The $5.2B agreement (that’s Canadian dollars, or US$4.94B) pretty much gives the cable company all video rights to one of the country’s two national sports (the other is lacrosse). It also freezes out The Sports Network (TSN), Canada’s top-rated English-language sports channel, which had held the NHL‘s television rights. With the addition of digital streaming opportunities, this is “the first time a premium North American-wide sports league has granted all of its national (Canadian) rights to one company on a long-term basis,” Rogers says. It’s a bonanza for hockey players; they’ll collect 50% of the revenues under the collective bargaining agreement they reached at the beginning of this year, following a 113-day lockout that began in September 2012. Rogers also says that the agreement will improve profits “from the outset and significantly.” If approved by the NHL Board of Governors next month, the agreement will give Rogers national rights to TV broadcasts and TV Everywhere streaming (including out of home) for all regular-season and playoff games as well as the Stanley Cup Final and special events. It will have sponsorship rights to the NHL Shield logo, and will handle Canadian ad sales for NHL.com. “Our vision is to build on the NHL’s legacy in Canada with an emphasis on storytelling, innovation, and technology — weaving the NHL, its teams and its stars even deeper into the fabric of Canadian culture,” says Rogers Media President Keith Pelley. The company has already sub-licensed English-language rights to Hockey Night In Canada to CBC and all national French-language multimedia rights to TVA.
The price is down 4% to $16.26 in mid-day trading after the gamemaker reported the deal to pay the activist investor $16.93 a share for his 12.02M shares — bringing the total number of Take-Two Interactive shares outstanding down to 81M. CEO Strauss Zelnick says that the agreement “reflects our confidence in the Company’s outlook for record results” in the current fiscal year, and leaves Take-Two with enough cash “to pursue a variety of investment opportunities, including repurchasing our Company’s stock.” But some may wonder whether Carl Icahn‘s exiting because he senses that things have peaked for the company behind titles including Grand Theft Auto, Borderlands, and Duke Nukem. Shares are up 31% over the last 12 months but have slipped about 14% since late August. Cowen and Co analyst Doug Creutz downgraded Take-Two to “market perform” last week saying that every major title the company has shipped in recent years “has been delayed at least once, sometimes for multiple years.” It also faces “a significantly uphill battle next year against a crowded industry release slate” which includes Titanfall, Destiny, Call Of Duty, Halo, and Assassin’s Creed.
The wording of AEG’s release about the restructuring is bitter cold: The company “has ended its relationship with Randy Phillips, the CEO of AEG Live, and is restructuring the management of that live entertainment subsidiary” it said. There’s no word of thanks — or anything about what happened, or will happen, with Phillips, who joined AEG Live in 2002 and last year signed a five-year contract. The announcement says that Jay Marciano, who was COO, is now chairman and will oversee a team in LA of Paul Tollett, John Meglen, Shawn Trell and Rick Mueller. “I look forward to my greater involvement with the enormously talented AEG Live Team in continuing to invest and grow one of AEG’s most important divisions,” Marciano says. Billboard’s industry specialist Ray Waddell reports that AEG is the world’s No. 2 concert promoter, behind Live Nation, and has grossed $1.1B in ticket sales so far this year with tours including Bon Jovi, the Rolling Stones, Justin Bieber, Carrie Underwood, Taylor Swift and Kenny Chesney.
Shares are -7.7% at midday, and that’s partly due to the opening weekend performance of Hunger Games: Catching Fire which grossed $160.6M at domestic box offices and $147M internationally. The consensus among Wall Street analysts was that the film would see $165M domestically, with some going as high as $175M. So the weekend was a slight disappointment. But most aren’t worried about the film’s prospects. With strong results overseas, Catching Fire is “already one-third the way towards our [global box office] ultimate of $900M after only 3 days in release,” B. Riley’s Eric Wold says. Stifel analyst Benjamin Mogil says that the international performance “will really matter for the title to have material upside…and given the current trajectory we believe that this will be the case.” So why the drop in the stock price? Some investors figure that Lionsgate has peaked for now, and will lose buzz as people begin to focus on its next major film, Divergent, scheduled to open on March 21. Cowen and Co’s Doug Creutz says that while he’s “optimistic” that Divergent will become a franchise “we continue to expect a much lower level of performance than for Hunger Games” forecasting that the sci-fi action film based on the bestselling novel by Veronica Roth will generate $130M at domestic box offices.
