BREAKING NEWS & VIEWS
Is Hearst 's 20% Stake in ESPN Now Worth $13.2 Billion?
Monday, November 26, 2012
In the aftermath of News Corp. buying a 49% stake in the Yes Network on Nov. 20, analysts pegged the New York Yankees' cable channel value at $3 billion. That, in turn, led Sanford C. Bernstein analyst Todd Juenger to estimate ESPN's net worth to be $66 billion.
That is quite a potential net haul for Hearst Corp. On Nov. 8, 1990, CEO (since 1979) Frank Bennack, Jr., negotiated the purchase of RJR Nabisco's 20% stake in ESPN for "between $175 million and $185 million." Using the Juenger valuation, that means that Hearst's share in ESPN has appreciated by nearly $366% to $13.2 billion.
It also meant that then-Paul Kagan associates media analyst Larry Gerbrandt was spot-on in telling The New York Times (Nov. 8, 1990) that the price was "surprisingly low" because it was 20% to 30% less than what might have expected prior to the  credit crunch and concurrent soft-deal environment. The price also reflects concern about advertising spending [in 1991]."
That certainly helped enhance the stature of the Los Angeles-based Gerbrandt, who is now Janas Consulting managing director.
The biggest beneficiary from ESPN's growth is, of course, Walt Disney Co. It acquired the 80% stake as part of the May 1995 purchase of CapitalCities ABC for $19 billion. That sum is now dwarfed by, per Juenger, Disney's share in ESPN being worth $52.8 billion.
If you have breaking news to share please contact min's editors.
min's Rising Stars Awards
Final Deadline: Oct. 9
The Economics and Organizational Structure of a Custom Content Studio Webinar
October 13 1:30 - 3 p.m.
Social Media Boot Camp
November 10 | Yale Club, NYC
Editorial and Design Awards Breakfast
November 18 | Yale Club, NYC
See all events and awards
Get even smarter. Need a quick primer on a media topic? Download a white paper!
Optimizing Your Printer Services - By MRI
Media Insights: minsider Viewpoints from the Front Lines - By min
|Copyright © 2015 Access Intelligence, LLC. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of Access Intelligence, LLC is prohibited. For more details please see Terms and Conditions.|