Discovery agrees to buy parent of HGTV, Food Network

Discovery agrees to buy parent of HGTV, Food Network

Discovery agrees to buy parent of HGTV, Food Network

The companies said Monday that they expect about $350m in cost savings. Quantbot Technologies LP boosted its position in shares of Discovery Communications by 1,035.8% in the first quarter.

Whilst this is an astronomical deal, members of both Scripps and Discovery will be looking forward to the benefits that the synergy of their companies will bring. The firm owned 41,794 shares of the company's stock after buying an additional 1,990 shares during the period. The business's revenue was up 3.3% compared to the same quarter previous year. Scripps missed its second quarter ad guidance and lowered its full-year estimates, and Discovery reported flat advertising and lower affiliate revenue. Nielsen's data cited by The WSJ, however, puts TLC, HGTV, Discovery ID, and Food Network at the top, along with Disney, as the most female-skewing cable channels across the top 20 networks in the U.S. There is also increased competition for viewers from streaming services such as Netflix Inc and Amazon.com Inc. The combined company's larger programming slate might also provide leverage in negotiations for inclusion in skinny bundles, or economy-priced cable packages that offer fewer channels than a standard contract.

In the United States, the combined firm will serve almost 20 percent of ad-supported pay-TV audiences, according to a joint statement.

"The transaction supports and accelerates Discovery's pivot from a linear TV-only company to a leading content provider across all screens and services around the world", David Zaslav, Discovery's chief executive, told investors.

The two companies are combining because they want to more effectively deliver you commercials.

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The media conglomerate Viacom VIAB, who owns Paramount Motion Pictures and popular TV networks like Nickelodeon, was also trying to buy Scripps.

The companies estimate they will have almost 20 percent of ad-supported pay-TV audiences in the U.S. as well as be home to five of the top pay-TV networks for women and a share of 20 percent of women watching primetime pay-TV in the US. Discovery said that it will evaluate the Scripps channels to figure out if any could be web-based, a move it has already taken with its own channels.

The deal "future proofs our brands on a global basis", Scripps chairman Kenneth W. Lowe said.

The deal requires regulatory and shareholder approvals. Gabelli reaffirmed a "buy" rating on shares of Scripps Networks Interactive in a research note on Thursday, July 27th. Allen & Co and JPMorgan served as financial advisers to Scripps. Any merger requires wooing the Scripps family, which holds more than 90 percent of the vote.

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