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Jerry Levin Q&A: Ex-Time Warner Chief Decries Fox Mega-Merger And Lack Of Creative Guts And Corporate Vision

By | Friday August 1, 2014 @ 9:21am PDT
Mike Fleming

Jerry Levin Q&A: Ex-Time Warner Chief Decries Fox Mega-Merger And Lack Of Creative Guts And Corporate VisionEXCLUSIVE: As we watch Rupert Murdoch attempt a colossal Time Warner takeover, who better to evaluate its merit than Jerry Levin. He steered Time Warner as chairman/CEO for many years, adding Ted Turner and AOL along the way. A retired philanthropist and chairman of StartUp Health, Levin is still paying attention and is therefore better suited than most to explain the complexities of Murdoch’s ambitious plan and its far-reaching impact. He was gracious with his time and wasn’t interested in sugarcoating, so buckle up.

mrlevinDEADLINE: Rupert Murdoch sees a match in Fox and Time Warner. All I see is a collision of duplicative assets, pink slips, two major studios making fewer movies, and nothing here that empowers creativity. Obviously I’m naive. What value do you see in a union between Fox and Time Warner?
JERRY LEVIN: None at all. It provides great theater; everybody gets excited when there are large transactions in the offing with iconic brands. But the fact is, it makes no sense, culturally or creatively. It’s not good for movies, and television, and storytelling. All it is is a financial construct that gets Wall Street going with valuations. It is so disruptive, particularly when you’re talking about two studios with vastly different cultures of their own. When you put these things together, usually there’s a push from Wall Street to cut back and make sure there are the right synergies, which there usually aren’t. It just means a lack of focus and trying to harmonize the cultures, particularly in this case, it doesn’t make any sense to me at all. Read More »

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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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Should Fox Shareholders Hope Murdoch Doesn’t Buy Time Warner?

By | Monday July 28, 2014 @ 8:18am PDT

Should Fox Shareholders Hope Murdoch Doesn’t Buy Time Warner?The risks of a deal are becoming more apparent as 21st Century Fox CEO Rupert Murdoch prepares to sweeten the $80B offer that Time Warner rejected, MoffettNathanson Research’s Michael Nathanson observes in a thought-provoking report this morning. With memories of the AOL Time Warner debacle still fresh in their minds, Time Warner execs won’t accept a non-cash bid “unless it is wildly generous,” the analyst says. He hopes Fox draws the line at $100 a share, up from $85, but notes that Murdoch could go to $105 without losing his company’s investment-grade debt rating. Yet if he prevails at that price, then Fox would have little margin for error. And Nathanson warns that mega-mergers “are more complicated than the simplicity of adding two Excel spreadsheet models together.”

The bottom line is that Fox’s stock “is in purgatory”as long as Murdoch’s interest in Time Warner remains alive. And the legendary dealmaker may not be able to pull it off. “After initially believing that this deal gets done at $100 per share, we have our doubts that it will be done at all,” Nathanson says. Among his concerns:

What’s up with Chase Carey?  The Fox COO is highly regarded on the Street, but his contract expires in mid-2016. Some shareholders “are nervous that this deal — and the value of [Fox's] stock — will fall short of expectations if Chase was to leave.” Read More »

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BSkyB To Acquire Fox’s Sky Italia & Deutschland Stakes, Create European Giant

BSkyB To Acquire Fox’s Sky Italia & Deutschland Stakes, Create European GiantAs expected, BSkyB said this morning that it will create “a world-class multinational pay TV business” with the acquisition of 100% of Sky Italia and 57.4% of Sky Deutschland. The UK’s leading pay-TV player has acquired the stakes from Rupert Murdoch‘s 21st Century Fox in a deal worth about £4.9B ($8.3B) in cash, plus assets. (Fox owns and will retain a 39% stake in BSkyB.) The combined group will have 20M subscribers in Europe across three of the four biggest markets. BSkyB will pay £2.07B for Sky Italia and £2.9B for Deutschland. It will also transfer its 21% ownership of National Geographic Channel to Fox at a value of £382M ($649M). That will raise Fox’s stake in the channel to 73%. BSkyB says it will also launch a voluntary cash offer to the remaining shareholders of Sky Deutschland at 6.75 euros ($9) per share. Subject to the number of shareholders who accept the offer, the overall cash value of the deals announced today could reach £7B ($11.9B). The moves come as BSkyB reported adjusted revenue for the year was up 7% to £7.6B ($2.9B).

