Analyst Says Failure Of Own Could Cost Discovery $143 Million

Unless it can engineer a massive turnaround of Oprah Winfrey's OWN cable network, Discovery Communications could end the year reporting a $142.9-million loss, according to SNL Kagan analyst Derek Baine. Clearly Baine believes such a turnaround is unlikely and that Discovery will likely be forced to cut the license fee it charges cable operators to carry the channel. Moreover, he observes, "we're expecting a big write-down in the first quarter and we would not be surprised to see Discovery ask Oprah Winfrey's Harpo Productions to finance some of the network's losses going forward." And while Oprah's Next Chapter may be drawing decent ratings on the network, they come with huge production expense. "Without a significant ratings boost by year-end, this could be Oprah Winfrey's last chapter in the cable network industry," Baine concludes. Discovery dismissed Baine's report as inaccurate and maintained that its venture with Winfrey "is on more solid ground with more business momentum than ever before." It expressed confidence "in the future of OWN and the longterm value we are building."



Tags: Discovery - Solid Ground


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