Oprah Gets Her Own Cable Channel. Will Discovery Get Oprah?

What's Oprah Winfrey worth to Liberty Media's Discovery Communications? About $420 million. That's essentially how much Discovery paid her today when it gave her control of Discovery Health Channel. The cable channel will now become OWN: The Oprah Winfrey Network.  A deal sweetner:  Oprah throws in her Oprah.com website, which claims 6 million uniques.

Discovery is handing Oprah 50% of Discovery Health, which under Winfrey's control will compete directly against NBC U's Oxygen, We, Lifetime, and any other networks targeting women. Last fall NBC U paid $925 million for Oxygen -- the equivalent of $12 a subscriber. At those same rates, Discovery Health's 70 million homes would be worth $840 million.

The question: How much will the value of the channel increase once Oprah stamps her brand on it? That depends in part in how much Oprah herself shows up on the network -- there are currently no plans to run her syndicated show on the channel. So far, Winfrey has had few failures extending her brand. Her magazine defies industry trends and her XM Radio channel "Oprah & Friends" does well, even though she rarely appears.

The deal solves what Discover does with the underperforming Discovery Health, which has a fraction of the viewers of Discovery Channel or TLC. It also solves the riddle of what Oprah does next; she has said, repeatedly, that she wants to retire from the daily grind of her syndicated show -- but she never does. Her syndicated show is sold to mostly ABC stations through the 2010-2011 season. Winfrey and Discovery will agree on a CEO for OWN, which will be spun out as a separate company. Oprah.com gets 6 million unique visitors and 80 million page views a month.