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Offers for Travel Channel Expected to Approach $1 Billion
October 30, 2009

Cox Communications is expected to command close to a billion dollars for the Travel Channel, people close to the bidding war for the channel said on Thursday. The company is entertaining bids from a number of media companies, including the News Corporation and Scripps Networks, three people with knowledge of the auction said. The people requested anonymity because they were not authorized by their employers to discuss the confidential process. At least one of the offers exceeds $900 million, they said.

When Cox was first approached about a potential sale in June, analysts said the channel could command $600 million to $700 million. The cable company said that month that it had retained Goldman Sachs to weigh its strategic options for the channel, and it has not commented since then.

By the ratings and revenue metrics of cable channels, the Travel Channel is undistinguished. The channel, which counts “Anthony Bourdain: No Reservations” and “Man v. Food” as its most popular shows, is distributed in nearly 100 million homes, but it earns on average just 6 cents per subscriber. It draws a modest average of 485,000 viewers in prime time.

But cable channels with wide distribution rarely come up for sale. And the hefty valuations attest to the appeal of the cable business, with its duel revenue streams from advertisers and subscribers.

“There are not many good businesses in the media sector as you look out secularly,” said Richard Greenfield, an analyst at Pali Capital. “The cable network business is one you can feel very good about over the next five years, especially where there are global expansion opportunities.” Two people with knowledge of the auction said on Thursday that the News Corporation was the leading bidder, but others cautioned that the companies were not yet in exclusive negotiations.

Source :-http://www.nytimes.com