyve done a terrific job and with the recent success with Project Runway and Drop Dead Diva a lot of the work is coming to fruition, its a wonderful time to be working with them."
Some view the change in ownership structure as recognition that Disney-ABC and Hearst could make faster headway exploiting Lifetime programming as part of a major international company than continuing alone. The move is also a cost-cutting exercise. The merger of Lifetimes assets is expected to save the parent companies millions of dollars in areas such as broadcast operations, sales and marketing, accounting and legal among other departments.
According to the statement, Andrea Wong will remain president and CEO of Lifetime Entertainment Services, and will report to Raven following the closing. Wong is expected to remain with the company.
The industry is rife with suggestions that current History Channel president and general manager Nancy Dubuc will gain a bigger role as a result of the merger. According to an article in Fortune magazine in January, Dubuc was considered for the top post at Oprah Winfreys new cable channel OWN, along with MTV Networks CEO Judy McGrath. Former MTV president Christina Norman ultimately got the job.
The well-respected Wong still has a year to run on her employment contract and is also riding high following the spectacular come-back ratings performance for Project Runway which bowed August 20. The show moved off NBC Universal's Bravo to Lifetime.
The new venture will house channels including A&E Network, History, Lifetime Television, Lifetime Movie Network, Bio, History International, Lifetime Real Women, History en Espaol, Military History and Crime & Investigation Network.