Martha Stewart Exploring New Lifestyle Channel With Hallmark; PE Partner

Two of the most recognized American brands, Hallmark and Martha Stewart, may be joining forces behind a new lifestyle cable channel. Crown Media Holdings, the parent company of Hallmark, is holding preliminary talks with Martha Stewart Living Omnimedia (NYSE: MSO) about forming a new company jointly owned by both outfits. If the talks move ahead, the two partners may seek to bring in a third party such as a private equity partner to help fund expansion.

The rationale behind such a get-together is simple: Crown Media, which operates two programming services, Hallmark Channel and Hallmark Movie Channel, wants to tap Martha Stewart Living Omnimedia’s digital expertise, while MSLO wants a bigger stake in the TV business. And if Oprah’s getting her own channel, why not Martha?

Executives stress that the talks are in the very early stages. The result could be a much smaller joint venture deal that would have the two firms simply agreeing to launch a new joint venture channel, tentatively called Hallmark Home. According to sources, the partners have already been sounding out distributors about plans for the service. More at B&C.