• by Wayne Friedman , June 4, 2009

A&E Networks and Lifetime Network are headed for a merger -- one that will help streamline back-office operations under one umbrella network holding entity, according to executives.

Much of this also involves reconfiguring the existing network partnerships that will eventually see NBC Universal, a minority partner in A&E Networks, ending this cable network relationship, sources said.

Currently, Walt Disney/Hearst/NBC Universal are partners for A&E Networks and Walt Disney/Hearst for Lifetime Networks.

Near term, the resultant company will have Abbe Raven, currently A&E Networks president/CEO, running the new combination A&E Networks/ Lifetime group. Walt Disney and Hearst will each have around 43.75% stakes, while NBC will own 12.5%, according to executives.

Andrea Wong, president/CEO of Lifetime Networks, Nancy Dubuc, executive vice president and general manager of History, and Bob DeBitetto, president and general manager, A&E Network & Bio Channel, will report to Raven.

Walt Disney and Hearst each had a 37.5% stake in A&E Networks, and NBC had 25%. For Lifetime Networks, Disney and Hearst were 50-50 partners.

Talks about the restructuring have been ongoing for over a year, which Robert Iger, president/CEO of Walt Disney Co., alluded to in Disney's earnings calls.

The big change is that NBC gains access to Lifetime, which initially gets a smaller share of a larger network group. But this is only temporary. Executives say NBC's share in the new company will be downsized, eventually selling off its share entirely over time to the other partners. In the future, Walt Disney and Hearst will become 50-50 partners in the whole structure. NBC representatives did not return messages by press time.

A Walt Disney spokesman issued this statement: "We can confirm that we are in conversations with our partners on the ownership structure, however, no agreement has been reached, and we have no announcements."

Iger said the two networks have been hampered a bit in terms of cost and growth possibilities. "We leave some money on the table by not managing them as a whole, meaning one company," he said a year ago in May. "Unwinding decades-old partnerships gets kind of complicated. It takes two, and in A&E's case, three partners to tango."

He added: "There are some tax liability issues -- not that they can't be dealt with. We've talked about it over time, seeing whether there is a way to restructure in some fashion. We will continue to explore those discussions."

A&E Networks has seven domestic networks: A&E, History Channel, Bio, History International, Military History, and Crime and Investigation Networks. Lifetime has three U.S. networks: Lifetime, Lifetime Movie Network and Real Women.

The combination will give the mostly male-viewer-dominated A&E Networks and female-skewing Lifetime Network combination more clout and complimentary offerings for a wide range of TV advertisers.