Sony in Talks to Buy MGM
Sony has teamed up with a pair of private-equity firms to acquire venerable film studio Metro-Goldwyn-Mayer Inc. for $5 billion, according to sources familiar with the situation.
The deal terms floated Wednesday involved Sony and buyout firms Texas Pacific Group and Providence Equity Partners splitting a $1.5 billion cash payment, with the consortium borrowing the rest. If successful, Sony would then merge MGM into Sony Pictures Entertainment.
Officials from Sony declined to comment, while spokespeople for Texas Pacific and Providence could not be reached.
MGM shares rose 12 percent Wednesday to close at $19.75 a share on a day in which trading volume was 10 times the daily average.
With more than 4,500 film titles, MGM has long been an asset sought after by other media companies. Indeed, Sony came close to acquiring the studio once before, but the deal faltered over issues of who would control the combined entity.
In terms of television, sources said the benefits of combining the two operations are a bit more dubious. While both companies have distribution internationally, they are lacking it domestically. In addition, neither MGM nor Sony has a robust television production operation on the level of a Warner Bros. or Twentieth Television.
Sony owns soap opera series “Days Of Our Lives,” “The Bold and the Beautiful” and “The Young and the Restless,” as well as “Joan of Arcadia” on CBS and syndicated game shows “Wheel of Fortune” and “Jeopardy!” In addition, Sony owns syndication powerhouse “Seinfeld.”
MGM’s roster of TV shows includes “Dead Like Me” on Showtime and syndicated series “She Spies” and “Stargate SG-1.”
Last month, MGM announced plans to issue to shareholders a one-time, $8-per-share dividend as part of the company’s efforts to, in its own words, “share the wealth” with shareholders. How that plan will fare given a potential sale remains to be seen, however.
Fox Renews Four Series, Orders Three More Years of ‘MADtv’: Fox has renewed dramas “The O.C.” and “24” and sitcoms “The Bernie Mac Show” and “Malcolm in the Middle” for the 2004-05 season. That makes “The O.C.” the first freshman series to get a second-year pickup. Still in question are the fates of drama “Tru Calling” and sitcom “Arrested Development.” Fox also ordered three more years of “MADtv,” which airs in late-night on Saturdays, taking it through the 2006-07 season. “MADtv” debuted in October 1995.
Belo Sees Q1 Profit Increase: 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 Wednesday.
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.
Within the advertising category, Belo said its revenue from spot surged 11 percent, or 8 percent when political was removed from the equation. Local advertising rose 12 percent, while national was up 2 percent.
Political, meanwhile, started the quarter slowly, pulling in $740,000 in January before advancing to $1 million in February and $2.8 million in March to total around $4.5 million. Much of that activity was seen in four states, Arizona, Missouri, Arizona and Washington, which are considered key battleground states for the presidential election.
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.
Diller, Vivendi Settle Fight After FTC Ruling: One day after the Federal Trade Commission approved NBC’s takeover of Vivendi Universal Entertainment, Barry Diller’s InterActiveCorp and VUE parent Vivendi Universal settled a fight that could have been a hurdle to completing the merger.
As part of their settlement, the two companies agreed on the terms of letters of credit that will be used to compensate InterActiveCorp for canceling covenants tied to the merger of NBC and VUE. Vivendi and IAC also agreed to suspend a lawsuit filed by Vivendi in Delaware Chancery Court and said the suit would be dismissed once the letters of credit are issued.
The companies did not provide further details about the letters of credit.
The plan removes a cloud that has hung over the $14 billion merger ever since the deal was announced in October.
The tussle between IAC and Vivendi centered on the type of letters of credit that were to be paid to Mr. Diller in exchange for relinquishing his VUE stake. Vivendi initially proposed credit letters backed by U.S. Treasury securities, but Mr. Diller rejected that proposal.
Mr. Diller was given a 5.4 percent stake in VUE and held preferred shares in Vivendi’s U.S. entertainment operation worth $2 billion after he sold USA Network to VUE in 2002. That gave him some ability to block Vivendi’s sale of assets under the VUE umbrella.
MTV2 Announces Advice Show: MTV2 announced a new weekly advice show starring artist Andrew W.K. Titled “Your Friend, Andrew W.K.,” the show will feature the musician answering fans’ calls and e-mails with his unique brand of advice.
“It’s amazing to actually have a television show!” Andrew W.K. said. “I don’t know if I’m really qualified to be giving someone advice, but since people are asking for it, I’m going to do the best I can to help them out.”
The show debuts May 22 at 9 p.m. (ET).
Sears, Miller Brewing Sponsor ESPN Shorts: Sears, Roebuck and Co. and Miller Brewing will be the first presenting sponsors of “ESPN Shorts,” a series of short films that will appear during “SportsCenter” telecasts. Each sponsor will present a series of 90-second shorts that tells a continuing story over a two-month period. Sears’ series, beginning this week, tells the story about a past-his-prime baseball scout who discovers a great young talent whose skills as groundskeeper are worthy of the Hall of Fame. The second “ESPN Shorts,” presented by Miller, is about a Boston family whose passion for baseball is surpassed only by their love of family and the challenges in juggling the demands of both.
Turner, NBC Downplay Impact of TiVo: Turner Entertainment Group isn’t worried yet about TiVo’s impact on traditional advertising models, said Keith Chandler, VP of business solution at Turner Entertainment Group, during a session Tuesday at the National Association of Broadcasters convention. “We view it as a positive at this point,” he said.
That’s because TiVo has raised viewership of the Turner networks, he said. “Right now we don’t have any big guns aimed at the TiVo world. We think it’s been slightly positive because it increases viewership,” he said. Mr. Chandler added that Turner expects positve results from the coming cable upfront.
Brandon Burgess, executive VP of business development at NBC, was also on the panel and said NBC is expecting a strong upfront too for both cable and broadcast. He added that 2006 will be the year to watch the possible impact of TiVo on ad revenues because penetration of DVRs will reach 10 percent then. “That’s when it starts hitting the radar screen,” Mr. Burgess said.
Trump to Headline Promax Conference Panel: Donald Trump, now one of the biggest names on television, will headline a panel at the Promax&BDA June conference in New York. Mr. Trump will be joined by Dennis Swanson, executive VP and chief operating officer of the Viacom Television Stations Group, and others on the “Big Guns” session to discuss how to get attention in today’s fragmented media world.