That napalm smell surrounding Hollywood is even more pungent this afternoon. I’ve just confirmed that Lionsgate management’s attempt to lowball MGM didn’t work. The studio has now dropped out of the auction after bidding between $1.3 billion and $1.4 billion. (For the record, the Wall Street Journal got to this first.) But what’s most interesting to me is that Lionsgate defied Carl Icahn’s warning not to do any major deals and did bid for MGM after all. (Yesterday, LG vice chairman Michael Burns wouldn’t admit to a bid when interviewed by CNBC.) This is entertaining indeed — until somebody gets hurt. And, inevitably, that’ll be the Lionsgate staff. Management needs to settle with Icahn, and quick.
The art world expects paintings to spike in value once the artists dies. It doesn’t often happen in the music world, but Michael Jackson has achieved one more record: getting the highest amount ever paid for a recording contract. According to reports, Sony Corp agreed to pay Jackson’s estate up to $250 million or more for 10 albums of unreleased songs and reissues of his well-known tunes. The Wall Street Journal broke the story that Sony has sold 31 million Jackson albums worldwide since his June 25 death. The new deal will be applied retroactively to the soundtrack to the documentary This Is It. This is the same Michael Jackson who struggled with his finances and his reputation until the day he died.
Before Stephenie Meyer authored the Twilight Saga, Anne Rice was the Queen of Vampires. So, in a recent Wall Street Journal interview, she talks about the fang explosion in showbiz. (And, yes, this is another in my shameless plugs for Twilight fan traffic):
WSJ: What do you think of the whole vampire phenomenon that’s taken hold?
Anne Rice: I think it’s wonderful fun. Now that I don’t write the Vampire Chronicles I feel free to enjoy it. I really enjoy the HBO series True Blood. When I was writing my own, I wouldn’t have wanted to be influenced.
WSJ: Have you read any of Stephenie Meyer’s books?
Anne Rice: No, I haven’t read any of the Twilight series, but I did see the film. I felt that it reflected the deep desire of young women to have the mystery and protection and wisdom of older men. I think many girls mature much earlier than boys, and they are frustrated when they approach young boys for love or protection. Hence the fantasy of a wise and protective vampire coming into the life of a young girl who, of course, appreciates him in a special way.
Here’s why the Wall Street Journal‘s Martin Peers is one of my favorite business journalists covering Big Media. He wrote today, “Sumner Redstone is true to his word. He said a year ago that he did ‘not intend to sell one more share of stock in Viacom or CBS.’ Wednesday he said he would sell not one but maybe a combined 50 million more shares in the two.” This is also why we love writing about Viacom’s crazy old coot. Because you can’t predict from one minute to the next what the 86-year-old Redstone’s gonna do especially since he became so over-leveraged. But finally he’s helping pay off his family business National Amusements’ $1.46 billion debt and holding onto the bulk of its movie-theater chain except for selling 35 U.S. movie theaters outside of its core business in the Northeast. It’s even sane to now see opportunity in the stronger stock market — the Dow hit 10,000 just today! — and unload all those non-voting shares and even some voting stock in both Viacom and CBS since the share prices have doubled in recent months after hitting rock bottom prices during the worst of the financial crisis. National Amusements faced a $500M debt payment later this month, so the company said today it plans to sell about $600 million worth of Viacom shares and $345 million of CBS shares along with some non-core assets to pay off its creditors. The company said …
The Wall Street Journal is reporting (subscription required) that Google’s YouTube is in discussions with Lionsgate, Sony and Warner Bros about allowing users to stream movies on a rental basis, marking one of the online video giant’s first moves toward charging for content instead of making it available free with advertising.
TUESDAY PM: The Wall Street Journal announced this evening that News Corp.’s $5 billion purchase of Dow Jones has been approved by the boards of both companies, which met separately over the past few hours. After three months of drama in the Bancroft family and public debate about journalistic values, the two companies are expected to sign a merger agreement and issue statements in the next few hours. The deal ends a century of Bancroft-family ownership at Dow Jones.
