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Oct 23, 2003  •  Post A Comment

CBS Pulls “The Brotherhood of Poland, N.H.” During November Sweeps

CBS is pulling new David E. Kelley drama “The Brotherhood of Poland, N.H.” from its Wednesday night lineup during the November sweeps. A series of specials and newsmagazines will fill the 10 p.m. time slot. On Wednesday, Nov. 5, CBS will air the “37th Annual CMA Awards” from 8 p.m. to 11 p.m. A special “48 Hours Investigates” featuring an exclusive interview with Robert Blake will air from 10 p.m. to 11 p.m. on Nov. 12. “The Victoria’s Secret Fashion Show” will air Nov. 19, from 10 p.m. to 11 p.m. CBS has yet to decide what to air in the time slot on Nov. 26. A “48 Hours Investigates” episodes will also air on Wednesday, Oct. 29.

“Brotherhood” is officially on hiatus, after a particularly poor performance last night, scoring only a 1.9 Nielsen Media Research rating and 5 share and 5.9 million total viewers.

Cablevision Modifies Plans for Spinoff Company: Cablevision Systems said Thursday it is amending its proposal to spin off its recently launched satellite service and is now planning to fold three of its entertainment cable channels with the satellite unit into a new company that would be run by Chairman Charles Dolan.

Under the new plan, the cable operator said it will combine its Rainbow DBS unit with cable channels AMC, WE: Women’s Entertainment and Independent Film Channel, and spin off those assets into a new company by Jan. 1.

Cablevision, meanwhile, would retain the cable systems, its high-speed data service, Madison Square Garden and its sports teams, Radio City Music Hall, the music channel Fuse and Rainbow Media’s stakes in regional sports teams. Further, in an apparent about-face, Cablevision said it will retain its movie theater chain Clearview Cinemas, which had previously been slated to go with the spinoff. Cablevision CEO James Dolan would become chairman of the cable operations following the spinoff.

A spokesman declined to discuss the fates of other Cablevision executives, including Rainbow Media President Josh Sapan.

Deregulation Arguments Postponed Again: The U.S. Court of Appeals in Philadelphia announced Thursday that it has postponed oral arguments on lawsuits challenging the Federal Communications Commission media ownership deregulation until Feb. 11. In an order earlier this month, the court said the hearings would be held Jan. 12. It had previously slated the hearings for Nov. 5.

Baseball Drives Fox to Victory: Fox racked up another nightly win with World Series baseball Wednesday night, beating its competitors in adults 18 to 49 and total viewers. Final numbers won’t be available until later this afternoon, but Nielsen Media Research fast affiliate numbers show Fox averaging about 19.5 million total viewers and a 6.9/18 in adults 18 to 49.

Among nonsports programs, ABC was tops in adults 18 to 49 with a 4.6/12 for the night. “My Wife and Kids” (4.8/14), “It’s All Relative” (4.1/11) and “The Bachelor” (6.4/15) were the top entertainment programs in their time slots in adults 18 to 49.

NBC’s repeat of “Law & Order” (6.0/16) handily beat original episodes of ABC’s “Karen Sisco” (3.0/8) and CBS’s “Brotherhood of Poland, N.H.” (1.9/5) at 10 p.m.

For the night, ABC came in second in adults 18 to 49 with a 4.6/12, followed by NBC (4.2/11), The WB (2.5/7), CBS (2.3/6) and UPN (0.8/2). In total viewers, NBC was second with 12 million, followed by ABC (10.7 million), CBS (8 million), The WB (5.6 million) and UPN (2.1 million).

Hopkins Leaves CNN: After 19 years of anchoring and reporting business news, Jan Hopkins is leaving CNN for the business sector. She has been named managing director and head of client communications for Citigroup Private Bank.

In her new role, Ms. Hopkins will anchor The Private Bank’s increasing number of live interactive video feeds and streaming video on subjects ranging from the global economic outlook to asset allocation changes. She also will conduct interviews with Citigroup product specialists, private bankers, outside investment professionals and Citigroup senior management and host internal videos and corporate events for employees.

Ms. Hopkins has been with CNN since 1984. She has been host of CNNfn’s “Street Sweep” as well the substitute anchor for CNN’s “Lou Dobb’s Tonight” and “Moneyline With Lou Dobbs.”

UPN Promotes Hewitt: Paul Hewitt was upped to VP of communications at UPN from director of communications. Mr. Hewitt’s duties include handling UPN’s corporate media relations and communications as well as executive speech writing for CBS and UPN. He will continue to report to Joanna Lowry, senior VP of media relations at UPN.

McGraw-Hill Reports Q3 Decline: McGraw-Hill said today that its four television stations suffered a 7.5 percent decline in third-quarter revenue to $24.6 million, since a bounce in political advertising tied to the California gubernatorial recall failed to offset the overall lack of political ad spending comparable to that seen during the 2002 election year.

