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A&E and lifetime merge

Posted by on Aug. 28, 2009 at 12:45 AM
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A&E and Lifetime Channels Complete Their Merger

The long-anticipated merger of the cable channels A&E and Lifetime was completed on Thursday as the companies that jointly owned the channels announced a deal that will place Abbe Raven, the current president of A&E, in charge of the combined entity.

The Walt Disney Company, the Hearst Corporation and NBC Universal announced the agreement, which has been in the works for several months. The deal, which still requires some last-minute international regulatory approval, calls for A&E Television Networks to acquire Lifetime Entertainment Services.

The new unit will continue to be called A&E Television Networks, with Lifetime Entertainment Services as a subsidiary. Specific financial terms of the deal were not disclosed.

The chief executive of Lifetime, Andrea Wong, will now report to Ms. Raven.

Ms. Raven, who has been at A&E and its predecessor companies since 1984, noted that the new entity has three of the top 10 entertainment cable channels by ratings: A&E, History and Lifetime. The new company will encompass 10 channels, including digital versions, and 20 Web sites, Ms. Raven said.

One advantage of the combination will be demographic reach, Ms. Raven said. Lifetime, with shows like "Project Runway" and a new drama, "Drop Dead Diva," is among the strongest cable channels in reaching women; History, with reality shows like "Ice Road Truckers," is among the strongest in reaching men.

Ms. Wong, who had a successful career at ABC as its head of reality programming, during which she brought on hits like "Dancing With the Stars," was chosen two years ago to rejuvenate Lifetime, which had been dropping in popularity. But a dispute over the acquisition of "Project Runway," the hit fashion reality show that had been on Bravo - a channel owned by NBC Universal - held up program plans for Lifetime.

"Project Runway" finally had its debut on Lifetime last week and attracted its biggest audience ever for an opening episode, 4.2 million viewers.

Ms. Raven said, "I'm very excited to be getting a service with ‘Project Runway' and ‘Drop Dead Diva,' and I'm looking forward to working with Andrea." She said that A&E had successfully revised its programming formula several years ago, resulting in greater reach among younger viewers and increased profits.

"Andrea has begun that transformation at Lifetime," Ms. Raven said. "I expect that to continue."

A spokesman for Lifetime said Ms. Wong could not be reached for comment.

The deal-making behind the merger involved some complex negotiations because of the ownership structure of the channels. Lifetime had been owned only by Disney and Hearst, while NBC Universal was an owner with the other two of A&E.

In the arrangement, announced on Thursday, NBC will own a smaller percentage of the combined channels, and the deal's terms include a mechanism under which NBC Universal may either chose or be required to sell its interest to the other two partners within the next 15 years.

Some analysts had suggested that NBC Universal would depart the merger shortly. One reason was the company's stated policy of seeking to control interest in all its cable properties.

But NBC has never held a controlling interest in A&E; its percentage of ownership was less than one-third, and Jeff Gaspin, NBC's top cable executive, said, "We are not at all looking to get out" of the merger.

by on Aug. 28, 2009 at 12:45 AM
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