Copy protection giant Macrovision, which expanded into television program navigation with its $2.8 billion acquisition of Gemstar-TV Guide earlier this year, has struck a deal to sell the TV Guide Magazine print property to Los Angeles-based private equity firm OpenGate Capital.
The price of the deal, which is expected to close on or around December 1, 2008, was not disclosed. Since Macrovision had already classified the TV Guide Magazine business as a discontinued operation, no gain or loss will be recognized for financial reporting purposes by the company as a result of the divestiture. The deal is subject to customary closing conditions, says Macrovision, but is not subject to stockholder approval.
TV Guide Magazine, which has some 21 million weekly readers but faces steadily increasing competition from the Web as a source of TV programming news, had already been identified by Macrovision as a non-core asset when it first described its plans for the Gemstar-TV Guide businesses. Other businesses within Gemstar-TV Guide included the TV Guide Network barker channel; the TV Guide Online Website; and the interactive program guide business, which supplies electronic program guides for both TV sets and cable set-top boxes.
Macrovision also plans to sell the TV Guide Network channel, which provides program grids and entertainment-related video and sells advertising overlays against it. But it is hanging onto the TV Guide Online Website, which had become tightly integrated with the interactive program guide business as Gemstar-TV Guide looked to make program navigation easier for consumers in a world of rapidly multiplying content choices with its
The TV Guide Website can be used to remotely program TiVo digital video recorders, for example, and Macrovision plans to extend that capability to cable customers of its interactive program guide. TV Guide Online has also developed some key search technology, particularly relating to bring Web content to the TV, which Macrovision views as being important to its overall digital-home strategy.
“That is why we decided to retain that property,” says Corey Ferengul, Macrovision EVP of Marketing.
More important, Macrovision will also be retaining ownership of the venerable TV Guide brand, which is used on its electronic program guides. The company is granting a license of the brand to TV Guide Magazine to support its publication. It is also licensing TV Guide’s program listing to the magazine, which will continue to use that data.
Whether Macrovision and TV Guide Magazine continue to have a relationship under which they share editorial content remains to be seen. While one of the original features touted for “My TV Guide” was show recommendations from TV Guide editors, neither Ferengul nor TV Guide president Scott Crystal would discuss whether TV Guide Magazine content would be featured on the TV Guide Online Website or IPGs in the future. Both executives said those possibilities are still under discussion by the respective management teams.
Moreover, Crystal won’t disclose what plans, if any, TV Guide Magazine and OpenGate have to create an online component of the publication after the divestiture from Macrovision is complete.
“Any plans regarding digital companions to the magazine are not being disclosed until the magazine sale closes,” says Crystal. “Until then, we’ll continue to work together and share content.”
It is possible that the cross-promotion and multi-platform advertising currently conducted between the magazine, Website, TV channel and IPG business will persist, says Crystal, even after the sale is complete.
“Going forward, that may continue depending on senior managements’ decisions,” he says. “It’s not something that necessarily will cease and desist on that December 1 date. It depends on our assessment of what’s the greatest benefit [to all parties].”
For his part, Crystal says that he and TV Guide Magazine staffers are excited about the future under OpenGate.
“The ability to not be tied to a technology company, but to be part of a new company that believes in the magazine brand is extremely promising,” he says. “The entire staff is thrilled about the next phase of the magazine.”