Posted Tuesday, Feb. 12, at 12:32 p.m. (PT); last updated at 4:30 p.m.
KCAL-TV becoming part of Viacom family
Viacom is in the final stages of buying KCAL-TV from Young Broadcasting. The Los Angeles Times reported Tuesday that the price tag is rumored to be $600 million and that the long-range plan may be to eventually switch Viacom’s UPN programming from Fox-owned KCOP-TV to KCAL, the rare independent station in a major market.
Cash-strapped Young reportedly began shopping KCAL and KRON-TV in San Francisco last fall when it appeared that Young, which had lost its Bay area NBC affiliation to KNTV-TV in San Jose, would lose its bid to sell KRON to NBC. NBC purchased KNTV from Granite Broadcasting late last year.
Viacom and CBS declined to comment. A representative of Young was unavailable for comment.
Murdoch says News Corp. paid too much for sports rights: News Corp. Chairman Rupert Murdoch conceded he overpaid for his football, baseball and NASCAR rights, for which the company late Tuesday reported it will take a $909 million write-off in its fiscal second quarter. The write-off reflects the shortfall in advertising revenues expected in the remaining years of the contracts and can be broken down to $387 million for the NFL, $225 million for Major League Baseball and $297 million for NASCAR.
“You would have to say that we overpaid based on this write-down,” said News Corp. President and CEO Peter Chernin. Declining network ratings and declining advertising revenues, for which there is no forecasted 2002 recovery, caused the company to lower its fiscal 2002 guidance to mid-single-digit growth in New Corp. operating income and upper- to mid-single-digit growth in earnings at the Fox Entertainment Group, the company said. “We are great believers in high profile sports,” Mr. Murdoch said. Whether it bids on future sports events “depends entirely on price.”
Although Fox television stations improved their overall market share and Fox News Corp. grew revenues 31 percent and earnings 39 percent in the quarter, News and Fox achieved its fiscal quarterly results with sizeable, unqualified costs cuts. Mr. Murdoch noted most recently pacings at Fox’s 33 TV stations are running ahead of last year, an encouraging sign for a recovery.
In the fiscal second quarter, News Corp. reported $492 million in operating income (down from $562 million a year earlier) on $4.12 billion in revenues (up from $3.85 million a year earlier). Operating loss after income tax and abnormal items was a loss of $606 million, compared with a loss of $23 million a year earlier. Abnormal items include the sports write-down and one-time gains on the sale of such assets as the Fox Family Channel to Walt Disney Co. Fox Entertainment Group reported net income of $455 million and an operating loss of $695 million on revenues of $2.8 billion.
Mr. Chernin told analysts the company is mounting a three-pronged attack on the Fox Network’s declining ratings. They include strong midseason replacement programs, fewer summer repeats to make way for the premiere of four new summer series (including “Pop Idols” from the United Kingdom) and aggressive development of at least 25 series pilots for the fall. He also noted the network is assured $25 million in revenues for leasing out its Saturday morning children’s block.
Cox in no hurry to acquire rivals: Cox Communications CEO Jim Robbins told analysts Tuesday he is in no hurry to acquire rival cable operators, including Adelphia Communications, as has been widely speculated and encouraged by a number of the company’s outspoken major investors. “Our bid for AT&T Broadband was driven by a unique set of circumstances. … We don’t see any opportunities that present any urgency to do any kind of deal,” Mr. Robbins said on a fourth-quarter conference call. Cox reported a broader net loss of $110 million, or 18 cents a share, compared with a $71.6 million, or 12 cents a share, on a 14 percent increase in revenues to $1.08 billion. The results include a $155.7 million charge to convert high-speed Internet subscribers from Excite@Home.
Political TV ad rates on House’s campaign finance reform agenda: The House was scheduled to begin debate late Tuesday afternoon on campaign finance reform legislation, with a vote expected Wednesday or Thursday. There are three House election reform bills in play, but the so-called Shays-Meehan measure, similar to the McCain-Feingold campaign bill already passed by the Senate, is likely to emerge as the one to be voted on. Both Shays-Meehan and McCain-Feingold contain controversial provisions that lower the already reduced rates federal candidates pay to run television ads. The National Association of Broadcasters strongly opposes those provisions and wants to strike them. At deadline NAB appeared to have scored a preliminary victory: The authors of Shays-Meehan have agreed to an up or down vote on the TV rate language.
