Biz Briefs

Apr 26, 2004  •  Post A Comment

DirecTV Group said last week that it has sold its 80.5 percent stake in the PanAmSat Corp. unit to private-equity firm Kohlberg Kravis Roberts & Co. for $4.3 billion, including the assumption of debt. KKR will pay DirecTV $23.50 per share in cash and assume $750 million in debt. The sale furthers DirecTV’s efforts to shed noncore assets in favor of focusing its energies on its satellite TV service, which executives project will grow by about 15 percent annually to 15 million subscribers by the end of 2006 from the current level of around 12 million. PanAmSat operates a fleet of 24 satellites used by media companies for video distribution. It was put up for sale shortly after Rupert Murdoch’s News Corp. purchased a controlling 34 percent stake in DirecTV late last year.
Adelphia May Be Put Up for Sale
Beleaguered cable operator Adelphia Communications said last week it is exploring putting itself up for sale as part of its emergence from Chapter 11 bankruptcy protection. The announcement comes amid speculation on Wall Street that a handful of MSOs are eyeing Adelphia and its 5.4 million subscribers in anticipation that the company will be ripe for a sale once it emerges from bankruptcy reorganization. Seen as best positioned to make a play for the company are Time Warner Cable and, to a lesser extent, Cox Communications. Comcast is also seen as a potential suitor, though many analysts discount the chances of a Comcast bid given the cable giant’s interest in The Walt Disney Co. Some Wall Street analysts have estimated Adelphia’s value to be as high as $21.5 billion.
Viacom Reports Q1 Profit Surge
Viacom reported a 60 percent surge in first-quarter profit to $710.5 million, or 41 cents a share, versus a year-earlier profit of $443.1 million, or 26 cents a share, as revenue climbed 12 percent to $6.8 billion. The company said advertising revenue growth of 21 percent to $3.2 billion, combined with double-digit growth at the company’s cable and television operations, fueled the increases. Viacom’s cable networks, the company’s biggest and best-performing division, reported a 21 percent increase in revenue to $1.4 billion, and a 24 percent increase in operating income, largely the result of higher advertising and affiliate fees. MTV Networks reported a 35 percent increase in advertising revenue, while BET posted a 16 percent gain. Cable affiliate fees rose 9 percent, thanks to gains at BET and MTV, which offset a slight decline at Showtime. The television operation recorded an 18 percent jump in revenue to $2.3 billion and a 38 percent rise in operating income to $336 million.
Belo Stations Post Higher Revenues
A stronger-than-expected bounce in political advertising revenue, coupled with robust gains in local advertising, helped Belo Corp.’s television stations post an 11 percent increase in revenue for the first quarter, beating previous company projections, Belo officials said last week. The Dallas-based owner of 19 television stations said the strength of advertising revenue helped the TV station group post a 22 percent surge in earnings before interest, taxes, depreciation and amortization to nearly $60 million, while earnings from operations soared 28 percent to nearly $49 million. Revenue rose to $157.1 million from 2003’s $141.6 million. The TV group’s results helped Belo report a 43 percent bounce in first-quarter profit to $22.3 million, or 19 cents a share, compared with $15.6 million, or 14 cents a share, a year ago. Revenue rose 9 percent to $351.3 million.
NBC-Vivendi Deal Closer to Becoming Reality
NBC’s planned acquisition of Vivendi Universal Entertainment moved two steps closer last week, after the network received an OK April 20 from the Federal Trade Commission and Barry Diller’s InterActiveCorp and VUE parent Vivendi Universal the next day settled their fight over how Mr. Diller would be paid to relinquish his stake in VUE. According to a source who is familiar with the situation, the official unveiling of NBC Universal is slated to take place before NBC’s upfront presentation the week of May 17.