The Weather Channel is reportedly moving ahead with a sale of the company that could split the business into a cable channel and a much more valuable digital operation, according to a report from Bloomberg. The move comes as pay-TV operators including Verizon have declined to carry the Weather Channel, noting that more and more users are obtaining weather information from the Internet.
Bloomberg reported that the owners of the Weather Channel -- Blackstone Group, Bain Capital and Comcast's NBCUniversal acquired the company for about $3.5 billion in 2008 -- have hired banks Morgan Stanley and PJT Partners Inc. to explore a sale. The business is being valued at around $3 billion, with much of that due to the channel's digital operations that stretch across Weather.com, Weather Underground and Weather Services International. The companies involved in the topic declined to comment to Bloomberg.
Verizon's FiOS service dropped the Weather Channel in March, explaining that "in today's environment, customers are increasingly accessing weather information not only from their TV but from a variety of online sources and apps." Verizon said it would instead direct its users to its own AccuWeather Network.
Likely as a result of the move, Comcast in July took a $252 million impairment charge related to its investment into the Weather Channel. Comcast valued its stake in the Weather Channel at $86 million, down from $335 million at the end of 2014.
"The old cable model is sort of like the DVD model of Netflix," Weather Channel CEO David Kenny told entertainment tabloid site TheWrap in July. Without going into detail on what OTT plans the network has, he said the Weather Channel "won't be a linear channel the way we know it today."
The Weather Channel is now in 89.7 million homes, down from nearly 100 million just four years ago.
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