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NBC Universal to buy Weather Channel

NBC Universal and buyout firms Bain Capital LLC and Blackstone Group LP agreed to buy the Weather Channel from Landmark Communications Inc, adding a cable network that reaches 96 million households.

The purchase price was about US$3.5 billion, according to a person who asked not to be identified because the terms weren’t made public. The channel will be based in Atlanta and NBC Universal will provide management, the companies said in a statement yesterday.

With the purchase, General Electric Co’s NBC can bolster the company’s own NBC Weather Plus channel and Web site.

Landmark’s Weather.com drew 36.4 million US viewers in May, Reston, Virginia-based researcher ComScore Inc said, making it the 15th most-popular Internet property.

NBC sites, excluding iVillage.com, didn’t rank in the top 50.

“It could embellish their presence,” said James Goss, an analyst with Barrington Research in Chicago, in an interview before the announcement.

The deal also removes the Weather Channel as a competitor, he said.

Representatives of the buyers declined to comment beyond the statement, while Landmark spokesman Richard Barry couldn’t be reached for comment.

Landmark hired JPMorgan Chase & Co and Lehman Brothers Holdings Inc in January to seek buyers for the Weather Channel and review options to boost the value of the entire Norfolk, Virginia-based company.

Owned by the Batten family, Landmark has said the entire company may be broken up and sold, including its newspapers and TV stations.

Fairfield, Connecticut-based GE rose US$0.40 to US$26.91 in New York Stock Exchange composite trading on Thursday. The shares have fallen 27 percent this year.

Blackstone, the New York-based firm that went public at the peak of the takeover boom last year, fell US$0.09 to US$17.23. The stock is down 22 percent this year.

Closely held Bain is based in Boston.

NBC, based in New York, and the buyout firms became the lone contenders after Time Warner Inc, the world’s largest media company, dropped its bid on June 13. The same day, Landmark said it was in “exclusive talks” with the NBC-led group. The Batten family initially sought as much as US$5 billion for the channel and Web site, the New York Times said on May 31.

Weather.com, created in 1995, syndicates its current conditions and forecasts to more than 100 million users of News Corp’s MySpace. The Weather Channel also runs sites for vacation rentals, climate-change discussions and international weather.

Weather.com is “the most highly coveted asset in the Landmark transaction, as the Web site is likely to serve as the growth driver moving forward,” Lehman analysts Anthony DiClemente and Vijay Jayant wrote in a January report when the sale was announced.

Landmark has said it plans to sell separately its CBS-affiliated TV stations in Las Vegas and Nashville, Tennessee.

Started in 1982 by billionaire Frank Batten Sr, the Weather Channel provides 24-hour programming. The network, with about 110 meteorologists among its 800 employees, started a high-definition channel in October.

Landmark had US$1.75 billion in sales in 2006 and 12,000 employees, Hoover’s Inc says.

Batten, a Norfolk native, took over as publisher of the Virginian-Pilot newspaper in 1954 at age 27 and proceeded to build Landmark Communications. He stepped down as chairman and CEO of Landmark in 1998, handing the positions to his son, Frank Batten Jr.

Landmark also owns the Roanoke Times in Virginia and the News & Record in North Carolina.

Deutsche Bank AG acted as the lead financial adviser along with Allen & Co and Credit Suisse Group AG for NBC, Bain Capital and Blackstone.
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