With 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.
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 »
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.
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 »
Because Rupert Murdoch wants to buy Time Warner, and journalists have reported Murdoch would sell off Time Warner‘s cable news network CNN, Jon Stewart last night launched a Kickstarter campaign to raise $10 billion in order to buy the network “and do…something with it. Not quite sure what yet.” ”CNN, America’s first 24-hour cable news network, has been terrible for many, many years. Does it have to be that way? Who knows, maybe it does,” The Daily Show host’s campaign explains. “So let’s find out for ourselves! This $10 billion, all-cash bid for CNN would secure control of a massive television network reaching over 100 million homes in the US alone, which we could then use to rebuild a news organization befitting this proud land. Or more likely we’d use it to make a lot more poop jokes. Either way, you get to watch!”
A mere $10 contribution gets your photo in an on-screen “21 box” of talking heads. For $15,000 it’ll be just you and Carol Costello in a “2 box”, with 5 minutes of freestyling. And for $5 million, CNN will initiate a 24-hour, 2-week hunt for your lost car keys. Watch here:
NBC 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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“Fox and Warner are both pretty powerful companies today. … I don’t know how it changes much if they come together,” Netflix Chief Content Officer Ted Sarandos told analysts today when asked about Rupert Murdoch’s bid for the entertainment giant. The effort probably has “more to do with cable negotiations with sports.” CEO Reed Hastings added that he would offer “no speculation” about what Netflix might do if Fox and Time Warner agreed to merge. “The more we work directly with producers, the less we have to worry with aggregation and big content suppliers.”
Media Merger Mania: Fox’s Bid For Time Warner Is Just The Beginning
Time Warner Shares Soar On Reports Of $80B Offer By Rupert Murdoch
On other matters: Sarandos talked up Chelsea Handler’s upcoming late-night talk show, saying her focus on entertainment and pop culture will make it “a great representative of the kind of programming on Netflix.” A nightly show makes sense for a company known for binge viewing because viewers are “not watching late-night talk shows the way they used to. They’re watching days weeks and sometimes months later.” The show ”is not instantly perishable content. It’s more perishable, but the economics level that out for us.”
Related: Netflix Touts ‘Orange Is The New Black’ As Q2 Earnings Meet Expectations
Sarandos also says that Netflix will premiere the upcoming AMC series Better Call Saul outside of North America. He talked up the … Read More »
Shares 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
But 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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Peter 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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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 »
Warning 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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“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 »
UPDATE. 6:46 AM: Time Warner confirms that it rejected 21st Century Fox‘s acquisition offer saying its board concluded that remaining independent “will create significantly more value for the Company and its stockholders and is superior to any proposal that Twenty-First Century Fox is in a position to offer.” Fox said it would pay $32.42 in cash plus 1.531 of its own non-voting shares for each Time Warner share. Directors don’t like the plan, in part because it involves “significant risk and uncertainty as to the valuation of Twenty-First Century Fox’s non-voting stock and Twenty-First Century Fox’s ability to govern and manage a combination of the size and scale of Twenty-First Century Fox and Time Warner.” The board also notes that there would be “considerable strategic, operational, and regulatory risks” to a deal.
PREVIOUS, 4:39 AM: Time Warner’s up nearly 20% in pre-market trading after The New York Times and CNBC reported that the media giant recently rejected an $80B takeover proposal by Rupert Murdoch‘s 21st Century Fox. The bid could “put Time Warner in play and might again ignite a reshaping of the media industry,” the Times says. Fox COO Chase Carey met with Time Warner chief Jeff Bewkes in early June offering $85 a share — 40% of it in cash — a 25% premium at the time. The proposal said that the combined companies could save at least $1B by eliminating duplication. Fox, which owns Fox News, offered to sell CNN to avoid antitrust problems, and indicated that it would maintain Time Warner’s studio and cable network operations, as well as most of its best execs, according to the reports. The Time Warner board seriously considered the proposal but rejected it, in part because the offer included nonvoting shares. Nonetheless, “Rupert Murdoch is ‘determined’ to buy Time Warner,” CNBC reports, citing unnamed sources. Murdoch is said to have enlisted Goldman Sachs and Centerview Partners to advise him while Time Warner has Citigroup.
Fox says that it “can confirm that we made a formal proposal to Time Warner last month to combine the two companies. The Time Warner Board of Directors declined to pursue our proposal. We are not currently in any discussions with Time Warner.” Read More »
I can tell you that DirecTV today filed a breach of contract complaint against Al Jazeera America. I can tell you that the civil case complaint demands a 10-day jury trial and seeks more than $25,000 but also is looking for declaratory relief. Finally, I can tell you that the 17-page filing by the satellite service provider has something to do with the Affiliation Agreement that DirecTV entered into with AJAM predecessor Current TV back on July 13, 2005, just over two weeks before the channel co-owned by Al Gore debuted. Beyond that, and who the plaintiffs’ lawyers are, virtually everything else in the complaint (read it here) is redacted. DirecTV reps had no comment when I contacted them about the blacked-out filing. Al Jazeera America weren’t saying much either. “We have not reviewed the complaint and therefore have no comment,” an AJAM spokesperson told me today. A non-redacted version also has been filed in LA Superior but is under seal, I’ve learned.
