NBC Universal is acquiring Oxygen Media, one of the nation's leading female-focused cable television networks, thus expanding its highly successful cable portfolio. The announcement was made today by Jeff Zucker, President and CEO, NBC Universal.
Under the agreement, NBCU will acquire Oxygen for $925 million. Net of financial assets, the purchase price is approximately $875 million. The network, which is available in more than 74 million homes, has been registering significant growth in both ad sales and viewership, with the just-completed third quarter being the most-watched in the history of the network. Launched in 2000, Oxygen is the only fully distributed entertainment cable channel launched in the last decade.
Zucker said: "In just seven short years, Oxygen has become the crown jewel of independent networks. It's a terrific property with a clear mission, strong brand, and desirable audience. This acquisition increases our foothold in the advertiser-coveted young, upscale, female demographic, and perfectly complements our current roster of cable channels and plays to our strength of running and operating cable networks."
The acquisition by NBC Universal is part of the company's strategy to transform its portfolio and focus on assets with potential for rapid growth. Oxygen joins NBC Universal's fully-owned cable entertainment networks, which include USA Network, the most-watched basic cable network in every key demographic; Bravo, the most upscale basic cable network, which just completed the best third quarter in its history; and SCI FI, the sixth-ranked basic cable entertainment network. Along with CNBC and MSNBC, NBC Universal's cable networks account for 50% of the company's profits, and are experiencing double-digit, year-over-year growth.
Oxygen was founded by current Chairman and CEO Geraldine Laybourne along with talk show host Oprah Winfrey and television producers Marcy Carsey, Tom Werner and Caryn Mandabach.
Commenting on the announcement, Laybourne said: "This deal with NBCU is the best way for Oxygen to grow. In seven years, we built a spectacular brand for women. We built Oxygen from scratch - we became profitable, grew from zero to 74 million subscribers and produced original programming that resonates with young women everywhere. I couldn't be more proud of my team. Now together with NBCU, Oxygen can become an even bigger brand."
Oxygen will strengthen NBC Universal's position of leadership in upscale, female-focused media. Oxygen's audience complements the viewers of Bravo and the Today show and visitors to iVillage, the leading online site for women. With these rich assets across multiple platforms, NBCU will now have an even more attractive go-to-market position in the fast-growing women's entertainment and lifestyle market.
Upon completion of the transaction, Oxygen will be merged into NBC Universal's Entertainment Cable division, which is managed by Jeff Gaspin, President and Chief Operating Officer, Universal Television Group.
Said Gaspin: "We are very excited to add Oxygen to our portfolio of cable assets. We believe we can take it to the next level by expanding the quality brand that has been created by Gerry and the rest of the team."
The Oxygen purchase will be substantially self-funded through the sale of non-core assets. NBC Universal is selling its two independent Telemundo television stations: KWHY in Los Angeles, one of its two Spanish-language stations in that city, and WKAQ in Puerto Rico.
The Oxygen transaction will be accretive to earnings after the first full year, and is valued at an attractive price per subscriber of less than $12. NBC Universal expects revenue and cost synergies of approximately $35 million in 2008.
The transaction is expected to close in November following the receipt of customary regulatory approvals.