Logo

Breaking News Archives

Feb 20, 2002  •  Post A Comment

Posted Wednesday, Feb. 20, at 11:30 a.m. (PT); last updated at 1:55 p.m.

Dick Clark Productions slapped with class-action suit

Dick Clark Productions, which announced an agreement last week to be acquired by CDP Capital Entertainment on behalf of Mosaic Media Group for roughly $140 million in cash, has been slapped with a shareholder’s class-action suit. The suit, brought by shareholder Walter Valenti, claims Mr. Clark and other principals of DCP (NASDAQ: DCPI) entered an “unlawful plan” to undertake “self-dealing” and undermine the value of other outside-owned public shares in the Burbank, Calif.-based entertainment company.

Mr. Valenti’s suit, filed on Feb. 15 in state Superior Court in Los Angeles, charges that Mr. Clark and Francis La Maina, chairman and CEO of DCP, and four company directors agreed to sell public shares to CDP Capital Entertainment for $14.50 per share-a “grossly inadequate and unfair price.” CDP Capital Entertainment is not named in the suit.

As part of the acquisition agreement announced on Feb. 14, Mr. Clark, who is estimated to hold 70 percent of the shares in the company, agreed to sell a portion of his stake in the company at $12.50 per share and invest the remainder of his shares-along with Mr. La Maina-in the acquiring entity, Mosaic Media Group.

The agreed buyout price of outstanding public shares in DCP is not far from current trading levels for the stock, which was valued at $14.30 per share in trading late Wednesday (down 2 cents on the day). Mr. Valenti’s suit also claimed DCP officials deliberately delayed release of second-quarter financial results (which were released today) until an acquisition agreement had been reached with CDP Capital and Mosaic Media Group.

“The defendants timed the announcement of the acquisition to place an artificial cap on the price for Dick Clark stock to enable them to acquire the stock at the lowest possible price and before the release of the company’s December 31, 2001, financial results,” said the brief, submitted by Mr. Valenti’s attorney, Darren J. Robbins.

However, if the case goes to trial, the somewhat mixed financial results for DCP’s latest quarterly earnings could pose a challenge to the notion that the public shareholders deserved a substantial premium over the $14.50-per-share price currently being tendered by CDP Capital Entertainment.

For the quarter ending Dec. 31, DCP took in $10.5 million in gross revenue, but reported a net loss of $2.9 million (or 29 cents per basic and diluted share). The loss, compared with $338,000 in red ink for the year-ago quarter (ending Dec. 31, 2000), represented a seven-fold increase. The bulk of the loss is attributed to a write-down of $4.7 million on the company’s investment in six of its “American Bandstand”-themed restaurants. Mr. Clark made his name in the music and TV business as host of “American Bandstand,” which originally aired on ABC in various dayparts from 1957-87, syndication (1987-88) and on the USA Network (1988-89).

Mr. Valenti’s suit alleged that public shareholders will not be able to benefit in DCP’s future growth, citing the company’s 10-year rights deal to produce and telecast the Golden Globe Awards through the year 2011.

Along with charging breach of fiduciary duty, much of Mr. Valenti’s suit concerns self-dealing charges.

“The acquisition is designed to essentially freeze Dick Clark Productions’ public shareholders out of a large portion of the valuable assets which have produced, and defendants expect to produce, substantial revenue and earnings, and these assets are being sold for grossly inadequate consideration to La Maina and Clark,” the filing states. Furthermore, the suit claims the acquisition is constructed “so that it transfers 100 [percent] of DCP’s revenues and profits to Clark and La Maina.”

“In essence, the proposed acquisition is the product of a hopelessly flawed process that was designed to ensure the sale of Dick Clark [Productions] to one buying group, and one buying group only, on terms preferential to Clark and La Maina and to subvert the interests of plaintiff and other public stockholders of Dick Clark [Productions].”

Mr. Valenti’s suit seeks injunctive relief to prevent the consummation of the acquisition, in lieu of DCP agreeing to a court order placing the company under an auction to seek the highest possible bids on its shares.

Press representatives and investor relations executives from DCP had not returned calls at press time Wednesday. Mr. La Maina and a representative for Mr. Clark also could not be reached.

LIN TV plans IPO: LIN TV Corp. said Wednesday that it has filed with the Securities and Exchange Commission for an initial public offering of $300 million of its class A common stock. LIN TV Corp. is the parent company of LIN Television Corp. and LIN Holdings Corp., which operate 26 television stations and provide management or sales services to an additional four stations in 19 markets.

The offering will be led by Deutsche Bank Alex. Brown as sole book-running manager. Bear, Stearns & Co. and J.P. Morgan Securities. will co-lead-manage the offering. Credit Suisse First Boston and Morgan Stanley & Co. will be co-managers for the offering.