The moves to create Sky Europe also come as Fox pursues a mega-acquisition of Time Warner. While speculation has been that the deal to combine the Skys was designed to raise funds for another eventual run at TW, it’s also considered that this deal has a distinct raison d’être and exists on its own … 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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BSkyB Deal To Create Sky Europe Said Nearing

By | Thursday July 24, 2014 @ 11:16am PDT

BSkyB Deal To Create Sky Europe Said NearingWhen BSkyB reports its full-year results tomorrow, it is expected to announce a deal to acquire 57% of Sky Deutschland and 100% of Sky Italia from 21st Century Fox. Speculation has swirled that this deal is near since it emerged that Rupert Murdoch’s behemoth had bid $80B bid for Time Warner. In May, UK pay-TV giant BSkyB confirmed it had initiated preliminary discussions with Fox to evaluate a potential acquisition of the latter’s pay-TV assets in Germany and Italy. Fox also owns 39.1% of BSkyB. A combination of the businesses would have about 20M subscribers, and could also provide a payday to Fox of an estimated $13B. I’ve been cautioned that these funds are not necessary for Fox to be able to up its bid for TW, but it would put extra money in the coffers while creating a huge pan-European group. “It could just be that 21st Century Fox sees it as a useful way of generating funds and eases management time to concentrate on other things. But the reason for doing it would exist on its own merits,” Enders Analysis’ Toby Syfret tells me. It’s worth remembering that English Premier League soccer rights are coming to auction again in 2015 and extra cash could certainly come in handy. Read More »

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Time Warner Changes By-Laws To Help Block A Hostile Takeover

By | Monday July 21, 2014 @ 1:50pm PDT

Time Warner Changes By-Laws To Help Block A Hostile TakeoverThis is the first concrete sign that Time Warner is determined to fight Fox CEO Rupert Murdoch if he decides to do an end run around the board in an effort to acquire the company. Directors adopted an amendment to TW’s by-laws, which took effect immediately, that makes it harder for a small group of shareholders to call a Business Leaders Gather For B20 Summit In Sydneyspecial meeting, Time Warner says in an SEC filing. Previously investors holding at least 15% of the total votes could demand a meeting. The change limits that right to “the Chief Executive Officer or a majority of the entire Board.” The fear was that Murdoch — or anyone — could have tried to stampede short-term investors into accepting a deal even if the board concluded that it would not serve their long-term interests.

Related: Bart & Fleming: Fox-TW Mania Means Banker Fees And Layoffs, Not Quality

Time Warner shares are down 1.6% in post-market trading following disclosure of the change. The company says that it intends to restore the 15% threshold at the 2015 annual meeting.

Related: Will Anyone Besides Rupert Murdoch Take A Run At TW?

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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.

Read More »

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DeadlineNow Morning Report: Weekend Box Office, Rupert Murdoch Tweets, Latest On ‘Midnight Rider’ (Video)

By | Friday July 18, 2014 @ 11:45am PDT
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Morning Report, Friday July 18

Will the 'Apes' sequel hang on to the No. 1 spot at the weekend box office in its second week as it faces off against newcomers 'The Purge: Anarchy', 'Sex Tape' and 'Planes: Fire & Rescue'?, Rupert Murdoch is back on Twitter saying he won't bid for Tribune, among other things, two 'Midnight Rider' filmmakers plead not guilty in the death of camera assistant Sarah Jones. Deadline's Dominic Patten reports.

