NBC Universal To Buy Oxygen for $925 Million
Women’s Network to Become NBC's Fourth Entertainment Cable Channel
By R. Thomas Umstead -- Multichannel News, 10/9/2007 4:50:00 AM
NBC Universal agreed Tuesday to shell out $925 million to Oxygen Media.
The deal gives Oxygen a powerful promotional platform that could help it compete with rivals Lifetime and WE, with NBC U president Jeff Zucker noting that NBC could promote Oxygen programs on the Today Show and supply Oxygen with Universal movies.
Oxygen founder Geraldine Laybourne said she’ll step down from the network at the end of the year. Zucker didn’t say who will run Oxygen or if there would be staff cuts, but said NBC would “look to utilize what we already have in place.” NBC and Oxygen expect to see $35 million in cost savings next year through the deal, he added.
Launched in 2000 by former Nickelodeon president Laybourne, Oxygen is the last independently-owned network to gain full distribution. Rumors of an Oxygen sale to NBC have been rampant since the summer.
The network would become the fourth entertainment cable network owned by NBC Universal, following Bravo, USA Network and Sci-Fi Channel, as well as its namesake NBC broadcast network.
“In just seven short years, Oxygen has become the crown jewel of independent networks. It’s a terrific property with a clear mission, strong brand, and desirable audience,” Zucker said in the announcement. “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.”
Laybourne said in a statement: “This deal with NBCU is the best way for Oxygen to grow. In seven years, we built a spectacular brand for women. We built Oxygen from scratch – 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.”
The 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, according to a statement.
The transaction is expected to close in November following the receipt of customary regulatory approvals.