Meanwhile, Senate Majority Leader Tom Daschle, D-S.D., expressed hope Tuesday afternoon that the House would pass Shays-Meehan with few if any changes. That way, there would be no need for lawmakers to iron out differences in a House-Senate conference, which could leave the legislation vulnerable to substantive changes. Further complicating matters, if the House version does not go to conference, the Senate must vote on it, but Sen. Mitch McConnell, R-Ky., is threatening a filibuster to block such a vote. Sen. Daschle told reporters during a briefing on Capitol Hill he’s unsure whether he has the 60 votes he needs to override a filibuster.
‘Futurama’ future uncertain: There is increasing speculation in Hollywood about how much future is left in Fox’s “Futurama.” Sources close to the show said producers and writers for the 8 p.m.-to-8:30 p.m. Sunday (ET) show have been released, told by Fox that the show is currently ceasing production. Created by Matt Groening, who is also the creative force and artistic hand behind Fox’s top-rated companion Sunday sitcom “The Simpsons,” “Futurama” has been somewhat marginally rated in the adults 18 to 49 demographic since its debut in March 1999.
Taking into account the greater lead time in producing animated TV series, sources have said there are 12 episodes already in advanced post-production for the 2002-03 season. Sources also said “Futurama” could conceivably have enough original episodes to run through most of next season after Fox ends its run of National Football League games in January. However, the staff reductions do raise questions over whether the 20th Century Fox Television-produced “Futurama” will see a fifth year for the 2003-04 season. With fours years of episodes “in the can,” it would ensure that sister Fox syndication unit, Twentieth Television, would have more than enough episodes to sell and distribute “Futurama” in the lucrative off-network syndication market.
As of midday Tuesday, Fox and 20th Century Fox Television representatives were checking to confirm if the 2002-03 season would indeed be the last for “Futurama.”
TNT looking for sports-driven rate increases for affils: Rate increases driven by big-ticket basketball and auto racing are on the horizon for affiliates of TNT, with the possibility of programming blackouts for affiliates who decline to pay. And the search is on at AOL Time Warner for a new economic model in the digital-cable age.
Those were just two of the topics touched upon at a wide-ranging press lunch hosted by Andrew Heller, president of domestic distribution, Turner Broadcasting System, at Manhattan’s iconic Russian Tea Room restaurant.
A Turner spokesman there also took the opportunity to announce the first-ever joint affiliate marketing campaign between HBO and a sister Turner Broadcasting network, in this case a tie-in with Turner Classic Movies and its “31 Days of Oscar” March programming. The TBS networks — which include CNN, Cartoon Network, TNT and TBS, as well as TCM and others — and HBO represent two separate divisions of the far-flung AOL Time Warner media empire.
Where Mr. Heller stands on sports-driven rate increases for TNT is in favor of equal increases that all affiliates
will pay. “We are going to take a rate increase,” he said. But Plan B for the affiliates who decline to pay is a “different structure,” Mr. Heller added. While he did not specify what that structure will be, he did allow that it “could involve” blacking out some product.
Mr. Heller also would not be drawn into specifying whether his Plan B possibility meant blacking out NASCAR and NBA offerings. TNT will be telecasting a Thursday NBA doubleheader under its new NBA contract, as well as a second season of high-octane NASCAR racing. Specific discussions with the affiliates will get under way in the next few weeks.
The AOL Sports Network, jointly owned by AOL TW and the NBA, will end up being called something else, Mr. Heller said, “something like” the All-Sports Network. If the new network, which will be built around the telecast of four NBA games per week, launches successfully, CNN SI “will cease to exist,” he said.
NBA games also will be airing on ESPN and ABC. Mr. Heller said he expects cross-promotions among all the networks involved, with, for example, ESPN “throwing to” TNT and the Turner network returning the promotional favor.
Multiplexing is not a “panacea” for the industry, Mr. Heller said, taking note of the high churn rates for dissatisfied digital customers. Economic opportunities AOL TW is exploring include a new digital “youth/lifestyle/music” network and subscription video on demand for kids programming. Kids tend to watch the same movie or program over and over, he observed, making an SVOD success that much more likely in the kids market.
As part of the new HBO/TCM “31 Days” affiliate promotion, customers in 40 markets who sign up for digital cable will receive free or discounted HBO/Cinemax for at least 31 days.
Calvi named WCBS Westchester correspondent: Mary Calvi will join WCBS-TV, New York, as the station’s Westchester correspondent, it was announced Tuesday by Joel Cheatwood, executive VP, news, Viacom Television Stations and news director, WCBS-TV. The station previously unveiled a new plan aimed at increasing its depth of coverage in the tri-state area, assigning “beat” reporters to all five boroughs and Westchester County.
(c) Copyright 2002 by Crain Communications