MGM Withdraws Bid for VUE Assets
Metro-Goldwyn-Mayer on Tuesday withdrew its $11.5 billion all-cash bid for the U.S. entertainment assets of Vivendi Universal, saying the French company’s price demands were greater than MGM’s valuation of the assets.
At the same time MGM majority shareholder Kirk Kerkorian said he would buy as many as 15 million shares to raise his stake in the studio to 73 percent.
The move by MGM comes as some bidders grow increasingly frustrated by Vivendi’s efforts to maximize the value of the assets, which, under the Vivendi Universal Entertainment umbrella include a film studio, television production facilities and cable channels USA, Sci Fi and Trio.
Some bidders warned as recently as two weeks ago that Vivendi ran the risk of alienating potential suitors if they further dragged out the process in an effort to get a higher price for VUE. Over the past several weeks Vivendi has pushed bidders to raise their bids and repeatedly has reminded suitors that the company is in good financial shape these days, suggesting to bidders that the company’s back isn’t against a wall with regard to a sale. The French-controlled company has also on several occasions has reminded bidders it might consider spinning off VUE in an initial public offering.
At least in the case of MGM, which was widely believed to have had the highest offer on the table, the tactics backfired.
“The VUE assets are attractive and would fit well with MGM,” said MGM Chairman Alex Yemenidjian. “Unfortunately, meeting the seller’s current price expectation would not be consistent with our valuation of the assets.”
MGM’s withdrawal leaves in the running Liberty Media, General Electric’s NBC unit, Viacom and investment teams headed by Vivendi Vice Chairman Edgar Bronfman Jr. and oil billionaire Marvin Davis.
By pulling out of the bidding, Mr. Yemenidjian made good on an assurance he offered last week during MGM’s second-quarter earnings call, in which he said the company would not overpay for the VUE assets and would consider passing on to shareholders some of the company’s wealth if a play for VUE fell through.
The studio in June made an $11.2 billion offer for the assets, and raised it by $300 million a few weeks later on the condition that Vivendi would provide MGM with more financial information. Vivendi publicly balked at MGM’s request, but privately acquiesced.
Meanwhile, Mr. Kerkorian, who personally and through his investment vehicle Tracinda controls 67 percent of MGM, said he will pay $16 each for up to 6 percent, or 15 million, MGM shares. That represents a 25 percent premium over MGM’s Tuesday closing price of $12.84. Under his plan, Mr. Kerkorian would personally buy 10 million shares, while Tracinda, of which he is the sole shareholder, buys the other 5 million.
A Vivendi spokeswoman declined to comment.
WB Will Start New Season Sept. 5: Getting a jump on the other broadcast networks, The WB will begin rolling out its new season on Friday, Sept. 5, with the premiere of “Grounded For Life,” which will air back-to-back episodes from 9 p.m. to 10 p.m.
The following week, on Thursday, Sept. 11, “Steve Harvey’s Big Time” debuts with a one-hour episode from 8 p.m. to 9 p.m., followed by the premieres of sitcoms “What I Like About You” and “Run of the House.” Regular 8:30 p.m. time slot occupant “The Jamie Kennedy Experiment” returns the following week on Thursday, Sept. 18. “Reba” premieres with a one-hour episode Friday, Sept. 12, from 8 p.m. to 9 p.m., leading into the premiere of “All About the Andersons” at 9 p.m. “Like Family” joins the Friday lineup Sept. 19.
Monday’s lineup of “7th Heaven” and “Everwood” returns Sept. 15., while the new Tuesday lineup of “Gilmore Girls” and “One Tree Hill” premieres Sept. 23, and the Wednesday lineup of “Smallville” and “Angel” debuts Oct. 1. “Charmed” returns with a two-hour season premiere Sunday, Sept. 28, while regular 9 p.m. time slot occupant “Tarzan” will join the schedule Oct. 5. The Sunday “Easy View” reruns of “Tarzan” at 5 p.m. will begin Oct. 12, and reruns of “Everwood” at 6 p.m. will begin Sept. 28.
The WB has also scheduled is special “Pepsi’s Play for a Billion” on Sunday, Sept. 14 from 8 p.m. to 10 p.m.
NBC Nabs ‘Upscale’ Viewers in Demos: In terms of “upscale” 18 to 49, 25 to 54 and 35 to 64 audience composition, NBC led all networks this past season, while Fox and The WB were the most upscale networks when it came to the percentage of their audiences for regular series that was composed of upscale adults 18 to 34, with NBC closely behind in that category too.