Related:
‘The Purge’ Scares In $2.6M, ‘Sex Tape’ Grosses $1.1M, ‘Planes’ Same As Last Year
‘Midnight Rider’ Exec Producer Jay Sedrish Turns Himself In To Georgia Police, Following Randall Miller & Jody Savin

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Rupert Murdoch Tweets: He Won’t Bid For Tribune

By | Friday July 18, 2014 @ 7:22am PDT

Rupert Murdoch Tweets: He Won’t Bid For TribuneLooks like Rupert Murdoch can’t acquire everything he wants. “Sorry can’t buy Trib group or LA Times — cross-ownership laws from another age still in place,” he tweeted overnight.  He salivated over Tribune‘s papers which include the Chicago Tribune, Baltimore Sun, as well as the Los Angeles Times. The parent company has wanted to sell them, and now plans to spin them off in a separate entity that will be publicly traded beginning August 4.

Murdoch still has plenty to keep him busy: Fox disclosed this week that it made an $80B offer for Time Warner, which the company rejected. And News Corp — Murdoch’s publishing company — is eyeing Time Inc, the publishing company that Time Warner just spun off. Read More »

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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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DeadlineNow: Time Warner’s Rejection Of Rupert Murdoch’s $80B Offer — What’s Next? (Video)

By | Wednesday July 16, 2014 @ 2:49pm PDT
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Time Warner Rejects Rupert Murdoch's $80B Offer

Deadline's David Lieberman weighs in on Time Warner's rejection of Rupert Murdoch's $80B Offer to buy the media giant and where things go from here.

Related:
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

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Media Merger Mania: Fox’s Bid For Time Warner Is Just The Beginning (Video)

Media Merger Mania: Fox’s Bid For Time Warner Is Just The Beginning (Video)Rupert Murdoch’s $80B offer for Time Warner makes two things clear: The much anticipated round of content company merger mania is here — and likely will include Time Warner even though it rejected the proposal from Murdoch’s 21st Century Fox. And virtually no deal idea is too big or outlandish. One major question at this point is whether a large digital company such as Google will seize the opportunity to buy a major content company. Giants such as Fox and Time Warner want to defend the pay TV status quo — the lucrative bundle that requires subscribers to buy channels they don’t watch. If they become more powerful, then it could slow efforts by Internet companies to claim a piece of the giant ad pie that goes to TV.

Content company stock prices today reflect their new popularity. In addition to Time Warner (+15.6% at mid-day) we see Discovery +6.6%, Viacom +4.3%, Lionsgate +3.7%, AMC Networks +3.4%, and Scripps Networks +3.4%. “The urgency to find a ‘dance partner” will increase across the sector,” Bernstein Research’s Todd Juenger says. “Nobody wants to be the company that gets left out of the consolidation wave, and companies would rather control their own destinies.” What’s more, every investment banker in the world now smells opportunities to collect millions in fees if they can propose and facilitate deals.

Time Warner has two things that make it especially attractive. Read More »

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UPDATE: Time Warner Shares Soar On Reports Of $80B Offer By Rupert Murdoch

By | Wednesday July 16, 2014 @ 6:46am PDT

UPDATE: Time Warner Shares Soar On Reports Of $80B Offer By Rupert MurdochUPDATE. 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.

21stcenturyfox1__131014203730-275x122PREVIOUS, 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 TimeWarnerlogoblueeliminating 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 »

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Scotland Yard Will Interview Rupert Murdoch As A Suspect In Hacking Inquiry: Report

Scotland Yard Will Interview Rupert Murdoch As A Suspect In Hacking Inquiry: ReportRupert Murdoch remains vulnerable to the UK phone hacking inquiries despite a split verdict yesterday in cases involving two of his former lieutenants, Andy Coulson and Rebekah Brooks: Scotland Yard has officially told the Fox CEO that it wants to interview him soon, and considers him a suspect, according to The Guardian‘s Nick Davies. “It is understood that detectives first contacted Murdoch last year to arrange to question him but agreed to a request from his lawyers to wait until the phone-hacking trial was finished,” he writes. Fox co-COO James Murdoch — who, in addition to being Rupert’s son, ran UK operations when much of the hacking took place — “may also be questioned,” the paper says.
Read More »

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News Of The (Media) World: Split Decision Frees Rebekah Brooks, Cuffs Andy Coulson In Murdoch’s Hacking Scandal

