Al Jazeera pays $500 million for Gore's Current TVBy ALEX SHERMAN and CHRISTOPHER PALMERI
January 03. 2013 9:04PM
NEW YORK - Current TV, the network co-founded by former Vice President Al Gore, was sold for about $500 million to Al Jazeera, the Qatar-based cable-news channel, according to two people with knowledge of the deal.
The proceeds represent an eightfold increase from the $60 million Gore and his partners paid for its predecessor in 2004, said one of the people, who asked not to be named because the terms are private. Gore, chairman, and Joel Hyatt, a co-founder and chief executive officer, announced the sale Wednesday, without providing financial terms.
"We are proud and pleased that Al Jazeera, the award-winning international news organization, has bought Current TV," they said in the statement.
Al Jazeera will replace existing shows with its own this year, according to a statement from the buyer.
The move expands its U.S. footprint beyond the pay-TV providers that carry the programming. Current TV, a news and opinion channel, reaches almost 60 million U.S. homes. Al Jazeera's English network was started in 2006 and reached 250 million households in 130 countries, according to its website.
"Current Media was built based on a few key goals: To give voice to those who are not typically heard; to speak truth to power; to provide independent and diverse points of view; and to tell the stories that no one else is telling," Gore and Hyatt said in the statement. "Al Jazeera, like Current, believes that facts and truth lead to a better understanding of the world around us."
Stan Collender, a spokesman for Al Jazeera with Qorvis Communications, said the company declined to comment on the price. He said Al Jazeera in the United States is carried by seven companies and reaches 4.7 million households.
The new channel will be based in New York and will double Al Jazeera's U.S. payroll to more than 300, according to the statement.
Current TV generated operating cash flow of $16.3 million on revenue of $108 million last year, according to the media research firm SNL Kagan.
The $500 million price "sounds high," said Derek Baine, a cable analyst with SNL Kagan. "It's a pretty risky deal for them."
The network's investors included funds controlled by Los Angeles billionaire Ron Burkle and San Francisco money manager Richard Blum, according to a 2008 Securities and Exchange Commission filing when the company unsuccessfully sought to sell stock to the public.
Blum is married to Sen. Dianne Feinstein, D-Calif.
The owners introduced Current TV in 2005 after purchasing the network from Vivendi.
Some pay-TV systems may choose not to carry the channel. Time Warner Cable Inc., the second-biggest U.S. cable company, said it would stop carrying Current TV with the ownership change. The cable provider carries Al Jazeera programming in New York City, according to the Al Jazeera website.