Discovery buys Scripps Network for $11.9B
In a follow up to our story last week, Discovery Communications Inc is acquiring Scripps Network Interactive Inc. for $14.6.9 billion, including debt. This will merge the primarily male viewer channels of Animal Planet and Discovery Channel with a primary female demographic in HGTV and Food Network.
The deal was completed Sunday night and announced Monday morning before stock trade opened up with Discovery paying 70% or $11.6 billion in cash and the remaining 30% in stock.
"While we believe the two companies are likely better positioned together, rather than apart, the longer-term issues facing the industry still remain," wrote John Janedis, an analyst at Jefferies. The combined, larger offering will give it an advantage for inclusion in "skinny bundles" or other cable packages that offer fewer channels than a standard subscription. Not only that, but Discovery could now offer up its own bundle that would include programming on its networks that could result in more subscribers per device and plan.
This is probably the best outcome for both networks as many people see Discovery Channel and Food Network as staples in cable packages. An alternative offer was made by Viacom, but that could have been for the worse as most Viacom properties are either accessible by "elite tier" packaging or not at all. Discovery Communications Inc has done well in this acquisition by making sure they aren't going anywhere as more and more consumers choose these "skinny bundles" but wanting to keep favorite cable channel offerings. Now excuse me as I have some Cutthroat Kitchen to catch up on.