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THE STATE OF THE TV STATION BUSINESS
[SOURCE: tvnewsday, AUTHOR: Harry Jessell hajessell@tvnewsday.com]
Lets face it: TV broadcasting has seen better times, but it's still a healthy business with great prospects. Here's the bad and the good and a few ideas for making it better. First the bad: The business hasn't been able to stop the erosion of non-political national spot revenue -- still a third of total revenue. Political advertising keeps growing -- it topped $2 billion in 2006 and is expected to reach new highs in 2008. But that growth masks the weakness in many of the other major ad categories and the quickening loss of network compensation. Broadcasters have yet to discover the key to DTV riches. They made the capital investment, but after 10 years of on-and-off experimentation, none has come up with a sure-fire way to recoup the expense. Local HD is another big expense with no obvious payoff, retrans cash is still elusive, the FCC is disinclined to award multicast must-carry rights and the newly empowered Democrats in Congress may crack down on TV violence and move to restrict advertising of pharmaceuticals, fast food and political candidates. The good: Cash-flow margins for most are still extraordinarily high, and broadcasters have been able to maintain healthy margins by using technology to cut payroll and other costs. Another trick is to run two stations out of one shop -- duopolies and virtual duopolies. TV stations have the programming that everybody wants to watch -- local news, The Guiding Light, Oprah and primetime. You might be able to see Ugly Betty on cable or Lost on an iPod, but you'll see them first on the local affiliate.
http://www.tvnewsday.com/articles/2007/01/23/daily.3/
See also --
* Limited Upside Seen For Big Media
[SOURCE: Forbes.com, AUTHOR: Joshua Lipton]
Market analysts see less upside ahead for media conglomerates. “While reports of the death of traditional ad media have repeatedly proved premature, they continue to slowly lose share and nothing seems likely to change the trend. History dictates that ad dollars follow eyeballs with a lag, and eyeballs continue to migrate away from traditional media.†Riding to the rescue of these companies could be cash-heavy private equity firms.
http://www.forbes.com/markets/2007/01/22/big-media-earnings-markets-equi...
The State of the TV Station Business
BROAD-BURKLE BID FOR TRIBUNE LIKELY TO REMAIN IN PLAY
[SOURCE: Los Angeles Times, AUTHOR: Thomas S. Mulligan thomas.mulligan@latimes.com]
The bid submitted for Tribune Co. by billionaires Eli Broad and Ron Burkle expires this afternoon, but people familiar with the auction say they expect the Chicago-based media company to withhold a response for now while encouraging the pair to stay involved. A major Tribune investor said last week that he found the Broad-Burkle bid to be attractive because it would involve an immediate $27-per-share cash dividend plus an infusion of $500 million in capital from the two entrepreneurs. Tribune, corporate parent of the Los Angeles Times, KTLA Channel 5, the Chicago Cubs baseball team and other newspapers and TV stations, also received bids last week from its biggest shareholder group, California's Chandler family, and from the New York-based private-equity firm Carlyle Group. The $4.7-billion Carlyle bid is only for Tribune's broadcast division and the Cubs [which many consider the jewel in Tribune's tainted crown]. Although the Chandlers did not spell out their plans in their letter, they are expected to later sell the newspapers, which include The Times, the Chicago Tribune, New York Newsday and eight other papers. Rupert Murdoch's News Corp. has thrown in with the Chandlers, agreeing to take a minority stake in their deal, according to a News Corp. insider who spoke on condition of anonymity because he had not been authorized to discuss the situation. Under the deal, News Corp. -- owner of the Fox TV network, cable's Fox News channel and the 20th Century Fox studio -- would get an operating agreement allowing it to cut costs by combining certain noneditorial operations of Newsday with those of its own New York Post.
http://www.latimes.com/business/printedition/la-fi-tribune24jan24,1,1823...
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NEWS CORP ENTERS BID BATTLE FOR TRIBUNE
[SOURCE: Financial Times, AUTHOR: Matthew Garrahan and Aline van Duyn]
Rupert Murdoch’s News Corp has joined the Chandler family in its bid for Tribune Company, with an eye to taking a stake in New York’s Newsday newspaper. Newsday, which is based in Long Island, is one of Tribune’s largest newspapers. Murdoch wants to combine back office and operational functions at Newsday with those of the New York Post, the News Corp tabloid that has made big circulation gains in recent years but continues to rack up losses. Murdoch would likely take a minority stake in a consortium owning the Tribune’s newspapers, rather than attempting to buy outright control of Newsday. Given News Corp’s television and newspapers interests in the New York market, the company would be constrained by media ownership rules. Any deal for Newsday would also hinge on the success of the Chandler consortium’s bid for Tribune, although Murdoch’s interests identify him as a potential partner if future bidders emerge for parts of the Tribune group.
http://www.ft.com/cms/s/7a8febee-ab0b-11db-b5db-0000779e2340.html
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* News Corp. participates in Tribune bid
http://today.reuters.com/news/articlebusiness.aspx?type=tnBusinessNews&s...