Could this complaint be something similar to when Time Warner Cable dropped Al Jazeera America from its service minutes after the Qatar-owned news channel bought Current TV for $500 million back in January 2013. Saying it didn’t consent to the sale, TWC jettisoned AJAM. The new station launched on August 20 that year, and a few months later the two sides … Read More »
The Dish Network chairman made his plea on Monday in meetings with all five FCC commissioners and several staffers, according to a Dish filing today. Comcast’s $45B deal for Time Warner Cable “presents serious competitive concerns for the broadband and video marketplaces and therefore should be denied,” Dish told regulators, according to its account of the talks. “There do not appear to be any conditions that would remedy the harms that would result from the merger.” Charlie Ergen said that Comcast could hobble Internet video services at three choke points: The cable company would control last-mile connection to the home and the point where content providers access Comcast’s network. In addition, it could squeeze potential rivals by devoting lots of its web capacity to special high-speed lanes for favored services. “Each choke point provides the ability for the combined company to foreclose the online video offerings of its competitors,” the filing says. Read More »
FCC Taps Economist Who Opposed Comcast's Acquisition Of NBCUniversal To Oversee Proposed Mega-Mergers
Deadline's David Lieberman looks at the FCC's choice to oversee the proposed Comcast-Time Warner Cable and AT&T-DirecTV mergers.
FCC Picks Critic Of Comcast’s NBCU Acquisition To Review Its Time Warner Cable Deal
The bull market that began in 2009 continued its stampede today in abbreviated trading ahead of Independence Day: The Dow Jones Industrial Average increased 0.5% and crossed 17,000 for the first time following a strong June jobs report that showed the unemployment rate dropping to 6.1%, its lowest point since late 2008. Media companies joined in the rally. The Dow Jones U.S. Media Index, up 0.7%, hit an all time high. So did Disney (+0.5%), Time Warner Cable (+0.7%), Charter (+0.3%), and Nielsen (+0.6%), while Time Warner (+0.7%) and Gannett (0.7%) touched 52-week highs.
Fox (+1.4%) led the Big Media pack followed by Discovery (+0.8%), Time Warner, Disney, Viacom (+0.2%), Comcast (+0.6%), and CBS (no change) while Sony dropped 0.5%. Read More »
Size matters in entertainment even for Time Warner, which has offloaded cable systems, Internet services, and — this year –magazine publishing, CEO Jeff Bewkes told an audience today at IESE Business School in New York . Time Warner has “the world’s largest collection of film and TV” and is the No. 1 program supplier to all of the major broadcast networks aside from the networks themselves. As a result, “we have been stable [and] extremely high in our earnings and results every year for the last 10 years.” Returns on capital for TV “are bigger than in the movie business for everybody.” Still, with its slate of about 20 movies a year — about a third of which are big-budget tentpoles, Warner Bros’ “returns in the movie business are bigger, year in and year out, than for our competition.” He says he greenlighted $370M for the Lord Of The Rings trilogy because it was the most efficient way to produce the films, even though it was a bigger risk. Now Warner has “a lot of of movies coming from DC Comics — Wonder Woman, Batman and Superman. … These are going to be highly sophisticated, like Bergman movies,” he said, apparently in jest. He adds that overseas countries account for about half of the studio’s revenues and that should increase due to “huge growth in China and Russia for movies.” Read More »
No surprise here. Comcast CEO Brian Roberts, whose family controls the company, has extended his contract for one more year to June 30, 2015. Roberts’ decision comes as the Comcast’s $45.2 billion offer for Time Warner Cable remains under regulatory review. According to a proxy filing with the Securities and Exchange Commission, Roberts earned $31.36 million last year, up from $29.1 million in 2012. During Roberts’ oversee of Comcast, the cable company bought NBC-Universal in 2011.
Peter 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: You and I have lived through a few journalistic zigs and zags in our years at Variety, and we were always candid with each other in analyzing risks and rewards. Variety was started by the Silverman family but the dynasty ran out of sizzle and sold control. Deadline was started by Nikki Finke but she never managed to create a dynasty before running out of sizzle. So the question is this: Where do you take Deadline from here?
Fleming: I think we built something exceptional with her. That said, a few people have asked me, ‘Why, when it looked like she might come back, did she start a site that is crapping all over you?’ I might as well begin there. The testiness that existed since her acrimonious exit aside, I got it in my head that enough time had passed and I wanted her back. I leaned on Jay Penske to end arbitration proceedings to make it happen, and he did just that. Here was my thinking. I like her. Even though we never met in person during our time together at Deadline, we had a lot of fun. When she and Jay hired me from Variety, they changed my life. My only goal was to get three kids through college without having to sell my house, and that effort is looking good. Since taking over, I have been able to extend a hand to several people I grew up with at Variety, and they’ve been great hires. I wanted to do the same with Nikki. My feeling was, when you reach the top after an unprecedented climb up a mountain like she did with Deadline, what’s wrong with staying to enjoy the view? I also thought a measured dose of her fire would complement the mix Nellie Andreeva and I have now.
Bart: Seems understandable. So why are you now known on her site as Mike Pflegming? Read More »
Twitter lights up during big TV events such as the Super Bowl, Olympics and the Oscars, but can the social-media platform deliver users directly to the tube? Comcast and Twitter are betting it can with SEEiT, a button embedded in tweets that actually can change the channel from a user’s smartphone or tablet or set a DVR to record a show. The platform works with shows from ABC, A&E, AMC, Fox, NBC and others as well as set-top boxes from Comcast, Cablevision, Charter and Time Warner Cable. “If you’re between 13 and 24, (social media) is probably the primary way you’re discovering things,” says Erik Flannigan, executive VP of multiplatform strategy and development for the Viacom Entertainment Group. That’s why Flannigan considers initiatives such as SEEiT to be “the tip of an iceberg.”
Programmers are intrigued: Nearly half of viewers under 30 use computers, smartphones or tablets to visit social networks during their TV time, research from Deloitte recently reported. A separate study from the Council for Research Excellence found that viewers of specials, sci-fi shows, sports and movies are especially eager to simultaneously chat online with others. “TV networks fully understand, top to bottom, that their mission is to deliver that (social media experience) to you in a relationship that’s 24/7/365, and it … Read More »