Landmark Communications, the Norfolk, Va.-based parent of The Weather Channel, is in the middle of a strategic review and has hired two investment bankers to evaluate its options, including a possible breakup of the company.
Landmark confirmed a report in Thursday’s New York Times that stated the company was possibly seeking a buyer for The Weather Channel as well as its newspaper and television station assets.
Landmark has hired investment banker JP Morgan Chase to advise it on The Weather Channel sale. Lehman Bros. is advising Landmark on the sale of its other media properties, including newspapers The Virginia Pilot in Norfolk, The News & Record in Greensboro, N.C., The Roanoke Times in Roanoke, Va.; 50 other small community newspapers and a handful of television stations.
Landmark president and chief operating officer Decker Anstrom said in an interview that the company is in the early stages of its strategic evaluation and that it may decide not to sell any assets at all. But he added that Landmark believed it was a good time as an independent, family-owned media company to evaluate its options.
While he would not disclose financial figures, Anstrom said that The Weather Channel is on track to report double-digit profit growth in 2008 and beyond. Coupled with its strong brand, a growing Internet web site (weather.com) that consistently ranks in the top 15 in terms of traffic, and its strong management team, now was as good a time as any to test the waters.
“It’s only logical for an independent company, given all that good news to explore what the marketplace may have to say,” Anstrom said.
According to the Times, media giants like News Corp., NBC Universal and Comcast have all expressed interest in the channel. Anstrom would not speculate as to what price the network might attract. The Times said that it could be as high as $5 billion.
“In general, I would always say on valuation that more is better,” Anstrom joked.
Landmark is owned by the Batten family, which bought its first newspaper in the 1900s. In 1982 Landmark launched The Weather Channel, which has since grown to 96 million homes. According to the Times, several media giants have expressed interest in the channel, including NBC Universal, Comcast and News Corp.
If The Weather Channel sold for $5 billion it would make the sale one of the biggest in recent years.
Oxygen Media, parent of the Oxygen cable network sold to NBC Universal last year for an estimated $925 million. Black Entertainment Network sold to Viacom in 2000 for $3 billion and Time Warner Inc. purchased the 50% interest in Court TV (now TruTV) that it didn’t already own for $735 million.
While fully distributed cable networks can garner attractive prices, adding to The Weather Channel’s cachet is its web site, weather.com. According to the Times and citing Nielsen/Net Ratings data, weather.com is the 18th largest media web site by traffic and had more than 32 million unique visitors in November.
Weather.com also has several partnerships with other media companies and in October struck a deal to provide weather information to MySpace. The site also has deals with Yahoo and AOL.