Weather Channel + Website/Newspapers/TV Stations=$5 Billion?

We’re still trying to get our heads around the $5 billion valuation assigned to Landmark Communications by the news outlets reporting its on-the-block status. A full-distributed cable network with a great brand and a prime web property, we would expect Weather Channel to get a healthy multiple. But $5 billion?

Landmark also owns two healthy CBS affiliates in Las Vegas and Nashville, and a slew of local newspapers, which generate the majority of Landmark’s cash and could be worth hundreds of millions. Landmark says it booked $1.75 billion in revenue in 2006. CNBC sources said $300 million of that is attributable directly to Weather Channel and $100 million (and growing) to

But one of the purported bidders for the company, NBC U, set the current value of a cable channel at $12 a sub with its $925 million acquisition of Oxygen last fall. By that metric, Weather Channel would be worth $1.14 billion on its own. Would NBC U be willing to double, even triple that? They might if it meant finally becoming a player on the web without its myriad cumbersome ties to Microsoft, important as ad dollars shift to the Web.

Another reason the price could hit bubble-level proportions is that it fits remarkably well within the portfolios of four of the biggest buyer/builders of cable channels, Time Warner (whose CNN is also based in Atlanta), Comcast, News Corp, and NBC U, meaning a potentially robust auction.

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