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Time Warner Cable Misses Q2 Earnings Expectations With Added SportsNet LA Costs And Declining Video Subs

By | Thursday July 31, 2014 @ 4:55am PDT

Time Warner Cable Misses Q2 Earnings Expectations With Added SportsNet LA Costs And Declining Video SubsOn the bright side: Time Warner Cable saw strong growth in broadband subs. But Q2 won’t go down as a quarter to remember for the No. 2 cable company, in the process of being acquired by Comcast. It reported net income of $499M, +3.7% vs last year, on revenues of $5.73B, +3.2%. The revenue number came close to the Street’s target of $5.74B. But diluted earnings at $1.89 a share fell short of expectations for $1.91.

Some of the weakness was due to the double whammy of increased programming costs — including for SportsNet LA, launched this year — while the number of residential video subs declined by 152,000 since March to 11.0M. Video revenues fell 4.8% to $2.55B while programming costs increased 3.9% to $1.3B. The declines were somewhat offset by price increases.

The broadband business carried the company. It added 67,000 subscriptions for a total of 11.4M while revenues increased 12.8% to $1.6B. TWC also added 79,000 phone customers, ending the quarter with 4.9M, although revenues slipped 5.2% to $490M. Looked at another way, the number of single and double play customers declined while the number of triple play subs increased for a total of 14.5M customer relationships, down 34,000.

CEO Rob Marcus says TWC “delivered the best second quarter subscriber volumes in years” as it “made terrific progress on our strategic and operating initiatives.” The company is “working hard to complete our merger with Comcast.”

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Hungry AMC Networks Angling For Major BBC America Stake

By | Wednesday July 30, 2014 @ 2:41pm PDT

Hungry AMC Networks Angling For Major BBC America StakeThe cable networks company known for its hits The Walking Dead and Mad Men could use the deal to further establish itself as a leading distributor of premium content — strengthening its ability to sell ads and negotiate high fees from cable and satellite companies. Bankers and executives are working on a cash and stock deal, I’m told — but with no dollar figures yet.

The arrangement would give AMC Networks just short of a majority stake in BBC America, unlike a previous representation arrangement with Discovery, which did not own equity. While BBC Worldwide would still control the channel and brand, AMC would be able to influence programming decisions and handle BBC America’s domestic ad sales and distribution. Talks have been ongoing for several months, but a deal isn’t complete. Bloomberg was first to report the negotiations.

AMC and BBC know each other well. They’re co-producers of The Honorable Woman, which premieres tomorrow on SundanceTV. Last year they partnered on Sundance’s Top Of the Lake, and they have an upcoming production, One Child.
Read More »

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Netflix And AT&T Reach Interconnection Agreement

By | Tuesday July 29, 2014 @ 4:10pm PDT

Netflix And AT&T Reach Interconnection AgreementAT&T customers should start to see fewer buffering delays when they watch Netflix as a result of the new interconnection deal. The actual agreement was made in May. Since then they’ve “been working together to provision additional interconnect capacity to improve the viewing experience for our mutual subscribers,” the companies say. “We’re now beginning to turn up the connections, a process that should be complete in the coming days.”

Related: FCC To Investigate Internet Peering Disputes

Netflix has complained that the deals that require it to pay to improve the quality of its transmissions effectively run afoul of the FCC’s goal to promote net neutrality. It has agreements with Comcast and Verizon similar to the new one with AT&T. Comcast, for one, has countered that Netflix is one of the biggest users of Internet bandwidth. What’s more, net neutrality rules apply to the links between an Internet service provider and the consumer, not the ones connecting content providers to ISPs.

Related: The ABCs Of Net Neutrality

The FCC is investigating these so-called peering arrangements as part of its effort to craft new net neutrality rules.

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Will Cable Companies Slash Taxes By Moving Their Lines Into REITs?

