• by Wayne Friedman , November 5, 2009

Scripps Networks Interactive has entered into an agreement to buy a majority stake in the Travel Channel from Cox Communications. The deal is valued at a pricey $975 million.

Scripps will form a new programming joint venture for Travel, which will also include the Food Network, DIY Network and HGTV. Scripps will control 65% of the new venture, and Cox will control 35%.

Back in June, the Travel Channel was believed to be worth between $600 million and $700 million. Two years ago, Cox exchanged a 25% share in Discovery Communications for Travel when it was worth an estimated $1.28 billion.

The price tag for Travel by Scripps is around 17 times net earnings -- well above the industry average, which is around 7 times earnings, according to Pali Research. Discovery and Scripps Networks currently trade around a 12 multiple. NBC bought the Weather Channel in 2008, before the recession, for $3.5 billion -- or 20 times the network's net earnings.

Scripps Networks will discuss the transaction during its earnings call with analysts on Nov. 6.

Recent interest from News Corp. in a possible purchase of the cable channel drove up the price. Travel Channel is one of the older established cable channels, with 95 million U.S. subscribers.

Programming analysts say Travel has few high-rated shows. Its most recognized program is the food-oriented "Anthony Bourdain: No Reservations."

The acquisition structure would be similar to the one that Comcast and General Electric have been discussing about NBC Universal. Comcast would control 51% of a new publicly traded joint venture, with GE getting the other 49%.

The new venture would include Comcast's programming networks: E!, G4, Style, Versus and The Golf Channel.