Left in the rain, the Weather Channel accepts an umbrella in the form of a $300m buyout

Entertainment Studios, a TV company owned by former comedian Byron Allen, bought the Weather Channel off of private equity’s clearance rack for $300m — after the brand changed hands for $3.5B in 2008. Skies were sunny when the Weather Channel launched in the ’80’s, but clouds began to gather in ’96 when the network launched […]


March 26, 2018

Entertainment Studios, a TV company owned by former comedian Byron Allen, bought the Weather Channel off of private equity’s clearance rack for $300m — after the brand changed hands for $3.5B in 2008.

Skies were sunny when the Weather Channel launched in the ’80’s, but clouds began to gather in ’96 when the network launched its back-stabbing stepchild, Weather.com, to get into the internet game.

Consumer preferences are harder to forecast than weather

Viewers rapidly migrated to the internet, limiting the Weather Channel’s leverage when negotiating broadcast contracts and setting the stage for them to get dropped by both DirecTV and Verizon

Attempting to keep viewers on the tube, the Weather Channel invested in sensational original programming — but the plan backfired. Turns out, Weather Channel viewers actually want to watch weather forecasts, not “Fat Guys in the Woods.”

Fighting to stay relevant is expensive

Unable to weather the storm, the newly broadened “Weather Company” put itself up for sale — ultimately selling out to Bain, Blackstone, and Comcast for $3.5B (less than the predicted $5B). But to make matters worse, private equity’s umbrella came with strings attached. 

The PE consortium disbanded the Company, selling Weather.com to IBM for $2B in 2015. But, having recouped their remaining investment already thanks to #managementfees, the equity sharks left the Weather Channel to slowly die — which is exactly what it was doing until its recent purchase.

Daily briefings, straight to your inbox

Business and tech news in 5 minutes or less

Join over 1 million people who read The Hustle

Psst

How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

Data shows where markets are headed.

And that’s why we built Trends — to show you up-and-coming market opportunities about to explode. Interested?

Join us, it's free.

Look, you came to this site because you saw something cool. But here’s the deal. This site is actually a daily email that covers the important news in business, tech, and culture.

So, if you like what you’re reading, give the email a try.