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Briefly Noted

Aug 19, 2002  •  Post A Comment

Eisner buys Disney shares
The Walt Disney Co. Chairman and CEO Michael Eisner spent $10 million of his own money to acquire 725,000 shares of Disney stock on the open market last Thursday at prices ranging from $13.55 to $14.49 per share. A Securities and Exchange Commission filing indicates his stake in the company now totals 13.9 million shares, not counting the stock he holds through retirement and other accounts. Mr. Eisner is under extreme pressure from hi s formerly supportive board of directors to reverse the company’s sagging fortunes or be replaced. The company is in the process of shrinking the size of the board.
Country-music idol search
With “American Idol” riding high in the ratings, USA Network’s “Nashville Star,” the new series that will launch a nationwide grass-roots search for the next great country music singer/songwriter, seemed all but inevitable. The contestants’ personal lives and stories of the inspiration behind their music will be themes throughout the series, and the grand-prize winner will receive a recording contract from Universal Music Group. “Nashville Star,” a limited-run series, is scheduled to premiere in the first or second quarter of 2003.
Gemstar-TV Guide to restate results
Gemstar-TV Guide International said late last week it will restate and delay the reporting of its 2001 financial results as it continues to review what analysts said are broader accounting problems that will likely become the subject of an expanded Securities and Exchange Commission investigation. The Pasadena, Calif.-based firm said it will reassign about $20 million of revenue from its TV Guide subsidiary, which will not impact 2001 net loss or cash flow or 2002 financial results, but will reduce operating income in the Interactive Platform sector. Its independent auditor, KPMG, has refused to sign off on the accounting change.
Gemstar Chairman Henry Yuen and Chief Financial Officer Elsie Leung appear to be headed for non-management roles as part of a major management restructuring being forced by Rupert Murdoch’s News Corp., which is 43 percent equity owner of the company. Standard & Poor’s put Gemstar-TV Guide on a negative credit watch late last Thursday over concerns about the company’s reported financial results.
Murdoch willing to sell Rainbow to Cablevision
News Corp. Chairman and CEO Rupert Murdoch told investors during an earnings call he would gladly sell the company’s minority stake in Rainbow Partners (which includes Madison Square Garden) for more than $1 billion to Cablevision Systems, but that he is ready to exercise the company’s “put” option in the joint-venture pact that could force a buy-back or a swap of Cablevision assets with equal value.
News Corp. and its Fox Entertainment Group subsidiary reported double-digit growth in their revenues and operating income in the fiscal fourth quarter and fiscal 2002. They forecast 25 percent to 30 percent cash-flow growth at Fox in fiscal 2003 and operating income growth in the high teens to low 20s percent range for News Corp., despite a gradually improving advertising market and a money-losing Fox Television network.
Although it will be unable to match last year’s record $1.3 billion in free cash flow, it continues to aggressively reduce debt. News Corp. posted a $1.74 billion fiscal fourth-quarter loss, reflecting the write-down value of its stake in Gemstar-TV Guide International, on which it lost a total of $6 billion in fiscal 2002 on its 42 percent stake.
Vivendi lowered to junk status
Moody’s Investors Service lowered its rating last Thursday on Vivendi Universal to B1, or junk bond status, citing the company’s cash shortage and financial risk to its restructuring plans as the company announced a $12 billion loss for the first half of the year and the sale of $10 billion in assets, including its Houghton Mifflin publishing unit. Standard & Poor’s also cut Vivendi’s debt ratings to junk status. Vivendi shares fell 25 percent to a one-year low of $11.80 a share despite confirmation of a new $3 billion credit facility with seven banks to service payments on the company’s $18.6 billion debt. Vivendi confirmed it would sell its stake in EchoStar Communications, some of its Canal Plus-related assets and Italian digital TV platform Telepiu.
Short takes
Kenny Plotnik has been promoted to news director at WABC-TV, New York, from assistant news director. … Ron Longinotti has been appointed VP and general manager of San Francisco CBS station KPIX-TV, from general manager of KGW-TV, Portland, Ore.