Media Money with Julia Boorstin

Cable Companies Making News And Making Deals?

I met up with several Wall Street analysts last night and everyone was talking about cable properties being on fire. Everyone taking a close look at the cable entities driving the media giants--like ESPN--and the ones now on the auction block.

Robert Redford's creation, the Sundance Channel is up for sale, according to Pali Research analyst Richard Greenfield. He's reporting that the 26-million subscriber cable channel is looking for between $400 to $500 million. The channel is co-owned by NBC Universal (55percent), CBS' Showtime unit (35 percent) and Redford owns only 10 percent.

Greenfield says likely buyers include Viacom , owner of cable properties including MTV and Nickelodeon, Time Warner which has HBO and others, and Cablevision , which owns AMC and IFC. Rumors about Cablevision being interested aren't being taken so well on Wall Street due to concerns that CVC would use cash for this acquisition that could otherwise pay down its debt.

Another big property up for sale is the Weather Channel, being sold offf by Landmark Communications, which is reportedly looking for a $5 billion price tag. Though CBS hasn't officially bid on the property, last week CBS CEO Les Moonves called the Weather Channel "something that could fit" with CBS portfolio, and his interest "depends on the pricing." One thing's for sure--with CBS sitting on $2 billion in cash and not too much debt, Moonves is interest in acquisitions. And since CBS doesn't own any networks that appear on basic cable TV, Moonves could see The Weather Channel as filling a certain niche.

Another cable company sure to make headlines is Discovery Communications. This past December Discovery Holdings (a parent company) announced plans to combine Discovery Communications with Advance/Newhouse Communications into a NEW holding company, Discovery Communications.

The stock is expected to sell sometime in the third quarter-- likely July or August. With brands like the eponymous Discovery Channel and Animal Planet and plans for "Planet Green," (a new channel about eco-friendly living to launch by the end of the year) analysts are telling me there's a lot of value here.

Questions?  Comments?