NBC buying Weather Channel
http://www.ajc.com/metro/content/business/stories/2008/07/06/ap_weather_channel.htmlBy KRISTI E. SWARTZ
Published on: 07/06/08
That large high-definition television screen isn't going anywhere, and your favorite Weather Channel anchors don't have to pack their bags either. They get to stay as part of NBC Universal's agreement, announced Sunday, to buy the Atlanta-based Weather Channel.
The 24-hour weather network, weather.com and other weather-related businesses have been sold to New York-based NBC for an undisclosed amount.
NBC said the Weather Channel will continue to operate as a separate unit based in Atlanta.
NBC has made no plans to move the company or make any specific changes, a person close to the negotiations said Sunday. NBC considers the Weather Channel's new high-definition studio a critical part of the network, the person said.
Officials from NBC Universal are expected to visit with Weather Channel staff later this week, the person said.
The Weather Channel's Virginia-based owner, Landmark Communications, put the network on the block in January. Initial reports said the company wanted $5 billion, but analysts had said the original figure probably was planted by investors eager to get companies interested.
Frank Batten Sr., Landmark's former chairman and chief executive officer, is "grieving about the sale, but he supports it," said Richard Barry, vice chairman of Landmark.
Batten's son, Frank Batten Jr., the current chairman and CEO, said in a statement he is proud of how far the network has come but that he knows under NBC, "the Weather Channel and its employees will have increased opportunities for growth."
Landmark started the Weather Channel 26 years ago as a basic 24-hour all-weather cable service. Barry said as the network has become more sophisticated, improving production values, "the basic theme has not changed — weather information 24 hours a day."
In June, the network began broadcasting its live morning and evening programs in high definition from a new $60 million studio that took 18 months to build. The project included a $400,000 HD screen as wide as a tennis court that can bring up radar, maps and graphics at the touch of a finger.
"HD is helpful because viewers like the high-quality definition," Barry said.
NBC is buying the Weather Channel as part of a consortium that includes private equity firms Bain Capital and the Blackstone Group. The companies said they expect to complete the sale, pending regulatory approval, this year.
Deutsche Bank, GE Commercial Finance, GSO Capital Partners and Sankaty Advisers LLC are financing the debt.
Time Warner, parent of Atlanta-based Turner Broadcasting System, was also a potential buyer. The company backed out last month when the price got too high, a person close to the deal said previously. Other interested companies at one point included News Corp., Viacom and CBS Corp.
"This will further position NBC Universal as the leading provider of news, information and weather, both online and on television," Jeff Zucker, president and CEO, NBC Universal, said in a statement.
Besides owning the Weather Channel network, NBC would gain weather.com and other interactive businesses; and Weather Services International and its subsidiary, Enterprise Electronics Corp., a maker of weather radar systems based in Enterprise, Ala., Landmark said.
NBC also would get Landmark's interest in Pelmorex, a weather company based in Canada, the company said. Pelmorex almost mirrors the Weather Channel with a TV station, interactive Web site and the ability to send alerts by e-mail.
The deal comes as analysts are pressuring NBC's parent, General Electric, to sell off the media giant.
NBC is 80 percent owned by General Electric. Vivendi, a media company based in Paris, owns the other 20 percent. NBC's cable investments include A&E, the History Channel, History Channel International and Biography Channel. NBC also owns other cable news operations, MSNBC and CNBC.
Nicholas Heymann, an analyst for Sterne Agee & Leach, said owning the Weather Channel will make NBC more attractive to buyers. He doesn't expect NBC to enter any deals until after the Olympics. The network is carrying the games on its main broadcast and cable stations.
"The Weather Channel is something that you constantly go to find," Heymann said in a telephone interview. "They [NBC] were told to put this together because to drive people to their Web site, they have to have content. This would give them another draw."
