Fox sold assets to focus more on its news business
Altice USA (ATUS) is acquiring digital news network Cheddar for $200 million in a transaction that’s expected to close by around July. Cheddar reaches ~40 million homes across the United States. In addition to its own networks, Cheddar distributes its content to third-party platforms. It has content distribution agreements with Comcast (CMCSA), Charter Communications (CHTR), and Altice itself. Cheddar also distributes its content through digital video platforms such as Dish Network’s (DISH) Sling TV, which reaches 2.4 million subscribers, and AT&T’s (T) DIRECTV NOW, which reaches 1.5 million subscribers.
Cheddar’s programming appeals to Millennials. Altice is buying Cheddar in order to supercharge its news business. It says its goal is to be a leader in news programming. Altice’s decision to acquire Cheddar comes after its rival Fox Corporation (FOXA) recently transformed itself in order to focus more on sports and news programming.
Altice’s revenue rose 2.9%
Fox sold its entertainment operations to the Walt Disney Company (DIS) in a $71.3 billion transaction that closed in March. The transaction saw Fox streamline its structure and add to its war chest as it looked to up its game in the sports and news businesses. When Fox announced its plan to sell its entertainment assets to Disney in December 2017, its executive chair, Rupert Murdoch, remarked that the transaction would allow Fox to pivot back to its first loves, news and sports, the Wall Street Journal reported.
With Cheddar in its portfolio, Altice is hoping to give Fox and other competitors a run for their money in the news business. Altice recorded a 2.9% year-over-year increase in revenue to $2.4 billion in the first quarter.