Morning Media Newsfeed: Apple to Buy Beats | Time Inc. Spin-off Set | House Questions Comcast Merger
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Apple in Talks for $3.2 Billion Beats Deal (Financial Times)
Apple is closing in on its largest ever acquisition with the planned $3.2 billion purchase of Beats Electronics, the headphone maker and music streaming operator founded by music producer Jimmy Iovine and the hip-hop star Dr. Dre. The deal could be announced as early as next week, people familiar with the negotiations said, but they cautioned that some details had yet to be agreed upon and talks could still fall apart. GigaOM While Beats Electronics is best known for its premium headphones, it launched a streaming music service, Beats Music, in January. According to the report, the streaming service would be included in the deal. Apple runs its own streaming music service, iTunes Radio. NYT / DealBook For Apple, whose revenue growth has slowed sharply in the last few years, the deal could point to a headlong move into the frontier of streaming music. iTunes Radio has been slow to enter the streaming world. At over $3 billion, the Beats acquisition would be a major departure for Apple, which under Steve Jobs favored smaller deals. CNET Beats Music debuted with a powerful billing and marketing partnership with AT&T and it has reportedly been growing quickly. Although the company has yet to disclose hard and fast subscriber numbers, industry estimates peg the total at about 200,000. The talks come as trends in music purchasing are shifting to subscription services. Data from the Recording Industry Association of America found that paid subscription services grew the fastest of all digital formats last year, rising to 57 percent, while revenues from permanent digital downloads that are iTunes’ specialty declined 1 percent. Mashable Apple has ramped up its pace of acquisitions in recent months. CEO Tim Cook has said in the past that he’s open to the idea of making 10-figure acquisitions. Apple stock was down by a little less than 0.5 percent in after-hours trading following the report.
Time Warner Spinning Off Time Inc. Starting May 23 (Capital New York)
Time Warner will officially start to spin off its Time Inc. publishing unit as its own publicly traded company on May 23, according to an S.E.C. filing submitted by the company. Following the spin-off, Time Warner will continue to be listed on the New York Stock Exchange as “TWX,” while Time Inc. will be listed as “TIME.” MarketWatch On June 6, investors who own Time Warner shares as of 5 p.m. on May 23 will receive one share of Time Inc. stock for every eight shares of Time Warner common stock they own. Time Warner disclosed the impending spin-off in March 2013, following the end of discussions to sell much of the magazine group to Meredith Corp. NYT After unsuccessfully trying to sell its struggling magazine business, Time Warner — which owns such brands as People, Sports Illustrated and Fortune – followed the path of other media giants like News Corporation and decided to split off its less lucrative print assets into a separate company. CNNMoney Time Warner has also spun off online advertising company AOL and Time Warner Cable. After Time Inc. is on its own, Time Warner will have three main divisions, all focused on TV and film content: Turner Broadcasting, HBO and Warner Bros.
House Grills Comcast Over Plans to Merge With Time Warner Cable (Variety)
Speaking of Time Warner, House Republican and Democratic lawmakers raised concerns Thursday about Comcast’s proposed alliance with Time Warner Cable, including the possibility that the company would gain too much market power of the lineup of channels and programming over its systems. Re/code Several lawmakers in the House Judiciary Committee hearing wondered how consumers would benefit from the deal. Comcast executives have previously said that consumers shouldn’t expect to see price cuts if the deal is approved by federal regulators. “What can be done to help lower prices?” asked Democratic Rep. Suzan DelBene, who said she has heard from constituents concerned about steadily more expensive monthly cable bills. Meanwhile, Comcast executive VP David Cohen said the deal “has the potential to slow the increase in prices.” Reuters While none of the lawmakers asked regulators to block the transaction, both Republicans and Democrats cautioned there were potential negatives in the $45 billion deal. Rep. Blake Farenthold, a Texas Republican, worried that small programmers may not be able to sell video to cable operators. Rep. John Conyers, a Democratic critic of big mergers in general, said a combined Comcast/Time Warner Cable would have 30 percent of the cable market, at least 40 percent of the broadband market, 19 of the 20 biggest cable markets and a major Spanish-language channel, as well as movies and television shows and sports programming. WSJ The Justice Department and the FCC will have final say on the deal, but lawmakers typically weigh in with concerns that are taken into account during the review process. Thursday’s hearing reflected increased concern about the merger in recent weeks from consumer groups and lawmakers about the power the combined company would hold in a host of markets, including pay television, broadband, video programming and cable advertising. Comcast has emphasized that the two companies don’t currently compete for cable or broadband subscribers, so consumer choice shouldn’t be affected by the deal.
