Discovery To Invest Up To $100 Million in Oprah Network; Has Spent $7 Million Till Now
This story was written by Rafat Ali.
The high-profile launch of "OWN: The Oprah Winfrey Network" in late 2009 has attracted its own share of speculation since the announcement in January earlier this year, including executives, programming choices and finances. The company has already names Robin Schwartz as president, Maria Grasso as SVP of programming, Robert Tercek as president of digital media, among others. But no other details on the finances have been revealed till now.
I found some details in Discovery (NSDQ: DISAB) Communications' first 10-Q as a newly minted public company:
-- It is expected that Discovery Health will be rebranded as the OWN Network in late 2009...meaning a launch in late 2009. Seems a bit too far out from the announcement date.
-- Discovery has committed to fund up to $100 million of the venture's operations through September 2011.
-- If additional funding is needed, Discovery may provide additional funds through a member loan or require the venture to seek third party financing.
-- Discovery provided a put right to Harpo which is exercisable on four separate put exercise dates within 12.5 years of the Venture's formation date. The put arrangement provides Harpo with the right to require Discovery to purchase its 50 percent ownership interest at fair market value up to a maximum put amount. The maximum put amount ranges between $100 million on the first put exercise date up to $400 million on the fourth put exercise date.
-- During the three and nine months ended September 30, 2008, Discovery incurred transaction costs of $4 million and $7 million, respectively, related to the OWN joint venture. Harpo has not yet contributed any assets to the venture.
-- Discovery must contribute its interest in the Discovery Health Channel and certain DiscoveryHealth.com content. Harpo must contribute the Oprah.com website (which will serve as the platform for the venture website) and certain Oprah.com content.
Now you know.
By Rafat Ali