Deal Buzz: CBS to Team Up with Lion’s Gate

CBS Corp (NYSE:CBS) is in talks to acquire a  50% stake in the basic cable channel TV Guide Network (TVGN), which One Equity Partners co-owns with Lionsgate (NYSE:LGF), according to multiple sources including Deadline and The Hollywood Reporter. They cite anonymous “insider” sources. One Equity Partners is a division of JP Morgan Chase & Co. (NYSE:JPM). The deal, reportedly valued somewhere between around $100 million and the $122.4 million One Equity Partners paid Lionsgate for 49% of TV Guide Network with a 1% option in  June 2009, is less than half of the $241.6 million Lionsgate paid to buy TV Guide Network in February 2009. The deal reportedly includes the TV Guide website (TVGuide.com) but not TV Guide magazine.

Besides its CBS broadcast network, CBS Corp also co-owns the CW broadcast network, owns the premium cable network Showtime and also owns a number of international television channels. Its 50% acquisition of TVGN would be its first foray into basic cable. The deal makes sense for both CBS and Lionsgate. Both companies have a history of doing good work together. Lionsgate produced the Showtime series Weeds and produces Nurse Jackie. The partnership would allow CBS to focus on what it does best–managing a content network–and let Lionsgate do what it does best–producing content.

Lionsgate TVGN partnership with One Equity Partners had less than spectacular results and was often bumpy. Both the chairman, Allen Shapiro, and the president, Mike Mahan,  of the co-owned TVGN left recently to pursue other opportunities, despite having helped setup and finance the deal for One Equity Partners. TVGN’s president was replaced by Dennis Miller, a key consultant for Lionsgate on an interim basis, ostensibly to prepare TVGN for a a shift to a new ownership setup between Lionsgate and another investor…