A bad month is getting much worse for Oprah Winfrey’s OWN network.
Research and investment firm SNL Kagan is the source authority for the kinds of financial information about cable channels that everyone wants to know, and that most companies don’t want to disclose. So it’s sure to attract a lot of attention with a report today from its respected long-time analyst Derek Baine, who says that Discovery may need to take “a significant write-down” in Q1 for its investment in OWN to account for “programming costs for shows that are not working, as well as severance costs for those being laid off.” Last week, the joint venture with Oprah Winfrey cancelled Rosie O’Donnell’s talk show and fired about 30 employees. Baine says he “would not be surprised to see Discovery ask Oprah Winfrey’s Harpo Productions to finance some of the network’s losses going forward. Discovery has already funded well-beyond its $189 million commitment, and they may want Harpo Productions to have more skin in the game.” Baine’s estimate of OWN’s $142.9M operating loss this year is up 33.6% from the $107M loss that SNL Kagan figured for OWN in 2011. Discovery reported a $35M loss for its equity investments last year, but that includes The Hub – which Kagan says probably broke even — as well as 3net and channels in Canada and Japan.