Through the Wire

Discovery Channel founder and chairman John Hendricks, fresh off a personal $58 million payday in 2007 (see Finance, page 34), is set to tap the public markets for even more cash.

Hendricks is an advisor to an investor in Education Media Inc., a “blank check” corporation that is trying to raise $100 million to make an acquisition in the education field.

Blank check corporations are basically shell companies that raise funds through an initial public offering to make acquisitions in a particular industry.

Although the principals don't know what they will buy at the time of the IPO, they have two years to do a deal or return the money to shareholders.

EMI filed documents with the Securities and Exchange Commission in November outlining their operation, amending the filing in January. The company has not yet set an IPO date, but eventually wants to sell 10 million shares at $10 each.

Hendricks has already lent $150,000 to EMI and through his personal investment vehicle Hendricks Investment Holdings owns about 612,500 shares. He, along with six other directors and officers of EMI, also agreed to purchase a total of 3.125 million warrants in EMI for $1 each in a private placement immediately prior to the IPO. Hendricks has agreed to buy 1.1 million warrants as part of the private placement.

That shouldn't be too hard for Hendricks to scare up — he received $58 million in compensation from Discovery in 2007, more than half way to EMI's stated goal.

Hendricks knows his way around education properties. Through HIH, he owns a travel club and travel-related properties including a resort (Gateway Canyons) in Gateway, Colo., where he plans to create a learning academy for guests that includes online and advanced media offerings in the area of informal and lifelong learning.

In the next five years, Americans will spend about as much time watching TV, other video or playing video games as they do sleeping: about 8 hours per day, according to projections by Toronto-based Solutions Research Group.

That would be up 31% from 6.1 hours on average today, as video becomes more ubiquitous on the Internet, mobile phones and other devices. SRG based the data on a survey of 1,014 U.S. residents aged 12 and older in February 2008, who compiled online diaries about their video-based consumption.

But daily time with traditional TV will remain more or less the same — at close to 4 hours — so SRG expects television's share of the total “video entertainment pie” to shrink from 64% today to 47% by 2013, “given the overall increase consumers' in total video-based entertainment consumption.”

In other words, expect a surge in the number of people falling asleep in front of their computers.