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May 24, 2001  •  Post A Comment

News Corp., EchoStar fight for DirecTV

Well placed sources say that despite Thursday’s latest twist in the battle for DirecTV, General Motors’ negotiations with Rupert Murdoch’s News Corp. remain on track. Those negotiations are GM’s “focus and priority,” despite reports that rival domestic satellite provider EchoStar Communications Corp. is assembling a $5 billion cash counter offer that could be backed by AOL Time Warner and General Electric, which owns NBC.

EchoStar is pricing a $1 billion convertible bond offering Thursday, proceeds from which could be used for such an offer. In a Securities and Exchange Commission filing Thursday, EchoStar said GM has told the company it is open to “establishing a dialogue” between their companies’ legal and financial advisors to find out more about EchoStar’s counteroffer.

However, sources say that is more in keeping with GM’s fiduciary responsibility to shareholders to consider any and all offers for its publicly traded Hughes Electronics subsidiary, which owns DirecTV. Earlier this year, GM and Hughes shut out EchoStar from any possible merger or acquisition talks. Since then, GM has given an initial nod to News Corp., which has proposed merging its global satellite assets with DirecTV in a new public entity called Sky Global, which would have the financial backing of Microsoft Corp. and John Malone’s Liberty Media Group. The companies involved declined comment.

Diversity coalition downgrades ABC: The multiethnic coalition that signed diversity agreements with the networks a year and a half ago gave thumbs down to ABC for its lack of progress in diversity, as expected (EMOnline, May 23). At a press conference in Los Angeles Thursday the coalition gave its report card on the past season, which included a “D” grade for ABC. The coalition blamed ABC executives for not wanting to meet with them, for canceling “Gideon’s Crossing,” which had minority representation, and for not putting more minorities in its new shows.

In response to the coalition, ABC spokeswoman Zenia Mucha said: “We’re disappointed that the coalition has misrepresented ABC’s record. The facts are ABC has had a 39 percent increase in ethnically diverse lead characters in our prime-time programming, a 47 percent increase in African American lead characters and a 57 percent increase in Hispanic lead characters. We also anticipate that characters in our pilots will be recast prior to the beginning of the season. We expect improvements and additional changes to the diversity of the casts.”The coalition will coalesce to make a decision on what action to take against the networks. Johnny Cochran and Bill Cosby participated in the conference via telephone. The coalition expects to use Mr. Cochran’s legal expertise in deciding how to take action.

“The time for talking is coming to an end,” Mr. Cochran said. “A lot of promises were made … It’s got to stop, and the time has come for us to strategize an action plan.”

Mr. Cosby said while there are more blacks in entertainment than other minority groups, the images blacks portray are often negative ones. “(The networks) don’t see a reason for including people and putting them in a series,” Mr. Cosby said. “It seems that we are these people who can bring a slowdown in ratings. … We’re asking that all of our children be given an opportunity. It still comes down to a matter of whether people will tolerate us. That’s a horrible word. And those in charge are tolerating us. Not good.”

NBC wins sweeps in key adult demos: Other than star Angie Harmon taking a two-hour final bow Wednesday night on NBC’s “Law & Order,” there were few fireworks at the end of the May sweeps period (April 26-May 23), which the Peacock Network won in the key adults 18 to 49 and 18 to 34 demos.

NBC, as expected, came out on top with a 5.1 rating/15 share average in adults 18 to 49 for the sweeps, holding a 19 percent margin over second-ranked Fox (4.3/12), according to preliminary Nielsen Media Research fast national data. However, with NBC down 7 percent year to year in the demo for sweeps, Fox’s 7 percent increase and CBS’s surprising third-ranked 18 percent spike in adults 18 to 49 (4.0/11) may have stolen some of the Peacock’s thunder. NBC eked out a somewhat surprising win in adults 18 to 34 with its 4.5/14 score edging Fox (4.4/14) by a mere 2 percent margin.

Continuing to show signs of fading due to “Who Wants to Be a Millionaire’s” waning popularity, ABC was disappointed with its fourth-ranked 3.2/10 score in adults 18 to 49, which marked a 31 percent slide in the demo.

