Channel One’s parent company is Primedia, Inc. Primedia is primarily a magazine publisher and it is 72% owned by Kohlberg Kravis and Roberts a leverage buyout firm. Yesterday, Primedia announced a merge with About.com. The resulting sell off of Primedia stock certainly must have spooked Primedia’s management lead by Tom Rogers. The stock dropped $4 a share from 15 1/2.
That means that Primedia lost a quarter of its worth yesterday after the announcement. Since Primedia was going to create a stock-swap with About.com shareholders, the deal may be in serious jeopardy since Primedia’s stock has plunged.
Primedia is interested in About.com for many reasons but one is it will aid in the target marketing of teenagers and preteens by Channel One. This was spoken about in the joint press conference that Rogers and About.com’s CEO Scott Kurnit participated in yesterday.
As the fortunes of Tom Rogers and Primedia continue to fade, there is more reason to expect a sale of Channel One and then there will be a house cleaning of the management. Parents, teachers, and students would greatly benefit from a sale of Channel One to a company like Disney/ABC that could then afford to remove the advertising and use it as a public service like CNN does with CNN Newsroom for teenagers.
One possible buyer may be MTV Networks. Channel One has hired one of the creators of MTV to design teen web sites for Channel One. If that doesn’t scare most parents, just think of MTV actually owning Channel One.
