It's a resounding success since the deals inception a decade ago. Everyone plus new others have made back their money.
Discovery took out loans of 330$ million against a $500 million expected loan total by 2016. OWN became profitable 2013 so another cash bridge was unnecessary.
Oprah brought in Tyler Perry and his stable of old and new shows exclusively created for OWN with him getting a probable 5% equity stake from Oprahs 50% that reverted back upon his exit next year but the stable of shows are contracted until at least 2020.
OWN has won multiple Emmys and most importantly Harpo was able to become more viable with Discovery absorbing the cost of liquidation in Chicago to move to West Hollywood production building and studio.
Harpo was able to repeat its stable of shows TOWS, Dr. Phil, Nate Berkus, Rachael Ray and Dr. Oz into another point of syndication, which means Discovery used some of that loan to pay its partner, Oprah for shows she outright or partially owns. Then they created at least another 40 shows since inception that may not have all been hits but kept 400 people from Harpo from being laid off as the company got the breather space to downsize.
Then Oprah signed a deal with Sirius XM to rebroadcast new and old shows. She basically took some of her old shows and put them on the radio.
No, read that again.
I was sitting in a car in NYC traffic and turned on the Oprah and Friends station and the REpeat of The Oprah Winfrey Show was makeovers.
I LISTENED to ----"Ooooh, that's a nice color on you. Is that your new hairstyle? That's the best coat for your frame."
That deal was $50million for 4 years.....wait for it, with free ad space for OWN.
We were friggin' IMAGINING the makeover show! Her voice sold us a makeover SHOW!
She'd done approximately $1 billion dollars in valued on air advertising of OWN before it started. But how does that translate?
You make money two ways in cable tv: Ad revenue and subscriber revenue.
So companies paid premium ad rates, as high as a million an ad for cross fertilizing spots on OWN, Oprah magazine, Sirius,
Oprah.com......wait how on
Oprah.com?
One collection of subscribers. Two affiliate sales. You click through
Oprah.com for a Kindle, affiliate tag is cookied to your computer. You buy a Kindle....or anything else, Kindle retail pricing starting at $149 and Harpo got 6%. Amazon sold $200 million worth of Kindles after she picked it as a favorite thing.....and wait for it....you got a special 10% discount for clicking through on
Oprah.com.
No, there's more......
Cable subscription rates were increased from a push by Discovery to do so. I don't have cable. But if you do, you're giving Oprah about 15 cents a month. The subscriber rate is $1.50 for the Discovery bundle of 8 channels. So Harpo gets 1/8 of the $1.50 of wait for it 90 million plus subscribers in America.
No, no, there's a smidge more.....all those India , Africa, England, Canada shows, visits and tours? To partner with four of the largest cable distributors in Europe, India, Canada and South America, using her fame/stable of shows as the vanguard to another 100 million subscribers.
But there's more!
All them shows?
Harpo is minimum 25- 50% production partner with. Another 40 shows. Reality shows run about $300,000 to $500,000 an episode, cheaper than scripted at $1-3 million.
But all them Chicago Oprah Show production teams? Moved to these new shows and who picks up the tab for the production, including employee salaries? Discovery and that $330 million loan.
But Tyler is leaving OWN for a new Viacom deal, you say?
But wait Paramount bought by Viacom bought King World.
But wait didn't King World distribute and produce the trifecta of syndication money bloc----TOWS, Jeopardy and Wheel of Fortune?
But wait wasn't the only way to keep Oprah from 1986 installments of ownership of her who through the end of her initial 4 year contract, King World cash? But at a certain point King World didn't have straight cash to keep renewing in cash so they paid Oprah to do her show in stock options and cash. When Paramount/Viacom came along both had to negotiate the purchase of King World and then Paramount because Oprah was a majority shareholder from the iterations of conversions.
She owns roughly 2-5% of Viacom.
The Tyler Perry ultimate hook up, huh?
So how to valuation of Discovery, hence OWN. Between loan potential of $500 million and subscriber fees totaling $1billion plus a year per channel, 50% is worth $150-$500 million.
The Harpo kick in was 0.
Harpo is now producing hit shows, highest cable channel for women, Weight Watchers, dozens of shows in network and cable syndication and production, employee stable kept, cross fertilization advertising in magazine, online and in Best Life concerts, worldwide promotion, cost of $70 million for cash buy out of 25%, bringing Discovery interest to 70% plus. Exclusive CEO contract for her through 2025 and rerunning of her stable of shows.
Harpo will probably average $100 million in overall profits per year for the 15-17 years since inception to 2025.
1.7$ - $4 billion overall.
Discovery overall:$17-30 billion based on a platinum grade spokesperson.
Failure?
Where?
On a. $300 million dollar investment that she put in 0 of?
She's made her company leaner and had time to expand its profitability in Weight Watchers stock options----$47 million in, valuation $250-400 million by the end, optioned for high stock price, with overall 10% ownership stake.
Art sale: $140 million.
Magazine: Approximately $150 million split with Hearst every year for the past 18 years, free ad space or back charged to production companies, Discovery, others.
HBO deal. 1 movie in the can. Production deal in place.
Food deal? At least $10 million a year as it slowly expands its SKUs.
The real money game in TV /cable, is long game and ownership.
Prediction, her net worth in 2025 will be between $5-10 billion and most of the billions were made on the strength of her platinum branding and sharing of said brand, The Oprah Winfrey Show being seed money an advertising platform for Oprah to become a brand and brand curator of digital, lifestyle and physical products.