Rosenberg to helm new Vivendi Universal SA studio: Sources say Studios USA Domestic Television President Steve Rosenberg will be the point man to run a combined syndication studio at newly merged Vivendi Universal SA, while Ned Nalle, Universal Worldwide TV’s president, will leave the studio’s TV division. Mr. Nalle could remain at the studio in a different capacity. The moves come as a result of Vivendi Universal’s recent $10 billion acquisition of USA Networks Inc.’s entertainment assets. The syndication studio will be based in the Universal lot in Los Angeles. With the top dog at the company now in place, the studio will now focus on the rest of the executive corps, with some layoffs expected on both sides.

Studios USA would not comment on the appointment.

Duchovny to return for ‘X-Files’ finale: Now that Fox’s “The X-Files” is set for its series finale during the upcoming May sweeps, departed co-star David Duchovny has agreed to reprise his role as FBI agent Fox Mulder for the final episode to air on Sunday, May 19 (8 p.m. to 10 p.m., ET).

In true “X-Files” fashion, story details for the remaining episodes of the series are under tight wraps. According to Fox, the final five episodes will begin to provide long-awaited answers to many of the show’s most-asked questions, culminating in the two-hour finale in which Mulder is reunited with agent Dana Scully (Gillian Anderson) after having been missing for the past year. Also, the final episodes of the series will examine many of the pieces involved in the long-running mythology that has continued throughout the show’s nine seasons.

The series finale is being written by series creator and executive producer Chris Carter and directed by co-executive producer Kim Manners. In addition to appearing in the two-hour series finale, Mr. Duchovny is confirmed to direct an “X-Files” episode set to air April 28, which is based on a story idea he co-wrote with Mr. Carter and executive producer Frank Spotnitz.

Mr. Duchovny, who also co-stars in the upcoming Steven Soderbergh film “Full Frontal,” is represented by Creative Artists Agency and Melanie Greene Management.

NBC takes the gold in second sweeps week: The Winter Olympic Games kept NBC on top for the second week of the February sweeps. The Peacock’s Salt Lake City coverage was helped by the media frenzy surrounding the pairs figure-skating controversy, which led to a second set of gold medals being awarded.

For the week of Feb. 11 through 17, NBC averaged a 9.7 rating/25 share in adults 18 to 49, 28 million viewers and a 7.0/21 in adults 18 to 34, according to Nielsen Media Research. In second place in the key adults 18 to 49 and 18 to 34 demos was Fox, with respective 3.5/9 and 4.0/12 scores. CBS was second for the week in total viewers, averaging 9.3 million.

Bennett signs on as CNN contributor: William Bennett is joining CNN as a network contributor, it was announced Wednesday by Sid B
edingfield, newly promoted executive editor of the CNN News Group. Dr. Bennett, co-director of Empower America and former secretary of education and director of the Office of National Drug Control Policy, will offer his commentary on social and cultural issues, primarily on “American Morning with Paula Zahn.” Starting Monday, March 4, Dr. Bennett will work out of CNN’s Washington, D.C., bureau. He will also contribute to other CNN programming.

Bruckheimer’s military reality series to premiere later this year: Noted filmmaker Jerry Bruckheimer (producer of “Black Hawk Down” and “Top Gun”), who has been cutting his teeth in the reality TV genre with CBS’s “The Amazing Race,” is teaming up with ABC to produce “Profiles from the Front Line”-a 13-episode series dealing with branches of the U.S. military engaged in various battlefield actions.

Slated to air this summer or fall 2002, the reality series is said by ABC to have the “full cooperation” of the Pentagon and U.S. Department of Defense, and will send producers and cameramen to hot spots around the world, where America’s military will be acting in the nation’s security interests.

Mr. Bruckheimer, who also executive produces CBS’s hit “CSI: Crime Scene Investigation” drama, will again be teamed with “Amazing Race” executive producer Bertram van Munster on the “Profiles from the Front Line” project.

Andrea Wong, ABC’s senior vice president of alternative series and specials, said in a prepared statement, “This would not be possible without the full, unparalleled support and cooperation of the Defense Department and the Pentagon, and there is no one better to bring these stories to life than Jerry Bruckheimer, Bert van Munster and the rest of the creative team.”

Mr. van Munster added: “This is going to be a very visual reality show with a strong patriotic message.”

However, taking into account widespread complaints from the TV networks’ news divisions over the U.S. military’s somewhat guarded vetting of news coming from the battlefield in last fall’s war in now-liberated Afghanistan, there are questions as to whether the military will restrict access to “Front Line” camera crews and have final editorial approval over the show’s content. News organizations also complained of a filtering process the military undertook in providing “pool” footage of aerial attacks in Afghanistan as well as ground operations against the ousted government’s Taliban fighters and supported Al Qaeda terrorists.

