Some Fuse staffers began getting pink slips today as the operation readies to merge with NuvoTV. Meetings with various categories of employees were held throughout the morning, according to a source with knowledge of the situation, who described a waiting-for-the-tumbrel scene filled with confusion and consternation at Fuse’s corner of parent MSG‘s 11 Penn Plaza HQ. “We announced in early April that we reached an agreement to sell Fuse to SiTV Media and these changes are part of that transition,” an MSG rep told Deadline, declining to elaborate. According to one insider, it’s that age-old “taking a look at what we need going forward” post-merger story.
Related: Sean Combs Says MSG Used Revolt TV To Bid Up Fuse Sale Price
Early last month, the parent company of Jennifer Lopez’s NuvoTV agreed to buy Fuse from MSG. SiTV Media agreed to pay $226M — and give MSG a 15% stake, the entities disclosed. The total value of the cash plus equity comes to about $275M, Stifel analyst Benjamin Mogil estimated at the time. The company, where Lopez is a shareholder and Chief Creative Officer, outbid an offer from Sean Combs said to be around $200M. Fuse reaches 73M pay TV subscribers, and should boost SiTV and NuvoTV — a Latin American entertainment network that reaches about 34M homes. Read More »
SiTV Media agreed to pay $226M — and give MSG a 15% stake — the entities disclosed this morning. The total value of the cash plus equity comes to about $275M, Stifel analyst Benjamin Mogil estimates. In any event, the company where Jennifer Lopez is a shareholder and Chief Creative Officer outbid an offer from Sean Combs said to be around $200M. Fuse reaches 73M pay TV subscribers, and should boost SiTV and NuvoTV — a Latin American entertainment network that reaches about 34M homes. With Fuse “we’ll have the ability to deliver a broad array of terrific content both from a Latino perspective and across multiple genres, including music, to a broader audience,” Lopez says. “The acquisition of Fuse means we now own two wonderful assets. It’s a phenomenal time for our company and we look forward to growing both networks in the years ahead.” SiTV CEO Michael Schwimmer adds that the deal “enhances our distribution relationships, dramatically expands our aggregate subscriber base, provides substantial economies of scale, affords unique opportunities for programming and cross-promotion and should be extremely appealing to the advertising community as we roll out our plans for both NuvoTV and Fuse.” Read More »
The performer who now just calls himself Diddy would use the music channel to boost distribution for his Revolt TV, another music service that launched in October, Bloomberg reports citing “three people with knowledge of the situation.” Comcast helped to launch Revolt to fulfill its agreement, in return for government support for its 2011 acquisition of NBCUniversal, to add minority-owned networks. But it’s been hard to secure distribution: Revolt only reaches about 22.8M homes, while Fuse is in 74M. Madison Square Garden put Fuse on the block in September retaining JP Morgan to “explore all strategic alternatives.” Distributors pay an average of 8 cents per month for each home Fuse reaches. Stifel analyst Benjamin Mogil noted at the time that Fuse could command a healthy price because its deals with distributors enable a buyer to reprogram the network to offer “anything other than live sports.” Many MSG shareholders are eager to see the company return cash to them, possibly by repurchasing shares. The stock has stagnated in recent months. In a call with analysts in February, Vice Chairman Hank Ratner — who was CEO at the time — declined to discuss MSG’s progress with the Fuse sale. Tad Smith, a former exec at Cablevision, took the top job at MSG last month. Cablevision CEO James Dolan is MSG’s executive chairman; his family controls about 69% … Read More »
The Madison Square Garden Company was up in pre-market trading this morning as it reported its Q4 and 2013 results for the period ended June 30. There were increases at both MSG Sports and MSG Media, but the year and the quarter were off at MSG Entertainment. Overall, full-year revenues grew 4% to $1.3B for the New York Knicks owner, and net income was up 34% to $142.4M, or $1.83 a share. For the quarter, net income was up to $36.4M or 47c cents a share, from $28.56M or 37 cents a share last year, beating analyst expectations. Quarterly revenues were $336.4M, a 1% increase over the same period in 2012. MSG Media, whose properties include the MSG TV Networks and music channel Fuse, had full-year revenues of $677.7M, +10%, and operating income of $328.6M, a 44% hike. MSG Sports, which houses the NBA’s Knicks, the NHL’s New York Rangers, the WBNA’s New York Liberty and the AHL’s Hartford Wolf Pack, saw a 1% bump in revenues to $470.3M. Operating income was $13.5M, +3%. At the MSG Entertainment division, producer of live shows including the Radio City Music Hall Christmas Spectacular, revenues fell 4% to $252.2M. MSG said the decrease was partially due to lower takings from the Christmas Spectacular franchise, primarily as a result of Superstorm Sandy’s impact on attendance in New York. The division notched an operating loss of $24.7M, an increase of … Read More »
