CBS Poised To Buy Half Of TV Guide, Partner With Lionsgate

EXCLUSIVE: CBS Corp, which already owns/co-owns broadcast networks CBS and the CW, pay cable network Showtime, and international TV channels, is adding a domestic basic cable network to its portfolio. I’ve learned that it is nearing a deal to acquire JP Morgan’s One Equity Partners’ interest in TV Guide, the company that encompasses the TV Guide Network, recently rebranded as TVGN, and With the deal, which could close as early as next week, CBS will become a 50-50 partner with TV Guide co-owner Lionsgate Entertainment, which originally acquired TV Guide in February 2009 for $241.6 million. I hear CBS will play slightly less than the $122.4 million One Equity Partners shelled out for 49% of TV Guide in June 2009 with an option to increase its stake by 1%.

TV Guide had been on the block for years. CBS surfaced as a potential suitor more than a year ago, along with other companies. CBS kicks the tires of potential acquisition targets all the time but rarely makes a move. After a thorough evaluation, I hear CBS concluded that TVGN is a fully distributed cable network (it is currently in 80 million homes) with a lot of upside. Also attractive was the prospect of partnering with another top Hollywood content producer, Lionsgate. The two companies already have business together — Lionsgate produced one of the signature series on CBS-owned Showtime, Weeds, and produces the premium cable network’s dark comedy Nurse Jackie. TVGN is giving CBS Corp the last major missing piece in its TV portfolio, a U.S. basic cable network. Meanwhile, CBS brings to the venture an expertise in running successful networks: CBS Corp has the top broadcast network, CBS, and hot pay cable net Showtime. Additionally, CBS manages another network that is a 50-50 partnership with a Hollywood heavyweight, the CW, which CBS co-owns with Warner Bros. The timing of CBS’ purchase makes sense as the company recently sold its outdoor ad business, and analysts speculated that CBS will probably use some of the cash for acquisitions.

Meanwhile, Lionsgate and One Equity Partners’ relationship has been bumpy. Allen Shapiro, who teamed with One Equity Partners in the 2009 purchase of half of TV Guide and served as chairman of the joint venture with Lionsgate, departed last fall to become chairman of Dick Clark Prods following the company’s acquisition by Guggenheim Partners, Mandalay Entertainment and Shapiro’s Mosaic Media Investment Partners. His top lieutenant and business partner, Mike Mahan, recently decided to leave his post as President of TV Guide after four years to pursue other opportunities. He is succeeded on an interim baisis by Dennis Miller, strategic adviser of  Lionsgate who has had a long-standing relationship with Lionsgate topper Jon Feltheimer.

TVGN is in better shape than when One Equity Partners stepped in. One of its biggest drawbacks had been its nature as a TV listing utility that had put buyers off. In 2009, only a third of TV Guide Network’s 80 million homes carried the network in full screen, without the guide. Now that share is at more than 83% and is expected to cross the 90% mark within the next year. In the past four years, TVGN also has shifted away from its dependance on infomercials. Meanwhile, TV Guide’s online division,, continues to grow, rising to 25 million monthly unique users online and through syndication.

This article was printed from