ABC said it will “primarily” will use footage shot by its “renowned team of filmmakers,” but will also rely on materials provided by the Department of the Defense. The network added that “when it is not possible, for reasons of national security, to accompany teams on certain operations, this unique coverage will be matched up with those who took part to provide a more intimate account of those missions.”

ABC officials were unreachable to further comment on what other sorts of guarantees or conditions the military has set on “Profiles from the Front Line’s” access to various military actions.

“Profiles from the Front Line” was created by Mr. van Munster. Mr. Bruckheimer, Mr. van Munster and Jonathan Littman (president, Jerry Bruckheimer Television) are the executive producers, and Pulitzer Prize-winning photographer David Hume Kennerly is the co-executive producer. “Profiles from the Front Line” is a production of Jerry Bruckheimer Television and Earthview Productions, in association with Warner Bros. Television.

Sony, News Corp. on PTC’s ‘raunch list’: The Parents Television Council has released a compilation of both top “family friendly” and top “raunchy programming” sponsors. Media companies Sony, News Corp. and Viacom have three of the four top spots on the “raunchy list,” with Procter & Gamble in third place on the list.

Wal-Mart leads the so-called family-friendly list, followed by General Mills, with Pfizer and Sears, Roebuck & Co. tied for third and Clorox cleaning up in fifth place.

The companies on the “raunchy list,” from Volkswagen to Victoria’s Secret (tied for eighth), and from the U.S. Government to Greyhound (tied for tenth), tend to market to younger people, who are typically thought to be more receptive to what the PTC calls “raunch.”

In the present study, the PTC compiled a list of advertisers on each of the 8-to-9 p.m. television programs on its own 2001 listing of Top Ten Best and Worst Shows on Prime-Time Network TV, which ranked TV shows from best to worst from a family-values perspective.

Series from the Top 10 Best list included “Who Wants to Be a Millionaire” (8:00 p.m. only) and “My Wife and Kids” (both ABC); “Touched By an Angel” (CBS); “Doc” (Pax); and “Seventh Heaven” and “Sabrina, the Teenage Witch” (both WB).

Shows from the Top 10 Worst list included “Boston Public” and “That ’70s Show” (both Fox); “WWF Smackdown!” and “Buffy the Vampire Slayer” (both UPN), “Dawson’s Creek” (WB) and “Friends” (NBC).

Shaw named GM of WGN Superstation: Bill Shaw is the new vice president and general manager of Tribune’s WGN Superstation, which is distributed on cable and satellite in more than 56 million homes around the country. He will manager the daily operations, affiliate distribution and sales for the station. Mr. Shaw joined Tribune Television as vice president of sales in August 2001, and prior to that was president and CEO of Fox Television Sales, the Fox/Petry joint venture.

Roberts to host RTNDF Dinner honoring Graham: Cokie Roberts, ABC News’ chief congressional analyst and co-anchor of “This Week With Sam Donaldson & Cokie Roberts,” will be master of ceremonies at the Radio and Television News Directors Foundation’s 12th Annual First Amendment Awards Dinner on March 13 in Washington.

The late Katharine Graham, former chairwoman and chief executive of The Washington Post Co., will be honored posthumously with the First Amendment Leadership Award for her contributions to “upholding the highest standards of journalism.” Ben Bradlee, vice president at large of The Washington Post Co., and Judy Woodruff, CNN anchor and senior correspondent, will present the award. Accepting the award will be Bill Ryan, former chairman and CEO of Post-Newsweek Stations.

Isham to run ABC News’ Investigative Projects Unit: ABC News is merging three investigative news and legal teams into one Investigative Projects Unit run by Christopher Isham, the longtime senior producer of the “World News Tonight” I-Team, now to be known as chief of investigative projects. Joining the unit are the teams led by chief investigative correspondent Brian Ross and senior legal correspondent Cynthia McFadden. The senior investigative producers of the unit are Chris Vlasto and Eric Avram.

Murray named CNBC’s Washington bureau chief: CNBC’s increasing editorial focus on Washington has led to the appointment of Alan Murray as the cable network’s D.C. bureau chief. He has been the Wall Street Journal’s Washington bureau chief since 1993. Mr. Murray, already a familiar face to CNBC audiences because of guest appearances, on Feb. 26 will become the first-listed co-host of what is now to be called “Capitol Report With Alan Murray and Tyler Mathisen.” Matt Cuddy, the CNBC bureau chief since 1998 is now the bureau’s news director.

Zahn to host CNN’s ‘People on the News’: Starting this Sunday, Paula Zahn, anchor of CNN’s “American Morning,” will also be the host of synergy-driven “People on the News,” a weekend magazine that CNN will expand from a half-hour to an hour.

(c) Copyright 2002 by Crain Communications