Liberty Media to Spin Off Charter Holdings Into Separate Company (Variety)
In related news, John Malone’s Liberty Media announced plans to spin off its cable holdings, largely comprising its stake in Charter Communications, into a new publicly traded company called Liberty Broadband by the end of 2014. THR Liberty Broadband Group will include Charter, TruePosition, a minority stake in Time Warner Cable and financial instruments. Liberty on Thursday reported mixed first-quarter financials as revenue rose, operating profit climbed slightly and net profit declined after a big one-time gain in the year-ago period. Liberty also said it acquired more shares of Charter, worth $124.5 million, to bring its stake to 26.4 percent. Reuters The announcement came amid more clarity on Charter’s expansion plans. A separate Liberty Broadband could help raise capital for Charter. On April 28, Charter said it would pay Comcast $7.3 billion for 1.4 million cable subscribers and trade about 1.6 million subscribers in different parts of the country in a deal that depends on regulatory approval of Comcast’s takeover of Time Warner Cable. Charter will also own one-third of a new cable company to be spun off from Comcast.
News Corp’s Revenue Falls Amid Ad Weakness (WSJ)
News Corp reported better-than-expected earnings for the March quarter that were hurt by foreign-currency fluctuations, continued declines in newspaper advertising and sale of a local newspaper group. Net income totaled $48 million, or 8 cents a share, down 85 percent from $323 million, or 56 cents a share, in the year-earlier quarter, which was boosted by a gain on the sale of News Corp’s stake in New Zealand pay-TV operator Sky Network Television. HuffPost / AP But the results beat Wall Street expectations due to better book publishing sales and gains in an Australian real estate website division that blunted a decline in its newspaper business. Revenue fell 5 percent to $2.08 billion, still above the $2.07 billion expected. Bloomberg News Corp is finding its footing as a separate business. Like many publishers, CEO Robert Thomson is working to transform the company’s print properties into a digital business as well as expand into markets around the globe. In addition to online acquisitions, News Corp has also sought assets in foreign markets, such as its pending purchase of romance publisher Harlequin Enterprises, which has a foothold in 11 countries and expertise in translations.
Discovery And Liberty Global Agree to $930M Deal for All3Media (Deadline New York)
Discovery and Liberty Global have agreed to acquire unscripted TV production group All3Media for $930 million. The price, at £550M, is less than All3Media’s majority shareholder Permira originally wanted. But the deal puts the U.K. production company in the hands of two formidable global TV providers that have created a joint venture for the purchase and vowed to let All3Media remain a stand-alone entity. Variety All3Media also has operations in the U.S., Germany, the Netherlands and New Zealand. The deal with Discovery and Liberty’s global arm is designed to expand the reach and scope of All3Media in its existing markets as well as taking it into new turf. Discovery and Liberty will each contribute $150 million in cash toward the purchase, the rest to be funded with equity and a credit facility to be raised by All3Media. WSJ The deal follows a series of trans-Atlantic deals among broadcasters seeking new content or broader audiences. Earlier this week, British broadcaster ITV PLC said it would buy U.S. independent television producer Leftfield Entertainment Group in a deal that could be worth as much as $800 million. Earlier this month, Viacom Inc. said it agreed to buy Britain’s Channel 5 Broadcasting Ltd. for £450 million, a move that will bolster its British audience but also help it gain overseas audiences for its own original programming.
CBS Q1 Profit Ticks Up Slightly Despite Revenue Shortfall (Variety)
CBS Corp. said first-quarter net income rose just 1.1 percent as the company faced difficult comparisons with a year-earlier period. The owner of the CBS television network, Showtime and Simon & Schuster said revenue came to $3.86 billion in the period, compared with $4.04 billion a year earlier. Entertainment revenues for the first quarter fell 9 percent to $2.30 billion from $2.54 billion in 2013, owing to the Super Bowl broadcast in 2013 as well as the broadcast of two fewer NCAA men’s basketball championship games in the first quarter of 2014. WSJ The earnings growth came primarily from content licensing and subscription revenue, such as carriage fees from pay-TV operators. The CBS network, whose entertainment programming includes the hit comedy The Big Bang Theory and the political drama The Good Wife, is poised to finish the TV season ending in May as the No. 1 broadcaster in terms of total viewers for the 11th time in 12 years.
Ryan Seacrest’s Firm Acquires Another Agency (AdAge)
Ryan Seacrest has added another agency to his growing media and marketing portfolio. Civic Entertainment Group, a marketing agency owned by Seacrest Global Group, has acquired Culture Shop, a marketing, social media and public relations agency. AgencySpy Culture Shop has worked with brands including Verizon, Farmers Insurance and USA Network. They will become a specialty practice within Civic Entertainment following the deal, “offering research and analysis on trends in TV, sports, music, gaming, film, advertising, technology, community and philanthropy.” Culture Shop founder Nate Schreiber will be made a co-CEO at Civic Entertainment. Schreiber founded Culture Shop in 2009, following a two-year stint as president of entertainment PR and marketing firm PMK/HBH.