GEFFEN TURNS PAGE IN A MEDIA DREAM STORY
[SOURCE: Financial Times, AUTHOR: Matthew Garrahan]
David Geffen’s new interest in the newspaper industry comes as a surprise, given the margin pressures the sector is facing amid the rising tide of competition from the Internet. Geffen, the founder of Geffen Records and a co-founder of DreamWorks SKG, the movie studio he started with Steven Spielberg and Jeffrey Katzenberg, wants to buy the Los Angeles Times. The newspaper is currently owned by Tribune Company, which also owns other papers, such as the Chicago Tribune, and is itself on the auction block. Rob Burkle and Eli Broad, two Southern California-based billionaires, have bid for Tribune, as has Carlyle, the private equity group, while the Chandler family, one of Tribune’s largest shareholders, has offered to buy the company and sell off the newspaper assets. With Tribune’s fate uncertain, Mr Geffen, worth an estimated $4.5bn according to Forbes magazine, is biding his time. One thing is clear though: having had a $2bn cash offer for the LA Times rejected by Tribune, he could yet play a key role in the newspaper’s future.
http://www.ft.com/cms/s/60e6e55c-ab0c-11db-b5db-0000779e2340.html
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CONGRESS, FCC TO EXAMINE TV ADS AND KIDS OBESITY
[SOURCE: AdAge, AUTHOR: Ira Teinowitz]
The controversy over whether TV ads cause obesity in kids is mounting again as Sen. Sam Brownback (R-KS) and Federal Communications Commission Chairman Kevin Martin unveil plans for a Valentine's Day forum to look at voluntary steps that might lessen the risk. Sen Brownback, a presidential candidate, described the forum as a public-private effort and said major marketers, media companies, health groups, consumer groups and advertising associations would participate. He said General Mills, McDonald's, PepsiCo, Kraft Foods and Coca-Cola would all be represented. From the media side, the following companies are expected to participate: Walt Disney, Viacom, Discovery Channel, Telemundo and the Black Family Channel. In a statement, Sen Brownback said he was pushing the event as "a bipartisan effort to provide a forum for the public and private sectors to jointly examine the impact of media on childhood obesity and to explore voluntary recommendations that will address the alarming rise in childhood obesity rates." He also said that Federal Trade Commission Chairman Deborah Platt Majoras and FCC commissioner Michael J. Copps will participate along with Sen. Tom Harkin (D-Iowa) who has been highly critical of children's advertising. The Benton Foundation will also participate.
http://adage.com/article.php?article_id=114496
*
http://www.tvweek.com/news.cms?newsId=11438
* Brownback, FCC Announce Media Task Force Participants
http://brownback.senate.gov/pressapp/record.cfm?id=267849
* FCC News Release: http://www.fcc.gov/obesity/documents/nr012307.pdf
* Commissioner Deborah Taylor Tate Enthusiastic About Childhood Obesity Task Force
http://www.fcc.gov/obesity/documents/stdtt012307.pdf
* Visit http://www.fcc.gov/obesity for the latest information on the task force.
http://adage.com/article.php?article_id=114496
LOCAL PAPERS MULL THEIR GLOBAL ROLE
[SOURCE: Wall Street Journal, AUTHOR: Sarah Ellison sarah.ellison@wsj.com]
The Boston Globe said it would close all three of its remaining overseas bureaus, reflecting a painful issue for larger metropolitan papers: In the presence of steep budget cuts, do they get out of international and national coverage and focus relentlessly on their local markets? Advertisers think they should, and so do some of the people interested in buying those papers. They see a world with wire services like the Associated Press and a tier of national papers like The Wall Street Journal, the New York Times and the Washington Post providing national and foreign news. "I'm not sure local papers need to cover Iraq, need to cover global events," Jack Welch, the former General Electric Co. chairman who wants to buy the Globe from New York Times Co., told CNBC last week. "They can be real local papers ... and purchase from people very willing to sell to you their wire services that will give you the coverage." Reducing international staff at big metropolitan papers has become a contentious debate at many newspapers as publishers struggle to redefine themselves. Overseas coverage can confer prestige and prizes, and attract talented reporters and editors, but now foreign bureaus are increasingly being considered a luxury. "Many other regional newspapers, some larger than ours, have taken similar steps in recent years," Globe Editor Martin Baron said in a memo to his staff. "All along, a guiding principle was to secure the resources required for local coverage and for journalism that has the most direct impact on our readers." The number of foreign correspondents at U.S. newspapers had dropped to 249 in 2006, down nearly 12% from 282 in 2000. The number of overseas reporters from all but the five largest papers fell to 52 in 2006 from 80 in 2000.
http://online.wsj.com/article/SB116960535347085821.html?mod=todays_us_ma...
