The Cleavester Show  

NBC Universal yesterday announced the acquisition of Oxygen, a cable television channel aimed at women.

NBC said it would pay $925 million including debt for Oxygen Media, as the company is called. It has been led by Geraldine Laybourne, a longtime cable executive, and backed by prominent financial supporters including Oprah Winfrey and Paul G. Allen, the former Microsoft executive.

The price was widely seen as a bargain for NBC Universal. Several financial analysts had in recent months estimated the channel’s value at $1 billion to $1.5 billion.

Derek Baine, a media analyst for SNL Kagan who had estimated the value of the channel at about $1.1 billion, said yesterday, “When you look at the comparable prices and the historical benchmarks, you would have to say NBC made a great deal.”

He noted that NBC was paying only $12 a subscriber for Oxygen, which has about 74 million subscribers. It paid $22 a subscriber for Bravo in 2002, when that channel had 54 million subscribers.

“NBC paid $1.3 billion for Bravo,” Mr. Baine said. “There was a lot of skepticism about that deal when NBC made it. But Bravo now generates over $150 million a year in cash flow.” He estimated that Oxygen could soon generate about $100 million in cash flow for NBC.

Jeffrey Zucker, the NBC Universal president who made the deal, likened the acquisition to that of Bravo because, like that channel, Oxygen is a brand for women. Mr. Zucker said NBC Universal planned aggressive cross-promotion of all its women’s brands, which he said included the “Today” show and the Internet site iVillage.

Both he and Ms. Laybourne called Oxygen “a perfect fit” with the other NBC properties. Ms. Laybourne, who had previously led the cable division of the Walt Disney Company and once ran the Nickelodeon channel for Viacom, said she would stay until the end of the year.

Oxygen Media began in February 2000 with enormous fanfare and a group of high-profile backers, chief among them Ms. Winfrey. It aimed to be a serious contender for ratings with the Lifetime Network, the leading cable channel for women.

But Oxygen struggled early to survive as it searched for a signature style of programming, Mr. Baine said. “They burned through $300 million in financing in the first five years and only started to break even in 2005.”

In recent years, revenue has begun to grow. Ms. Laybourne said the last quarter was the best in the network’s history. That made the channel more attractive to NBC. “I think we’re catching them at a very good time,” Mr. Zucker said.

NBC executives also said that the timing of the deal was fortunate for the company, with credit markets drying up and some of NBC Universal’s logical competitors for Oxygen, like Time Warner and Viacom, apparently preoccupied with other issues. Representatives of Oxygen said that hints that another cable channel for women, WE, might come on the market also pushed the timetable of the deal.

Mr. Zucker said NBC would keep the channel’s identity as a home for young adult women viewers. “We won’t reinvent it,” he said. “They are a channel for women between 18 and 34 and we’ll go hard after that.”

Oxygen’s investors, which also included executives from the former Carsey-Werner production company, will cash out reasonably well, Mr. Blaine said.

Nancy B. Peretsman, the managing director of Allen & Company, which served as investment adviser to Oxygen, said, “There is a natural pause at the seven-year mark,” when investors ask themselves, “Do we take this to the next level or does somebody else?”