Discovery Buys HGTV Parent Company Scripps in $14.6 Billion Deal
HGTV will soon have a new home: Discovery Interactive announced Monday morning that they would acquire Scripps Networks Interactive in a cash and stock deal valued at $14.6 billion.
The deal is expected to boost the companies’ leverage when negotiating with pay TV services, they said.
More channels means more negotiating power when it comes to getting the networks into “skinny bundles,” or economy priced cable packages—or even the ability to launch their own, according to CNBC.
CNBC also reports that with the additional lineup, Discovery “can cut costs and use Scripps’s shows to further its international reach.”
Discovery’s Animal Planet and Discovery Channel have a largely male viewership, whereas Scripps’ HGTV, DIY Network, Food Network, Cooking Channel, and Travel Channel cater to a majority female audience. Combined, the new company will have 20 percent total cable viewership.
But as cable competes with streaming services, networks have had to cover their bases. After ending ties with Netflix in 2016, Scripps recently inked a deal with rival Hulu for a bundle of lifestyle programming to stream on their service.
This isn’t the first network merger we’ve seen this year, or even this month; QVC announced it was buying rival shopping network HSN earlier in July for $2.1 billion in stock.
Discovery, which has tried to buy Scripps on two previous occasions, outbid Viacom this time, with a deal that is 70 percent cash and 30 percent stock. Since last week when mentions of the deal started, Discovery’s stock prices have gone up 3 percent, and Scripps’ is up nearly 30 percent. The deal is expected to be finalized in early 2018.