That's how much the private equity fund OpenGate Capital has agreed to pay Macrovision for the unprofitable magazine and all its liabilities. The cover price, by way of comparison, is $2.99.
Take this magazine -- please
To sweeten the deal even further, Macrovision is loaning OpenGate up to $9.5 million to help get going -- at a very friendly 3% interest.
"I'd borrow from Macrovision any time," one investment banker said of the terms.
The terms were not disclosed when Macrovision said Monday it had struck a deal with OpenGate, but emerged in a Macrovision filing to the Securities and Exchange Commission yesterday.
For Macrovision, the deal clears from its books a money-losing print magazine and its 3 million subscribers who need to be serviced.
It acquired the title when it bought Gemstar-TV Guide for its digital assets last January. But the magazine lost about $20.3 million in 2007, according to Gemstar's 10-K filing for the year ended December 2007. Gemstar said in that 10-K: "We currently anticipate continuing, but declining, losses for the next two to three years."
OpenGate believes it can turn the title's liabilities into profits. "The reason we acquired this business is simple," OpenGate managing partner Andrew Nikou told AdAge.com yesterday. "It needed additional investment. We're investing in this company to take it to the next stage."
Macrovision is selling cable's TV Guide Channel separately.
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