Business Briefs

Feb 11, 2002  •  Post A Comment

MGM may increase Rainbow Media stake
MGM may soon increase its 20 percent stake in Rainbow Media Group to as much as 50 percent, which would allow it to consolidate Rainbow’s cable channels on its balance sheet, according to knowledgeable sources. MGM also is negotiating to license some of its James Bond and other films to Rainbow’s AMC for a short run and is discussing the creation of at least one branded themed program service. All MGM Chairman Alex Yemenidjian said during MGM’s earnings call last week is that investors could expect the company to have “a deepening” relationship with Cablevision Systems, Rainbow’s majority owner. There is also renewed speculation that MGM, NBC (a minority owner of Rainbow) and Rainbow will merge. Mr. Yemenidjian declined to discuss takeover speculation. MGM had record fourth-quarter earnings of $39 million, or 16 cents a share, on a 29 percent rise in revenues to $375.5 million. Its television program division posted a narrowed loss of $1.2 million on flat revenues of $29.7 million in the quarter.
Messier calms fears about stock decline
Vivendi Universal Chairman Jean-Marie Messier took the unusual move of issuing an internal online letter to employees Feb. 6, calming fears about a 4 percent drop in the company’s stock price-to its lowest level since Sept. 11-and takeover speculation. He said he has no plans to take over Yahoo!, MGM or Germany’s KirchMedia and that there is no sell-off of Vivendi Universal stock by major shareholders such as Liberty Media, Philips or the Bronfman family. He assured investors that even under new, complex accounting rules, the company has “no hidden risks or speculative investments” and no onerous change in debt.
Univision still hurting from soft ad market
Univision Communications reported a 21 percent decline in fourth-quarter cash flow to $77 million on 2 percent growth in revenues to $233.8 million. Better than most analysts expected, it still reflects continued widespread advertising softness. Some of the nearly 70 percent drop in fourth-quarter profits was attributed to costs associated with the recent launch of its second network, Telefutura, and other ventures.