Weather Channel Sees No Change As IBM Buys Parent’s Digital Assets
Prospects for The Weather Channel may look cloudy today after IBM announced it has bought The Weather Company’s digital Product and Technology Businesses — to be run by the Weather Company’s CEO David Kenny.
But the network says everything’s sunny on its end: The Weather Channel is not part of the deal and “will continue to be owned and supported by our existing shareholders — Bain Capital, Blackstone and [Comcast’s] NBCUniversal — and operate as a stand-alone business,” says The Weather Channel Television Network CEO Dave Shull.
The owners paid $3.5 billion in 2008 for the company.
The channel has a long-term contract with IBM to license weather forecast data and analytics, the technology company says. IBM did not say how much it agreed to pay for assets including WSI, Weather.com, Weather Underground, and The Weather Company brand.
IBM hopes that the addition of weather data with its Watson computing platform will make the company “unsurpassed in the Internet of Things, providing our clients significant competitive advantage as they link their business and sensor data with weather and other pertinent information in real time,” IBM Solutions Portfolio and Research SVP John Kelly says. “This powerful cloud platform will position IBM to arm entire industries with deep multimodal insights that will help enterprises gain clarity and take action from the oceans of data being generated around them.”
Shull says that The Weather Channel “operates as a distinct and separate business with its own leadership team, which enables this to be a smooth and seamless transition. We believe a bright future lies ahead for the television business as the most trusted source of weather information.”
The IBM deal follows a turbulent period for the channel, which is seen as mature. In March, Verizon FiOS dropped it saying that “customers are increasingly accessing weather information not only from their TV but from a variety of online sources and apps.” Last year, DirecTV dropped the channel for three months in a carriage contract dispute.
The Weather Channel acknowledged last month that it is “facing unprecedented challenges in the subscription television business” as it laid off 50 staffers and moved away from “non-weather” original programming, to re-focus mornings on weather.
In Q2, Comcast took a $252 million writedown on its investment.
The Weather Company was known to be looking for a buyer for the high-value digital properties. The entire company had been valued at $3 billion, Bloomberg reported in August.