Gemstar-TV Guide Sold to Macrovision

Future of Magazine That Started It All Unclear

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NEW YORK ( -- Macrovision, a Sunnydale, Calif., software and rights-management company, has struck a deal to buy Gemstar-TV Guide, the publisher of TV Guide magazine and proprietor of interactive program guides, for $2.8 billion in cash and stock. The companies' announcement this morning settled one question raised when Gemstar put itself on the block in July -- but shed little light on the new owner's plans for the magazine that started it all.
Nowhere in Macrovision's statement is the word 'magazine' mentioned.
Nowhere in Macrovision's statement is the word 'magazine' mentioned.

In a lengthy statement to the press, Macrovision said the newly combined company will be a "leading enabler of the digital home entertainment experience and well-positioned to capture emerging opportunities across this exciting landscape." It does not mention, even once, the word "magazine."

"Users today are demanding an open, easy-to-use and integrated set of capabilities that delivery on the promise of the digital home," said Fred Amoroso, president-CEO, Macrovision. "This presents challenges to the content providers, distribution channels and device manufacturers as they struggle to quickly bring such offerings to market while preserving their unique value propositions. We are now in a position to accelerate our vision by providing an enhanced combination of capabilities in support of the entire value chain, which is designed to deliver a differentiated solution for customers."

Asked about the magazine, a Macrovision executive didn't add much clarity. "During the transformation timeframe, until the transaction is closed, Macrovision will work very closely with the Gemstar-TV Guide executive team to explore and fully understand each of its entertainment businesses and access them overall," Corey Ferengul, exec VP-marketing and solutions, said in an e-mail through a spokeswoman. "There is no decision or specific direction on any of the Gemstar-TV Guide media businesses. Until the transaction is closed, it is business as usual."

The deal is expected to close early in the second quarter of 2008.

The magazine is losing money as it continues absorbing costs from its transformation to a smaller-circulation, larger-size entertainment magazine from the old digest format. The company expects it to lose $20 million to $23 million this year, but that's much better than its original expectation of 2007 losses as high as $30 million to $35 million. Losses are expected to continue to decline for the next few years until profitability returns.

Rich Battista, CEO of Gemstar-TV Guide, called the transaction "terrific" for the company's stockholders. "We believe that the combined entity, with its complementary technologies, customers and global presence has the potential to redefine the consumer entertainment experience and drive significant additional stockholder value."
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