By | Tuesday July 29, 2014 @ 10:56am PDT

Will Cable Companies Slash Taxes By Moving Their Lines Into REITs?That’s the question of the day in telecom after tiny Windstream Holdings said it plans to take advantage of the tax-cutting strategy. That sent its shares up 13.9% in mid-day trading, and boosted most other cable and telecom company stocks on a relatively flat day for the market.

Windstream took everybody by surprise this morning when it said that it will spin off its fiber optic and copper cable lines into a publicly traded real estate investment trust (REIT). The TV, broadband, and phone provider plans to pay $650M a year to lease the lines. What’s more, Windstream says it received a “favorable private letter ruling” from the Internal Revenue Service endorsing the gambit. That will enable the company to slash its debt by $3.2B, freeing cash for broadband upgrades, with a REIT that’s “positioned to provide an attractive dividend to shareholders and grow revenue through lease escalation, capital investment and acquisitions.” The Arkansas-based company had 421,100 digital TV customers and 1.2M broadband subscribers in March.

Image (7) verizon-att-comcast__140606182627-275x138.jpg for post 739499“To our knowledge, this is the first instance of telecommunications network assets being contributed to a REIT,” says MoffettNathanson Research’s Craig Moffett. Can others follow suit? Perhaps. Everyone in cable and telecom “will surely look closely at emulating Windstream because the tax savings are potentially so significant,” he says. Moffett’s back-of-the-envelope calculations show possible tax savings of $5.2B for AT&T, $4.2B for Verizon, $2.3B for Comcast (with Time Warner Cable), and $235M for Cablevision. But that would change if Congress jumps to plug what might be seen as a huge loophole in the tax laws. Read More »

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CNBC And Fox Now Added To Apple TV Lineup

By | Tuesday July 29, 2014 @ 9:43am PDT

CNBC And Fox Now Added To Apple TV LineupYou need a pay TV subscription to see the CNBC and FOX NOW programming  – and not all providers have deals to offer the business news and entertainment services online to their customers. Still, these are big additions to Apple’s streaming platform, which the tech giant is eager to promote after initially characterizing it as a mere hobby.

Apple TV becomes the first TV-connected streaming platform to offer a “full-featured CNBC TV Everywhere experience,” says NBCUniversal TV Everywhere GM Alison Moore. Users can watch the channel live, and see shows or clips on demand.  CNBC President Mark Hoffman says that makes it possible for viewers “to be in control of their experience.” Pay TV providers authenticating the service include AT&T U-verse, Cablevision’s Optimum TV, Comcast’s Xfinity TV, Cox, DirecTV, Dish Network, RCN, Suddenlink, Verizon FiOS and Wide Open West.

Those accessing FOX NOW will be able to see full episodes of shows including Brooklyn Nine-Nine, Sleepy Hollow, The Simpsons, Family Guy, New Girl and Glee beginning the day after they first air. FOX NOW will offer bonus interviews and clips from its music shows including So You Think You Can Dance and American Idol. The Apple-based service can tap user preferences to recommend programming. Its Post-Play feature can facilitate binge viewing by automatically showing the next episode in a series. FOX Now is also available on iPhones and iPads as well as Android devices, Xbox, Roku, Samsung Smart TVs, and Windows 8. All of the major pay TV providers, except DirecTV, authenticate FOX NOW on Apple TV.

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Time Warner Shares Could Match Fox’s Offer Without A Deal: Analyst

Time Warner Shares Could Match Fox’s Offer Without A Deal: AnalystTime Warner CEO Jeff Bewkes just won an indirect endorsement for his argument that his shareholders would be better off letting him lead the company instead of accepting a cash and stock offer from Rupert Murdoch. Without a deal, Time Warner shares should hit $95 within a year, and there’s “a credible stand-alone bull case valuation of $105,” Morgan Stanley Research’s Benjamin Swinburne says today. The numbers are important: Time Warner rejected Murdoch’s $85 a share bid, and many analysts say that he could go as high as $105 before choking on the cost. That probably wouldn’t impress shareholders if they believe that they’ll see that price without the risk that would come with such a big deal.

