NBC has entered into a deal to buy Oxygen Media, the company co-founded by Oprah Winfrey and targeted to women in the key 18-49 demo. The company will pay $925 million for Oxygen, which is headed by Geraldine Laybourne.
Oxygen was sold at a good time, as their numbers in the target demographic had grown by 19 percent in prime-time, and 7 percent overall during that same period of time.
This of course offers opportunities for integration with their existing property iVillage, which has been overtaken this year as the No. 1 online destination for women by Glam Media, which enjoys 20 million unique visitors monthly, against iVillage's 15.4 million, according to comScore Media Metrix.
Of course integration couldn't solely justify the price tag, and NBC (GE) says they should receive a cost savings of $35 million in 2008 as a result of the purchase, 
and Oxygen could add to company earnings within about a year.
One positive, according to NBC, is it won't be going into debt to service the acquisition, as they'll sale some of their non-core assets to fund the deal.
So what is this really all about? Everybody knows General Electric CEO Jeffrey Immelt isn't going to think about selling NBC until after the Olympic Games. So this is probably a move to strengthen the company in the female demographic to make it even more attractive to potential suitors in the future.
There's always the long shot that this could cause a large increase in revenue which would help the company look more attractive to keep for General Electric as well. I doubt that though, as their current fall schedule isn't looking too good, as far as numbers go. They have to have a great season to stay in the GE fold in my estimation. It doesn't look like they're going to get it.
One thing that could change that is if the GE stock price moves up in a significant way, and shareholder pressure to sell NBC diminishes as a result.
If that doesn't happen, it looks like the Peacock is being fattened up to be sold.
» NBC Universal Better in Third Quarter for General Electric from BizofShowBiz
The third-quarter report by General Electric (GE) shows NBC Universal did a lot better for them, as profits increased by nine percent and revenues by 3 percent. Profits ended at $589 million for the quarter.With the overall General Electric profits... [Read More]
Tracked on: October 12, 2007 7:37 PM | Permalink to Trackback