Posted by: Ron Grover on January 02
Was there ever any doubt that News Corp. and Time Warner would come to an agreement that would allow Time Warner’s cable unit to continue showing News Corp’s cable or broadcast properties on its system? The announcement on Jan. 1 that the two sides had averted a showdown that would have kept the BCS football game on the sidelines for 11 million folks is, well, a yawner.
It’s become almost an annual kabuki dance among cable or satellite operators and content providers to show which side – content or distribution – has the most muscle when it comes to such talks. Guess what fellas? Neither of you really have what it takes any longer to force your will on the other.
The last time we had a showdown anywhere near this size was back in 2000, when Time Warner, in the midst of a similar showdown with ABC, allowed Regis Philbin and his then-hit show Who Wants to Be a Millionaire” to go dark for some 3.5 million homes. The cries from Washington were deafening. Hearings were held, fingers slapped.
So when the chorus started again in Washington on Dec. 30 on the current impasse you knew that Fox and Time Warner were destined to do whatever they could to avoid having DC on their backs. First, Sen. John Kerry urged the sides toward arbitration, and then FCC commissioners started encouraging peace. If there is anything that a media company wants less than a shutdown in the ad markets, it’s to have the feds on their backs. So Time Warner and News Corp. wisely extended the Dec. 30 deadline, then scurried to cut a deal that you know is less than the monthly $1 per subscriber fee that News Corp. had all but insisted was their right to get from cable operators.
One thing News Corp chairman Rupert Murdoch, who owns TV stations, newspapers and internet sites, understands is that he sure as heck doesn’t want an angry FCC looking over his shoulder. In the past, he’s done back flips to keep them happy, whether it was striking a deal that allowed him to own the New York Post and New York area TV stations, or to get his deal to buy DirecTV passed a few years back. As for Time Warner, do you think they want the feds thinking bad thoughts about them when the FCC is still contemplating rules on such things as “net neutrality” – that is, whether Time Warner’s online offerings are to be regulated? Uh, no.
Sure, it was good theater. News Corp. told America that it might not get the NFL, American Idol or Glee. Time Warner said it was fighting to keep consumer prices from zooming if Fox high jacked higher fees from them. Yeah, yeah. A good show boys. It sure played in Washington.
Posted by: Tom Lowry on December 31
As surely as the ball drops in Manhattan’s Times Square, another certainty on New Year’s Eve now seems to be that a tv programmer and a cable distributor will be locked in a public feud over money that almost certainly goes right down to the wire at midnight.
This year’s warring contenders are executives from News Corp.’s Fox Network and those from Time Warner Cable, the country’s second largest cable operator with 14 million customers. Fox is threatening to pull its programming at midnight tonight and leave those subscribers staring at black on their flat screens unless Time Warner Cable agrees to pay Fox a buck a month for every subscriber.
These kinds of disputes are nothing new. Time Warner Cable and Viacom did the same dance last New Year’s Eve before an 11th hour resolution was worked out.
But even if Fox and Time Warner Cable iron out a deal before midnight, the year-end spat may just have greater repercussions this time. The two sides may see negotiating in public as a necessary tactic, but being front and center with consumers, and pandering politicians, could come back to bite them.
Whatever Time Warner Cable agrees to pay Fox will surely be passed on to subscribers in their monthly bills. Consumers are already fed up with escalating cable bills, threatening to drop their service and instead watch free video offerings on the Internet. In this economy, the possibility that cable bills will rise even further can only mean that a campaign to mandate something called the a la carte model will be rekindled. Under this model, subscribers would have the choice of receiving, and paying for, only the channels they want. That may mean you would only get 30 channels instead of 500, but they would be the channels you know you will watch on a regular basis. If the Internet has taught consumers anything, it’s that choice on their own terms is a great thing. If, once the dust settles and Fox gets anywhere near a buck, the battle with Time Warner Cable may serve to push frustrated consumers to the breaking point.
A la carte was a big deal about five years ago when then-Federal Communications Commission Chairman Kevin Martin supported giving consumers this choice. Cable companies and programmers vehemently opposed a la carte, saying it would destroy the economics of their business. By unbundling cable offerings and fragmenting audiences, they argued, advertising rates would plummet and niche programming could not be supported. At the same time, distribution fees would rise even more, they posited.
Congressional hearings were held on the matter, but the a la carte debate faded away after Martin’s FCC reports on subject were called into question. The current FCC Chairman Julius Genachowski, busy with plans to expand broadband access in the country, has said little about his position on a la carte. But with politicians like Sen. John Kerry taking a deep interest in the Fox- Time Warner Cable standoff (he’s threatening to intervene to make Fox stay on the air), can it only be a matter of time before Congress along with consumer groups make a la carte headlines once again?
Posted by: Ron Grover on December 28
It suddenly occurred to me today – after my wife and I were forced to head back to the theater twice in the same weekend to catch Sherlock Holmes -- that Robert Downey, Jr. has suddenly become the hottest actor on the planet. That’s right, Robert Downey, Jr., who six years back had to drop out the Woody Allen film Melinda and Melinda because the costs to insure him were too high after several well-publicized arrests and a trip to the drug rehab clinic.
But Robert Downey, Jr seems able to do no wrong these days at the box office. As I found when I couldn’t get into his flick on Saturday, he has his third mega-hit on his hands with Sherlock Holmes, which opened second this weekend to Avatar but still clocked a steep $65.4 million.