By | Tuesday June 24, 2014 @ 8:24am PDT

News Of The (Media) World: Split Decision Frees Rebekah Brooks, Cuffs Andy Coulson In Murdoch’s Hacking ScandalUPDATES WITH NEW INFORMATION: A 130-day trial highlighted by testimony as lurid as the tabloid headlines at its center ended today with a split decision for two of media mogul Rupert Murdoch‘s most trusted consiglieres. Rebekah Brooks, the flame-haired former head of Murdoch’s U.K. print operations, was found not guilty on five charges related to the notorious telephone-hacking scandal that resulted in the 2011 shuttering of the News Of The World scandal sheet. The official jury findings were not guilty on one count of  conspiracy to hack voicemails, two counts of conspiracy to pay public officials and two counts of conspiracy to pervert the course of justiceImage (2) Andy-Coulson__131031225952.jpg for post 624902

Brooks’ successor, bespectacled tabloid editor Andy Coulson, the  former communications chief to Prime Minister David Cameron, may face prison time, having been found guilty of conspiring to hack phones while he ran the News Of The World. The jury is still considering charges of misconduct in public office against Coulson and former News of the World royals editor Clive Goodman.

Coulson, a former lover of Brooks’s, was the only one among seven on trial found guilty of conspiracy to intercept mobile phone calls and messages. The Cameron connection will undoubtedly exacerbate reaction to the decision, as the verdicts reverberate through UK and U.S. political and media centers.

Image (1) Rupert-Murdoch__130216061256.jpg for post 484229News UK, formerly known as News International and part of Murdoch’s News Corp, said in a statement: “We said … Read More »

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Big Media Moguls With Out-Of-Whack Compensation: Exclusive Deadline List

Highest Paid Media ExecutivesHere’s a question to ask yourself if you aren’t sure whether media mogul pay reflects merit or cronyism: Did Viacom and CBS executive chairman Sumner Redstone deserve $93M, an 80% year-over-year increase, in the combined compensation he received from the companies in 2013? The answer to this query, and others like it, seems especially relevant here in Deadline’s fourth annual effort to try to make sense of the outsized sums media companies pay their leaders. They’re among the most lavishly compensated in corporate America where CEOs made 206 times what the average worker did in 2011, up from 26.5 times in 1978, economist Thomas Piketty notes in his surprise bestselling new book about growing wealth disparities. Compensation 1That strikes many as fundamentally unfair: The California legislature is weighing a bill that would raise tax rates for companies that give their CEOs more than 100 times the average pay for their workers.

Here’s our contribution to the discussion: a tally of the highest-paid executives in media, with metrics and analysis to help you decide what they’re worth. The chart on the right (click to enlarge) shows media execs whose compensation exceeded $10M in 2013 according to company proxies. Below you’ll find our in-depth look at the top 11 earners on the list. Why 11? That enables us to add Rupert Murdoch, who shouldn’t be left out of any discussion of media wealth and power. Those in this Group of 11 collectively made $448.6M in 2013, +15.6% vs 2012, with their median pay  +8.3% to $32.5M.

Related:
Out Of Whack – 2012
Out Of Whack — 2011
Out Of Whack — 2010

One of the things you’ll see is how much Redstone contributes to the high level of executive pay in media. He and other leaders at corporations he controls occupy four of the 11 spots on our list. That has a ripple effect: All companies represented here (with a caveat, discussed below, for News Corp) include Viacom and CBS in the list of peers against which they benchmark pay for their own execs. And Redstone isn’t all that unusual. You frequently see high pay at enterprises, like many in media, run by families that own little equity but control decision-making by virtue of their supervoting shares.

Boards usually justify their high outlays by pointing to metrics of company success, which they credit to the CEOs. But while those on this list are smart and shrewd, it’s worth asking how much of their good fortune — including their rising stock prices — also represents good luck. Keep in mind that all of the media powers represented by this year’s top 11 own broadcast and/or pay TV channels. Cable and satellite companies complain that these programmers have oligopoly power to raise prices on distributors. Many are aggressively doing so, which distributors say pressures them to raise your rates. Programmers also benefit from a new source of cash: license fees from digital services including Netflix and Amazon Prime.