Swinburne’s analysis begins by accepting Bewkes’ forecast that cable and satellite company payments to Time Warner’s Turner networks will grow at double digit rates each year over the next five years. “Given 7 out of the top 10 distributors have already renewed (as of early ’14), we see limited downside risk to [the] guidance,” the analyst says. Those payments now account for 20% of Time Warner revenues.

HBO also could grow subscriptions and revenues by tinkering with its pricing and deals with pay TV distributors. It has about 30M domestic subscribers, but the below-average penetration rates at Time Warner Cable and Dish Network suggest that there are “key opportunities for HBO to drive further revenue-generating subscriber growth.” Along that line, Bloomberg reported today that HBO is considering expanding a test with Comcast, introduced last year, that offers broadband service, basic TV, and HBO … Read More »

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TCA Postmortem: Consolidation News Framed Press Tour Conversation

By | Friday July 25, 2014 @ 8:48am PDT
Nellie Andreeva

TCA Postmortem: Consolidation News Framed Press Tour ConversationWith the power of fans growing and the influence of TV reviews declining in the age of social media, the once marque summer TCA press tour has been taking a back seat to Comic-Con. Once again, the Los Angeles critics convention served as a warm-up for the San Diego geekfest, with the networks trying to save their noisy announcements for the Con. But what would’ve been another uneventful summer TCA was livened up by two big consolidation stories that broke in the first and second week — 21st Century Fox’s decision to put both the broadcast network and 20th Century Fox TV under the studio’s chairmen and CEOs Dana Walden and Gary Newman, and the company’s (for now unsuccessful) bid to acquire Time Warner.

TCA Logo New (2)The first news, which had been widely expected, was met largely with approval as an inevitable move in an industry where owning content is becoming more and more important. CBS has helped grow CSI into a billion-dollar franchise for the parent company, which owns the show. Compare that with The Big Bang Theory, which CBS developed and nurtured to a blockbuster hit that would make as much as $3 billion — for another company, Warner Bros. TV. Watching how much money it has made for WBTV, with the Chuck Lorre series, and for 20th Century Fox TV, with How I Met Your Mother, the network focused on growing its own syndicatable comedies, recently renewing CBS Studios-produced The Millers for a second season. During CBS’ TCA executive session, chairman Tassler was asked whether ownership played a role in the decision to renew The Millers over two 20th TV freshmen, The Crazy Ones, which drew bigger DVR ratings increases, and Friends with Better Lives, which showed better retention. “We will never ever, ever discriminate based solely on ownership,” Tassler said. “We feel that The Millers has a lot of great story material still imbedded in the DNA of the show.” Read More »

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Does Time Warner Need CBS To Thwart A Fox Takeover?

Does Time Warner Need CBS To Thwart A Fox Takeover?Time Warner CEO Jeff Bewkes has a problem. Fox CEO Rupert Murdoch is preparing to sweeten his offer for the owner of Warner Bros, CNN, and HBO after it rejected an $80B cash-and-stock proposal last month. And Bewkes, who says he wants to keep Time Warner independent, has few takeover defenses. What can he do? Here are a few of the leading options that Time Warner execs and their advisors at Citigroup are weighing.

Corporate And Media Leaders Attend Allen & Company Media And Technology Conf.Combine with CBS: This would make Time Warner toxic for Fox: The FCC would not allow Murdoch to control two of the four biggest networks, and two of the largest TV station groups with overlaps in the nation’s largest markets.

And the business logic of a Time Warner-CBS combination is compelling. CBS chief Les Moonves would like to diversify his company to make it less dependent on domestic TV advertising. (He has already said that he’d like to buy CNN if Fox prevails with Time Warner and puts the news channel on the block.) Moonves also has made it clear that he’d like to play a bigger role in movies — his CBS Films appears to be struggling to figure out its identity. CBS could address these concerns by blending with Time Warner’s cable channels and movie studio.

