Even if the ratings and carriage fees aren't huge, the value of being in nearly 100 million homes apparently is. Brian Stelter at the New York Times writes:
Cox Communications is expected to command close to a billion dollars for the Travel Channel, people close to the bidding war for the channel said on Thursday.
The company is entertaining bids from a number of media companies, including the News Corporation and Scripps Networks, three people with knowledge of the auction said. The people requested anonymity because they were not authorized by their employers to discuss the confidential process. At least one of the offers exceeds $900 million, they said.
By the ratings and revenue metrics of cable channels, the Travel Channel is undistinguished. The channel, which counts “Anthony Bourdain: No Reservations” and “Man v. Food” as its most popular shows, is distributed in nearly 100 million homes, but it earns on average just 6 cents per subscriber. It draws a modest average of 485,000 viewers in prime time.
Though $.06 a month per subscriber isn't much, but Nielsen estimates the Travel Channel is available in 93,990,000 homes. For purposes of back of the napkin math, I'm fine with calling that 100 million homes and figuring the $.06 per subscriber winds up being around $6 million in subscription revenue per month.
The cable model strives for a split between subscriber revenue and advertising revenue. If they are able to obtain a 50-50 split, that would be another $6 million a month. So back of the napkin gets it near $150 million in annual revenue. Fetching $1 billion would be somewhere around a 7X multiple of annual revenue.