Even if the ratings and carriage fees aren’t huge, the value of being in nearly 100 million homes apparently is. Brian Stelter at the New York Times writes:
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.
[...]
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.
Though $.06 a month per subscriber isn’t much, but Nielsen estimates the Travel Channel is available in 93,990,000 homes. For purposes of back of the napkin math, I’m fine with calling that 100 million homes and figuring the $.06 per subscriber winds up being around $6 million in subscription revenue per month.
The cable model strives for a split between subscriber revenue and advertising revenue. If they are able to obtain a 50-50 split, that would be another $6 million a month. So back of the napkin gets it near $150 million in annual revenue. Fetching $1 billion would be somewhere around a 7X multiple of annual revenue.
A format change would be valuable for the carriage space, even if it’s only $.06 a month. The Nashville Network went to National Network and then Spike, so changing for demos could help anyone who owns a network – especially if you want to give it carriage. Discovery dumped their home network for “Green Living” in an attempt to appeal to environmentalists for a channel that wouldn’t otherwise have been able to get carriage.
Besides, if the business holds steady the Travel Channel investors double their investment in 14 years, assuming they don’t screw something up horribly.
I haven’t watched Travel Channel in years. It seemed after a while they were just rerunning the same stuff all the time, and creating no new programs. Then when they finally did create new stuff, it wasn’t as good.
Love Ghost Adventurers on Travel. Tonight they have a 7 hour live show!
1 billion for the Travel Channel? I wonder how much Fox News is worth? Aren’t their carriage fees .75 to .85 now after signing new agreements with their cable/sat carriers?
I read FNC had a free cash flow of $500 million+
I haven’t watched the Travel Channel since the World Poker Tour left for the Game Show Network (now GSN).
Dingo, the WPT is now on Fox Sports.
And the value of the Travel Channel is more for those companies with other cable channels due to being able to cross-promote.
who new having the fat bald guy eating private parts is worth a billion. pass the mountain oysters
I rarely ever watch Travel because they don’t broadcast in HD on DirecTV. Until they do, I have 50+ other options that come before them.
Travel use to be much better. Ghost hunters and all these food shows dont belong. Food belongs on Food network. Travel channel is just that travel. They can do allot with it but so much of the time they just air rerun after rerun. Sometimes its ok to repeat the show a few times but come on 20 times gets old.
They should have kept Made in the USA too.
They have a show coming out in March called AMERICA’S WORST DRIVER. It’s a big game show and is really funny. If you’ve seen the British or Canadian version you know what I mean.
The two best shows the world has ever known are on said channel
Ghost Adventures and Man VS. Food
The 7 hour event was awesome, had 10 friends over and watched the whole thing, when we weren’t throwing spoons and drawing on our other friend