Scripps Buys a Country Cousin

10/17/2004 8:00 PM Eastern

E.W. Scripps Co. will take Great American Country to the next level by adding high-quality Americana-type programming aimed at Middle America, officials said last week after agreeing to buy the channel for $140 million.

“We have broad experience creating programming that might enhance the feeling that already exists on Great American Country,” Scripps Networks executive vice president John Lansing said.

Scripps executives went to great lengths to explain how GAC, which they’re buying from Jones Media Networks and cable pioneer Glenn Jones, fits into their stable of cable networks.

Scripps’ Cable Stable
Subscribers in millions
[a] Nielsen Media Research
[b] Figure supplied by Scripps
[c] Figure from E.W. Scripps, full-time equivalent households including 5 million via Scripps-owned affiliated TV stations.
HGTV 87.2 [a]
Food Network 85.5 [a]
Fine Living 23.5 [b]
DIY 30.4 [b]
Shop at Home 51 [c]
GAC 34 [b]

That portfolio includes Home & Garden Television, Food Network, Fine Living, Do It Yourself Network and Shop at Home Network.

Scripps executives said they have no plans to tamper with GAC’s country-music video format. Instead, they’ll add to and improve the longform lifestyle programming already on the channel, seeing “rich potential for all sorts of related lifestyle programming that we believe can hit home with much of Middle America,” as Scripps Networks chairman Frank Gardner told analysts last week.

Scripps envisions GAC as a network built around the country format “but complemented by some high-quality, Americana-themed programming that you just can’t find anywhere else on the TV dial today,” according to Gardner. “We’re talking about a Who’s Who of the best of all of the country-music artists with a good dose of mom, the American flag and apple pie thrown in.”

Scripps sees plenty of room for two country-music video channels to thrive, both the 34 million subscriber GAC and dominant CMT: Country Music Television, owned by Viacom’s MTV Networks and in 76.9 million homes. Country music is now the hottest radio format in the nation, with 2,000 stations programmed that way across the U.S.

GAC is selling at a reasonable price, actually cheaper than the $8-per-subscriber rate Scripps paid Belo Corp. for a 56% stake in Food Network in 1997, according to Gardner.

“If all goes as planned, we’ll be paying about $4 a sub for GAC. So at that valuation, we think there’s a lot of potential for a very attractive return.”

Scripps said that for now at least, it will keep GAC (which launched in 1996) in Denver, and will retain the staff and president Jeff Wayne.

“We don’t view the network as being broken in its current state,” Lansing said. “Our point of view on the network would be how we can bring value to it based on what we’re good at.”


Currently, GAC’s schedule is 70% videos and 30% long-form shows, anchored by the strong performing franchise The Grand Ole Opry Live.

Scripps will be looking for ways to “inject more personality” around GAC’s videos, with programming either related to the artists or to where the artists are from.

“Certainly the demographic target of that network, women and adults 25 to 54, mirrors our other networks,” Lansing said.

Scripps can lend long-form programming expertise to GAC — and has the leverage to build distribution, something the channel lacked as a Jones-owned standalone.

“Scripps has done well with their services, and I expect them to do well with GAC,” said Frank Hughes, senior vice president of programming for the National Cable Television Cooperative.

Like GAC, CMT’s lineup is getting an injection of long-form series, and is actually producing some pilots.


That doesn’t daunt Scripps with respect to GAC’s prospects. For example, Lansing pointed out CMT’s 18-to-34 target demographic is younger than GAC’s.

“Clearly, CMT is a great competitor in this category,” he said. “We think there’s room for two very successful networks.”

CMT officials declined to comment on GAC’s sale.

In the third quarter, CMT’s primetime household ratings were down 25%, to a 0.3, according to Nielsen Media Research data provided by Disney ABC Cable Networks Group. Third-quarter ratings for GAC weren’t available.

For the full year, the acquisition is expected to reduce Scripps Networks’s segment profit by $5 million to $10 million. GAC’s total revenue for this year is expected to be about $12 million.

In buying GAC, Scripps intends to maintain cross-promotion arrangements the channel and Jones Media Networks through its subsidiary, Jones Radio Networks, an independent radio programmer that serves more than 5,000 stations.

Jones said that the GAC sale made sense at this juncture.


“We felt that the sale at this time was in the best interest of our shareholders as it brings value, monetizes an asset and allows us to build on radio business,” Bob Hampton, group vice president and director of Jones International, said in a prepared statement.

“Scripps is a great company that can bring substantial resources to GAC and take it to new heights. Jones Radio Networks will continue to have a relationship with GAC, with cross-promotions that will be beneficial to both companies and our strong commitment to country music.”

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