“Look out Facebook!” the News Corp CEO wrote today in a tweet. “Hours spent participating per member dropping seriously. First really bad sign as seen by crappy MySpace years ago.” Easy to see why he’s still smarting over the “crappy” asset that he bought in 2005 for $508M and sold two years ago for $35M. But his warning also reflects the passion Facebook inspires among supporters and critics alike on the anniversary of its ill-fated initial public offering at $38 a share. The stock closed today at $26.25 — down 31.3% — and has been pretty much flat for more than five months. Bears say that Facebook can’t sustain its torrid growth as it faces potent competitors — including Google, Twitter and Tumblr — and a shift among users from personal computers to advertising unfriendly small screened mobile phones and tablets. “Facebook is now scrambling to boost revenues through bigger ads that take over the entire screen,” BTIG’s Rich Greenfield notes today. He contrasts that to Google+, a social network that “is not out to harm the user experience through disruptive, annoying, spammy ads, they simply want the data to improve search and other products.”
News Corp chief Rupert Murdoch this morning sent this memo to staff everywhere. Again, while the parent company logo changes after the corporation splits, the film and TV studio’s 20th Century Fox name will not:
Today I am proud to unveil our new logo, which serves as a powerful symbol of the inspiration and high bar set by our company. Like our name, the logo reflects the rich creative heritage of Twentieth Century Fox and signals the promise of the 21st century and our restless drive toward the future.
Ultimately, our new logo celebrates the powerful commitment of you and your colleagues to the excellence and innovation that will propel 21st Century Fox forward.
Click here and take a look!
Cable networks, film, and television propelled revenues for the first three months of 2013, although the company acknowledges that ad sales were hurt by ratings declines at American Idol. News Corp says it generated $2.90B in net income, +190% vs the period last year, on revenues of $9.54B, +13.5%. The top line was well ahead of the $9.14B that analysts expected. The bottom line number includes $2.43B in gains from overseas business deals, as well as $42M in costs related to the UK hacking scandal investigations and $25M in costs tied to the effort to spin off the publishing assets. With those stripped out, earnings fell 9.4% and equaled 36 cents a share – bulls-eye with the consensus forecast. Cable network revenues were +17.1% to $2.78B, with operating income +17.4% to $993M. The company says that domestic affiliate revenues were +11% but ad sales were just +2% in contrast to last year when Fox News benefited from political ads and regional sports networks had more basketball games. Life Of Pi helped to boost Filmed Entertainment revenues 17% to $2.01B with operating income +6.3% to $289M. A near doubling of retransmission consent payments and lower programming costs helped the broadcast operation see a 1.4% increase in revenues and 14.6% growth in operating income to $196M. But the Publishing unit struggled as ad sales at the Australian newspapers fell. It reported revenues -4.3% to $1.94B and operating income -34.6% to $85M. CEO Rupert Murdoch says that the company …
He produces and voices a good chunk of Fox’s Sunday animation block but Seth MacFarlane has never been on The Simpsons until now. The multitasking MacFarlane will make his debut on TV longest running scripted series’ season finale on May 19. He will guest voice as “Ben,” a married man who Marge gets to know online on a swingers site. Lisa Lampanelli is also guest voicing on The Simpsons’ one-hour Season 24 ender. Oscar host and The Family Guy, American Dad and The Cleveland Show creator, EP and voice actor MacFarlane joins a long long line of exalted Simpsons guest stars including Thomas Pynchon, Johnny Cash, Tom Waits, Buzz Aldrin, John Waters and News Corp boss himself Rupert Murdoch, who appeared in Season 10.
Tom Mockridge, the former CEO of Rupert Murdoch’s News International, has been named successor to Virgin Media‘s outgoing CEO Neil Berkett. The UK’s Virgin Media is in the process of being acquired by John Malone’s Liberty Global in a $23.3B deal, setting the stage for a battle of the billionaires in the UK pay-TV sector where Murdoch’s Sky is the number one operator and Virgin is number two. Mockridge resigned as the News International head in December 2012 after assuming the reins in July 2011 amid the phone hacking scandal. He spent more than two decades at News International owner News Corp. where he also held the posts of chief executive of European television operations and chief executive of Sky Italia. Liberty’s takeover of Virgin will be voted on by shareholders in June with the acquisition to close shortly thereafter. Berkett will leave Virgin when the deal is finalized.