The chief obstacle is that CBS is controlled by Sumner Redstone, who also owns Viacom. He hasn’t wanted to give up either property, and some bankers believe he’d prefer to … Read More »

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Hey Tom Cruise, Johnny Carson, George Clooney, Frank Sinatra, Channing Tatum And Others: SAG Owes You Money But Can’t Find You

Hey Tom Cruise, Johnny Carson, George Clooney, Frank Sinatra, Channing Tatum And Others: SAG Owes You Money But Can’t Find YouEXCLUSIVE: The Screen Actors Guild exists to collect wages and benefits and disperse them to dues-paying members, but a Deadline investigation begs a multimillion-dollar question: Why are so many living and deceased thesps owed unclaimed residual checks worth $40 million, money that is drawing interest for the union’s general fund? The roll call of Who’s Owed is a Hollywood Who’s Who, including more than 75 Oscar-winning actors or their estates and dozens of Emmy winners who likely are unaware they are owed residuals. A union spokesperson tells Deadline the union is working to locate those members, but it is difficult because people change agents and don’t notify the union, or they move and mailed checks are returned by the post office and never cashed.

Still, could it really be that hard to find some of these performers? Deadline found that if you threw a rock on the red carpet of any major industry event, chances are you’d hit somebody SAG owes money to.

Jodie Foster Warren BeattyLike: reigning Best Actress Oscar winner Cate Blanchett, and Tom Cruise, George Clooney, Bradley Cooper, David O. Russell, and former Oscar host Steve Martin. Or Michael Douglas, Dustin Hoffman, Elizabeth Taylor, Jodie Foster, Warren Beatty, Jay Leno, Sally Field, Sean Connery, Christopher Plummer, Channing Tatum, James Franco, Jim Carrey, Sharon Stone, Owen Wilson, Justin Timberlake, Melissa McCarthy, Julianne Moore, Pierce Brosnan, Zac Efron and Andrew Garfield.

The music side of the ledger of Who’s Owed reads like a wing … Read More »

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Why Did Netflix Shares Fall Today?

By | Tuesday July 22, 2014 @ 1:19pm PDT

Why Did Netflix Shares Fall Today?The stock price fell 4.6% to $431.09 even though the Q2 earnings reported last night were largely in line with analyst expectations, subscriptions were up impressively, and management forecasts were upbeat. What gives?

The simplest explanation is that Netflix always is susceptible to downturns because its shares are so expensive, reflecting investor optimism about its prospects. They trade for about 128 times the company’s earnings — a stark contrast to more stable media giants such as Fox, Comcast, Time Warner and CBS whose stock prices equal about 20 times earnings.

Related: Netflix Says It Sees Little Change If Fox Acquires Time Warner

And Netflix bears found some reasons to be skittish. The company will have to boost spending to secure the content it will need to serve new markets including Germany, France, Austria, Switzerland, Belgium, and Luxembourg — and that could put pressure on earnings “as soon as next year,” says Wedbush Securities’ Michael Pachter. He’s concerned about the decline in DVD-by-mail rental subscribers; they account for “half of all operating profit for the company.” The analyst also says that Amazon’s recent streaming deal with HBO suggests that “a stand-alone subscription plan is coming” that would make the e-retailer a more potent video competitor.

Related: Wall Street Wonders: Will HBO’s Deal With Amazon Change The Online Video Game?

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NBCU Says Its Strong Upfront Ad Sales Cut Pricing Gap With Competition

NBCU Says Its Strong Upfront Ad Sales Cut Pricing Gap With CompetitionNBC and cable networks led by USA “were trading at a 20% discount to our competition” in the cost-per-viewer of ad sales before the recent upfront market, NBCU chief Steve Burke told analysts this morning. “We’re now at about a 10% discount.” Comcast‘s entertainment arm says it bucked a trend in the upfront — seen as generally down 5% vs last year — as it benefits from the growing popularity of its shows, and a decision to sell broadcast and cable ad inventory together. “If the industry was down 5% and we were up 10%, that’s a 15% difference vs what we would have done” if NBCU had sold broadcast and cable separately. “It’s a swing of $750M” that will go “a long way toward closing monetization gap.”
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Comcast Reports Mixed Q2 Financials As NBCU Films Slip, Offsetting TV Strength