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http://online.wsj.com/article/SB116960535347085821.html?mod=todays_us_marketplac…
MIXED MESSAGE IN MEMPHIS
[SOURCE: Wired in Washington, AUTHOR: Drew Clark]
SavetheInternet.com is David to the Bell companies’ Goliath. Over the last two years AT&T, Verizon and their trade group, the United States Telecom Association, spent more than $50 million lobbying Congress to change the nation’s telecommunications laws. Those payments were made in vain. The Bell-favored bill, which had overwhelmingly passed the House, died last year in the Senate. “Save the Internet,†by contrast, spent $250,000 on educating the public on its side of the story. “Save the Internet†opposed the Bell bill, and made Network Neutrality its rallying cry. It gathered more than 1.5 million signatures in support of this notion: that Bell companies must be stopped from controlling the content that flows over their broadband networks. At the National Conference for Media Reform earlier this month, all the panelists were neutralistas. Not all agreed on what their struggle meant. For Matt Stoller, a political blogger at MyDD.com, the victory was a win for the political left. “The Net Neutrality fight is the first pro-regulatory stance in public debate that has been put forward in 30 years or so that won, and it won in a very specific way,†said Stoller. “We had a debate in the public domain about whether the government should regulate the Internet. We convinced the American people that the government should regulate something.†But Adam Green, communications director for MoveOn Civic Action, preferred this philosophy: “We need to show and prove the world that we are on the side of the free and open market, and the free and open exchange of ideas.†A bit later, Green derided the telecommunications industry critics of neutrality for “trying to brand us as being against companies.†It’s best to keep both sides off-balance, said Tim Wu, the Columbia University law professor who first penned the term “Net Neutrality.†Some dislike his turn of phrase, but he couldn't be happier: “For better or worse, that term Net Neutrality has become a third rail†of telecom politics. Touch it at your peril."
http://www.wiredinwashington.com/20070123.htm
Mixed Message in Memphis
REGULATORY TRENDS: NEW ENABLING ENVIRONMENT
[SOURCE: International Telecommunication Union, AUTHOR: Andy Banerjee, Analysis Group; Gary Madden and Joachim Tan, Curtin University of Technology]
The future of voice communication will be the future of all forms of electronic communication; and the market will most likely be served by a combination of broadband technologies, prominent among them end-to-end fibre (wireline) and 3G (wireless) technologies (and their successors). In this context, the central question is: how must regulatory policy change to facilitate such a future? Specific regulatory or policy reforms in future communications markets marked by convergence and intermodal competition must be guided by the dynamic efficiency principle.
* First, when the last mile access bottleneck disappears, regulatory focus should shift from the terms on which service and content providers can gain access to end users towards ensuring interconnection among IP networks, and between IP networks and access networks.
* Second, any blanket network neutrality rule should be resisted. While undue discrimination may still need to be monitored and rooted out, traditional common carrier regulations accompanied by a blanket network neutrality rule can actually prove to be counter-productive. Third, regulatory authorities must redesign licensing regimes to adapt to new market realities created by convergence and intermodal competition. Such licensing regimes should not favour the emergence of a particular technology or service but rather allow the market to make those decisions.
* Finally, regulation for the future voice environment must mean prudent applications of discretionary policies. Those policies may include: providing incentives to develop and deploy small-scale, modular, and scalable broadband technologies; providing opportunities and systems for aggregating demand for broadband services; constraining international mobile roaming charges to encourage roaming and international voice communication demand; rejecting mandatory MVNO access to the networks of incumbent mobile operators unless specific market failure warrants such access; encouraging pricing models that recognize the multi-sided nature of emerging broadband markets; and renewing global efforts to control spam.
http://www.itu.int/osg/spu/newslog/Regulatory+Trends+New+Enabling+Enviro...