No surprise about who topped the list of 2012′s highest paid CEOs at the media companies whose compensation practices I track most closely. (See here for an explanation). CBS’ Les Moonves returns to the head of the pack with $62.2M, even though his package was 11.1% smaller than it was in 2011. That was an anomaly: The top 20 collectively made $542.7M, up from $416.6M in 2011, according to company proxy statements filed at the SEC. It took $25.9M to crack the Top 10 — last year Time Warner Cable’s Glenn Britt made it with $16.4M. The most notable change in this year’s list vs 2011 is the jump by Liberty Media’s Greg Maffei to No. 2 from No. 28 as his company adjusted stock options just in case the feds change the corporate deduction this year for performance-based compensation.
Yahoo’s Marissa Mayer also joins the top 10 following her move there from Google. Her appearance also highlights a quirk in this year’s list which has more CEOs than companies: Yahoo had three CEOs last year (Mayer is still there) and there were two apiece at Sirius XM (James Meyer replaced Mel Karmazin) and Cinemark (Tim Warner is now in charge). Also, remember that this list just includes corporate CEOs, not division chiefs or board chairs. I’ll be back soon with a list of the highest-paid media execs. The numbers on the right are the amount in millions of dollars for the total compensation as reported by each company.
Here’s our list of 2012′s highest-paid media CEOs:
UPDATE, 7:32 AM: I misread the Murdoch family voting plan and want to clarify. The group will participate — but only up to 39.4% of the total after factoring out the disqualified ballots from non-U.S. citizens. The cap was spelled out in the company’s proxy last September.
PREVIOUS, 5:51 AM: The meeting will take place in NYC’s Citi Auditorium and News Corp shareholders of record as of April 19 will be able to vote, the company says this morning in SEC filings. The process may be a little complicated, though. The decision to split into two companies — one with mostly entertainment assets and the other focused on publishing — involves the transfer of 29 U.S. television station licenses. “Under U.S. federal law, no broadcast station licensee may be owned by a corporation if more than 25% of that corporation’s stock is owned or voted by non-U.S. stockholders if the Federal Communications Commission finds that the public interest will be served by the refusal or revocation of the license,” News Corp says. It has asked the FCC to let non-U.S. shareholders vote on all of the bylaw changes regarding the split but hasn’t received a response yet. If there’s no ruling by the voting date, or the FCC rejects News Corp’s request, then the company will suspend the votes of non-U.S. shareholders. Australia-born CEO Rupert Murdoch became a U.S. citizen in 1985. He and …
He’ll receive a total of at least $28.3M from both entities in the fiscal year that ends June 2014, up from $24.6M planned from News Corp for fiscal 2013, according to a company filing at the SEC this morning. The bulk of Rupert Murdoch‘s pay will come from the entertainment entity, to be called 21st Century Fox, where he’ll be Chairman and CEO. The News Corp board’s compensation committee voted to give him at least $23.3M there, consisting of a $7.1M base salary, a $10.5M target bonus, and a $5.7M target long-term incentive opportunity. Meanwhile he’ll receive $5M from the publishing unit, referred to as “new News Corporation,” where he”ll be Executive Chairman. That package will include $1M base salary, $2M target bonus, and a $2M target long-term incentive opportunity. The committee says that the amounts are “competitive and appropriate given Mr. Murdoch’s responsibilities.” What’s more, most of the additional income is tied to company performance “which will further align Mr. Murdoch’s compensation with the interests of stockholders.” His total compensation likely will be higher than the amounts in the new targets: He made $30M in the fiscal year that ended last June after adding in $7.6M change in pension value and $384,611 in other compensation — mostly for his personal use of the company plane — according to the company’s most recent proxy statement.
BBC One controller Danny Cohen has been appointed director of BBC Television, rounding out the senior management team of new director general Tony Hall. Cohen will sit on the BBC’s executive and management boards and will oversee the BBC’s four main channels as well as the BBC iPlayer and online content for BBC Television. He also now oversees BBC Films as well as the broadcaster’s drama, entertainment, knowledge and comedy genres and BBC Productions, Europe’s largest TV production group.
Cohen was named controller in October 2010 and is responsible for such series commissions as Call The Midwife, Last Tango In Halifax, The Voice UK and Ripper Street. Upcoming series include the adaptation of J.K. Rowling’s The Casual Vacancy, Starz/BBC drama The White Queen, fantasy project Atlantis and BBC America co-production Strange And Norrell. Cohen starts his new job on May 7 at a salary of £327,800. Hall recently appointed the former editor of Rupert Murdoch’s The Times newspaper, James Harding, as head of news.