Those are the topline conclusions of the just released Upscale Television Report from Magna Global USA, which defines “upscale” as a household with $75,000-plus income.
Individual programs favored by upscale viewers varied widely, depending on the demographic. For example, The WB’s “Dawson’s Creek” was the favorite program among upscale adults 18 to 34, but it ranked 19 on the list of favorites for upscale 18 to 49 year olds and was 61 on the list for upscale adults 25 to 54. And NBC’s “The West Wing” was tied for first among upscale adults 25 to 54 and was first among upscale adults 35o 64, but it dropped to 57 among upscale 18- 34-year-olds.
The favorite series among upscale 18 to 49 year olds was “Will & Grace,” tied with “Good Morning, Miami.” “W&G” and “GMM” also tied “West Wing” and “Frasier” as the favorites of the upscale 25- to 54-year-olds.
Only three series made the list of the favorite 15 programs for all four upscale adult demos (18 to 34, 18 to 49, 25 to 54 and 35 to 64). They are NBC’s “Will & Grace” and “Good Morning, Miami,” and Fox’s “24.”
Spielberg Saddles Up Old West Mini for TNT: Mega-director Steven Spielberg, who struck ratings gold for the Sci Fi Channel with his epic “Taken” miniseries, is again lending his talents and prestige to a basic cable miniseries and will produce a 12-hour mini for Turner Network Television about the opening of the American West.
Mr. Spielberg will be executive producer for the untitled miniseries, which will track two multi-generational American and Native American families, with each telling the stories of the development of the West from their own points of view.
Production of the miniseries is slated to begin in summer 2004, with its potential premiere in summer 2005 on TNT. Cast, writers and individual episode directors for the project are to be determined.
Darryl Frank and Justin Falvey, the co-heads of DreamWorks Television, will be co-executive producers of the project.
Dorgan Plans Senate Vote on Ownership Measure: Sen. Byron Dorgan, D-N.D., today announced that he’s planning to schedule a Senate vote on a measure to overturn the Federal Communications Commission’s media ownership deregulation during the first week of September-right after lawmakers return from their summer recess.
At a press briefing, the lawmaker also said he believes he has the Senate votes to roll back “one of the most complete cave-ins to corporate interests I’ve ever seen by what is supposed to be a federal regulatory agency.” Earlier this month, the House of Representatives voted 400-21 to approve appropriations legislation that would roll back only one part of the FCC’s June 2 ruling-a provision that raised the national cap on TV ownership from 35 percent to 45 percent.
Sen. Dorgan’s measure would overturn the cap and other aspects of the FCC’s decision, including provisions relaxing the agency’s TV duopoly and newspaper-broadcast cross-ownership rules. In his effort to overturn the FCC, Sen. Dorgan is using a resolution of disapproval-a parliamentary maneuver that allows lawmakers to sidestep usual legislative procedures.
The resolution has been co-sponsored by a bipartisan group of 20 senators that includes Sen. Trent Lott, R-Miss., and Sen. Ernest Hollings, D-S.C. But the prospects for passage are unclear in the House, where GOP leaders have vowed to fight efforts to overturn the FCC.
ABC Fall Season Premiere Schedule: ABC will debut the majority of its series during the traditional fall broadcast premiere week Sept. 22 to Sept. 28. Exceptions a
re Monday and Thursday nights, which will premiere earlier. “Threat Matrix” will be the first regular scripted series to premiere Thursday, Sept. 18, leading into a new “Extreme Makeover.” The new season of “Monday Night Football” starts Monday, Sept. 8, with its lead-in “PrimeTime Monday” debuting a week later on Sept. 15. “20/20” premieres Friday, Sept. 5, and “PrimeTime Thursday” premieres Thursday, Sept. 11.
Several returning sitcoms will get one-hour premieres, including “According to Jim” (Tuesday, Sept. 23, 9 p.m. to 10 p.m.), “My Wife and Kids” (Wednesday, Sept. 24, 8 p.m. to 9 p.m.) and “George Lopez” (Friday, Sept. 26, 8 p.m. to 9 p.m.). Those moves will delay the premieres of three other sitcoms by a week — “Less Than Perfect” (Tuesday, Sept. 30, 9:30 p.m. to 10 p.m.), “It’s All Relative” (Wednesday, Oct. 1, 8:30 p.m. to 9 p.m.) and “Married to the Kellys” (Friday, Oct. 3, 8:30 p.m. to 9 p.m.) New drama “Karen Sisco” also gets bumped back a week (Wednesday, Oct. 1, 10 p.m. to 11 p.m.) because “The Bachelor” debuts Wed., Sept. 24 with a two-hour premiere from 9 p.m. to 11 p.m.
