How much is the Hallmark Channel worth? Until today, its asset value was of passing interest. But now owner Crown Media
Buyers could be lured by its 68.5 million subscriber base and the channel's eight consecutive months as a top 10 cable channel in total-day ratings. Ratings have been especially strong for original programming at the ad-sponsored network.
But the cloud inside the silver lining might be the company's second-quarter results. Revenue jumped 50% year over year (which is fantastic) but didn't make its way to the bottom line. Crown posted a $56.3 million net loss for the quarter.
But don't turn your nose up and walk away -- yet. At the right price, selling the Hallmark Channel could provide a handsome boost to Crown Media's bottom line.
Look back to 2001, when Disney
The real prize in the package sold by News Corp.
In 2002, General Electric's
In 2003, Viacom
Pricing the Hallmark Channel is difficult, because the company's ramped-up spending for programming keeps EBITDA negative. Given the channel's high ratings, it can likely command more than Bravo's $18.38 per subscriber, but it's unlikely to sell for more than $30.50 per subscriber (a total of $2.1 billion). Then again, since top-10 cable assets are rarely for sale, who knows how high the price may go?
Crown Media's stock is up 20% this morning, giving the company an enterprise value of $1.7 billion. Dividing the enterprise value by the number of Hallmark Channel subscribers leads to a price of $24.81 per subscriber, right in the middle of our estimated range. Until it becomes clear that a buyer will make an offer Crown Media can't refuse, that seems a reasonable enough estimate.