By | Tuesday July 22, 2014 @ 4:13am PDT

Comcast Reports Mixed Q2 Financials As NBCU Films Slip, Offsetting TV StrengthComcast has become so big and complex that its earnings are almost always mixed — and Q2 was no exception, although the combination of soft revenue growth with strong profits sent shares up 2.1% in pre-market trading. The cable giant reported net income of $2.03B, +16.1% vs the period last year, on revenues of $16.84B, +3.5%. Analysts expected the top line to come in a little higher, at $16.95B. But earnings at 76 cents a share handily beat the consensus forecast of 72 cents.

NBCUniversal also seemed to have a split personality with operating cash flow +20.4% to $1.43B while revenues were +0.3% to $6.02B. The main Cable Networks operation saw sales grow 2.6% to $2.48B with affiliate fees +4.2% while ad sales fell 2.2%. Still, by controlling costs, the unit’s operating cash flow rose 6.3% to $914M. The Broadcast Television unit told a similar story: With rising retransmission consent fees, its revenues increased 4.9% to $1.8B. Image (4) the-voice-judges__140601175730-275x183.jpg for post 738728But ad sales fell 1.7%, which the network partly attributes to having fewer hours of The Voice than it had last year. Still, broadcast operating cash flow increased 16.2% to $240M reflecting, the company says, “a slight increase in operating costs and expenses.” Theme Parks proved to be NBCU’s most consistent performer despite the increased costs for Orlando’s The Wizarding World Of Harry Potter-Diagon Alley attraction which opened this month. Attendance and spending were both up, resulting in a 12.8% increase in revenues to $615M with … Read More »

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Netflix Touts ‘Orange Is The New Black’ As Q2 Earnings Meet Expectations; Streaming Service Tops 50M Subs

By | Monday July 21, 2014 @ 1:13pm PDT

Netflix Touts ‘Orange Is The New Black’ As Q2 Earnings Meet Expectations; Streaming Service Tops 50M SubsShares are up about 2% in early post-market trading, though probably mostly due to subscriber gains — topping 50M streaming customers worldwide for the first time — rather than the financial results for Q2. Netflix generated $71M in net income, up from $29.5M in the period last year, on revenues of $1.34B, +25.4%. While the growth is impressive, it was also expected: Revenues came in just a little ahead of the $1.33B that analysts anticipated. Earnings at $1.15 a share were a penny shy of the consensus forecast.

Related: CBS Drama ‘The Zoo’ To Be Available On Netflix In 2015

Jodie Foster earns first Emmy directing nomination with Orange Is The New BlackBut the company says it had 36.24M domestic streaming customers at the end of the quarter, up 570,000 from March, which it attributes to “our ever-improving content offering, including Orange Is The New Black Season 2.” Netflix expects an additional 1.33M in Q3. On the international side, streaming customers increased by 1.12M over the three-month period to 13.8M. But the company lost 342,000 DVD-by-mail customers, ending the quarter with 6.17M.

Related: Oscar-Nominated Film Now Aiming To WIN An Emmy For Netflix – How Is It Eligible For Both?

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MSNBC Flatlines On Big Big News Day While Fox News Dominates & CNN Ratings Surge

By | Monday July 21, 2014 @ 12:58pm PDT

MSNBC Flatlines On Big Big News Day While Fox News Dominates & CNN Ratings SurgeThe rule of thumb is that when news is breaking and a crisis is unfolding, cable news networks see a big jump in viewership. Turns out that’s not the case if you are MSNBC. On the first full day of coverage of the Malaysia Airlines disaster and Israeli troop movement into Gaza the day before, the Comcast-owned news channel actually was down double digits among adults 25-54 both in total day and in primetime on July 18. While rivals CNN and Fox News Channel were up 16% and 13% in total day over the comparable day last year, when the news was much quieter to say the least, MSNBC fell 38% to a mere 87,000.

