Oprah Winfrey's cable network could lose $142.9 million this year amid weak ratings for its programming, SNL Financial, a data research provider covering financial, real estate and media industries, said Thursday.
OWN, launched by Winfrey and Discovery Communications Inc. (Nasdaq: DISCA), saw its ratings go up 10 percent in January to a 0.13. That's considered miniscule, however, compared to the programming investment, according to SNL, which is based in Charlottesville, Va.
Discovery had invested $312 million into OWN through December. The Los Angeles cable network's ratings for last year, however, were merely even with Discovery Health, the relatively obscure channel OWN had replaced, USA Today reported.
OWN recently canceled Rosie O'Donnell's talk show despite high hopes for the program after it failed to attract a big audience. OWN said Monday it plans to let go 30 of its 150 staff members.
The economics of a start-up cable network just don't work with the cost structure that was in place, Winfrey said in a statement.
Discovery has already exceeded its funding commitment of $189 million, according to SNL. If OWN continues to struggle and lose money, Discovery could ask Winfrey's Harpo Productions to fund more of the cost or the channel could go dark, SNL said.
Associated Press TV writer Lynn Elber said in a column this week that a key question for OWN is if it's tame, politically-correct content can work in a world dominated by shows with more blowsy charms like Walking Dead, Jersey Shore and Swamp People, which currently tops cable ratings.
Meanwhile, Discovery said it still supports OWN; it said SNL's report is riddled with inaccuracies and bad information.
The venture is on more solid ground with more business momentum than ever before, said David Leavy, a Discovery spokesman. We remain confident in the future of OWN, and the long-term value we are building.
Shares of Discovery closed Thursday down 15 cents at $48.18.