Tyler Perry Is Great For OWN, And No Big Loss For TBS And Lionsgate: Analyst
Cowen and Co analyst Doug Creutz makes a plausible case, although not completely persuasive one, for his prediction this morning that Tyler Perry’s decision to make OWN his TV platform will work out for everybody. Creutz acknowledges that details haven’t been announced for the two new scripted series that Perry will introduce in mid-2013 on Oprah Winfrey’s joint venture with Discovery. Also, ”we’re not sure Perry’s sitcoms are a great match for Oprah’s aspirational female-targeted brand,” Creutz says. Still, he forecasts that the entertainer’s deal “could potentially bring a meaningful ratings boost to OWN, helping that network climb to profitability in FY13.” Discovery CEO David Zaslav has already promised the Street that OWN will at least break even. Indeed, Creutz says that Perry could increase the prime time audience at OWN by 10% or more even with smaller ratings than he generates at TBS.
That’s saying something, because Perry’s shows have lost a lot of punch on the Time Warner-owned network. They account for about 2% of TBS’ overall prime time audience this quarter, down from about 7% last year, Creutz estimates. As a result, he says the loss to TBS will be “modest” in the first half of 2013, and “non-material” after Q3. Meanwhile, Perry’s contribution to Lionsgate, which syndicates his shows, “has already been on the wane for the past couple of years as the runs of [Tyler Perry's House Of Payne and Meet The Browns] have ended.” Lionsgate probably makes higher profits from recent TV syndication deals than it did with Perry. So his loss “is unlikely to have a major impact on the growth trajectory” for Lionsgate’s TV business.
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