The stations, four ABC affiliates, two of which are in California, hurt overall performance for McGraw-Hill’s information and media services group, which also includes the company’s publishing assets, including weekly magazine BusinessWeek. The unit recorded a 3.5 percent drop in revenue to $176.1 million and a 2.4 percent decline in operating profits to $19.3 million.

The division’s performance was offset by gains in McGraw-Hill’s other units, including its credit rating agency Standard & Poor’s. The overall company reported a 5 percent rise in profits to $14.1 million, on a 4 percent increase in revenue to $1.6 billion.

ABC’s ‘Line of Fire’ to Debut Dec. 2: ABC’s new drama “Line of Fire” will premiere Tuesday, Dec. 2, at 10 p.m., while “NYPD Blue” takes a hiatus. “Fire” will run until February, when “Blue” will return with original episodes. That means that ABC will air original episodes of series in the 10 p.m. Tuesday time slot all season.

“‘NYPD Blue’ has always had very demanding production and post-production schedules,” ABC Entertainment President Susan Lyne said. “When we looked at their delivery calendar for December and January, our choices were to air ‘Blue’ repeats, or use this as an opportunity to launch a strong new drama. Given the competition in that hour, the fact that we can have original programming Tuesdays at 10 p.m. gives us a much stronger midwinter schedule.”

ABC has ordered 13 episodes of “Line of Fire.” With “NYPD Blue” slated to return to the 10 p.m. Tuesday time slot in February, it’s unclear whether all 13 “Line” episodes will run in that time slot. If the show is successful, either it would have to move to another time slot or “Blue” would have to move to make room for it.

“Line of Fire” was created by executive producer Rod Lurie. Marc Frydman and Jeff Melvoin are also executive producers. “Line” is produced by DreamWorks Television in association with Touchstone Television.

ESPN, Cox in Satellite TV Dispute: ESPN will urge sports fans in Cox Communications’ markets to switch to satellite TV and other cable competitors, if Cox follows through on threats to drop the sports network in its increasingly heated contract dispute over carriage terms with the programmer. At least that was the word from George Bodenheimer, president of ESPN and ABC Sports, at a press briefing in Washington this morning. “Be assured that ESPN would seek out the millions of ESPN fans in Cox cable markets by aggressively marketing ESPN’s availability though other distributors in Cox franchise areas,” Mr. Bodenheimer said.

Mr. Bodenheimer also unveiled an ESPN-sponsored study that contends that the top drivers of rates for Cox customers and other cable subscribers have been the costs of the industry’s infrastructure improvements and other operating costs, not rising costs for programming. Indeed, according to the ESPN study, basic cable programming costs have accounted for only about 20 percent of the cost increases for cable operators in recent years.

“Its [Cox’s] annual expenditures in the last four years for capital and overhead far exceed the amount spent on programming,” Mr. Bodenhe
imer said. Mr. Bodenheimer also said Cox’s cost for all programming in its expanded basic tier, which costs subscribers an average of $40 a month, comes to $11 per subscriber per month. He also said that Cox derives about $4 per subscriber per month from local ad revenues. “That would make Cox’s net expanded basic cost about $7 per sub per month,” Mr. Bodenheimer said. “Most businesses would beg for this type of opportunity.” Added Mr. Bodenheimer, “Cox’s effort to blame ESPN for its retail pricing decisions is just plain wrong.

For Cox, this is contract negotiation rhetoric directed solely at improving its already healthy, growing 35 percent margin business.” Mr. Bodenheimer also said that moving ESPN up to a separate, extra-fee tier as Cox has proposed would be a “huge disservice to Cox’s expanded basic cable customers and the 87 percent of them who consider themselves sports fans.” Cox officials say that unless ESPN agrees to moderate its price increases, the cable multiple system operator wants the leeway to shift ESPN to a separate tier, because the sports network has been jacking up the rates for its service by 20 percent each year. Cox currently pays $2.61 per sub per month for the service under a contract that expires in March next year.

At his press briefing, Mr. Bodenheimer said that Cox’s real cost per sub for ESPN came to about $1.50 per month, when the revenues Cox realizes from local ad sales are included in the equation. But a Cox spokesperson said local sales only dropped the real price to $2.31 per subscriber per month. In a new contract, ESPN officials have told Cox, they want to continue to be able to increase the price of the sports network by 20 percent a year, according to the Cox spokesperson. “If you do the math, ESPN would cost more than $10 per customer per month in less than 10 years,” the spokesperson said.

In a statement, Jim Robbins, Cox Communications president and CEO, said, “We agree that cable is a terrific value and we know that many of our customers enjoy watching ESPN. But the rapid and unrestrained rise of sports programming costs is threatening the value of cable television for American consumers. Clearly ESPN’s 20 percent increases are disproportionate to the economic reality of the world today. If we raised our rates 20 percent a year, what do you think our customers would say? To quote George Bodenheimer, ‘Like any business, you want to pay less for your product.’ We’re trying to negotiate a better price for Cox customers.”

