The family that helped launch satellite television provider DirecTV said Tuesday that it had teamed with a group of investors, including movie moguls Harvey and Bob Weinstein, to buy Ovation, a tiny cable channel devoted to the arts.
Despite an already cluttered media landscape, the deal shows that investors remain interested in very specialized television channels. The Minnesota-based Hubbard family also believes that the arts are a wide-open field that can attract an affluent audience that corporate advertisers will pay a premium to reach.
Ovation represents the fourth major investment by Weinstein Co. since the two brothers started the company in October. The Weinsteins are trying to build a full-fledged media company in the wake of their split last summer from Walt Disney Co., which bought Miramax Film Corp., the company they founded.
"This is just part of our strategy to show the world that we are more than just filmmakers," Harvey Weinstein said in an interview. "Ovation puts us into the cable world."
Weinstein Co. formed a film unit to produce African American family comedies, invested in a small online social networking site, bought control of home entertainment distributor Genius Products Inc. and has released such movies as "Transamerica," "The Matador" and "Scary Movie 4."
The family and investors declined to discuss terms of the deal. Together they have contributed about $55 million to buy the channel, hire a management team and establish a fund to acquire programming, according to two sources who declined to be named because the terms are supposed to be confidential.
Besides Weinstein Co., other investors are Perry Capital, Corporate Partners II and Arcadia Investment Partners.
The channel was bought from a team of investors led by JPMorgan Chase.
Hubbard Media Group, which sold its stake in DirecTV to General Motors Corp. for $1.3 billion in 1999, will be Ovation's controlling shareholder with a majority of seats on the nine-person board. It is a subsidiary of Hubbard Broadcasting Inc., which operates TV and radio stations in Minnesota, New York and New Mexico.
The channel is Hubbard's second. Next month, the company plans to launch a movie-themed cable channel called ReelzChannel after spending six years lining up distribution agreements with major cable operators.
Launching new channels is challenging because cable and satellite operators are focused on devoting bandwidth to new services rather than adding to their already well-stocked lineup of networks.