In households, CBS, which realized a healthy 35 percent spike in adults 18 to 34 (a fourth-ranked 3.1/10), locked up a sweeps win (8.8/15), up 7 percent from its year-ago sweeps average. NBC came in second (8.4/14, down 6 percent), and ABC was third (7.4/13, down 28 percent). Final national averages for the sweeps and end of the traditional season will come out Thursday afternoon, although the numbers are expected to mirror the preliminary May sweeps results.

NBC won Wednesday night in adults 18 to 49 (6.1/17, down 13 percent week to week) thanks to the 9 p.m.-to-11 p.m. (ET) finale of “Law & Order” (7.1/19), though the 11-year staple was off 16 percent from the two-hour time-period average the previous week (8.5/21). Some of the networks’ ratings juice may have been sucked away by UPN’s 8 p.m.-to-10 p.m. finale of “Star Trek: Voyager”

Fox came in second on the night in adults 18 to 49 (4.5/13), with its 9 p.m.-to-10 p.m. finale of middling reality series “Boot Camp” (5.0/13) down 2 percent from its previous week’s outing.

‘Voyager’ helps UPN hit second-highest rated night in history: UPN came in second for the evening among households in the overnight metered markets last night, with the two-hour series-ender of “Star Trek: Voyager” leading the network to the second-highest-rated night in its 61/2-year history.

The 8 p.m.-to-10 p.m. (ET) series finale of “Voyager” went into ultra-warp drive in the ratings to close the last night of the May sweeps period (April 26-May 23) with an 8.3 rating/13 share household average in Nielsen Media Research’s metered markets. Leading the evening were NBC’s season-ending “Ed” and two “Law & Order” episodes, which posted an 11.9/18 in overnight households.

“Voyager,” often seen as more of a disappointing ratings-getter during its regular series run than the three previous “Star Trek” series franchises before it, saw its finale post 86 percent share improvement from the previous week’s average for the evening.

“Voyager’s” series premiere on January 16, 1995 — the night of UPN’s debut — remains the network’s highest-rated show of all time with a 14.7/20 household metered average.

In atypical fashion, UPN’s “Voyager” finale Wednesday night beat The WB’s season-ending episodes of “Dawson’s Creek” (4.8/8) and “Felicity” (3.8/6), which averaged a combined 4.3/6 household score, by a whopping 93 percent ratings margin.

“Voyager” opened its first half-hour with a 7.6/12 score, then grew 10 percent over each half-hour to peak at an 8.8/13 for the 9:30 p.m.-to-10 p.m. frame. For the 8 p.m. hour, “Voyager” posted a 7.9/12, an increase of 140 percent over the 5 share “Seven Days” averaged in the time period last week. In the closing 9 p.m. hour, “Voyager’s” 8.7/13 posted 63 percent share improvement over its own score on May 16.

Senate twist trips up ownership rules progress: The growing momentum in the Senate toward further relaxation of the broadcast ownership rules is about to grind to a halt. That’s because Sen. James Jeffords’ defection Thursday from the GOP will shift control to the Democrats and install Sen. Fritz Hollings, D-S.C., as head of the Senate Commerce Committee. Unlike the current panel head Sen. John McCain, R-Ariz., Sen. Hollings has no interest in increasing the broadcast ownership cap or loosening the newspaper-broadcast cross-ownership restriction. Sen. Jeffords made his historic announcement today in his home state of Vermont and said he’ll officially become an independent when Congress completes its consideration of the Bush administration’s tax cut bill.

bviously Hollings is not a deregulator in any sense,” said an industry source. Meanwhile, Sen. Tom Daschle, D-S.D., who will replace Sen. Trent Lott, R-Miss., as Senate majority leader, said campaign finance reform will be a top priority. That’s of concern to broadcasters, because the Senate passed a campaign finance measure earlier this year that requires television stations to offer politicians rock-bottom rates for political ads.

FCC expected to confirm new members: The Senate Commerce Committee will hold a vote Thursday afternoon on the nomination of three new regulators to the Federal Communications Commission and the reappointment of Republican Michael Powell as chairman. The vote was originally scheduled for Thursday morning but was postponed due to scheduling conflicts caused by Sen. James Jeffords’ announcement that he’ll leave the Republican Party. The new FCC nominees are Michael Copps, a Democrat, and Kevin Martin and Kathleen Abernathy, both Republicans. The committee is expected to approve the picks, with their nominations moving next to the Senate floor.

