Travel Channel Auction Heats Up

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The auction for The Travel Channel is reportedly heating up, with News Corp. vaulting into the lead with an estimated bid for the network in the $800 million to $900 million range.

That is a pretty hefty premium for the network, known mostly for its traveling foodies Anthony Bourdain of No Reservations and Adam Richman of Man v. Food, as well as less culinary-centric shows like Bridget's Sexiest Beaches.

And it far outpaces original expectations for the channel.

Adam Richman in Man V. Food

When Cox Communications said in June that it would hire Goldman Sachs to investigate strategic alternatives for Travel, most analysts expected it would sell for upwards of $600 million.

Pali Research media analyst Richard Greenfield estimated that Travel Channel will throw off about $50 million in cash flow in 2009, valuing an $800 million to $900 million bid at a 17 times multiple.

The Financial Times reported Oct. 22 that News Corp. was in the lead, but that other companies like Scripps Networks Interactive and a consortium led by Providence Equity Group could trump their bid.

It is expected that Travel would fit well with News Corp.'s National Geographic Channel.

While the valuation for Travel Channel harkens back to the heady days of earlier in the decade -- when Viacom paid $3 billion for BET Networks in 2000, it implied a cash flow multiple of 23 times -- it wouldn't be out of character for News Corp. to make a much higher bid to increase its chances of winning. It launched a $5.6 billion bid for Dow Jones & Co. in 2007, well above what most observers have valued the property. News Corp. closed the Dow Jones deal in January 2008.