TV Guide Sells For $1
VC Firm Snaps Up Magazine For 100 Pennies
By Mike Farrell -- Multichannel News, 10/16/2008 7:46:00 AM
Beverly Hills venture capital firm OpenGate Capital knows a bargain when it sees one. The VC firm, which generally likes to spend between $100 million and $800 million for controlling interests in technology companies, recently purchased iconic TV Guide Magazine from owner Macrovision Solutions for the low, low price of $1.
That’s right, $1. Or about one-third the newsstand price of $2.99 an issue.
According to the sale agreement filed with the Securities and Exchange Commission Oct. 14, Macrovision also agreed to loan OpenGate $9.5 million (at 3% interest, another bargain), to run the magazine.
The deal is expected to close Dec. 1 and no shareholder vote is required for approval.
Macrovision purchased Gemstar-TV Guide International, the magazine’s parent, in April for about $2.8 billion, mainly for its interactive programming guide technology. In addition to the magazine, Macrovision is also shopping cable channels TV Guide Network and TVG. Those sales are ongoing.
When Macrovision first agreed to purchase Gemstar, the magazine was valued the magazine at about $61 million, according to SNL Kagan. But the magazine has been bleeding cash—it was expected to lose between $20 million and $23 million this year, according to SNL Kagan. The magazine lost $20.3 million in 2007 and $41.8 million in 2007, according to published reports.
The magazine, which once had a circulation of around 20 million in the 1970s, revamped itself in 2005 focusing on celebrity news and fewer TV listings. Its rate base is about 3.2 million, according to its Web site.
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