CBS to convert TV Guide into new entertainment cable network

CBS Corp. (NYSE: CBS) said it struck a deal to acquire a 50 percent stake in TV Guide Network, and that it'll convert TVGN into a new basic cable network focused on entertainment programming. It'll operate the network through a 50/50 partnership with Lionsgate.

The deal, which closed on Tuesday, could allow CBS to strike distribution deals with cable operators and satellite TV providers that include retransmission-consent for its TV stations, along with increased license fees for the entertainment network. CBS didn't detail the programming that will run on the network, or the new brand for the channel, which it said would be announced "at a later date."

Formerly known as Prevue Channel, TV Guide consisted as a channel that ran scrolling TV listings in the 1990s. Interactive program guide developer Henry Yuen merged Gemstar with TV Guide in 2000, forming Gemstar-TV Guide International. After Yuen was found liable for securities fraud in 2006, Gemstar sold its interactive program guide assets and TV Guide to Macrovision, which later renamed itself Rovi (Nasdaq: ROVI). Lionsgate bought TV Guide from Rovi for $255 million in 2009, and sold half of the network to One Equity Partners in 2010.

CBS said Tuesday that it bought One Equity's 50 percent stake in TV Guide, and that it'll run the network through a joint venture with Lionsgate, which is one of the top producers of TV series and movies.

TV Guide had switched its focus from running TV listings to entertainment programming in recent years. Under Lionsgate ownership, it has added syndicated programs such as Who's The Boss and Dharma & Greg. With CBS taking a 50 percent stake, the rebranded network could challenge top general entertainment cable networks such as Time Warner's (NYSE: TWX) TBS, News Corp.'s (Nasdaq: NWSA) FX and Comcast's (Nasdaq: CMCSA) USA Network.

But CBS could also face resistance from distributors such as Time Warner Cable (NYSE: TWC) which have complained about networks that change their programming strategy  from those agreed to in carriage deals.

For more:
- see the release

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