Walking Dead Helped But AMC Q1 Earnings Still Missed Expectations (Deadline New York)
AMC Networks reported net income for Q1 of $71.4 million, up 16 percent vs. the period last year, on revenues of $524.6 million, a 37.3 percent increase. That was comfortably ahead of the consensus analyst prediction of $507.5 percent. Still, adjusted earnings at $1.04 a share missed forecasts for $1.16. AMC’s hits helped to boost ad sales at the National Networks operation by 26.8 percent, while fees from cable and satellite companies increased 15.9 percent. THR The stock of AMC Networks hit a 52-week low yesterday as Wall Street expressed disappointment that the company’s first-quarter earnings rose less than expected amid higher costs, especially tied to original series. During an earnings call on Thursday, CEO Josh Sapan faced several questions about the cost of producing and promoting original series, which partially outweighs the revenue boost they provide by lifting ad revenue. In the first quarter, for example, The Walking Dead contributed to a 27 percent ad gain for the company’s U.S. business.
Quentin Tarantino Withdraws Lawsuit Against Gawker Over Leak (THR / Hollywood, Esq.)
Director Quentin Tarantino has voluntarily dismissed a lawsuit against Gawker only a week after it looked like the dispute was expanding. Tarantino sued in January with claims that Gawker had “crossed the journalistic line” by linking to the 146-page script for The Hateful Eight under a post titled, “Here Is the Leaked Quentin Tarantino Hateful Eight Script.” The allegation appeared to need more factual support. Gawker’s attorneys attacked the idea that the mere possibility of someone reading the script amounted to a direct infringement act, and the judge agreed. The judge allowed Tarantino to amend his lawsuit, which he did last week.
National Journal Adds Five Writers in Advance of June Issue Redesign (FishbowlDC)
The National Journal on Thursday welcomed several new writers and contributors in advance of its June magazine redesign to include Nora Caplan-Bricker, Michelle Cottle, Ethan Epstein, Daniel Libit and Simon Van Zuylen-Wood. Cottle, most recently a Washington reporter for The Daily Beast, joins the magazine as a senior writer. Caplan-Bricker will join the magazine as staff correspondent and is currently a staff writer at The New Republic. Van Zuylen-Wood (a staff writer for Philadelphia magazine who has also worked for The New Republic and written for Politico), Epstein (of The Weekly Standard) and Libit (formerly with Politico) will join the magazine as contributing writers.
Amazon is Now Delivering Books on Sundays in Select Cities (GalleyCat)
Amazon first started Sunday U.S. delivery back in November in New York and Los Angeles. Now the online retailer has extended the service to 15 new cities including: Austin, Texas; Cincinnati; College Station, Texas; Columbus, Ohio; Dallas; Houston; Indianapolis; Lexington, Ky.; Louisville, Ky.; New Orleans; Oklahoma City; Philadelphia; San Antonio; Shreveport, La.; and Waco, Texas. Amazon has plans to extend the Sunday service to more cities in the U.S. later this year.
U.S. Journalist Adam Baron Deported From Yemen (HuffPost / Backstory)
Adam Baron, a freelance journalist reporting from Yemen the past three years, has been deported from the country. Baron regularly writes for the McClatchy newspaper chain and the Christian Science Monitor. James Asher, the Washington bureau chief for McClatchy, confirmed that he has been deported and that Baron “believes the deportation is about his journalism.” Iona Craig, an Irish freelance journalist who writes for The Times of London, tweeted the news about Baron and noted there’s now “only one foreign journalist” officially in Yemen. Craig indicated that only she and Baron were operating with journalist visas.
Ad Agency Giants Said to Call Off $35 Billion Merger (NYT / Dealbook)
The Omnicom Group and Publicis have called off their $35 billion merger, bringing a premature end to a deal that would have created the largest advertising company in the world, according to people briefed on the matter. A mix of clashing personalities, disagreements over how the companies would be integrated and complications over legal and tax issues derailed the deal nine months after it was announced.
Hacking Trial Nears End as Prosecution Makes Closing Arguments (THR)
The News Corp phone hacking trial is entering its final stages with the prosecution on Thursday continuing closing arguments in the case, which has been running for more than six months. At the center of the trial have been Rebekah Brooks, the former editor of the News of the World tabloid and former CEO of the U.K. newspaper arm of Rupert Murdoch’s News Corp, and Andy Coulson, also an ex-editor of the paper and former head of communications for British prime minister David Cameron.
What’s your biggest grammar pet peeve?
ErinMKenna Their, there and they’re and you’re and your. Although predictive text can ruin that.
MSRG_Pubs “Waiting for” replaced by “waiting on”. Are you anticipating something, or serving it coffee and hoping for a tip?
deannav cringe: “a whole nother,” splitting the word “another” in half and inserting the non-word “nother” in the middle
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