Entertainment Studios (Byron Allen) purchases Atlanta-based Weather Channel

James Cantore is one of the biggest names on The Weather Channel. CREDIT: Rodney Ho/rho@ajc.com

Posted Thursday, March 22, 2018 by RODNEY HO/rho@ajc.com on his AJC Radio & TV Talk blog

Byron Allen‘s privately held Entertainment Studios has purchased Atlanta-based Weather Channel.

The dollar amount was not disclosed though a source told The Hollywood Reporter it was in the $300 million range.

The cable network has been owned by two private equity firms – Bain Capital and the Blackstone Group – and media giant NBC/Universal since 2008. It was purchased at the time for an estimated $3.5 billion.

To add a layer of confusion, the owners in 2015 sold off the Weather Channel’s digital assets to IBM for an estimated $2 billion. This means the current purchase doesn’t include weather.com or the Weather Channel app. The cable network now licenses the Weather Channel brand from IBM.

Clearly, for Bain, Blackstone and NBC/Universal, this was not a profitable investment the past decade. Interestingly, NBC/Universal chose not to absorb the Weather Channel into its existing family of networks, which include Bravo, CNBC, MSNBC and Syfy.

“I think it shows the diminished value of the Weather Channel, which used to be a staple and indispensable for any cable operator,” said Phil Swann, who runs tvanswerman.com. “It’s not anymore.”

Instead, the Weather Channel will be part of an independent production company started in 1993 by Allen, a former entertainer who decided to focus on building wealth behind the scenes in Hollywood. His networks include automotive.tv, pets.tv and Justice Central.  The production company has also released movies such as “47 Meters Down,” Christian Bale’s “Hostiles” and Ted Kennedy biopic “Chappaquiddick.”This will be by far Allen’s biggest network brand name.

BEVERLY HILLS, CA – MARCH 04: Byron Allen attends Byron Allen’s Oscar Gala Viewing Party to Support The Children’s Hospital Los Angeles at the Beverly Wilshire Four Seasons Hotel on March 4, 2018 in Beverly Hills, California. (Photo by Jesse Grant/Getty Images)

“The Weather Channel is one of the most trusted and extremely important cable networks, with information vitally important to the safety and protection of our lives,” said Allen in a press release. “We welcome The Weather Channel, which has been seen in American households for nearly four decades, to our cable television networks division. The acquisition of The Weather Channel is strategic, as we begin our process of investing billions of dollars over the next five years to acquire some of the best media assets around the world.”

Swann said he is impressed how Allen was able to secure placement of his cable channels on DirecTV and U-Verse after settling a racial discrimination case against AT&T in 2014. That distribution helped him fund this Weather Channel purchase, Swann added. “You might remember him as a comedian but he turned out to be a really shrewd businessman,” he said. “More power to him.”

The company will remain in Atlanta, where it’s been located since it was launched by Landmark Communications nearly 36 years ago.

In recent years, under CEO Dave Schull, has refocused the network on pure live weather news as opposed to reality shows. “It was a strategic mistake,” he said in a recent interview before the purchase was announced. “It was done to drive ratings. It was a little shortsighted in terms of understanding where the media space is going.”

What few non-scripted shows it does air primarily focus on weather such as “Strangest Weather on Earth” and “SOS: How to Survive.”

“I think especially in this age of Netflix and Hulu you know what you stand for,” Schull said. “Consumers want to know what they’re going to get. If they want general entertainment, the solution is go to Netflix and Hulu on demand. If you want live programming, we are a trusted source. You come to us. You don’t come for us for general entertainment.”

Ratings tend to spike when there are big weather events so last summer, with a succession of hurricanes, the Weather Channel thrived. At one point last fall with Irma and Harvey, the network aired 188 consecutive hours of live weather coverage.

DirecTV in 2014 pilloried the Weather Channel for not being focused enough on weather and kept the network off its services for its then 20 million subscribers for three months. The Weather Channel at the time promised to focus more on live programming and has followed through.

 

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