Executive compensation payOur list and the charts that follow include Deadline’s annual Out-of-Whack analysis. It illustrates not only that CEOs make vastly more than the public. Some boards are far more generous to the top dog than they are to others in the C-suite. That could be a sign that directors are in the CEO’s pocket, or lack confidence in their executive bench, many corporate governance experts say. In any case, research shows that lopsided outlays promote groupthink, damage morale, and often depress a company’s stock price. It’s a judgement call as to how much of a disparity is too much. Yet those who track the phenomenon typically become alarmed when a CEO makes more than three times the median for the four other top execs whose income must be disclosed to shareholders per SEC rules. Eighteen of the 30 companies we monitor and that have filed information for 2013 failed the test, often miserably, up from 14 out of 31 last year. Read More »

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Super Bowl Helps Fox Beat Fiscal Q3 Earnings Forecasts

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UPDATE: COO Chase Carey says not to worry about speculation that he’s preparing to leave. “Rupert and I have an understanding and a new agreement,” he told analysts in a conference call. “We just haven’t gotten it on paper yet.”

PREVIOUS, 1:08 PM: Shares are up about 4% in postmarket trading after Fox reported that the Super Bowl helped to score an additional $338M at the TV business — enabling the company to beat expectations for the first three months of 2013, an otherwise mixed quarter. Rupert Murdoch‘s entertainment operation generated $1.07B in Super Bowl XLVIII - Seattle Seahawks v Denver Broncosnet income, -63% vs the period last year, on revenues of $8.22B, +11.8%. The top line exceeded forecasts for $7.99B. Adjusted earnings at 47 cents a share also beat predictions for 35 cents.

Related: Super Bowl Scores With Record 111.5 Million Viewers

The dominant Cable Network Programming unit’s revenues increased 11.5% to $3.15B — slightly less than analysts anticipated — with cash flow +10% to $1.18B. The business benefited from an 11% increase in the cash it collects from cable and satellite companies, and an 8% increase in domestic ads. But it also had higher expenses to launch Fox Sports 1 and FXX. At the Fox broadcast operation revenues with the Super Bowl RIO-2-Affichewere +27.1% to $1.59B, higher than the consensus forecast, with cash flow +31.5% to $288M. Ad sales were up 30%, although Fox says that it also suffered from “lower general entertainment ratings, led by declines at American Idol.” Filmed Entertainment suffered from comparisons with early 2013 which included A Good Day To Die Hard, Parental Guidance, and Life Of Pi and as it absorbed costs, but didn’t collect revenues, for Rio 2 which was released in April. Revenues fell 2.9% to $2.28B although cash flow increased 6% to $354M from sales of streaming rights to Amazon of TV shows including The Americans and 24. Read More »

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Discovery & BSkyB Poised To Acquire UK’s Channel 5: Report

channel5Back in February, word began to spread that longtime frenemies John Malone and Rupert Murdoch were eyeing a joint acquisition of the UK’s Channel 5. Malone-backed Discovery Communications and BSkyB, majority owned by Murdoch’s 21st Century Fox, have now reportedly gone ahead and sewn up a deal. Broadcast reported that Discovery and BskyB are nearing an announcement they have acquired the broadcaster in a deal valued at £350M, which would give the former a 70% stake and the latter 30%. But media entrepreneur Richard Desmond’s Northern & Shell, owner of Channel 5, has said it received several bids and was still evaluating them, according to Bloomberg. The free-to-air broadcaster was thought to be seeking a buyer with about £700M to spend, but many were skeptical it would fetch such a price; Desmond paid about £103.5M for it in 2010. Other companies that have been said to have shown interest include Viacom, Turner Broadcasting, BT, NBCUniversal and Saban Capital.

Channel 5 is notably the home of Big Brother, although its contract for the show expires in 2015. The net also airs U.S. dramas like Under The Dome, CSI and Person Of Interest; weekly average ratings hover around 4%. Read More »

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