Report: Oprahs Network May be in The Hole For as Much as $330MIt’s been a tough go of it for Oprah Winfrey, the former queen of daytime television. She’s been excluded from Time’s annual list of influential people and it’s no secret that her Oprah Winfrey Network (OWN) is struggling for ratings.

“[T]he new cable channel attracts less than a 10th of the audience her syndicated TV show used to pull in,” Edmund Lee and Andy Fixmer write in Business Week.

But even with lousy ratings and a loss of clout, it looks like Winfrey has yet to address her biggest problem: the increasing amount of cash OWN owes its partner, Discovery Communications.

“Winfrey’s gold-plated brand has been tarnished by the network’s slow start, but [David] Zaslav’s [executive officer of Discovery Communications and Winfrey’s partner and half-owner of OWN] bank accounts may have suffered even more,” Lee and Fixmer report.

“From its 2008 inception through Dec. 31, OWN may have lost as much as $330 million [emphasis added],” their report adds.

The Discovery channel fronted the money for OWN and, so far, that investment has not paid off. In fact, even if Winfrey’s network turns a profit in 2013, Discovery may still be forced to write off some of the $420 million it invested.

Here’s a more complete overview of the financial damage [emphases added]:

Discovery has poured at least $585 million into OWN. It contributed the Discovery Health Channel (OWN took its slots on cable systems), which it valued at $273 million, as its equity stake and loans and interest of $312 million, according to the SEC filing. (OWN’s borrowings from Discovery have tripled since the venture was formed.) The lower $420 million investment value Discovery noted in its yearend filing suggests its share of the OWN loss is $165 million and growing.

Discovery “expects operating losses at OWN to exceed the balance of equity contributions recorded by OWN,” according to the company’s filing.

But Winfrey’s name still carries some weight.

Report: Oprahs Network May be in The Hole For as Much as $330M“Advertisers still want to be a part of Oprah’s brand,” Brad Adgate, head of research at media-buying firm Horizon Media said. “It’s not a four-alarm fire yet as far as marketers go.”

But that’s not to say the network is without major problems. There have been changeups and firings at the executive level, the network was forced to reduce its 150 person staff by 30 last year, the ill-fated “Rosie O’Donnell Show” got the boot, and Discovery has had to increase its loan commitment several times (from $100 million in 2008 to $242 million last June).

Report: Oprahs Network May be in The Hole For as Much as $330MNevertheless, a couple of Discovery executives are hopeful that the savings made in network cuts as well as new contracts hammered out with cable providers will turn around the network’s money problems.

“If we grow a meaningful audience that wants to spend time with OWN, and we think that we will,” Zaslav said, “this will be a very significant asset.”

But what’s the real bottom line?

“Discovery Networks invested more than $500 million in Oprah Winfrey’s cable network, which may have lost more than $300 million,” Lee and Fixmer write.

Read the full report here.

(H/T: TV News Check)