AFRICANGLOBE – Sean Combs, the hip-hop mogul now known as Diddy, has bid about $200 million for the Fuse cable-TV channel, said three people with knowledge of the situation.
Combs, 43, rose to fame as rapper Puff Daddy and has since founded fashion, liquor and media businesses, including the cable-music channel Revolt TV. He would convert Fuse, owned by New York-based Madison Square Garden Co. (MSG), into Revolt TV, which has backing from Comcast Corp, said the people, who requested anonymity because the talks are private. Combs is one of several Fuse bidders, one of the people said.
With the purchase, Revolt TV would gain wider distribution and higher subscriber fees, one person said. Fuse is available in about 74 million homes through pay-TV systems including DirecTV, Dish Network Corp and Cablevision Systems Corp, compared with Revolt TV, which reaches about 22.8 million homes and is carried by Comcast and Time Warner Cable Inc, according to researcher SNL Kagan.
“As we have stated, we are exploring strategic alternatives for Fuse, and will have no further comment during what is still an ongoing process,” Kimberly Kerns, a spokeswoman for MSG, said yesterday in an e-mail.
Keesha Johnson, a press contact for Combs, declined to comment.
Michael Senno, an analyst at Credit Suisse, estimated in a Sept. 12 report that Fuse would receive bids between $200 million and $250 million.
“An offer of $200 million seems low for almost 75 million households,” said Paul Sweeney, an analyst.
The Dolan family, which spun Madison Square Garden off from Cablevision four years ago, has been asking for about $400 million for Fuse, according to one of the people. Al Jazeera acquired Current TV for about $500 million last year. Current reached about 60 million U.S. homes. Fuse’s distribution on Comcast and Time Warner Cable would be less valuable to Diddy because they already carry Revolt TV.
Revolt made its debut on Comcast last year and airs music videos, live performances, news and interviews.
Fuse airs original programming including “Billy on the Street,” which stars comedian Billy Eichner accosting New Yorkers on public sidewalks with celebrity trivia questions, and “Big Freedia: Queen of Bounce,” a reality series featuring New Orleans musician Big Freedia.
MSG hired JPMorgan Chase & Co. to explore a sale of Fuse, according to reports. That decision was made after various parties expressed strategic interest in the TV network, Hank Ratner, the former chief executive officer, said on a Nov. 1, 2013, earnings conference call. Tad Smith replaced Ratner as president and CEO last month.
MSG was little changed at $57.55 yesterday in New York. The shares are little changed this year.
By: Andy Fixmer and Alex Sherman