August 2014

Fox, Time Warner Prepare to Make Their Cases

When 21st Century Fox and Time Warner report earnings results for the June quarter on August 6, the media companies won't just be detailing their operating performance. Each one will be making a case -- however subtle -- for why it should prevail in the great media-industry merger battle of 2014. Wall Street will be watching for clues about the state of the US advertising market after broadcast and cable-television networks alike faced lower revenue from this spring's so-called upfront—the advance selling season.

Time Warner Should Be Practicing Its Solo

Time Warner may face that reality as it stands its ground in the face of an unwanted $80 billion bid from 21st Century Fox. As the government weighs pending mergers by pay-TV providers, including Comcast and Time Warner Cable and AT&T and DirecTV, it seems only a matter of time before content owners will begin to tie up too. The first to be thrown into play, Time Warner now has two other options besides a deal with Fox: show it can create more value on its own or wait for another bidder offering more. The latter could be a challenge. There are few other obvious candidates with both the motivation and wherewithal in the near term.

A News Giant Going It Alone

After spending years in the shadow of bankruptcy proceedings, management turmoil and its more prominent broadcasting stations, the Tribune Company’s publishing division, including well-known newspapers like The Los Angeles Times and The Chicago Tribune, is striking out on its own. The print properties are being spun off into a new company, Tribune Publishing, which starts trading on the New York Stock Exchange, under the symbol TPUB, on August 5. The parent Tribune Company plans to continue on as essentially a television business, having accumulated 42 TV stations. Spinning off troubled print divisions has become a popular model for big media companies in the last year.

Alibaba Is Investing Huge Sums in an Array of US Tech Companies

Alibaba Group, the Chinese Internet retailer, is coming to America with its checkbook wide open.

It would be simple to declare that Alibaba, which became a tech powerhouse by amassing a sprawling collection of businesses in its home country, is trying to take its omnivorous approach to the United States, and it is willing to spend big to make that happen. But the recent investments aren’t just about size. Alibaba is also rubbing elbows in the sometimes insular world of Silicon Valley-funded start-ups, where a handful of plugged-in financiers can help the company spot the next breakout smartphone app or e-commerce trend before it hits the mainstream.

Australia poised to reshape battered media sector

Australia is planning its most radical shake-up of media ownership laws in two decades in a move that could lead to billions of dollars of mergers and reshape an industry in financial distress.

Reform proposals circulated by prime minister Tony Abbott’s government have been welcomed by the industry. However, they are prompting concern among academics who warn that they could undermine diversity in the news media and tighten Rupert Murdoch’s grip on the industry. Murdoch’s News Corp controls more than 60 percent of Australia’s newspapers.

Black Caucus Wants Diversity Boilerplate in FCC-Vetted Mergers

Rep Maxine Waters (D-CA) and other members of the Congressional Black Caucus are urging the Federal Communications Commission to use its upcoming merger reviews to promote more diversity in the media business through a laundry list of enforceable conditions mandating diversity in virtually all aspects of company business.

In a letter to FCC Chairman Tom Wheeler, and 50 other legislators outlined a set of guidelines for the commission as it vets the proposed Comcast/Time Warner Cable and AT&T/DirecTV and Sprint/T-Mobile mergers, saying those unions are an opportunity to "encourage" diversity.

Why an Iliad Purchase of T-Mobile Would Be an Easier Sell in DC

While it’s not clear if T-Mobile’s owner Deutsche Telekom is taking seriously a $15 billion bid from French telecommunications firm Iliad, one thing is certain: The deal would be a lot easier to get approved than any merger with Sprint.

Antitrust regulators wouldn’t likely have many issues with an Iliad deal since the French company doesn’t have any US telecommunications assets and its purchase of T-Mobile wouldn’t consolidate the industry by lowering the number of large wireless carriers from four to three.

The Federal Communications Commission would consider whether the deal is in the public interest as well as ensuring it falls within foreign ownership limits. The foreign ownership issue likely wouldn’t really be much of an sticking point, however, since T-Mobile’s current majority owner is German telecommunications giant Deutsche Telekom. Transferring ownership to a French company wouldn’t really be a big deal -- unlike, say, an acquisition by a Chinese or Russian company with government ties.

What the Unlocking Consumer Choice and Wireless Competition Act Means For You

[Commentary] President Barack Obama signed the Unlocking Consumer Choice and Wireless Competition Act, which finally grants Americans a right that 114,000 people petitioned for, the President argued for, that both the Senate and the House of Representatives unanimously agreed to pass.

So now we have the right to unlock our phones. But what does that really mean?

Apple $450 million e-book settlement wins court approval

Apple won preliminary court approval for its $450 million settlement of claims it harmed consumers by conspiring with five publishers to raise e-book prices.

In approving the accord, US District Judge Denise Cote in Manhattan overcame concerns she had expressed over a settlement provision allowing Apple to pay just $70 million if related litigation were to drag out.

Sinclair’s Deal For Allbritton Closes

Sinclair Broadcast Group’s $985 million deal to acquire Allbritton has, at long last, closed, according to insiders in both companies. Sinclair and Allbritton agreed to the deal July 29, 2013, but regulatory issues held up the approval process.

Benton

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