MUMBAI: NBC Universal has acquired Sparrowhawk Holdings and its global portfolio of pay TV channels, including the international (non-US) Hallmark Channels, from Providence Equity Partners, 3i and management shareholders.
The announcement was made by NBC Universal president and CEO Jeff Zucker, NBC Universal International president Peter Smith and Sparrowhawk Media chairman David Elstein.
Under the terms of the agreement, NBC Universal will acquire the 18 feeds of the international Hallmark Channels, which air across 152 territories to more than 60 million subscribers in the UK, Europe, the Middle East, Africa, Australia, Latin America and Asia.
The acquisition by NBC Universal represents a major step forward in its strategic commitment, announced by Zucker in April, to more than double the size of its international cable channels in the next two to three years. Sparrowhawk’s channel brands will be added to NBCU’s extensive portfolio, which includes the Sci-Fi, 13th Street, Studio Universal and Universal Channel brands.
Zucker said, “This is a perfect strategic investment for NBC Universal and illustrates our commitment to growing our company internationally. It is another step, among several we will take in the next year, to transform our entire portfolio, with an eye toward high-growth areas. Our combined assets will now allow us to build leading global brands and create scale in the international marketplace. The Hallmark Channels’ geographic breadth is of particular importance to us, as it will bolster our position in existing markets and boost our growth in Asia and Central and Eastern Europe.”
Upon completion, the agreement will augment NBCU Global Networks to more than 30 channels in total, with ongoing plans to expand to more than 50 channels over the next two – three years.
Smith commented, “This acquisition is an integral part of our international expansion strategy. The Hallmark Channels are a well-established channel brand, astutely positioned for strong future growth. Movies 24, KidsCo and Diva TV are exciting new channel brands, all poised for major expansion, which will fit seamlessly with our international growth plans.”
Elstein added, “Since acquiring the Hallmark Channels business, Sparrowhawk has significantly increased its scale, launching additional channels and feeds, enlarging the staff and embarking on a major joint venture in the form of KidsCo. We have also signed long-term contracts with major carriage clients, and are confident of playing a growing role in the pay TV marketplace. We have not been looking for a sale, but the opportunity of joining our assets with those of NBC Universal is unique, and offers our staff, customers and suppliers the prospect of a yet more exciting and expansive future. We wish the combined venture every success under its new ownership and congratulate all our staff for demonstrating, with their hard work, the high value of the Sparrowhawk assets.”< Page Break >
The owners of Sparrowhawk, led by Providence Equity Partners and 3i, will sell to NBC Universal all of the company’s shares, so that NBC Universal will own the international (non US) versions of the Hallmark Channel, Movies 24, Diva TV and Sparrowhawk’s stake in the KidsCo joint venture. As a result of the sale, NBC Universal will also own the broadcast facility based in Denver, Colorado, and the international distribution rights to over 580 titles in the Sparrowhawk International Library (formerly the Crown Media/Hallmark Library).
In the UK market, the deal will give NBC Universal a portfolio of channels, with the UK Hallmark Channel, Movies 24 and Diva TV complementing NBC Universal’s existing UK assets: Sci-Fi Channel and CNBC Europe. Hallmark UK, the largest channel in the group, is a Top 10-rated pay TV channel in the UK and already carries leading NBCU-produced series such as Law & Order, House and Monk.
Movies 24, a made for TV movie channel, was recently launched on Sky and Virgin TV in the UK. The company has plans to roll the channel out internationally in the near future.
KidsCo, a 24/7 multi-platform global channel for children and families, was formed as a joint venture between Sparrowhawk Media, DIC Entertainment and Nelvana Enterprises in April 2007. It is planned to launch on 7th September in Central and Eastern Europe, with subsequent debuts in approximately 40 territories across Europe, Latin America and Asia.
Diva TV, a new general entertainment and lifestyle channel targeted at women is scheduled to launch in the UK on 1st October, along with Diva +1. Additionally, Hallmark +1 is planned to launch in early 2008.
On completion of the transaction, operations will be merged into NBC Universal’s Global Networks division and managed by Roma Khanna, its newly appointed President of Global Networks & Digital Initiatives. Titles in the Sparrowhawk library will be managed by NBC Universal’s television sales division, headed by Belinda Menendez, President, NBC Universal International Television Distribution.
The signed agreement is expected to close following receipt of customary regulatory approvals.