Saturday night and Sunday night full lineups premiere Sept. 27 and Sept. 28, respectively.
ABC has also scheduled “Stephen King’s Kingdom Hospital” to debut Thursday, Feb. 5, in a special two-hour episode from 9 p.m. to 11 p.m.Andrew McCarthy, Diane Ladd and Bruce Davison have been cast in ABC’s midseason drama series “Stephen Kingdom’s Kingdom Hospital.” Mr. McCarthy will play Dr. Hook, a brilliant surgeon who has a habit of collecting medical equipment. Ms. Ladd will play Mrs. Druce, a psychic hypochondriac who becomes a fixture in the emergency room. Mr. Davison will play Dr. Stegman, an arrogant doctor lacking in bedside manner. Production on the series begins Aug. 11 in Vancouver, Canada.
ABC, ESPN, ESPN2 to Telecast 90 NBA Games 2003-04 Season: ABC, ESPN and ESPN2 will telecast a collective 90 regular-season NBA games during the 2003-04 season, the second season under the Disney-owned networks’ $4.6 billion contract. ABC will carry 18 games (four more than broadcast last season) starting with an evening doubleheader Christmas Day. The ESPN slate starts Oct. 29 with an evening doubleheader.
Clear Channel Has Slight Q2 Profit: Broadcasting giant Clear Channel Communications on Tuesday reported a slight increase in second-quarter profits, buoyed by a one-time gain related to the company’s early retirement of debt.
San Antonio-based Clear Channel, which owns 36 television stations in addition to 1,200 radio stations, a billboard business and a concert-venue operation, said profits for the period were $251.3 million, or 41 cents a share, vs. a year-earlier profit of $238 million or 39 cents a share. Excluding a one-time $41.3 million pre-tax gain associated with paying down some debt early, profits for the period would be $225.7 million.
Revenue climbed nearly 7 percent to $2.32 billion, lifted by Clear Channel’s billboard and live-entertainment businesses. Earnings before interest, taxes, depreciation and amortization rose 1 percent to $632.9 million.
The so-called “Other” category, which includes the company’s television operations and media and sports representation businesses, recorded a 2 percent increase in second-quarter revenue to $139.5 million, while cash flow climbed 4 percent to $30.2 million.
The company, which acknowledged that the weak advertising environment took its toll on the second quarter, was more optimistic about the second half of 2003, expecting the ad picture to improve as the economy recovers.
LIN Reports Wider Q2 Loss: LIN Television on Tuesday reported a widened second-quarter loss to $11.2 million, or 23 cents a share, from a year-earlier loss of $9.2 million, or 23 cents per share, caused by a $23.6 million charge associated with the company’s early repayment of debt as well as general slowness in advertising.
Revenue for the Providence-based owner of 24 television stations rose 2 percent to $91.1 million from a year-earlier $89.2 million.
The widened loss was the direct result of fees and write-offs associated with the company’s issuance of $325 million in new debt securities, which were used to retire $300 million of debt with a higher interest rate.
Retiring that debt helped improve the company’s balance sheet, CEO Gary Chapman said. “These new financings will reduce regular interest expense to approximately $11 million per quarter and enhance liquidity from operations,” he said.
Going forward, the company anticipates that third-quarter revenue could fall between 5 percent and 10 percent, hurt by difficult comparisons from a year ago, when the company saw robust advertising from political campaigns, and by ad sales that are pacing downward by mid-single digits.
FreemantleMedia Promotes Mackay: Catherine Mackay was promoted to regional CEO, USA, Australia and Asia at FremantleMedia. Ms. Mackay was deputy CEO of FremantleMedia North America and CEO of FremantleMedia Enterprises. She will remain CEO of FremantleMedia Enterprises. She reports to Fremantlemedia CEO Tony Cohen.
WB to Broadcast ‘Family TV Awards’: The WB will broadcast the fifth annual “Family Television Awards” Monday, Aug. 25, 9 p.m. (ET). The awards will take place Thursday, Aug. 14, 6:30 p.m. at the Beverly Hilton Hotel in Beverly Hills, Calif. Jennie Garth and Holly Robinson Peete will co-host the show, which is produced by dick clark productions.