‘Weakest Link’ gets closer to syndication: A syndicated run for NBC’s “Weakest Link” got a step closer to reality with Tribune Entertainment picking up barter sales rights to the property. In February, the two studios entered into a multiyear arrangement under which Tribune Entertainment would oversee all barter ad sales for NBC syndicated series “The Other Half” and “George Michael’s Sports Machine.”

The pickup was the latest for Tribune, which has under gone ad sales growth thanks to barter arrangements with Universal, Hearst and NBC.

News Corp.’s deal with Chris-Craft caught in holding pattern: Government approval of News Corp.’s long-pending application to buy Chris-Craft Industries television stations could be delayed for months now because top Federal Communications Commission officials have not been able to agree on what conditions to impose on the transaction, sources said.

The key controversy is what to do about News Corp.’s effort to combine its media properties in the New York market — the New York Post and WNYW-TV — with Chris-Craft’s WWOR-TV.

Earlier this month, the FCC staff recommended that the company be permitted to keep all the properties, at least pending the resolution of agency proceedings to consider relaxing a rule that currently bars broadcasters from acquiring daily newspapers in their market. But sources said the agency’s two Democrats — Commissioners Susan Ness and Gloria Tristani — have refused to sign off on the deal, and that could force Chairman Michael Powell to put the issue on hold until after the Bush administration’s new FCC commissioners come on board.

Under one possible scenario, Mr. Powell could simply wait to vote on the issue until Ms. Ness steps down from the agency, something she said she would do by June 1. With GOP FCC Commissioner Harold Furchtgott-Roth’s support, he would then have a 2-1 vote majority. But sources warned that Ms. Tristani could simply block the vote altogether at that point, a move that would score her big points with News Corp. chief Rupert Murdoch’s Democratic enemies on Capitol Hill, because a three-vote quorum is needed for any vote at the agency.

“If I were Mr. Murdoch, I’d be quaking at this point,” said one source close to the issue, adding that the impending shift in leadership in the Senate from Republican to Democrat could mean trouble for the News Corp. chief’s plans to acquire DirecTV as well. If the FCC’s Mr. Powell opts to wait for the new commissioners to vote on the Chris-Craft deal, that could lead to a substantial delay for News Corp., because it could be months before the new crop of FCC commissioners feels comfortable enough to vote on the merger.

Also complicating the picture is that Sen. Ernest Hollings, D-S.C., who is shortly expected to be named chairman of the Senate Commerce Committee, is a strong proponent of the broadcast-newspaper cross-ownership ban. “It seems as if Chairman Powell couldn’t get a third vote from Commissioner Ness or Commissioner Tristani,” said Andrew Schwartzman, president of the activist Media Access Project. “Now he may be waiting to get a third vote from one of the new commissioners.”

Andrew Butcher, a News Corp. spokesman, said, “We’ve said all along that we’d like to close the deal by June 30, but there’s no financial penalty if it doesn’t close on that date. We would simply hope that it gets approved as quickly as possible.”

Keating promoted at Twentieth: Shannon Keating has been upped to vice president of domestic distribution at Twentieth Television. Ms. Keating, who has been at Twentieth since 1998, will be bumped up from her most recent position as executive director, domestic distribution. In her new position, Ms. Keating will continue to oversee distribution of Twentieth’s syndication and basic cable programming. She is responsible for the distribution of such Twentieth first-run product as “Power of Attorney” and “Divorce Court” in addition to off-network properties such as “X-Files,” “The Simpsons” and Carsey-Werner-Mandabach’s “Cosby.”

CTAM heads for San Francisco: If you’re looking for tips on how to market to consumers in the brave new world of broadband, you might consider booking a midsummer’s flight to San Francisco for CTAM’s “Walk on the Wired Side” summit, a July 22-25 conference to be held at the San Francisco Marriott.

Keynote speakers set so far include Brad Ball, president of domestic marketing, Warner Bros. Pictures; Rick Belluzzo, president and chief operating officer, Microsoft Corp.; Dawn Lepore, vice chairman and chief information officer, Charles Schwab Corp.; Josh Sapan, president and CEO, Rainbow Media Holdings; Barry Schuler, chairman and CEO, America Online; and Roy M. Spence Jr., president and a founder of GSD&M, an Austin, Texas-based advertising agency.

(c) Copyright 2001 by Crain Communications