TUESDAY AM: News reports this morning say News Corp’s last-minute $30 million bribe to the Bancroft family worked, and Dow Jones & Co will become a cog in the wheel of Rupert Murdoch’s Behemoth Media empire. Now he can use the Wall Street Journal brand to help launch his Fox Business Channel later this year. Gee, most people would have been offended that Rupert was treating them like prostitutes — in effect, saying: we’ve already established that you’re a whore, now we’re just negotiating the price. But the Bancrofts let greed be their guide instead of their conscience. So now we know: $30 mil is the current price of the principle of press independence. I’m still sure key holdout Christopher Bancroft didn’t give up the good fight. But news reports say Bancroft family members owning 32% (of the clan’s 64.2%) of Dow Jones’s overall votes have agreed to support Rupe’s $5 billion bid – more than enough to clinch the deal. News Corp has scheduled a board meeting for 4 p.m. this afternoon, and Dow Jones’s board is due to …
After all News Corp’s big talk how it wasn’t going to raise its price for Dow Jones & Co, tonight comes news that Rupert Murdoch is now talking about a sickening payoff to the Bancroft clan. That’s right, an out-and-out bribe in the neighborhood of $30+ million for the family holdouts to either forget about the principle of press independence or else forget about the idea of a richer offer. It’s not surprising, though it is disgusting, that Rupe is using greed as a way to appeal to those Bancrofts who don’t want to sell out to him. Gee, most people would be offended that Rupert is treating them like prostitutes — in effect, saying: we’ve already established that you’re a whore, now we’re just negotiating the price. But leave it to the Wall Street Journal to describe the News Corp bribe oh-so-delicately as “an unusual deal for the company to cover advisory fees for the Bancrofts in exchange for some holdout family members supporting the deal… The late-night proposal under discussion was for the Dow Jones board to create a fund to cover payments to firms advising Bancroft family members, including Merrill Lynch and the law firms Hemenway & Barnes and Wachtell, Lipton, Rosen & Katz. News Corp. would assume these liabilities if it bought Dow Jones. The fees could total at least $30 million, according to people familiar with the situation.
“Dow Jones is expected to argue that the Bancrofts deserve help with their advisory fees because their trusts …
Now the Denver branch of the Bancroft family will vote against accepting News Corp’s $60-a-share offer, putting pressure on Rupert Murdoch to raise its offer, according to a news alert by the Wall Street Journal this morning. But News Corp has no intention of raising the price of its offer. The Denver clan, which holds 9.1% of Dow Jones’s voting stock, is seen as an important faction within the Bancroft family and has been one of the most closely watched among Dow Jones management and News Corp executives. Though the outcome is seen as too close to call, there’s increasing doubt the deal will get done.
Previous: Are Bancrofts Leaning ‘No’ To Rupe Deal?
When news warrants, I’ve been trying to file brief updates on the bumpy road that the Murdoch-Dow Jones deal is traveling. Here’s the latest: One Bancroft family member who is a member of the Dow Jones board and staunchly opposes the Murdoch deal, Christopher Bancroft, is wearing a blue fishing cap with the words “Bite Me” embroidered on it. Another key family member who had been ambivalent about the sale and seen as a swing vote inside the clan is now definitely opposed, the Wall Street Journal reports. The family gathered at a Boston Hilton hotel on Monday to official hear Murdoch’s bid, hear a series of presentations and then to deliberate in private. Now Reuters is reporting that the clan doesn’t expect to decide the matter until early next week.
