Weather Seeks Shelter In a Digital Asset Sale

The Weather Co. is scanning the horizon for clear skies after stormy times these past few years.

The parent of cable network The Weather Channel has hired investment banker J.P. Morgan to look for a buyer, possibly selling its digital assets and keeping the fully distributed network, according to reports.

Bloomberg reported Aug. 20 that J.P. Morgan and PJT Partners, a boutique investment firm headed by former Morgan Stanley co-president Paul Taubman, were shopping the assets. According to Bloomberg, the digital assets — including websites and Weather Underground, as well as Weather International Networks — are the most valuable piece of The Weather Co., worth an estimated $3 billion. The Weather Channel cable network has fallen on some hard times recently: It was dropped by Verizon Communications’s FiOS TV service earlier this year and has been an easy target for distributors looking to pare down affiliate-fee costs.

There has been talk of a Weather Channel sale for about a year — that’s when the company first started to interview banks — but it heated up recently with the addition of PJT Partners and its recent write-down by Comcast. Comcast’s NBCUniversal unit owns about 25% of The Weather Co.; NBCU joined private-equity giants Blackstone Group and Bain Capital to purchase the company in 2008 for about $3.5 billion. Comcast took a $250 million write down for The Weather Co., its share of a goodwill impairment, in its most recent 10-Q quarterly statement, valuing its 25% interest at $86 million.

Comcast and The Weather Co. declined comment.

Just who would buy the assets remains to be seen. The last big transaction in the programming sector was AMC Networks’s purchase of Liberty Global’s international programming arm Chellomedia for about $1 billion in 2014. The last big domestic programming deal was in March 2013, when Comcast completed the purchase of the remaining 49% interest in NBCUniversal it didn’t already own from General Electric for about $16.7 billion.

While a tech company may be interested in the digital assets, $3 billion seems a high price to pay to break into what is already a crowded field. But The Weather Channel has strong brand recognition, which could justify paying a higher price.

According to sources familiar with the company’s thinking, Comcast is not interested in raising its stake in the channel.