Tags: oprah | discovery

Oprah's OWN Likely to Lose $142.9 Million This Year

Wednesday, 21 Mar 2012 10:31 PM

 

By Tim Molloy

NEW YORK, March 21 (TheWrap.com) - The Oprah Winfrey Network could lose an estimated $142.9 million this year, research and investment firm SNL Kagan said Wednesday, suggesting this might "tempt" co-owner Discovery to pull the plug on the venture.

SNL Kagan noted that the cancellation of Rosie O'Donnell's show last week ended hopes that it could boost the network's low ratings. OWN laid off 30 employees on Monday in another sign of problems for the network.

The firm said there could be a "significant write-down" at OWN for the first quarter of this year for programming costs for failed shows and severance costs.

Discovery spokesman David Leavy told TheWrap that SNL Kagan's report was "riddled with inaccuracies and bad information."

"The venture is on more solid ground with more business momentum than ever before," Leavy said. "Last Sunday, OWN was the number network on cable for women and people at 10 p.m. We remain confident in the future of OWN, and the long-term value we are building."

SNL Kagan focused on less hopeful numbers, saying the network was forced to pay out $15 million of what was to be a $40 million, two-year contract for O'Donnell.

"The problems the network faces are many," the firm said, including bad press that may discourage advertisers and carriage agreements that will expire in late 2012 and 2013.

"That means Discovery could end up negotiating carriage agreements for OWN again starting at the end of this year. Its hope for license fees of 20 cents to 25 cents per sub may now be unrealistic," the firm added.

A person close to OWN told TheWrap those numbers were inaccurate.

SNL Kagan also noted -- as TheWrap reported earlier this week -- that Discovery is taking on a greater role in the management of OWN, including installing Discovery chief financial officer Neal Kirsch as the chief operating officer position at OWN.

SNL Kagan also said it would "not be surprised to see Discovery ask Oprah Winfrey's Harpo Productions to finance some of the network's losses going forward." Discovery has already invested heavily in OWN, agreeing in August 2010 to boost its initial $100 million commitment by $89 million. In February 2011, it committed another $50 million, mostly toward programming.

The firm said OWN could still bounce back, noting recent ratings improvements. But if it doesn't, it could be doomed.

"Stay tuned, the story at OWN is far from over. Ratings for OWN in January were up 10% to a 0.13, after Oprah's new show, "Oprah's Next Chapter," aired, but it's still a miniscule rating compared to the programming investment," the firm said. "Without a significant ratings boost by year-end, this could be Oprah Winfrey's last chapter in the cable network industry."

© 2015 Thomson/Reuters. All rights reserved.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

FBI Probes Powdery Substance Mailed to Franklin Graham Charity

Friday, 30 Jan 2015 22:56 PM

The FBI Friday said it was investigating a letter containing a white powdery substance that was mailed to the headquarte . . .

Report: FBI Had Secret Cold War Plan for Martial Law

Friday, 30 Jan 2015 22:45 PM

The FBI reportedly came up with a top-secret, though short-lived, plan for preserving national security in case of a nuc . . .

Americans Love Lower Gas Prices, but They're Pocketing Savings

Friday, 30 Jan 2015 22:26 PM

Americans are saving about $60 a month from lower gas prices - but they're not spending much of it. The Wall Street Jour . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved