A tale of Big Media is coming to cable. Continuing its recent moves toward original scripted series, Bravo is developing the drama Moguls. The series will follow the professional and personal challenges of a media boss and his family. “Moguls will be similar in tone to The West Wing,” an insider says. While the series may or may not have the walking-and-talking motif that characterized Aaron Sorkin’s political drama, Moguls will have a media boss of its own: Michael Jackson, the former chairman of Universal Television and former CEO of the UK’s Channel 4, will serve as executive producer on the show. Love And Other Drugs screenwriter Charles Randolph and playwright Sharyn Rothstein are working on a pilot script now, we are told. In her TV debut, Rothstein will be Moguls’ supervising producer. Randolph will serve as an executive producer; he also is working on the Cold War pilot for HBO The Missionary, a spy thriller developed by Randolph and friend (and bestselling New Yorker writer) Malcolm Gladwell.
Sure, every Oscar weekend there are the Friday night agency parties — Ari Emanuel’s WME fete, and Jim Berkus” UTA party for the Coen Brothers, and Bryan Lourd’s CAA bash (where the valet parkers screwed up the parking situation so badly that the Triple-A crowd had up to a 2-hour wait for their cars). But the place to really see the Big Media moguls, past and present, and their assorted pilot fish on parade is Barry Diller’s Saturday afternoon lawn luncheon ostensibly in honor of Vanity Fair editor Graydon Carter. This year drew a particularly good 300+ crowd to the tent on Diller’s Beverly Hills estate for Hollywood’s major meet’n'greet. Guests included in no particular order: Sir Howard Stringer (eating the repast of veggie chili and fried chicken and poached salmon with Rupert Murdoch), David Geffen, Ron Meyer (who took his new NBCUniversal boss Steve Burke), Sandy Gallin, Bryan Lourd, Jeff Berg, Oprah Winfrey (who dined with Michael Eisner and Larry Gordon and her BFF Gayle King), Ron Howard, Brian Grazer, Arianna Huffington, Eva Longoria, Valentino, Wendy Stark, Joan Collins, Terry Semel, George Hamilton, Toby Emmerich, Penny Marshall, Lorraine Bracco, Balthazar Getty, Alan Grubman, David and Victoria Beckham, Les Moonves, Anderson Cooper, California Governor Jerry Brown, Jeffrey Katzenberg, Tom Freston, Bob Daly, Jonathan Dolgen, Brett Ratner, Dani Janssen, Shirley MacLaine, Alana Hamilton Stewart, Donna Karan, Oswald Botang, Kevin McCormick, A. Scott Berg, Cheryl Tiegs.
EXCLUSIVE: I’ve just learned that five well-known Hollywood Democrats — David Geffen, Bob Iger, Peter Chernin, Haim Saban, and Ari Emanuel — are hosting a November 4th fundraiser for Ari’s brother Rahm Emanuel in his bid to become Chicago’s next mayor. Rahm, a former Democratic U.S. Representative from Illinois’ 5th Congressional District (2003-2009), resigned as President Obama’s White House Chief Of Staff on October 1st to throw his hat into the mayoral race following the retirement of Richard M. Daley whose last name more or less owned that political office the way most families would takeover the dining table. The Hollywood fundraiser will be held at Saban’s palatial Beverly Hills home.
For those keeping score, Geffen is the former DreamWorks SKG partner and longtime music and film mogul. Iger is the CEO of the Walt Disney Company. Chernin is the former No. 2 of Rupert Murdoch’s News Corp and now a busy Fox TV and film producer. Saban is a private equity investor and entertainment producer best known for making the Power rangers into a worldwide hit and co-owner of the largest Spanish language media company in the U.S., Univision, as well as one of the Democratic party’s single largest donors. And Ari is the co-CEO of WME Entertainment, one of the largest Hollywood talent and literary agencies and now expanding into marketing and investment banking. All the men are Democratic Party donors, with Geffen, Chernin, Ari Emanuel, and Saban the most …
UPDATE: The Walt Disney Co was the last major studio and network to report quarterly earnings, and its fiscal 3rd quarter profit rose 40% on the strong box office grosses from Pixar’s Toy Story 3, Marvel’s Iron Man 2, and Tim Burton’s Alice In Wonderland 3D. As promised, here is an earnings roundup showing that Big Media is alive and well and even flourishing not just this quarter but in many cases for next quarter or even the entire year. Yet the trickle down effect has been slow or nonexistent for Hollywood. After rounds of layoffs during the economic crisis, the moguls are still slow to put people back to work. And the movie and TV community still is underemployed. But what everyone can count on is that Big Media’s good news for the benefit of Wall Street will turn into bad news to the detriment of talent, behind-the-camera, post-production, and below-the-line unions when it’s time to negotiate:
August 5th: Viacom Inc Reports Sharply Higher Earnings For Q2
Credit the rebounding economy and recovering advertising market. Net earnings rose to $420 million, or 69 cents a share, up 52% from $277 million, or 46 cents a share, a year ago. Executive Chairman Sumner Redstone gushed, ”With six months under our belt in this calendar year, day after day our confidence continues to grow as the emerging economy recovery builds. Now of course we’re not all the way back, but the light is brighter than it’s been for some time… Consumers are returning to the marketplace, marketers are beginning to spend again to grow revenues and capture share and Viacom is now and will continue to benefit.” Revenue at Viacom’s media networks group rose 6% to $2.1 billion.
Viacom CEO Philippe Dauman said ad revenue growth has been improving quarter by quarter. “Once we get into October and into the December quarter, we will benefit from this upfront where we have greater volume than last year at higher pricing. Dauman singled out Jersey Shore as a show where ”we have advertisers scrambling to get on it. We have advertisers who want to be wall to wall in particular episode. We’re turning them away.” Viacom’s movie business was down 10% to 41.25 billion, led by a 43% drop in home entertainment revenue. Also, Paramount Pictures has primarily been distributing others’ films like Iron Man 2 and Shrek Forever After in 2010 and self-financing its own pics. It is deliberately pursuing a strategy of a smaller slate of films in 2010-2011. Still, the film unit booked income of $69 million, reversing an $8 million loss in the same quarter a year ago. Viacom continued to post equity losses from its EPIX joint venture but said it should approach break-even by the end of the year.
August 4th: News Corp Posts Improved 4th Quarterly Results
News Corp posted a profit of $875 million, or 33 cents a share, for its fiscal 4Q ended June 30th easily beating analysts expectations. That compared with a loss of $203 million, or 8 cents a share, a year ago, when News Corp took an impairment charge. Revenue grew 6% to $8.11 billion, as companies spent more to advertise on the company’s television stations, TV channels and newspapers. That beat the average forecast of analysts of $8.05 billion. COO Chase Carey explained that brisk sales of advertising at Fox Broadcasting and the company’s cable television networks made the difference, while ad rates at the Fox network are up by a double-digit percentage from this spring. Ad rates are even better at the cable channels, which already represent more than 50% of the company’s profits. Local television station advertising revenues improved 29% in the quarter and 8% for the year compared to the same periods a year ago, reflecting strength in the automobile and telecom sectors.
Carl Icahn might not be crazy about Lionsgate co-chairman/CEO Jon Feltheimer and the rest of the indie studio’s management team, but MIPCOM loves him. He’s been named MIPCOM’s 2010 Personality of the Year. Feltheimer was been cited for “his leadership at the helm of Lionsgate and for driving creative productions and developing award-winning TV programs, including Mad Men, which have become global phenomena,” according to a MIPCOM missive. He’ll give a keynote address as part of MIPCOM’s Media Mastermind series of presentations. Feltheimer has been Lionsgate CEO since 2000.
Full story coming…
EXCLUSIVE: To overhear Jeffrey Katzenberg’s private conversations these days, Comcast supposedly wants to buy DreamWorks Animation and make him head of NBC Universal. But at last week’s Camp Allen — Sun Valley’s annual Alllen & Co investment conference attended by the Who’s Who of tech, Internet, entertainment, and media industries — Comcast’s Brian Roberts and Steve Burke were telling a very different story. They mentioned to several power players that Katzenberg has been pursuing them to buy DreamWorks Animation and lobbying them to make him head of NBCU. (“Because they’re the new guys in town,” one of my sources explains. “Even though Steve and Jeffrey never got along when they both worked for Disney.” Burke, the son of former Capital Cities/ABC president and icon Dan Burke, spent a dozen years in key Walt Disney Co positions before quitting in 1998 to go to work for Comcast.) I heard that the Comcast guys told various Camp Allen bigwigs that they aren’t interested in DWA or Katzenberg — emphasizing that Burke is going to be very hands on with NBCU.
I’ve been hearing that Jeffrey already has offered up DWA to every Hollywood studio, but they and their parent companies have passed. Before Comcast, the most recent “no” came from Time Warner’s Jeff Bewkes. Meanwhile, DWA has two years to go on its distribution deal with Paramount but also an “out” clause after 10 films. Then again, Katzenberg can always obtain DWA’s freedom by buying out Paramount’s deal share himself.
My pal Claudia Eller has a funny little scoop on the LA Times website about how Starz chief Chris Albrecht made a Blackberry mistake that led to Chris McGurk and Danny Rosett’s exit from Overture. (So I gotta ask: is this why moguls like Alan Horn and Ron Meyer refuse to use smart phones or even computers?) On July 1, Albrecht began a vacation in Majorca and read a hush-hush e-mail about the future of the Overture duo. Albrecht tapped out a confidential response suggesting that when he returned on July 12th there should be a discussions about removing the pair. But the reply went to approximately 400 Starz employees and senior executives — including McGurk and Rosett.
Hollywood is jetting to the annual Allen & Co investment conference in Sun Valley starting today. I’ve just been emailed the in-room schedule by a participant, and this year showbiz is back in favor because of an “Entertainment Panel” consisting of Barry Diller, Peter Chernin, Jeff Katzenberg, and Bobby Kotick (the CEO/president of Activision Blizzard for those who are joystick challenged). Ken Auletta, the CEO pornmeister, moderates. No Friday night dildos. No sandwich boards for out-of-work moguls. Gawd, Camp Allen has become such a showbiz snorefest. Just look at the sked:
– “Women In Technology” – Tom Brokaw moderating, with panelists: Ursula Burns and Anne Mulcahy from Xerox and Sheryl Sandberg for Facebook.
– “Modern Europe” – Tom Friedman moderating, with panelists: Lionel Barber from the Financial Times, Mathias Döpfner, and Niall FitzGerald from Thompson Reuters, Jean-Bernard Lévy from Vivendi
– “Social Internet’ – Erin Burnett of CNBC moderating with panelists: Marc Andreessen, Reid Hoffman and Mark Zuckerberg.
– Lunchtime Panel – “Understanding The Brain”
– “Global Risk” – David Ignatius moderating, with panelists consisting of military dudes.
– “The Business of Running a City” — Charlie Rose moderating with panelists: Mike Bloomberg, Cory Booker, and Richard Daley.
– “The New Breed Of Companies” featuring Square, Pandora, thinged and groupon.
– Untitled Panel moderated by Anderson Cooper with panelists: Warren Buffet, and Melinda and Bill Gates.
I’m being told there’s really nothing new with these explanatary conversations. And, anyway, Lionsgate can’t do any kind of deal with MGM unless the studio management brokers some settlement with 32% shareholder Carl Icahn, who has made it clear he won’t approve any big buys by the studio right now. Strange that this is coming on the heels of reports that Spyglass is in the lead to run MGM. (Spyglass Beating Summit To Run MGM?)
Lionsgate management attempted a lowball bid of $1.3B-$1.4B during the MGM auction and then dropped out in March. That’s the last time Lionsgate defied Icahn’s warning not to do any major deals. Among other customary conditions, Icahn’s offer has tightened the reins on Lionsgate not to “enter into any material transaction outside of the ordinary course of business (including any acquisition of assets over $100 million, and any issuance of securities other than upon the exercise of currently outstanding options)”. Though buying MGM would make Lionsgate a bigger player in Hollywood, such an acquisition would add tremendous debt to the studio. And if they gave stock to a seller, then it would dilute Icahn’s stake. Carl wouldn’t be happy about that.
Lionsgate Reworks Terms With JP Morgan To Keep Cash Flowing (As Long As Studio, And Not Icahn, Controls 50% Of Shares)
Carl Icahn surprised almost everybody when he completed his $7 per share tender offer deadline with control of 32% of Lionsgate, shares. Hollywood immediately feared the indie studio would be unable to continue business as usual, because Lionsgate’s $340 million credit facility with JP Morgan Chase Bank contained a covenant that allowed the lender could revoke the credit line once an outsider accrued more than 20% of shares in a takeover bid. Today, Lionsgate announced that it has amended its revolving credit facility with JP Morgan Chase. The trigger threshold for Change of Control has been upped from 20% to 50% control or ownership of the Company’s equity securities. This gives Lionsgate brass the ability to spending money while the Icahn Group takeover attempt plays out. The company notes that it keeps the same interest rate it had before, which is 2.5% above the standard bank borrowing rate (which is currently around 1.175%).
NBC Universal, which faced some tough questions on Capital Hill last week about the proposed NBC Uni-Comcast venture’s commitment to diversity, will have a major presence at the July 28-Aug.1 convention and career fair of the National Association of Black Journalists in San Diego, highlighted by an appearance by NBC Uni president and CEO Jeff Zucker.
According the event’s schedule, NBC Uni will sponsor four sessions, the only media company to do so, with company’s reporters and executives also appearing on nine other panels. Among the NBC Uni 4 sessions is a panel featuring Zucker about the new J.J. Abrams drama series Undercovers, which stars two black actors, Boris Kodjoe and Gugu Mbatha-Raw. Access Hollywood’s Shaun Robinson will moderate the panel, the only one at the convention dedicated to an entertainment program, which also includes Kodjoe and NBC Uni’s chief diversity officer Paula Madison. Completing the NBC Uni theme at the convention, NBC News and its local TV stations will receive NABJ’s Best Practices Award, and Paula Madison will receive its Legacy Award.
In response to yesterday’s news by Carl Icahn that his $7 per share tender offer resulted in 13.2% of outstanding shares that bring the Icahn Group’s stake to 32%, Lionsgate has focused on the 68% of stock Icahn doesn’t control. There was a high level of anxiety in the industry yesterday over the company’s future and its ability to generate product as a proxy battle looms. Here is Lionsgate’s just-released statement:
Once again, Lionsgate’s shareholders have spoken in support of the Board and management’s strategy to create value. Holders of over 68% of Lionsgate shares have rejected the Icahn Group’s offer, with only 13.2% of the outstanding shares being tendered into the offer at its expiry.
Four months have passed since the Icahn Group announced its intention to make a tender offer, and after repeated extensions, numerous changes to its tender offer and a barrage of unwarranted attacks on the Company, including personal attacks on the Board and management, the Icahn Group remains a minority shareholder. We at Lionsgate want to take this opportunity to thank our shareholders for their continued support.
The vast majority of our shareholders have yet again demonstrated that they are serious about protecting the value of their investment in Lionsgate.
With respect to the Company’s credit facilities, Lionsgate is in advanced discussions with its lenders regarding finalization of a waiver or amendment that will prevent the potential event of default that could otherwise result from the Icahn
His $7-a-share tender offer doesn’t expire until 8 PM ET tonight. But he’ll be Lionsgate’s largest shareholder after stating publicly today he has received 12.5% of the studio’s shares from stockholders presumably including Mark Cuban. That 31% is a big jump from the 19% stake he held in the film company before he put his offer on the table. It’s also a blow to current Lionsgate management which has kept advising shareholders not to deal with Icahn. He offered $7 a share for the remainder. MORE
Intensively over the next few days, extending even for the next few weeks, a gaggle of studio moguls and/or their executives have scheduled a series of meetings with top agencies in Hollywood. Yes, the movie gods are coming down off Mount Olympus in order to soak up the wisdom of the mere mortals who rep the talent. Top agencies like CAA and WME and UTA and ICM are hosting intimate confabs with 20th Century Fox (Tom Rothman and/or Emma Watts) and Warner Bros (Jeff Robinov and/or Greg Silverman) and Universal (Adam Fogelson and/or Donna Langley) and Paramount (Rob Moore and/or Adam Goodman). That’s how seriously this Summer of Discontent has unsettled the studios who are beginning to admit being relatively clueless what to greenlight next now that so many movies aren’t clicking with moviegoers. “I have three heads of studios coming into my office. They’re completely at a loss about what to do,” one top tenpercenter put it bluntly. So what are the agents going to tell the studios? Here are our writers, here are their pitches and treatments and scripts, here is the originality you should be making instead of numbing predictability. Like, duh. Could this be an opportunity for creativity? That’s what a major producer told my colleague Mike Fleming yesterday: “this sluggish summer might be a blessing in disguise for talent and producers who want to take risks but have been hamstrung for the past two years by studios that …
In the latest salvo in the bare-knuckle brawl of rhetoric between Lionsgate management and Carl Icahn, Lionsgate sent a missive to shareholders pointing up the futility of performance by his past takeover targets, particularly those in media. The letter comes two days before the expiration of Icahn’s $7 per share offer, one he said will not be extended again.
The Lionsgate letter to shareholders charges that “Carl Icahn has a long history of destroying shareholder value,” and cites a 96% share price decline while Icahn was a board member of Blockbuster, a 99.8% drop in share value while Icahn was chairman of the board at WCI Communities, before it filed for bankruptcy; an 80% decline in share value while Icahn was chairman of the board of XO Holdings; and a 68% decline in American Railcar since Icahn took over that company. The missive doesn’t disclose ventures where Icahn achieved success, but claims in particular that his track record at Blockbuster indicate “his obvious lack of knowledge and understanding of the media business.”
Lionsgate also hammers Icahn over his track record as a distributor of low-budget films, which is described by the missive as “an abject failure.” Icahn backed Stratosphere Entertainment in 1997 with distribution vet Paul Cohen. The intention was to release 12 films annually predicted to gross between $3 million and $30 million worldwide. None of the films, which included Hideous Kinky and One Tough Cop, grossed more than $1.3 million, before …
NOW IT GETS PERSONAL: Carl Icahn Rips Lionsgate Bosses For Lavish Overspending And “Ticking Time Bomb Of Debt”
Carl Icahn today issued this open letter to the board of directors of Lionsgate. But this time, Icahn got personal: attacking “management’s lavish new offices, their huge salaries and more than a few mentions of the Bentley driven by CEO, Jon Feltheimer” and threatening to replace the board since it “is clearly unwilling to tell the Emperor he wears no clothes” with a proxy fight. Icahn has been threatening a proxy fight for months now even though such battles are always expensive, very time-consuming, and rarely successful. But there is no doubt that Icahn, if he gets Marc Cuban’s shares, now has a poison pill-less Lionsgate whimpering:
Dear Members of the Board:
As you know, the offer by my affiliates to purchase any and all of Lions Gate’s outstanding common shares for $7.00 in cash per share is expected to close next Wednesday, June 16th. As I have previously announced, we will not be extending the offer again. I am writing to express my grave concern as a shareholder – and, I believe, as a soon to be much larger shareholder – over your apparent ambivalence regarding Lions Gate’s fate. I am truly mystified by some of your actions – and your inaction – in the face of the abject failure of the current management team to deliver value to shareholders, and I fear for the future of our company.
As you have
BREAKING NEWS! UPDATE: Lionsgate insiders tell me: “This isn’t a big surprise and doesn’t change the dynamics of the Icahn takeover fight. Cuban was one of Icahn’s nominees for the Yahoo Board of Directors in 2008, and we always thought it was likely he would tender to Icahn. We think if he does tender to Icahn at seven dollars a share, he’s leaving money on the table.”
Noon: Carl Icahn scored another huge victory in his hostile takeover battle for Lionsgate. Then again, Mark Cuban is one of the kookiest entrepreneurs out there and may just be seeking publicity at Lionsgate bosses’ expense or a negotiating advantage with the studio for board seats, movie and TV deals, access to the sizeable library, etc. Until today, Icahn had not been able to get traction with Lionsgate stockholders for his $7-a-share tender offer. But what Cuban said this morning on CNBC is “I really think I’m going to tender and I will have a conversation with them today… I have my reasons I don’t want to get into. But I think it’s the right move for right now and the right move for the long term, for the company and me.”
With Cuban’s shares, Icahn would become Lionsgate’s largest shareholder. Cuban owns 5.3% of Lionsgate shares, and Icahn already owns nearly 19%. To date, only about 4% of the studio stockholders had agreed to tender to him despite Icahn extending …
UPDATE: Lionsgate doesn’t release its earnings until later today, but the company eyes the extension of Carl Icahn’s $7 per share tender offer as a victory, as Lionsgate claims that less than 4% of shareholders tendered into the offer that was due to expire today.
The company issued this statement: “Lionsgate’s shareholders have demonstrated that they believe the Icahn Group’s offer is financially inadequate. Lionsgate appreciates the continued support of its shareholders and notes that, while there is no need for shareholders to take action at this time, those shareholders who have tendered into the offer can still withdraw the shares.”
Lionsgate will release earnings late today and hold an analyst and investor conference call tomorrow at 9 AM East Coast time.
EARLIER: In the latest saga in Carl Icahn vs. Lionsgate, Icahn has extended to June 16 his tender offer of $7 for outstanding shares of the indie company. Icahn’s tender offer expired today, and he didn’t get very far in his hostile takeover quest. The move comes as Lionsgate prepares to unveil its earning later today, after the market closes.