Regulatory Trends: New Enabling Environment
MEDIA OUTLETS BATTLE IT OUT OVER FREE-SPEECH RIGHTS
[SOURCE: USAToday, AUTHOR: Martin Kasindorf]
In a dispute between the "new media" of the Internet and the "old media" of broadcasting, liberal bloggers and conservative talk-radio hosts are accusing each other of trampling the First Amendment's guarantees of free speech. Hundreds of blogs are exhorting national advertisers not to buy commercial time on Disney-owned KSFO-AM in San Francisco because some on-air hosts have made comments that the bloggers allege are racist or encourage violence. KSFO personalities say the bloggers are trying to muzzle their political views. The bloggers say they're rallying behind the free-speech rights of a colleague whose website was briefly shut down after Disney's ABC network threatened to sue over alleged copyright violations. Some advertisers, including Bank of America and MasterCard, have deserted KSFO since an anonymous media critic identifying himself online as Spocko began posting recordings of the station's "Hot Talk" hosts. Spocko and some of his readers have been e-mailing the audio to KSFO advertisers since 2005, asking the companies whether they want to be associated with the controversial rhetoric. The First Amendment flap was debated Sunday on CNN's Reliable Sources. Dan Riehl, a blogger critical of Spocko, said some of the radio hosts' comments "were blown out of proportion or misrepresented" in the complaints to sponsors. Mike Stark, another blogger and a Spocko ally, said: "The way to fight free speech that you disagree with is to engage in more free speech. And that's exactly what Spocko did."
http://www.usatoday.com/printedition/news/20070124/a_blogger24.art.htm
Media outlets battle it out over free-speech rights
THE MEDIA'S OBSESSION -- MAKE IT STOP!
[SOURCE: Media Matters for America, AUTHOR: Eric Boehlert]
[Commentary] The press truly has embraced the notion of the nonstop campaign and Boehlert thinks it has done so for increasingly selfish reasons. For political scribes, presidential campaigns can be career-making seasons, when high-profile promotions, book deals, TV punditry contracts, and teaching positions can be pocketed. For news media companies, presidential campaigns mean big business; relatively inexpensive content that can be endlessly rehashed. In other words, they're good for the bottom line. The never-ending analysis for 2008, though, has already morphed into a deafening background noise. And the press' often shallow performance last week does not bode well for the long term. We have an industry of media political pros who have surprisingly little to say, yet insist on saying (or writing) it over and over and over.
http://mediamatters.org/columns/200701220010
* Rivals CNN and Fox News Spar Over Obama Report
http://www.nytimes.com/2007/01/24/us/politics/24obama.html
The media's obsession -- make it stop!
REP BOUCHER TO RESURRECT DIGITAL COPYRIGHT MEASURE
[SOURCE: Technology Daily 1/20, AUTHOR: Andrew Noyes]
Legislation that would repeal a ban against circumventing anti-piracy technologies on digital content will be introduced before the end of February, Rep. Rick Boucher (D-VA) said. The bill, which failed in the 109th Congress and in previous sessions, has been championed by the Consumer Electronics Association, Electronic Frontier Foundation, Public Knowledge and other advocates for "fair use" of copyrighted material. Movie studios and music labels have lobbied against the measure. Rep Boucher said that he is "considering some modifications" to the bill and has not arrived at a final draft. Despite minor changes, the measure would still "empower the purchasers of digital media to make fair use of the media that they lawfully acquire," he said. The measure would uphold the landmark Betamax ruling of the Supreme Court from more than two decades ago, Rep Boucher said. The court found that devices with substantial non-infringing uses shall not be the basis for holding manufacturers legally accountable if others use the technology to infringe copyrights.
http://www.njtelecomupdate.com/lenya/telco/live/tb-CIER1169579593145.html
Rep. Boucher To Resurrect Digital Copyright Measure
RATED R FOR RIDICULOUS
[SOURCE: Los Angeles Times, AUTHOR: Kirby Dick, "This Film is not yet Rated"]
[Commentary] The Motion Picture Assn. of America and the National Assn. of Theatre Owners last week heralded a "reform" of their film ratings system, which assigns the ratings G, PG, PG-13, R and NC-17 to most films released in this country. Unfortunately, the MPAA's changes are almost entirely cosmetic and only go a small way toward fixing a broken system -- a system so closed to public scrutiny that no news organization had been able to disclose its workings until they were revealed in the documentary "This Film Is Not Yet Rated." Despite protestations to the contrary, it appears that the film shamed the MPAA into paying lip service to its critique. As the film revealed, the association has been violating its own rule that raters must have school-age children, and it has refused to allow filmmakers to refer to other films when they appealed a rating. Both absurdities will be fixed. But these are minimal changes. All of the fundamental problems of the ratings system remain: its secrecy and lack of accountability, its bias against independent and gay filmmakers and its excessive concern with sexuality while rating violence much less restrictively. An effective and unbiased film ratings system is of great importance to parents, educators, film audiences and filmmakers. If the MPAA is going to continue to oversee the ratings system, it must make some real changes: reveal the names of all members of the ratings and appeals board, disavow homophobic discrimination and place more restrictive guidelines on violence rather than sex. The sooner it makes these changes, the better.
http://www.latimes.com/news/printedition/asection/la-oe-kirby24jan24,1,5...
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Rated R for Ridiculous