The flick is certain to pass $100 million, which would give the 45-year old Downey roles in three $100 million performances in the last two years – his breakout starring role as Tony Stark in Iron Man, which grossed $318 million in the US and $585 million worldwide, and the comedy Tropic Thunder, for which he was nominated for an Oscar for his hilarious turn as an Australian method actor who undergoes surgery to play an African-American. (Oh, and the film also grossed more than $110 million in the U.S.)
So, why is Robert Downey, Jr. so hot? Well, the camera clearly loves him these days. He mugs, smirks and plays the smart aleck with such style that he can pull of the role of a snarky corporate exec in Iron Man or the equally smarmy Sherlock Holmes. But chalk one up for Hollywood. For once they’ve got it right, casting a bad boy gone straight in the role of – well – a bad boy who has more or less gone straight.
So, surround Downey’s bad boy acting with enough pyrotechnics --- Iron Man taking out Arab terrorists with his pulse beams or Sherlock Holmes escaping a fiery warehouse – and you’ve got a special effects-fueled superstar. It’s worked before: Tom Cruise in the Mission Impossible series, or Christian Bale in the Batman movies. Add in that Downey comes cheap these days – he got a “mere” $6 million for starring in Iron Man – and he’s the kind of superstar Hollywood loves these days as well.
Now, will he stay cheap? Uh, no. The crowd with whom I saw Sherlock Holmes roared when the trailer for Iron Man 2 came on the screen before the main attraction. And Downey was at his smirking best on screen when he faced down a congressional inquiry in his role as the defiant Tony Stark. The crowd ate him up. And they’ll do the same this May, when Iron Man 2 opens.
Posted by: Tom Lowry on December 09
For media reporters everywhere, Thursday will be one wistful day. AOL CEO Tim Armstrong is expected to climb the podium and ring the opening bell at the New York Stock Exchange. With that, AOL will officially be unleashed from Time Warner. The divorce marks the end of an era. The soap opera representing the union of AOL and Time Warner was the media story that just kept on giving for a glorious and tumultuous decade.
When I took over the media beat at BusinessWeek in October, 2000, my first story was a commentary that said Time Warner executives were already questioning whether merging with AOL made sense, this three months before the deal would close. The piece was illustrated with storm clouds looming over a photo of Time Warner CEO Jerry Levin and AOL CEO Steve Case. That prompted an angry call from the Time Warner PR denizens to our then editor-in-chief Steve Shepard. The worst was still to come for AOL Time Warner, the best for those of us covering media. Accounting scandal. Corporate politics. Management shakeups. Government investigations. Parent company name change. Strategy Shifts. Turf battles. Plunging share price. Shareholder lawsuits. Sweeping layoffs.
The story's lasting legacy for journalism outfits is that the AOL Time Warner merger broke down newsroom silos. It really was the first big story that made technology and media reporters work together because AOL in those days was typically covered by the tech side. And, boy, were we suspicious of each other. I partnered for years with Cathy Yang, our AOL reporter, but it took a while before we worked well as a team. Today, the overlay between technology and media is so common that teaming up is no big deal.
Now, tens of thousands of column inches later, three books and I am sure a script has been optioned somewhere, we’ve come to the end of the AOL and Time Warner thread. We’re going to miss the worst corporate merger in history. They say the recent NBC Universal-Comcast partnership will become the new AOL Time Warner. Maybe. But I just can’t imagine it will dish out the same Sturm und Drang that kept us rich in bylines all these years.
Posted by: Ron Grover on December 07
David Maisel will soon be an ex-super hero. The Chairman of Marvel Studios, who helped build the comic book company into an action movie powerhouse, is leaving the New York-based company once its $4 billion deal with the Walt Disney is finalized, BusinessWeek has learned. Maisel confirmed his departure, which could come shortly after the acquisition is finalized, expected to be Dec. 31.
Maisel, a one-time talent agent, says he intends to stay on as executive producer for three of the films that Marvel has put into production, Iron Man 2, Captain America and Thor, and will also be a part of Marvel’s effort to resurrect a Broadway show based on Spider-Man. “I couldn’t ask for a better six year ride,” says Maisel, "but now I get to work on projects that I like and explore other opportunities.” He would not say what he intends to do next.
Maisel was the first Marvel executive to discuss the notion of a sale with Disney, according to documents that Marvel filed with the SEC. Maisel and Iger, who knew each other from Maisel’s year at Disney in the mid-90s, would often do lunch. Iger broached the notion of a deal and Maisel took to Marvel's brass. The deal was finally agreed upon on August 31 for $50 in Disney stock and cash. Maisel, who made $5,2 million in cash, stock and incentives in 2008, is to collect an estimated $20.3 million in accelerated stock options and other benefits tied to the sale.
At Marvel, Maisel was instrumental in helping to build Marvel into a separate production entity, rather than continuing to license its films to other studios. In 2005, he engineered a $525 million film production facility that gave the company the funds to bankroll its own films and which Paramount would distribute for the company. Marvel’s first film under that agreement, the 2008 flick Iron Man, grossed more than $318 million at the US box office.
Kevin Feige, president of the studio and its top creative executive, is expected to stay with the studio after the deal is completed. Marvel and Disney both had no comment on the pending deal.
