Time Warner Inc. has dropped out of the race for The Weather Channel, throwing the auction for one of the more attractive cable network properties to hit the market recently into disarray.
Reuters first broke the story Friday afternoon that Time Warner had withdrawn its bid for The Weather Channel. Sources close to the auction confirmed the Reuters report.
Whether this means that The Weather Channel will fall to the other remaining bidder—a group including NBC Universal, Blackstone Group and Bain Capital—or that the auction has been broken still remains to be seen.
According to several published reports, NBC has engineered a package that would include about $1.8 billion in equity and $1.7 billion in debt.
Officials at NBC and The Weather Channel parent Landmark Communications did not return phone calls for comment.
Time Warner was one of the two lead bidders for The Weather Channel, which was put on the block in January. Landmark had hoped to attract as much as $5 billion for the network and its related Web sites.
That hope may have been what forced Time Warner from the table, according to cable executives familiar with the auction. Bids for the company were in the $3.5 billion to $4 billion range.
But The Weather Channel kept coming back to the bidders asking for more and changing the deadline for final bids in the hopes of getting at least one of the bidders to increase their price. According to sources and published reports, the deadline for “final” bids had been extended at least three times.
“They just kept trying to get more,” said one source familiar with the auction process about Landmark.
Earlier this month at the Merrill Lynch Media Conference in London, Time Warner chief financial officer John Martin said that while he thought The Weather Channel would make a nice fit, Time Warner would be “extremely price disciplined” in any deal.