Image (2) foxnewschannel__121107055533__130821210939__130827191454__140401180009-150x149.jpg for post 715548Take a look at primetime, the numbers get even harsher for MSNBC with a 46% fall in the demo to 118,000 from July 19, 2013 compared to a rise of 16% and 30% for FNC and CNN. Winning in all categories on Friday and benefiting from the breaking news, FNC had 268,000 among 25-54s for total day and 323,000 during primetime. Seeing an uptick as it commonly does during breaking news, the often ratings struggling Time Warner-owned network got 208,000 in the demo total day and 263,000 in Image (1) cnnlogo__140117174347-275x131__140122180929__140425214942__140602211242.jpg for post 739150primetime.

Related: FNC Wins 50th Straight Ratings Quarter

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Deadline Q&A: Can Matt Strauss’ Hollywood Deals Help Comcast Defend Cable?

By | Monday July 21, 2014 @ 11:34am PDT

Deadline Q&A: Can Matt Strauss’ Hollywood Deals Help Comcast Defend Cable?Matthew Strauss isn’t a household name in Hollywood yet. But he should be, and possibly will be soon. As Comcast Cable’s GM of Video Services, Strauss oversees the cable colossus’ Xfinity cloud-based X1 platform, video on demand, TV Everywhere, and — starting last year — sales of digitally downloadable movies and TV shows (known as Electronic Sell Through). In other words, he leads the cable industry’s counter-offensive as digital services led by Netflix and ad-zapping DVRs make inroads with pay TV consumers.

Studios and networks are taking notice, and striking deals with Strauss that push the boundaries of technology, and traditional business practices. For example, Comcast and FX have just begun to let VOD customers watch episodes of The Bridge a week before they appear on the channel itself. Deadline caught up with Strauss to find out the latest about that experiment and others that could reshape the medium. Here are his thoughts, edited for length and clarity.

DEADLINE: VOD has been one of Comcast’s top initiatives. Where do things stand?
STRAUSS: I have a long history with VOD. I’ve been working on this for almost 13 years now. About 70% of our digital subscribers use on demand every single month, and by the end of this year we’ll have 200,000 hours of on-demand content available. We surpassed our 30 billionth program viewed on demand last year. So this is something that has gone from almost an infancy, novelty kind of product and now is deeply entrenched. For the first time we now have the top 100 rated Nielsen shows … Read More »

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Bart & Fleming: Fox-Time Warner Merger Mania Means Banker Fees And Layoffs, Not Quality

By and | Sunday July 20, 2014 @ 9:25am PDT

Bart & Fleming: Fox-Time Warner Merger Mania Means Banker Fees And Layoffs, Not QualityFlemingBartColumn_badge__140510005503Peter Bart and Mike Fleming Jr. worked together for two decades at Daily Variety. In this weekly Sunday column, two old friends get together and grind their axes on the movie business.

Bart: Like  7th grade boys staring in the mirror, corporate CEOs these days keep asking themselves, “Am I big enough?” What scares them is the prospect of becoming a takeover target, and there’s been a rush of takeover talk lately —Rupert Murdoch’s bid for Time Warner being the most dramatic. Size means safety in the corporate universe and Time Warner became vulnerable by ridding itself of Time Inc., AOL and Time Warner Cable — the latter becoming a target for Comcast. With giants like Google, Apple and Amazon looming, CEOs are scared they can’t measure up, but the folks who should really be frightened are the creatives and their audiences. Bigness means giant fees for bankers and profits for shareholders, but the impact of the monoliths is easy to read — a universe of corporate plodding, tentpoles and sequels.

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Will Anyone Besides Rupert Murdoch Take A Run At Time Warner?