Dow Jones’s 16-member board voted to approve News Corp.’s $5 billion bid for the company, with two directors abstaining from the vote and one — Christopher Bancroft, who has been actively seeking alternatives to Rupert Murdoch — leaving the meeting early. The board’s backing now sends the offer to the Bancroft clan, who control the majority voting shares of the company, for a final vote. The Wall Street Journal said tonight that the family is set to meet Monday and will be given several days to consider the deal. “The board’s endorsement puts some pressure on the Bancrofts to back a sale, but doesn’t obligate family members — who have been divided over the bid — to do so.” Previous: Rupe In Tentative Deal To Buy Dow Jones
The Wall Street Journal announced tonight that Rupert Murdoch’s News Corp. has reached a tentative agreement to buy Dow Jones at its original $5 billion offer price. The deal will be put to the full Dow Jones board Tuesday evening for its approval. The deal still faces its biggest hurdle — getting approval from the Bancroft family, which controls 64% of Dow Jones’s voting stock. The family’s position on the deal is reportedly too close to call. The Bancroft family remains sharply divided on a sale to Rupe. While some members are open to a deal, others have been looking hard for an alternative. Michael Elefante, the Bancroft family’s lead trustee, has scheduled a meeting for Thursday where he’ll present the agreement to all Bancroft family members before asking for their final vote. Elefante is expected to give the clan several days to make a decision, suggesting a final resolution could be achieved some time next week. Needless to say, stay tuned…
If you had trouble reaching a Wall Street Journal reporter this morning, that’s because many who belong to the union chose not to show up for work across the country until this afternoon. It’s been described to me as a “non walk-in”. First, because they feel the paper’s long tradition of independence is threatened since its editorial integrity is dependent on an owner committed to journalistic independence. (In other words, that’s not Rupert Murdoch.) And second, they want their absence to remind Dow Jones management how uncool it is to award golden parachutes to 135 top executives while seeking to eviscerate employees’ health benefits and impose salary adjustments that amount to a pay cut. Dow Jones is currently in contract negotiations with its primary union, Independent Association of Publishers’ Employees, a local of the Newspaper Guild. Even to the point of beseeching other buyers, the union is fighting Murdoch’s Dow Jones purchase which sadly seems inevitable now. Wait til the WSJ reporters read Murdoch’s new Time magazine interview in which he dismissively rails about the ruling Bancroft family trying to guarantee the WSJ‘s editorial independence and integrity: “They can’t sell their company and still control it — that’s not how it works. I’m sorry!” Get those resumes ready now.
By tomorrow, this photo will be posted with all the studio guards, kinda like those Wanted: Dead Or Alive posters. The New York Times issued an internal memo today saying Brooks Barnes, a reporter on the TV beat at the Wall Street Journal for the last few years, is joining the NYT‘s Business Day to cover the entertainment industry from Los Angeles. Brooks will replace Laura Holson, who after six years in LA will return to New York to cover a national beat “focusing on the convergence of the communications, wireless and entertainment industries”. Brooks, who also will work closely with NYT culture desk reporters based in LA, will cover the business of Hollywood: the players, the studios, the financiers. Included in his Bizday portfolio will be Walt Disney Co. Before covering television, Brooks wrote for the WSJ‘s weekend section, and before that the Philadelphia Inquirer. The memo said “the entertainment business is in his blood. Barnes grew up traveling far and wide with his parents, who quit their teaching jobs when he was in the first grade to work for a carnival selling cotton candy.” Expect him on the beat later this summer. But from the sound of things, Holson’s job will entail mining her many showbiz contacts. Meanwhile, Gawker.com has some interesting analysis about what Barnes’ arrival may mean. I’m not sure I share all its opinions, but interesting all the same.
For my own recent coverage, see:
I’m pleased to see that the Los Angeles Times and The Washington Post has caught up days later with my reporting about the possibility of David Geffen paying $1 bil for control of the Los Angeles Times through a joint venture. (The New York Times is still way behind.) UPDATE: Now the Wall Street Journal finally matches my scoop, days late. The paper says Geffen and Zell are scheduled to meet Friday evening for informal talks. And, just as I’ve already reported, WSJ says the two men know each other and have spoken about the newspaper before.
