French conglomerate Vivendi Universal said Feb. 5 that revenue for 2003 tumbled 56 percent to 25.5 billion euros ($32.1 billion) from a year-earlier level of 58.2 billion euros, the result of asset sales, a drop in the value of the dollar against the euro and weakness at the company’s games and music groups. Vivendi Universal Entertainment, the film and television production operation that is being merged with General Electric’s NBC broadcast network, reported a 4 percent decline in revenue to just over 6 billion euros ($7.6 billion), the result of the sale of the Spencer Gifts retail chain and a strong performance by the film and television operations, which offset lower revenues at the company’s theme park business.
Sinclair Profit Down for Fourth Quarter
Television station group Sinclair Broadcast Group on Feb. 5 reported a 32 percent fall in fourth-quarter profit to $16 million, or 19 cents a share, vs. a year-earlier profit of $23.5 million, or 27 cents a share, hurt by a steep drop in political advertising revenue. Revenue slipped nearly 3 percent in the quarter to $192.8 million, largely the result of a 9 percent decline in broadcast revenue to $173.1 million at the company’s 62 television stations. For the year, Baltimore-based Sinclair swung to a profit of $14 million, or 14 cents a share, after reporting a loss of $574.8 million, or $6.64 a share, a year ago.
Gannett Profit Rises 3% in Fourth Quarter
Gannett, the newspaper giant that also owns 22 television stations, said Feb. 2 that it recorded a 3 percent increase in fourth-quarter profit to $358 million, or $1.32 a share, from a year-earlier profit of $347 million, or $1.30 a share, driven by robust gains in advertising revenue, which offset a drop in TV revenue. Revenue for the McLean, Va.-based company rose 6 percent. For the year, Gannett’s profit rose 4 percent to $1.21 billion, or $4.49 a share, from $1.16 billion, or $4.31 a share, on a 4 percent revenue increase to $6.7 billion. The company’s television operation saw its revenue tumble 14 percent to $196.7 million in the fourth quarter, and 7 percent for the year to $719.9 million-the result of a sharp dropoff in political advertising spending, particularly in the fourth quarter.
Charter Hints at Legal Action in Allen Dispute
Charter Communications is considering its legal options if it cannot resolve a dispute with majority shareholder Paul Allen over securities used to pay for the 2000 purchase of cable systems from Bresnan Communications, Charter said in a Securities and Exchange Commission document filed Feb. 2. The battle centers on whether the securities, issued as part of Charter’s acquisition of Bresnan four years ago, convert to a one-third ownership stake in cable systems, as Mr. Allen contends, or into common stock, as Charter asserts. If Mr. Allen, who owns a 55 percent stake in Charter, is correct, the securities were worth $678 million as of Sept. 30, 2003; under Charter’s scenario, the securities have a value of around $115 million.
Hughes Ends Settlement Talks With Pegasus
DirecTV parent Hughes Electronics has ended settlement talks with satellite operator Pegasus Communications, saying that, after a year of mediation, the two companies cannot reach an agreement on when a resale pact is scheduled to end.
The decision to pull the plug on talks came after a meeting Thursday between Hughes CEO Chase Carey and Pegasus CEO Marshall Pagon.
“We believe that Pegasus has an unrealistic view of its contractual position and, therefore, of its resulting business prospects and fundamental valuation,” Mr. Carey said in a statement. “With every day that passes, both Pegasus’ significance to DirecTV and its value as a stand-alone enterprise diminish.”
The move by Hughes to end negotiations is perhaps the clearest signal yet of the new world order that exists at the company now that it is controlled by News Corp., which late last year acquired a controlling 34 percent stake in the satellite company. DirecTV and Pegasus had held court-ordered mediation talks since January 2003.
At issue is the termination date of an agreement with the National Rural Telecommunications Cooperative, of which Pegasus is the largest member, to resell DirecTV services to rural customers in the United States.
NRTC sued DirecTV, claiming the satellite operator was circumventing the cooperative and selling satellite services directly to rural customers. The two sides reached a settlement in August, with all of the members except Pegasus agreeing to continue selling DirecTV services until 2011.
With the talks ended, Hughes said Pegasus is left with the choice of either ending its right to sell DirecTV services in June 2008 or signing on to the NRTC agreement and selling the services until 2011.
Fox Taps PanAmSat for Satellite Duties
Fox signed a 15-year agreement today with satellite operator PanAmSat in which the network put domestic and international transmission of all of its U.S. programming on a fleet of PanAmSat satellites, a move that consolidates broadcast operations and brings everything under the News Corp. umbrella.
PanAmSat is 81 percent owned by Hughes Electronics, which came under News Corp.’s control late last year when the media conglomerate paid $6.6 billion for a 34 percent stake in Hughes. Hughes also is the parent company of No. 1 satellite TV firm DirecTV.
As part of today’s agreement, Fox inked a 15-year cable contract for 10 transponders and a 15-year broadcast contract for four transponders. The deal also includes a 10-year pact for three transponders to be used for international broadcasts.
In all, PanAmSat said it will support Fox using 17 transponders located across seven satellites in its global fleet of 30 satellites.
Liberty: GNS Made Call to End Station Deal
Television broadcaster Liberty Corp. said today that last month’s decision to bail out of a $43 million deal to buy television station WTVW-TV in Evansville, Ind., rested with GNS Media, the company with which Liberty had a leased marketing agreement to run the station.
Liberty CEO Hayne Hipp said during a conference call to discuss the company’s fourth-quarter earnings that GNS was the company that terminated the agreement to purchase the Fox affiliate from Nexstar Broadcasting, and that Liberty had no relationship with Nexstar.
The comment came as Liberty’s profit and revenue figures for the fourth quarter and the year were announced, showing that the Greenville, S.C.-based company was hurt by a sharp drop in political advertising spending at its 15 network-affiliated television stations.
Liberty reported its profit for the fourth quarter fell 41 percent to $7.6 million from a year-earlier figure of $12.9 million. On a per-share basis, the profit rang in at 40 cents a share, down from 66 cents a share a year ago. Revenue fell 10 percent to $55.6 million.
For the year, Liberty swung to a profit of $23.9 million, or $1.24 a share, compared with a year-earlier loss of $14.4 million, or 73 cents a share. Revenue slipped 3 percent to $200.3 million.