Madison Square Garden Media still hasn’t come to terms with Time Warner Cable over increased fees for MSG and MSG+ sports networks. MSG Media yanked the networks early New Year’s Day from TWC systems in New York City and the Buffalo vicinity. BTIG analyst Rich Greenfield noted in his blog today that the last time the two feuded over rate increases back in 2005 the battle lasted two months. Meanwhile, MSG has been holding viewing parties for TWC customers to watch Knicks, Rangers and Sabres games and directing them to alternative providers such as Verizon FiOS. Greenfield notes that Time Warner Cable is about to launch its own expensive sports network venture in Los Angeles after acquiring rights to the Lakers and Major League Soccer’s Galaxy in Southern California and co-investing in a Mets venture in New York. Additionally, TWC expects eventually to bid against Fox Sports Net for rights to Los Angeles Dodgers games. Fox Sports, which has rights to Dodger games through the 2013 season, is fighting a bankruptcy court battle with the Dodgers to prevent new bids from taking place before this fall.
One of cable’s most irksome long-running battles isn’t over yet: Cablevision is appealing an FCC order that requires MSG — which the cable operator controls — to offer HD feeds of its two New York regional sports channels to Verizon FiOS and AT&T U-verse. That announcement followed a statement from Verizon today saying that it had “a home-team win in overtime” and promising to offer HD versions of MSG and MSG+ in December to FiOS TV customers in all service packages except FiOS TV Local. The HD feeds are a big deal to fans of the New York Knicks, New York Rangers, New York Islanders, the Buffalo Sabres and the New Jersey Devils.
Cablevision’s appeal continues a dispute that began in 2009 – and that seemed to have reached an end last week. The FCC formally approved a decision from its Media Bureau requiring MSG to deal with FiOS and AT&T, and the federal Second Circuit Court of Appeals refused Cablevision’s request to stay the FCC order. But Cablevision says it is returning to the court for a stay while it seeks a review of the FCC’s orders. “We continue to believe that an unbiased review of the data can only result in one conclusion: that there has been no competitive harm to the nation’s two largest phone companies,” Cablevision says. “In a highly competitive marketplace like New York, a forced sharing of offerings only deters companies from investing and innovating, which hurts both fair competition and consumers.” Read More »
UPDATE, 8:10 AM: MSG CEO Hank Ratner told analysts that he can’t say much about the lockout “in light of (NBA) league restrictions.” But it has created problems. “We are exploring opportunities to bring other live events to the Garden” to replace the lost games, he says. It’s been tough to do so at the last minute, though. Ratner has scheduled two performances and adds that “we’re going to use the influence that we have as Madison Square Garden to schedule as many dates as we can.” Can companies that have bought suites at the Garden cancel them? The company says not to worry — but won’t give specifics. Season-ticket holders can get refunds, including for the eight Knicks home dates that have been lost. MSG is required to send the cash out within 10 days and include a 1% annual interest rate payment retroactive to October 1. The company says the lost games won’t cause its sports TV channels to run afoul of its cable and satellite affiliation agreements. The deals have provisions for work stoppages; hockey and Knicks-related programs will fill in for some of the lost games. MSG Media President Mike Bair says that “the vitality of the market for hockey has been better than last year and better than our plan.” Meanwhile the company continues to upgrade the Garden, and says the total bill should come to $980M.
PREVIOUS, 5:42 AM: We’ll have to wait for the company’s quarterly conference call with analysts to find out what how badly the NBA lockout might hurt the owner of the New York Knicks, MSG regional sports networks, and the Madison Square Garden arena. There was no mention of it in this morning’s earnings report. But the disruption follows a strange quarter as the company closed Madison Square Garden and the Theater at Madison Square Garden for upgrades. MSG reported net income of $21.3M, up 10.5% vs the same period last year, on revenues of $177.6M, down 6.9%. The revenue figure was well ahead of the $173.88M that analysts expected. And earnings, at 28 cents a share, zoomed past the 10 cents the Street anticipated. Read More »