NewsCorp.’s Rupert Murdoch and a coalition of buyers led by Ron Burkle and Eli Broad have been eyeing the Tribune Co. sale. But sources tell the NYT that Koch Industries, led by conservative billionaire brothers Charles and David Koch, could have a leg up on other bidders if they make an offer for all eight of Tribune’s regional papers including the LA Times, The Chicago Tribune, The Baltimore Sun, The Orlando Sentinel and The Hartford Courant. Apparently the Koch Bros are only interested in newspapers – not the TV stations – for now.
The News Corp. Chairman and CEO today Tweeted a defense of the New York Post’s controversial Thursday front-pager blasting two innocent men as “Bag Men” sought by the FBI: @rupertmurdoch: “All NYPost pics were those distributed by FBI. And instantly withdrawn when FBI changed directions.” CNN’s Jeff Zucker similarly praised his network’s coverage despite its glaring errors covering the Boston bombers. But Washington was watching. In his Friday address President Obama tsk-tsked unnamed media outlets for risking public safety with bad reporting. “In this age of instant reporting and tweets and blogs, there’s a temptation to latch on to any bit of information, sometimes to jump to conclusions. But when a tragedy like this happens, with public safety at risk and the stakes so high, it’s important that we do this right”.
UPDATE: Forget that News Corp is renaming its new separate media and entertainment business 21st Century Fox to take it into the future. 20th Century Fox is sticking to its past. ”The film studio is not changing names or logo,” a 20th Century Fox movie exec tells me today. Another tells me that the TV studios also are keeping the 20th Century Fox name. Why? Because the studios studied the situation and discovered that the name is one of the most recognizable in the world and has “real value” and “positive association” to the public, particularly overseas. (I hear that’s why the parent company is leveraging that name.) “It’s an 80-year-old brand that stands for something and means something to people,” the studio decided. Executives tell me the studio would have changed its moniker at the millennium. “But it’s long since lost the connection to the century. It’s a brand. It’s something that has lasted. The other company is brand new and begins in the 21st century.” I’m told that Rupert Murdoch and his Big Media corporation had “no issue” with 20th Century Fox retaining its name. I personally think that the film/TV studios simply didn’t want to pay to change all that perfectly good letterhead stationery. Meanwhile, Futurama keeps calling the studio ’30th Century Fox’.
BREAKING… 21st Century Fox replaces the previously announced name Fox Group for the independent media and entertainment company. The publishing side will retain the name News Corp when the Big Media corporation splits off its two main businesses. The new name will be effective with the separation and “draws on the Company’s creative heritage, while also speaking to the future as well as the innovation that defines its portfolio of businesses,” according to today’s press release. (I hear Rupert Murdoch‘s giant actually hired a naming company for this rather obvious choice unofficially pictured here.) Under the 21st Century Fox umbrella will be a global portfolio of cable and broadcasting networks and properties, including FOX, FX, FXX, FS1, Fox News Channel, Fox Business Network, Fox Sports, Fox Sports Network, National Geographic Channels, Fox Pan American Sports, MundoFox and STAR; film studio Twentieth Century Fox Film; and television production studios Twentieth Century Fox Television and Shine Group as well as its pay-television services in Europe and Asia, including Sky Deutschland, Sky Italia and its equity interests in BSkyB and Tata Sky. On June 28, 2012, News Corp announced the separation of its businesses into two separate independent companies, with the other containing newspapers, information services, and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia. The split still needs federal regulatory approval. Here is Murdoch’s memo to all employees about the new name announcement:
James Harding resigned as editor of Rupert Murdoch’s The Times neswspaper in December saying, “It has been made clear to me that News Corporation would like to appoint a new editor of The Times.” Reports suggested that Harding’s departure was the result of upset at The Times’ parent company over the paper’s somewhat critical stance during the phone-hacking scandal that had engulfed News Corp.’s UK press arm, News International. When Harding starts his new job as director of news and current affairs at the BBC on August 12, he’ll be joining another company that has seen its share of recent crises.
The BBC’s news division has been plagued by troubles in the past six months including the Jimmy Savile scandal, botched reporting at the flagship Newsnight program and walkouts by journalists. Its Panorama program is drawing fire this week over allegations that London School of Economics students were put in harm’s way during the filming of a documentary in North Korea.
