NBC Universal put out a welcome mat for a new girl posse Tuesday by agreeing to pay $925 million to buy Oxygen Media, the independent cable television channel for women launched seven years ago by talk-show host Oprah Winfrey, cable programming pioneer Geraldine Laybourne and Los Angeles TV maverick Marcy Carsey.
The sale gives Oxygen's private owners a graceful exit from a tough business. As the media landscape became more cluttered and fragmented, Oxygen found it increasingly difficult to garner attention for its shows that catered to young women and to make big ratings strides.
The Oxygen deal also demonstrates just how important cable channels have become to NBC Universal's bottom line, particularly since the NBC broadcast network's prime-time fortunes collapsed two years ago.
NBC's cluster of cable channels -- USA Network, financial news channel CNBC, Sci-Fi, Bravo and MSNBC -- contributes 50% of the company's profit.
"Cable is the real driver of this company," NBC Universal Chief Executive Jeff Zucker said during a conference call with reporters to announce the acquisition.
The sale is expected to close next month. NBC Universal plans to sell two of its Spanish-language television stations, including KWHY-TV Channel 22 in Los Angeles and another in Puerto Rico, to help finance the transaction. NBC owns two other stations in L.A.: KNBC-TV Channel 4 and the Spanish-language Telemundo station, KVEA-TV Channel 52. NBC needs to shed one L.A. outlet to comply with FCC rules that limit station ownership, and KWHY has the smallest audience.
Many in Hollywood have wondered whether NBC is plumping up its portfolio in case parent company General Electric Co. decides to sell its media arm after next year's Olympics in Beijing. In August, NBC agreed to pay $350 million for London-based Sparrowhawk Media, which has the U.K. Hallmark cable channel. In an interview Tuesday, Zucker dismissed the suggestion.
"This is a real expression of support and commitment from GE to this company," he said. "They have been willing to step up and support us in making strategic acquisitions that will help us grow our business."
The purchase price was less than the estimated $1.1 billion to $1.5 billion that some analysts expected the asset would fetch. Oxygen is available in 74 million homes, which is a sizable reach for a relatively young cable channel. Such wide distribution is increasingly rare as cable operators have gotten stingier with their shelf space because of the proliferation of channels.