Consumer advocates are horrified by the thought that Comcast, possibly in conjunction with Charter Communications, might become even bigger than it already is by engineering a deal to buy Time Warner Cable. But two Wall Street analysts say this morning that this would make sense financially — and probably would pass muster with federal regulators. TWC shares closed on Friday at $132.92, and investors might see an offer of $160 if Comcast and Charter decide to team up to buy TWC and divide the spoils, Wells Fargo Securities’ Marci Ryvicker says. She envisions Comcast taking 67 TWC markets with 7.4M subscribers, mostly in the east (including Manhattan), while Charter could end up with 20 markets that have 4.5M subs (including Los Angeles). Even though Comcast is the No. 1 cable operator and also owns NBCUniversal, Ryvicker says the feds might allow it to grow. There’s no formal cap on cable subscriptions — in 2009 the U.S. Court of Appeals threw out the 30% limit. And since Comcast and TWC don’t compete with each other in any markets “it would be tough to see an outright objection [on antitrust grounds] from either the FTC or DOJ.” The FCC is a different story, since it can weigh broader questions about the public interest. Yet Comcast could argue that — because it owns NBCU — it wouldn’t abuse the clout it would have to demand lower programming prices. Comcast might have to accept a lot of conditions and restrictions. Still, Ryvicker doesn’t see it “walking away from an opportunity that could reap significant long term benefits.”
Deadline’s financial editor talks with host David Bloom about Sony’s big investor meeting this week and the changes and cuts it’s promising to make to enhance the health of its “vital” entertainment unit; the race between Sony and Microsoft as each finally launches long-awaited next-generation videogame consoles; more big cuts at the long-suffering Tribune Co.’s newspapers; and John Malone and Charter Communications look like they’re about to go hunting for more cable companies.
Consolidation talk was everywhere today, and investors believe that there’s something to it. Following reports this AM that Comcast and Charter Communications are weighing individual bids for Time Warner Cable, Bloomberg says that …
The stock is +8.3% in early trading following reports that Comcast and Charter Communications are seriously considering possible bids for the No. 2 cable operator. CNBC’s David Faber reports that Comcast shareholders want it to go after Time Warner Cable. While the companies aren’t in active discussions, the owner of NBCUniversal is looking at the obstacles a deal might face at the FCC and the Justice Department. Comcast has 21.6M video subscribers while TWC has 11.6M. If they combined, Comcast would have about 35% of all multichannel video subscribers. That story follows a Wall Street Journal report this morning that Charter — galvanized by its top shareholder, Liberty Media’s John Malone — is close to landing the funds it would need to make an offer for TWC. Charter, with 4.3M video subscribers, has been talking to Bank of America, Barclays, and Deutsche Bank about potential debt arrangements. TWC has a market value of $37B, and a buyer likely would have to pay a premium over that. Most analysts believe that the time is ripe for some cable consolidation. They say that the video business is mature, and distributors need more clout to resist demands by broadcast and cable networks for higher payments. CBS’ drubbing of TWC in their 32-day contract impasse this past summer underscored the view that cable operators — facing growing competition from satellite and telco video providers — can’t afford to let popular channels go dark. But consumer advocates would flip over a deal that increases Comcast CEO Brian Roberts’ control over media content and distribution. TWC’s footprint includes Manhattan and much of Los Angeles. Like most cable operators, TWC is the leading broadband provider in its markets. The company also has 18 local news channels, 13 local sports channels, and seven local lifestyle channels.
