Viacom is out of the running for deal to buy Scripps Networks
Viacom Inc. is out of the running to buy cable television programmer Scripps Networks Interactive, according to people briefed on the matter.
That leaves rival Discovery Communications as the lone bidder for Scripps, which is known for owning cable channels such as HGTV, Cooking Channel, Travel Channel and the majority stake in the Food Network.
Viacom Chief Executive Bob Bakish was said to be interested in buying Scripps to bolster Viacom’s struggling cable business, which includes MTV, Nickelodeon a nd Comedy Central.
But the move would have been risky for Viacom, given the company’s substantial debt load. Credit rating service Moody’s last year downgraded Viacom’s debt to the lowest level of investment grade, and buying Scripps could have risked that status.
The New York cable giant is also in the midst of an effort to turn around its TV business, as well as movie studio Paramount Pictures.
Now Discovery, known for channels including Discovery channel, Animal Planet and TLC, will negotiate exclusively with the Scripps family. The talks reflect an increasingly challenged landscape for mid-size cable programmers facing competition for inclusion on so-called skinny bundles.
The negotiation between Scripps and Discovery could result in a deal as soon as next week, though the talks could still fall apart, said a knowledgeable person who was not authorized to comment publicly because the talks are private.
Scripps has remained popular among pay-TV distributors that are offering smaller and lower-cost bundles of family-centric channels to budget-conscious subscribers. Scripps Networ ks, which closed on Wall Street up 3% at $84.07 on Wednesday, holds a market value of almost $11 billion.
Discovery’s market capitalization is $15.6 billion. Its shares increased 2% to $26.58. Viacom's stock fell 1% to $39.75.
The Wall Street Journal first reported that talks between Viacom and Scripps had ended.
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