October 9, 2007
NBC Universal Buys Oxygen
Gerry Laybourne sells Oxygen to NBCU for just under $1 billion.
By Shirley Brady
Oxygen chairman and CEO Geraldine Laybourne.
Not unlike some of its viewers, Oxygen is fed up with being single, and has made no secret of the fact it's been looking to get hitched.
Its search is over — NBC Universal announced this morning it's acquiring the seven-year-old women's network founded by veteran cable programmer Geraldine Laybourne.
The deal, which was rumored this summer, is just shy of $1 billion. NBCU values the transaction at $925 million, or about $875 million net of financial assets.
The cheeky and younger-skewing (than, say, Lifetime) Oxygen Media is now in 74 million homes.
Having launched as an ahead-of-its-time converged Web/TV play before downsizing and retooling its strategy in the wake of the dot-com meltdown, it's seen as a fit with NBCU's iVillage Web property and with NBC's The Today Show audience and Bravo network on its TV side.
"In just seven short years, Oxygen has become the crown jewel of independent networks," commented NBCU chairman and CEO Jeff Zucker on today's deal. "It's a terrific property with a clear mission, strong brand, and desirable audience."
"This acquisition increases our foothold in the advertiser-coveted young, upscale, female demographic, and perfectly complements our current roster of cable channels and plays to our strength of running and operating cable networks," he added.
Oxygen chairman and CEO Laybourne, a former executive at Nickelodeon, launched the network with backing from Charter Communications chairman Paul Allen, talk show host Oprah Winfrey and TV producers Marcy Carsey, Tom Werner and Caryn Mandabach.
With today's news that she's finally selling her indie network, Laybourne stated, "This deal with NBCU is the best way for Oxygen to grow."
"We built Oxygen from scratch," she added. "We became profitable, grew from zero to 74 million subscribers and produced original programming that resonates with young women everywhere. I couldn’t be more proud of my team. Now together with NBCU, Oxygen can become an even bigger brand."
Oxygen will be merged into NBC Universal's Entertainment Cable division under Jeff Gaspin, President and COO of the Universal Television Group. Oxygen joins NBCU's cable portfolio, which also includes USA, SCI FI, MSNBC, CNBC, Bravo, Sleuth, Universal HD and mun2 and their related Web properties.
NBCU said its purchase of Oxygen, which is expected to close next month, "will be substantially self-funded through the sale of non-core assets"— namely, its two independent Telemundo television stations: KWHY in Los Angeles, one of its two Spanish-language stations in L.A., and WKAQ in Puerto Rico.
NBCU added that its Oxygen transaction "will be accretive to earnings after the first full year, and is valued at an attractive price per subscriber of less than $12. NBC Universal expects revenue and cost synergies of approximately $35 million in 2008."
On a conference call with reporters today, Laybourne said she will continue to serve as the network's chairman and CEO through the end of the year, when she will hand over Oxygen to her still-to-be-determined successor.
Gaspin and his NBCU colleagues will meet with Laybourne's executive team — including Oxygen president Lisa Gersh, programming president Debby Beece and distribution president Mary Murano — and other candidates to determine who will assume leadership of the network.
Oxygen has been a pioneer on a number of fronts. It was the first cable network to host an upfront this year — with an unheard-of January preview for advertisers — and has also been ahead of the pack by testing ad sales brokered on the eBay online ad exchange this summer.
It was one of the first programmers to embrace original VOD content with the launch of its Air Karaoke and Oh! Baby broadband/VOD channels, and the first to launch its own social network, Oomph.net. Other digital extensions include its broadband video channel, SheDidWhat.tv.
With Oxygen single no more and Court TV now owned by Turner, there's only a handful of major independent networks — most notably, Hallmark Channel, which is also searching for a buyer — left on cable TV.
Laybourne, meanwhile, will continue as the only programmer to serve on the board of a major U.S. cable operator. She's on the board of directors for Insight Communications, which was also entertaining bids this summer until it was pulled off the block by its owner, the Carlyle Group.
For more on Oyxgen, read CableWorld's "Oxygen at 5" cover story, and expanded online Q&A with Laybourne and her executive team.