By | Thursday July 17, 2014 @ 3:49pm PDT

Will Anyone Besides Rupert Murdoch Take A Run At Time Warner?It’s a foregone conclusion now that something big will happen with Time Warner. Its stock wouldn’t be up 20% since yesterday morning — when Fox CEO Rupert Murdoch‘s $80B June offer came to light – if investors thought that Time Warner’s rejection of it was the last word on the matter. Indeed, the stock closed today at $86.12, which means a lot of people are betting that Fox or someone else will top the $85 a share stock-and-cash proposal that Time Warner shunned.

But here’s the problem: Some of Wall Street’s top analysts don’t know who has the desire and wherewithal to wage a bidding war with Fox. If Time Warner seriously wants to escape Murdoch’s embrace, it might have to make a deal of its own — perhaps to buy CBS. Even if it did, “Time Warner would still have to make the argument that more value would be created by merging with CBS than by accepting Fox’s tender offer,” Bernstein Research’s Todd Juenger says.

What about other usual suspects who might covet Time Warner? Comcast and AT&T are out of the running as they pursue their acquisition deals with, respectively, Time Warner Cable and DirecTV. Here are others that might conceivably kick the tires:

Disney: Hard to find anyone who thinks the company will jump in. Disney doesn’t need a big deal, especially with a “clear strategy that should play out over the last two years of Bob Iger’s contract,” MoffettNathanson Research’s Michael Nathanson says. The CEO likes properties that appeal to targeted audiences that he can coax to attend Disney … Read More »

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WGA Makes Last FCC Pitch On Latest Net Neutrality Rules

By | Wednesday July 16, 2014 @ 7:13pm PDT

WGA Makes Last FCC Pitch On Latest Net Neutrality RulesWarning that Internet video distribution could, like cable television, become “dominated by a few vertically-integrated conglomerates,” the WGA West made its last pitch to the FCC today for proposals to protect Internet neutrality. The FCC is expected to hand down its new policy on the issue within a few weeks, following the close today of a public-comment period on the latest proposal to regulate Internet transmission of video and other data.
In January, the U.S. Circuit Court of Appeals in Washington D.C. struck down parts of the FCC’s 2010 rules, leading to a new round of guidelines, including a controversial provision that would say Internet Service Providers “may not act in a commercially unreasonable manner to harm the Internet.”
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Fox-Time Warner News Colors Senate Committee Look At Online Video; Netflix’s Reed Hastings Declines Invite

By | Wednesday July 16, 2014 @ 2:25pm PDT

Fox-Time Warner News Colors Senate Committee Look At Online Video; Netflix’s Reed Hastings Declines Invite“We’re in an arms race,” Public Knowledge CEO Gene Kimmelman told the Senate Commerce Committee at a hearing to explore the prospects for broadband video. It’s “no surprise, content companies bulk up” as Fox wants to do with its $80B bid for Time Warner, which was rejected by the company but disclosed today. Following Comcast’s deal to buy Time Warner Cable, and AT&T’s with DirecTV, “consumers are between a rock and a hard place….They started the ball rolling and as we’ve seen from today’s stories, we don’t know where it’s going to end.”

Representatives from Comcast and AT&T indirectly debated with execs from Dish Network, the WGA, and Kimmelman over whether online video providers have to fear mergers or need strong net neutrality rules. Committee Chairman Jay Rockefeller (D-W Va) ended the proceedings by arguing for municipal broadband to provide a low-cost option for poor residents. He also said that he invited Netflix CEO Reed Hastings, who declined to show. “I can’t figure [it] out because I’m trying to help them, I think. But he didn’t want to be here.”

Dish says that later this year it plans to introduce a low-priced online video service that will include live streams of ESPN, and could be threatened by the union of the two largest cable companies. “Comcast doesn’t necessarily want us to succeed because we’re competitors,” says the satellite company’s Deputy General Counsel Jeffrey Blum. “We are very concerned that a combined Comcast and Time Warner Cable will have an incentive and ability to stifle our service.” Read More »

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