Liberty Global chairman John Malone is a step closer to facing off in the British cable biz with long-time frenemy Rupert Murdoch. European authorities today cleared Liberty’s $23.3B takeover of UK cable operator Virgin Media. The European Commission said its investigation “confirmed that the transaction would not raise competition concerns, in particular because the parties operate cable networks in different Member States and because of the merged entity’s limited market position in the wholesale of TV channels in the UK and Ireland.” Liberty already operates in 10 European Union states, including Ireland, but not the UK. Virgin is the second largest pay-TV operator in the UK where it competes, notably, with the News Corp.-controlled Sky. The Commission said the combined group “would still face sufficient competitive constraint from other players.” The deal was originally announced in February. In March, we reported that Virgin Media CEO Neil Berkett will exit with $86.8M in severance, options and rewards once the transaction is completed.
Rupert Murdoch Credits Inspiration Of Margaret Thatcher
The death of Margaret Thatcher has stirred intense reaction in the UK this week. The former British Prime Minister was a polarizing figure, but Rupert Murdoch has made no secret of his respect for her. Last year around this time, he told the Leveson Inquiry into UK media ethics that he remained “a great admirer.” Today, he penned a tribute in his London Times newspaper crediting her with being “an inspiration in my business life.” Murdoch had meetings with Thatcher around the time that he was bidding to acquire Times Newspapers, but has said he never asked her for any favors. Thatcher was famous for her stance against the unions during the 1979 strikes in Britain. Murdoch in his tribute called her “a risk-taker” who inspired his own position in the newspaper strikes of 1986, “the first major strike in private industry that had been won by the owners since the war.” Without that win, Murdoch writes, “We would not have the vigorous competitive press that is a feature of modern Britain. It was the same in the television industry. We took huge risks in creating satellite television which many critics derided as the end of civilization, but as a result, we created thousands of jobs and viewers now enjoy far greater choice.” In conclusion, Murdoch wrote, “Thanks to her I have experienced in Britain many of my defining moments as a businessman.”
It looks like News Corp‘s soon-to-be-separated publishing company might not include the Dow Jones Local Media division, with Bloomberg reporting the company has hired an investment bank to explore a sale of the assets. The unit houses a group of community papers that includes the Cape Cod Times in Massachusetts and The Record in Stockton, CA. Last week, Rupert Murdoch said the new publishing operation will have about $2.6 billion cash on hand and almost no debt when it becomes stand-alone, an indication it could expand. The publishing assets lost $2.08B in the fiscal year that ended in June 2012, down from a $678M profit, on $8.65B in revenues, -4.8% (much of that decline is due to the closing of the UK’s News Of The World tabloid). The new company’s properties had 24,000 employees as of September 30, including 9,000 in the U.S., 4,000 in the U.K. and 9,000 in Australia.
I’m surprised to see Credit Suisse analyst Michael Senno’s raise his recommendation for News Corp this morning to “outperform” from “neutral.” A few weeks ago he warned that we should expect “modest” growth in this year’s upfront ad sales market. That should be worrisome for Fox, where prime time ratings are down 17% so far in the current TV season. And News Corp shares are beginning to look expensive. They opened this morning at $30.85, a 52-week high. After rising 20% in 2013, and 55.4% for the last 12 months, News Corp is approaching the all time high of $33.50 it hit in early 2000. But Senno likes just about everything he sees at Rupert Murdoch’s company as he raised his target price to $36 from $28. Mostly he believes the company can continue to squeeze cash from pay TV distributors and subscribers: By 2017 he forecasts that cable and satellite companies will pay $1 per subscriber per month for Fox Sports 1, up from about 22 cents that they currently pay for SPEED which is being rebranded as a general sports channel. Senno is optimistic that News Corp can also raise prices by rebranding Fox Soccer into a young adult-oriented FXX, and changing FUEL into Fox Sports 2. The analyst also believes Fox’s ratings will recover from the downturn that’s due in part to the off-pitch performances of American Idol …
Geoff Webster, the former deputy editor of News Corp‘s UK tabloid The Sun, is the latest to be charged with conspiring to commit misconduct in public office. Britain’s Crown Prosecution Service said today that Webster was charged with two offenses, one related to allegations he authorized £6,500 in payments for information supplied by a public official to one of his journalists, the other related to an allegation that he OK’d a £1,500 payment for information provided by an unknown public official. The crimes are alleged to have taken place between July 2010 and August 2011. The charges fall under Scotland Yard’s Operation Elveden, which stems from News Corp’s handing over 300M internal emails in an effort to cooperate with police amid the phone-hacking scandal. Webster is the fourth Sun journalist to be charged under the investigation. Former editor and News International chief Rebekah Brooks also faces charges under Elveden. Webster will appear in a London court next week.