Robert Sachs, president and CEO of the National Cable & Telecommunications Association, in a statement described ESPN’s study as oversimplifying cable’s economics. “Delivery of popular channels such as ESPN depends upon infrastructure, personnel and programming investment,” Mr. Sachs said. “But when sports programming fees have increased significantly year to year due to soaring player salaries and TV rights, it’s impossible to ignore these costs as a contributing factor in cable price increases.”

Sony Pictures Entertainment Experiences Q2 Loss: Japanese conglomerate Sony said Thursday its Sony Pictures Entertainment unit produced a loss for the fiscal second quarter as its box-office bomb “Gigli” and a lower profit margin on the syndication sale of television series “The King of Queens” took their toll on the unit and the overall company.

SPE, which includes both the film studio and the television production and syndication businesses, produced a loss of 4.6 billion yen ($42 million) for the three months ended Sept. 30, vs. a year-earlier profit of 9.9 million yen. Revenue for the period rose 1 percent to 187.4 billion yen ($1.7 billion).

The revenue increase was attributed to strong video sales of films “Anger Management” and “Daddy Day Care,” plus the first television syndication sale of “The King of Queens.” However, that syndication sale fell short of the profit margin generated a year ago on the cable syndication deal struck with Turner for “Seinfeld,” and coupled with the weak box-office results, contributed to the unit’s loss.

The Pictures unit’s results, combined with a sharp drop in sales at Sony’s games division, contributed to an overall 25 percent drop in profit for the company to 32.9 billion yen ($300.1 million) from a year-earlier figure of 44.1 billion yen. Revenue rose slightly to 1.8 trillion yen ($16.4 billion).

The quarterly results come as Sony is set to launch a reorganization plan that could involve eliminating 500 positions at SPE. Sources close to the situation said few details are available ahead of an Oct. 28 meeting at which some details of the reorganization-including any layoffs-should emerge.

Cox Takes Rate Debate to the Web, Launches Site to ‘Educate Consumers’: Cable operator Cox Communications, continuing its public fight with sports programmers such as ESPN, on Thursday launched a Web site aimed at educating consumers and policy makers about what it called “the rapid, unrestrained” rise in programming fees charged by sports-themed cable networks.

The site-found at www.makethemplayfair.com-contains background information, frequently asked questions and news articles related to the battle between cable operators and programmers over rising programming fees.

Atlanta-based Cox has been the most vocal of the cable operators balking at double-digit programming fee hikes being sought by some programmers, threatening to drop channels such as ESPN or Fox Sports if they don’t ease off of their price increases.

The announcement of the Web site’s launch coincided with a press briefing in Washington Thursday morning by ESPN President George Bodenheimer, who, armed with a study commissioned by ESPN, blamed rising rates not on programming fees but rather on system upgrades by the operators to provide additional services to customers.

Both salvos come on the eve of a U.S. General Accounting Office study slated to be released tomorrow that examines why cable rates are rising faster than inflation.

Viacom Reports Gain, Projects Growth: Media giant Viacom said Thursday its third-quarter profit climbed 9 percent, while its free cash flow more than doubled, on the strength of strong results at its cable networks and television operations. The company also reaffirmed its full-year outlook and projected growth in 2004.

The company, which owns CBS, MTV and Nickelodeon, generated a third-quarter profit of nearly $700 million, or 40 cents a share, up 9 percent from a year-earlier profit of $640 million, or 36 cents per share. Revenue climbed 5 percent to $6.6 billion-which the company said was a record. Free cash flow soared 230 percent to $708 million.

“This was another amazing quarter,” said Viacom President Mel Karmazin during a conference call Thursday. “Every one of our ad-supported networks showed increases.”

Viacom’s cable networks collectively recorded an 18 percent surge in revenues to $1.47 billion, led by a 25 percent jump in advertising revenue. MTV Networks’ collection of channels reported a 26 percent jump in ad revenue, while Black Entertainment Television produced a 24 percent increase. Cable affiliate fees rose 8 percent, led by MTV Networks and BET, which offset a slight decline at pay channel Showtime.

“The cable networks had a strong upfront,” Mr. Karmazin said. “Scatter for the quarter continues to come later and later. There is a belief among advertisers that if they hold their money longer there is a pricing advantage. The good news is the fact that the scatter business is coming.”

On the television side, Viacom managed to overcome a weak economy and the absence of political advertising spending to generate a 5 percent increase in revenue to $1.88 billion. CBS and UPN collectively generated a 7 percent increase in ad revenue, while the TV stations group’s revenues were what Viacom described as “slightly higher.”

The company said its syndication business also produced revenue gains, thanks to “Dr. Phil,” “Everybody Loves Raymond” and “The Parkers.”

Looking ahead, the company reaffirmed its 2003 guidance of mid- to high-single-digit revenue growth and operating income and said it expects to post 5 per
cent to 7 percent revenue growth in 2004, with operating income likely to rise 12 percent to 14 percent.