UPDATED, 1:50 PM: “We do very much have the ambition about creating a bigger universe around Spider-Man. There are a number of scripts in the works” involving characters and villains in the series, Sony Pictures Entertainment chief Michael Lynton told analysts in a Q&A session wrapping up his operation’s first meeting with investors. But he didn’t offer details, except that Sony is “working closely with Marvel and Disney.” But lest fans of the Marvel world take that to mean that Spider-Man could finally join his buddies in an upcoming The Avengers or other Marvel/Disney film — think again. Sony’s longtime rights deal with Marvel for Spider-Man allows them to exploit any character within the superhero’s universe — including villains, girlfriends or even Aunt May. But Disney, which acquired Marvel in 2009, owns merchandising rights to Spider-Man and those related characters, so any further exploitation would have to involve Disney.
While Sony today promised to hold down costs, especially for films, Lynton says that “we have in no way shape or form lost our commitment to the movie business. The movie business sits at the heart and soul of the company.” And he wouldn’t feel constrained from approving a major project. “We never once found ourselves lacking for capital” when it comes to a needed investment including an acquisition. That also was true when Disney snagged Marvel. With theme parks and several cable channels, Disney has “a few more channels to exploit” the properties. “You have to measure it against that backdrop.”
At least $150M of the total will come from overhead and “operational efficiencies” with the rest from changes in procurement practices, CFO David Hendler told investors today at Sony‘s presentation about the entertainment business. “We’ve taken a hard look …
Sony Pictures CEO Michael Lynton just laid out the new plan to investors as he discussed ambitious financial goals for the company’s entertainment units. That will include “a significant shift in emphasis from motion pictures to higher margin television” production and distribution. The company says that Sony Pictures should generate $8.4B in revenue in the 2015 fiscal year, with at least a 7.5% operating profit margin. In addition, Lynton says that revenues through 2017 should grow at low- to mid-single-digit annual rates, with operating income rising by high-single- to low-double-digit rates. He added that the music segment should report $4.8B in revenues in 2015, growing flat to slightly up through 2017, and a 9.5% operating margin growing by mid- to high-single-digit rates. The film greenlighting process is “more onerous from end to end,” Lynton says. “The times demand that we set a higher bar and we have done just that.” When it comes to dealing with talent, the studio warns that it will now be “saying ‘no’ when in the past we might have said ‘yes’.” Directors will be told that they are “on the financial hook for financial overruns.” When it comes to profitability “we are not satisfied.” In addition to the cost controls, the studio is looking for digital and international opportunities including “content with universal appeal.” It will foster an “innovative entrepreneurial culture” and encourage “creative excellence.” But financial discipline will be “front and center.” He noted that Sony is working with a “third party” — reportedly Bain & Co. — to help find cuts. Lynton also talked up the company’s “One Sony” strategy which includes producing documentaries about Sony Music artists including Michael Jackson, and hiring singer Adele to sing the theme to the James Bond film Skyfall. ”This is our time,” Lynton says. “We intend to seize it…and deliver to shareholders more of the profits that you deserve.”
CEO Peter Liguori told staffers in a memo today that he wants the business units at his publishing operation — which includes the Los Angeles Times, Chicago Tribune, and The Hartford Courant — to organize “by function, rather than by geography.” The goal is to “continue investing in the lifeblood of our business: best-in-class reporting, effective sales and digital growth.” But while newsrooms aren’t the primary targets for the layoffs, editorial staffs will see “selective reduction” from the drive to cut the workforce by about 6%. The changes come as Tribune plans to sell or spin off the publishing operations, and bulk up on television stations. As part of today’s announcement, L.A. Times Publisher Eddy Hartenstein and Tribune Publishing CEO Tony Hunter promised to handle the layoffs “with respect, dignity, and assistance for the future.” They also named executives to run the revamped units. The list includes Chicago Tribune’s advertising SVP Bob Fleck who’s now EVP of Advertising for Tribune Publishing, and LA TImes EVP Bill Nagel who has been named EVP of Marketing for Tribune Publishing. The company emerged from Chapter 11 bankruptcy protection at the end of 2012. Tribune says that in Q3 the publishing unit generated $44.7M in operating profit, up from $1.3M last year, on revenues of $446.4M, -3.9%.
Here’s Liguori’s memo:
The Hollywood’s lobby group’s finances took a hit in 2012, a tax filing shows — but CEO Chris Dodd did just fine even as the MPAA licked its wounds from its failed effort to promote tough anti-piracy legislation. …