NBC Universal buys 18 Hallmark channels outside the U.S.
LONDON: NBC Universal said Tuesday that it had agreed to buy a group of international pay television outlets, including 18 versions of the Hallmark channel outside the United States, as it moved to increase its exposure to fast-growing TV markets in Asia, Eastern Europe and elsewhere.
NBC Universal, which is controlled by General Electric, agreed to buy Sparrowhawk Holdings, which owns the channels, from the private equity firms 3i and Providence Equity Partners, and from David Elstein, a British television executive.
The companies declined to specify a price, though reports in Britain have put it at about £175 million, or $350 million. The investors paid $242 million for the channels two years ago.
Jeff Zucker, chief executive of NBC Universal, has made global expansion a priority as the company tries to catch up internationally with other U.S.-based media conglomerates. With less than 20 percent of its revenue coming from outside the United States, NBC Universal trails Walt Disney, which owns ABC, and News Corp., which owns the Fox network, in developing a global footprint. Zucker has said he wants to generate 30 percent of revenues outside the United States by 2010.
“In isolation, this deal isn't going to get us there,” said Peter Smith, president of NBC Universal International. “We're going to need to do a fair bit more.”
The acquisition of Sparrowhawk, which analysts say has an estimated $200 million in annual revenue, is the first big international acquisition since Smith was named to his post last year. In addition to acquisitions, NBC Universal plans to start new channels and expand existing ones into new markets.
Smith said the international Hallmark channels - the U.S. version is not included in the deal - would complement NBC Universal's existing international channels because their programming was popular with women. Existing NBC Universal channels, including the Sci-Fi channel, are more popular among men.
In addition to the Hallmark channels, Sparrowhawk owns Movies 24, which shows made-for-TV films in Britain. It also plans to start a channel for children called KidsCo in Central and Eastern Europe, and one in Britain called Diva TV that will be aimed at women.
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