Joe Flint, Los Angeles Times (MCT) , Published March 22 2012
Big losses for Winfrey's OWN? Discovery refutes report of $142.9 million in lossesLOS ANGELES - Things may get darker before they get brighter at OWN, the cable network launched by Oprah Winfrey and Discovery Communications.
Winfrey and Discovery - the cable programming giant that is Winfrey's sugar daddy on OWN and has already pumped over $300 million into the struggling start-up - have in the last several days announced a round of layoffs, a new executive structure and the cancellation of the pricey and low-rated talk show starring Rosie O'Donnell.
Now a top media analyst casts more clouds on OWN.
In a report released Wednesday, analyst Derek Baine of influential consulting firm SNL Kagan projected that OWN could lose $142.9 million in 2012.
Baine's report comes just days after OWN canceled O'Donnell's talk show and announced it was cutting 20 percent of the network's staff.
“OWN's staff reduction and the cancellation of ‘The Rosie Show’ are clear signs that the network is struggling,” Baine wrote, adding that reining in costs “will only do so much to keep Discovery Communications Inc. from pulling the plug on the network if ratings continue to remain low.”
A top Discovery executive questioned the validity of Baine's report.
“The report is riddled with inaccuracies and bad information,” said Discovery Senior Executive Vice President David Leavy. “The venture is on more solid ground with more business momentum than ever before.”
Leavy, who earlier this week told the Los Angeles Times that Discovery had no plans of bailing on OWN, reiterated that the company remains “confident in the future of OWN, and the long-term value creation we are building.”
Discovery insiders note that the financial picture at the channel will improve next year when the bulk of cable and satellite operators start paying significant fees to carry OWN.
(c)2012 the Los Angeles Times
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