Icahn Poised to Put Pressure on TW
Financier Carl Icahn, fresh from orchestrating an investor coup at video retailer Blockbuster that led to a board shakeup, is said to be gearing up to lead a group of shareholders who want to push media giant Time Warner to share more of its cable unit with the public and even explore spinning off its publishing unit. Mr. Icahn is also pushing the company to increase the size of its share buyback from the present level of $5 billion. Whether Mr. Icahn will be successful remains an open question, however. Analysts noted that Time Warner is so large, it could cost Mr. Icahn billions of dollars to amass enough shares to have any real power at the media giant. Further, they noted that most large shareholders have been supportive of Time Warner’s management. The speculation helped boost Time Warner shares nearly 2 percent last week.
Triple Play Boosts Cablevision
Cablevision Systems announced last week that it swung to a profit of $222 million in the second quarter, compared with a $187.1 million loss a year ago, as its strategy of offering customers a triple-play package of video, data and voice services continued to help rack up gains during the period. Revenue advanced 6 percent to $1.2 billion. The company, which also owns cable programming company Rainbow Media Holdings, attributed most of the success to its core cable operations, which reported growth in virtually every business line, including an increase of nearly 21,000 basic-cable subscribers during what is typically a weak quarter for cable operators. That growth helped offset weakness at Rainbow due to its interest in Fox Sports Net Chicago, which lost the rights to carry Chicago’s four professional sports teams and drew lower affiliate-fee revenue as a result.
EchoStar Profit Soars; Subs Lag
EchoStar Communications announced last week that its second-quarter profit soared to $856 million from $85 million a year ago as a tax gain helped put a shine on a quarter that found the company missing many analysts’ subscriber growth projections. Revenue rose 18 percent to $2.1 billion. The company added 225,000 subscribers in the quarter, which was off 33 percent from year-earlier subscriber growth.
Paxson Narrows Its Q2 Loss
Paxson Communications, the debt-laden broadcaster that recently changed its programming strategy to focus on independently produced television content, reported last week that it narrowed its second-quarter loss to $41.8 million for the period, compared with red ink of $48.8 million a year ago. The 2005 second quarter benefited from a $34.8 million tax gain. Revenue fell 9 percent to $63.3 million, the result of lower ratings, which have led to lower network spot revenues.
Crown Posts Loss as Revenue Rises
Crown Media Holdings, the parent company of Hallmark Channel, announced last week that it posted a wider second-quarter loss of $56.3 million, compared with red ink of $40.6 million a year ago. Subscriber and affiliate-fee growth led to a 50 percent surge in revenue to $45.7 million.