Media Money with Julia Boorstin

Lions Gate Snaps Up TV Guide Network

Lions Gate Entertainment is the unexpected buyer of the TV Guide Network and for $255 million from Macrovision Solutions.

Just last month, Macrovision announced it struck a deal to sell the divisions to media entrepreneur Allen Shapiro and a division of JP Morgan Chase for as much as $300 million. But Lions Gate has plenty of cash on its balance sheet and additional funds from a credit facility, and it reduces payments Macrovision might have to make if the assets don't perform as well as they had in the past. So Macrovision figured this deal was a safer bet — it's now expected to close February 28.

Lions Gate CEO Jon Feltheimer says he plans to turn the channel into a billion dollar asset — a full-service entertainment channel. The network is already the 19th-most distributed network, in 83 million homes, but it just didn't have the access to original programming to make it particularly relevant, in this era when people can find TV listings in any number of places other than the TV Guide channel.

Feltheimer plans to move the TV Guide channel away from its dull guide, shifting more towards original programming. Lions Gate's current TV programming — including Weeds (on Showtime) and Mad Men (on AMC) — appeals to women, fitting nicely with TV Guide channel's 40-something female demographic. And this is a category LGF isn't serving with its other cable offerings: it co-owns FEARnet, a Video-On-Demand Internet horror channel with Sony and Comcast, and owns 42 percent of, a digital distribution platform targeting young men.

This isn't the only cable channel Lionsgate is working on — it's also planning a movie channel, "Epix" with Viacom and MGM. Epix aims to compete with the likes of premium cable nets Showtime and HBO, whereas TV Guide will likely target a broader audience.

With this new distribution platform and the additional carriage revenues, will this give LGF a leg up, and an opportunity to reverse its stock's 40 percent slide in 2008? As the media giants struggle with a host of issues including the industry-wide decline in ad revenues, it'll be interesting to see if LGF can fashion itself a more nimble mini-media conglom.

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