Less than nine months ago, Sony’s Sir Howie Stringer was treated to five fawning print profiles. (And I wondered at the time why no Sony product gets as much great PR.) One of those media outlets was the Wall Street Journal. Well, now the WSJ is servicing Sir Howie yet again. That’s because Stringer spends the new article whining and whining and whining about those pesky Japanese working at Sony who are trying to sabotage his turnaround. (Stringer’s 20/20 hindsight to fixing his poor relations with Tokyo that began because he didn’t get an apartment there? “I should have faked it better.” Now doesn’t that inspire all sorts of confidence…) All I can say is: Geez, suck it up, Sir Howie. And stop blaming everyone but yourself.
Turns out that the Los Angeles Times is not the only media outlet suffering a mass exodus. So is Bloomberg News. I hear that dozens of Bloomberg News staffers worldwide have exited so far this year, and lots more are lining up, especially in New York. The latest is Dana Cimilluca, who covered mergers and acquisitions for Bloomberg News out of its NYC headquarters, according to my “fish”‘ sources (those expensive tropical beauties that reside at Bloomberg’s Manhattan headquarters at 731 Lexington Avenue). Cimilluca is headed to the Wall Street Journal. His quitting Friday caused quite the Bloomberg newsroom stir because he was the only reporter on his team — or for that matter in all of Bloomberg News — who broke any M&A news. Apparently, at WSJ, he’ll not only write for the paper, but also have a blog — something along the lines of The New York Times‘ must-read “Deal” blog done by Andrew Ross Sorkin. Why the Bloomberg mass exodus from all those free snacks and that fancy new building next to Bloomies when so many of their colleagues are looking for jobs? The problem seems to be the, um, difficult personality of Matt Winkler, editor in chief. Stay tuned for the fish to come up for air and explain all.
Ousted by Disney. Now about to ousted by Yahoo!. Lloyd Braun can’t catch a break. According to the Wall Street Journal, the Terry Semel-topped Internet company will announce tomorrow an expanded role for financial chief Susan Decker as Yahoo! grapples with slowing revenue growth, a falling share price and dissent in its ranks. One of the victims of the reorganization will be media-group head Braun. But the soon-to-be-retired Semel stays as chairman/CEO — for now. It was back on November 2004 that Yahoo! announced Braun’s appointment in a great gig as head of Yahoo!’s media and entertainment division, which included Yahoo!’s movies, TV, entertainment, music, games, finance, news and weather, sports, health and kids businesses. Braun was based in Santa Monica, reporting to chief operating officer, Dan Rosensweig, who’s also being swept away. Braun is best known to Hollywood as the ex-chairman of Disney’s ABC Entertainment Television Group from January 2002 until April 2004. Note to Hollywoodites: these Internet guys are like the Wallendas: they may soar above the skies for a short time, but then they take big nosedives.
This just in from the Wall Street Journal, which has been on top of this financial story from the beginning: “The first round of bids for Tribune Co. have come in low, prompting the newspaper and TV company to notify bidders that it is now prepared to consider offers for parts of the business, say people familiar with the situation. Tribune’s move opens up the auction to people interested in bidding for individual assets such as the Los Angeles Times… A much wider group of people is likely to show interest in specific assets. Wealthy individuals such as David Geffen, Eli Broad and Ron Burkle have already come forward signaling their interest in acquiring the Los Angeles Times.” Meanwhile, I just heard today that Geffen’s reason in part for wanting the paper is because of the liberal Hollywood mogul’s obsession with the LAT‘s editorial and opinion sections and how boring, inconsequential and wrong-headed he believes they are. Oh, by the way, Geffen’s hanging out these days with Frank Rich, The New York Times columnist. And the mogul has sold yet another painting at the top of the art market, this time a classic drip painting by Jackson Pollock for about $140 million, prompting more speculation it’s for his LA Times war chest. For more depth on Geffen’s pursuit of the LA Times, see my previous: …