Discovery CEO David Zaslav was as optimistic as he could be yesterday when he spoke to analysts about his OWN joint venture with Oprah Winfrey. But his company’s annual report filed this morning at the SEC tells a slightly different story: It says that Discovery has already contributed $312M to the venture, far more than its original $189M commitment. What’s more, Discovery “expects to provide significant additional funding to OWN.” And despite Zaslav’s enthusiasm, the funding “is expected to exceed OWN’s earnings for the next two years.” Indeed, Discovery acknowledges that the channel’s early results “have been below its initial business plan” which means “there is a possibility that the results of OWN’s future operations will fall below the revised long term projections.” Could that lead to a write-down? Perhaps. Discovery says that it will “continue to monitor the financial results of OWN” to determine whether “an impairment has ocurred.” The filing says that Discovery expects to recoup its investment, which accrues interest at a rate of 7.5% compounded annually. “There can be no event of default on the borrowing until 2023,” it adds — although the venture is supposed to repay in four years “to the extent that OWN has excess cash” to handle the debt. While Discovery owns 50% of OWN, it can’t ensure that it will be repaid because Winfrey “holds operational rights related to programming and marketing, as well as selection and retention of key management personnel.” As a result, Discovery doesn’t control “activites that are critical to OWN’s operating performance and success.” One other thing: Beginning in 2016, Oprah can require Discovery to “purchase all or part of (her) interest in OWN.” Yesterday Zaslav said that he expects the channel to become “a significant asset” and that it’s “off to a nice start in 2012.″
Los Angeles, CA – Meg Lowe has been named senior vice president of distribution and strategy for OWN: Oprah Winfrey Network, it was announced today by Erik Logan and Sheri Salata, presidents of OWN. Lowe has been elevated to the position having most recently served as senior vice president of distribution for Discovery Communications. In her new role, she will lead sales and affiliate marketing and all carriage negotiations for OWN.
OWN: Oprah Winfrey Network today released a new 70-second promo for the January 1 launch of the cable channel. While the first one that has been running in movie theaters was all about Oprah (and balloons), this one features more of the stars from OWN’s inaugural slate of series.