Oprah Winfrey's OWN could record a higher loss this year, so it's predicted by SNL Kagan analyst Derek Baine. According to the senior analyst at the research firm, the network is likely to lose $142.9 million in 2012 after losing $107 million in 2011.
In a research note, Baine additionally reports that the network's co-owner Discovery could take a write-down on its joint venture with Winfrey. "We believe that there may be a significant write-down at OWN in the first quarter from both programming costs for shows that are not working as well as severance costs for those being laid off," he writes.
Baine also notes that OWN may face difficulty in getting advertisers as explaining, "With all of the bad press that the channel is getting, advertisers may tire of playing the waiting game for shows to catch an audience." Meanwhile, the cancellation of "The Rosie Show" is believed to end hopes that OWN could gain more viewers this year.
However, a spokesperson for Discovery says that the analyst report is "riddled with inaccuracies and bad information." He also insists that the network is "on more solid ground and has more business momentum than ever before," before adding, "We are superbly confident in the future of OWN and the long-term value creation we're building."
OWN has shown signs of troubles when it announced the layoffs of 30 employees as part of a restructuring and budget adjustment. The network's CEO and chief creative officer Winfrey admitted, "The economics of a start-up cable network just don't work with the cost structure that was in place."