The auction for the Travel Channel seems to have reached a fork in the road. Talk of News Corp. (NYSE:NWS) possibly dropping out of the running, according to Reuters, has surfaced while parent Cox Communications Inc. (NYSE:COX) is considering a joint venture as another possible scenario to offload the asset.
The bidding price seems to have gotten too high for News Corp. as Cox's $1.1 billion price tag has prompted the New York media giant to possibly rethink continuing to bid. However, as late as last week, News Corp. had joined Scripps Network Inc. (NYSE:SNI) as the top contenders for the Travel Channel.
Another scenario for Travel Channel that has been reported is Cox selling a 65% stake while holding on to the remaining stake and operating it as a joint venture, The Wall Street Journal said. This option might be more appealing for Cox because it'll receive some money for its asset while holding on to a stake that might be more valuable down the road.
The risk obviously is uncertainty around the future value of the Travel Channel, which could dip if advertising revenues don't pick up. Additionally, the impact of newer ways to deliver content -- such as digital video recorders, video streaming by NetFlix.com (NASDAQ:NFLX) and an up-and-coming Apple Inc.'s (NASDAQ:AAPL) iTV service -- could push viewers to circumvent watching niche cable channels and possibly erode the Travel Channel's audience. - Gerald Magpily
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