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Al Jazeera Buys Al Gore’s Current TV for $500M

Daily Ticker

There has been a lot of talk about the death of the TV business over the past 10 years.

And the TV business is indeed beginning to change in ways that will change the status quo for TV companies, especially networks.

But those changes are happening slowly.

And in the meantime, it's business as usual in the TV industry, which means coining money at a rate that is almost unfathomable to anyone who works in the print or digital-media or even radio businesses.

Case in point?

A cable TV network that no one watched, Al Gore's Current TV, just sold for $500 million.

Okay, it's an exaggeration to say that no one watched Current, although that's exactly what the network's best-known host, Eliot Spitzer, recently told the New York Times' Brian Stelter, but it's not an exaggeration to say that Current's ratings were lousy.

The ratings were so lousy, in fact, that the network was at risk of getting dropped by Time Warner Cable (TWC).

Nor was the programming that Current TV produces attractive to its new buyer, the Qatar-owned news organization Al Jazeera. According to Stelter, Al Jazeera plans to "shut Current" and replace it with another news network, Al Jazeera America.

So, why, exactly, did Al Jazeera pay $500 million for Current TV if no one watches Current and Al Jazeera plans to just shut the whole thing down?

Because Al Jazeera wanted access to America's TV viewers--specifically, the cable distribution contracts that enable Current to be watched in tens of millions of American households.

Even after Time Warner dumped Current instantly because of the sale, Current is available in about ~30 million American households.

That's more households than, say, another recent entrant into the U.S. cable news business, BBC, which is available in 25 million houses.

So Al Jazeera's purchase of Current, in other words, was similar to buying a crappy airline for its airport landing rights (distribution) rather than its brand or customers or current business.

Of course, those cable distribution agreements will all come up for renewal at some point.

And there is already a knee-jerk reaction by some cable systems to carrying a network that is still associated with the airing of the anti-American rants of the mass-murderer Osama Bin Laden in the years after 9/11. So it would not be surprising to see other cable systems drop Al Jazeera over time, even if the company does manage to produce a cable news channel that Americans want to watch (there are already a lot of cable news channels, and Americans don't care much about international news, which is where Al Jazeera might have an edge).

Unlike most of America's other cable networks, Al Jazeera also can't "bundle" its new network with other networks that Americans want to watch--ESPN, for example--and force the cable systems to take it.

So, unless it was hallucinating (which, frankly, it may well be), Al Jazeera can't have been confident that it will successfully preserve, much less expand, this distribution without shelling out a good deal more money in distribution payments.

Which means that Al Jazeera may have just paid $500 million for, well, nothing.

And $500 million, it's worth noting, is a lot more than some once-proud newspaper companies are selling for these days. And it's a lot more than the most successful digital news organization, Huffington Post, sold for a couple of years ago ($300 million).

The proprietor of Current TV, meanwhile, former Vice President Al Gore, will reportedly walk away with a tidy $100 million, which is more than the phenomenally successful digital news mogul Arianna Huffington walked away with.

So, to sum up:

A cable network that no one watches just sold for $500 million.

Let's hope we all die the way the TV industry is dying!