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CBS vs. Viacom: Les Moonves could win either way

Does Leslie Moonves want to get fired? Should he?

When Viacom's chief executive Philippe Dauman walked out of the door back in August 2016, he did so safe in the knowledge that his golden parachute was filled with $75 million. Dauman bowed out after losing an epic board room battle with Viacom's controlling shareholder, Shari Redstone.

Now CBS chief executive Leslie Moonves is taking his turn in the firing line by blocking Redstone's efforts to merge CBSA and Viacom. CBS on Monday filed a lawsuit in an effort to block Redstone from pushing forward a merger with Viacom, a rare move in which one company is suing its parent company. 

Is Moonves playing like he's got nothing to lose? Well, sort of. Investors may want to take a look at whether his compensation package is structured to give him the incentive to push as hard as he can for what he wants thanks to the money he could receive if he's removed from CBS.

Page 72 of the latest proxy statement from CBS includes details of "potential payments in the event of a termination, and certain other events." One footnote states that Moonves would have received payments totaling $131.1 million had he exited in 2017. According to filings dated February 28, 2018, Moonves also holds one percent of the Class B shares of CBS. Moonves is one of the highest paid executives in television and earned $69 million last year. His wife, Julie Chen, hosts the CBS show "Big Brother."

Redstone's National Amusements, which has the majority of the voting shares controlling both CBS and Viacom, fired back at the lawsuit with a veiled threat. The company believes the CBS action was in retaliation for "raising specific concerns about incidents of bullying and intimidation in relation to one CBS director, dating back to 2016."

National Amusements has not named the director.

Judge Andre Bouchard has set a hearing for May 16 to consider CBS’s request for a restraining order that would prevent Redstone from blocking a May 17 special shareholder, at which CBS plans to consider a dividend that would dilute Redstone's voting shares in CBS from 79 percent to  17 percent.

 

A screenshot of the CBS proxy statement showing some of the payments Moonves would be due if he leaves or is let go from CBS. CBS

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Netflix: the Albanian army that took over the world

Netflix just became the biggest pure-play media company in the world when measured by Wall Street sentiment — market capitalization.

For the first time, Netflix on Thursday jumped past Disney after yesterday surpassing Comcast. The company is now worth more than double Time Warner, whose chief executive Jeff Bewkes once referred to Netflix in 2010 as the Albanian army

Just four years ago, Netflix was boasting it had $300 million to spend on content and would make five new shows a year.

"The goal is to become HBO faster than HBO becomes us," said Netflix content chief Ted Sarandos back in 2013. Now, it has $8 billion to spend on content and is making 80 movies and TV shows a year.

Management teams from rival media companies have long scratched their heads given the injustice in it all. Netflix doesn't have to prove its shows are watched. All Netflix has to do is keep signing subscribers.

But even Netflix, which has proved naysayers wrong, doesn't want to be judged on that metric forever, because sooner or later you run out of growth (or maybe you don't). Wall Street believes there's a wholesale change in the way people watch TV, even while for many of us Netflix is simply an add-on.

Netflix's market cap ended Thursday at an astounding $160.94 billion, which is not bad for a firm that charges not much more than $10 per month. The list of talent getting checks from Sarandos gets longer by the day and now includes even a former president as one of its creatives.

Bloomberg media analyst Paul Sweeney, who's been watching the sector forever, observes that Netflix is trying to get the street to judge it instead on profitability without much luck. As long as things keep chugging along then maybe Netflix is a future buyer of Disney, not the other way around.

Stranger Things have happened.

Major media company market caps as of Thursday afternoon:

Netflix: $160.94 billion

Disney: $152.20 billion

Comcast: $143.17 billion

Time Warner: $73.74 billion

Twenty-First Century Fox: $73.59 billion.

 

 

Michelle Obama teases new book with a look at the cover

The Obamas are flooding the zone right now.

On Monday, Netflix announced a wide ranging multi-year deal with Barack and Michelle Obama, which could include scripted and unscripted series.

Now comes a teaser for the former first lady's upcoming book. Michelle Obama posted the cover on her Instagram account on Thursday, showing her in an off the shoulder white top coupled with a huge smile.

The book is called "Becoming Michelle" and encourages readers to fulfill their own potential, as she did, moving from Chicago's South Side to become one of the most recognizable and well-liked people in the U.S.

The photo already has 687,000 likes as of Thursday afternoon. The 400-page book, from Crown Publishing, comes out November 12, just after the mid-term elections. 

Disney's Hulu board member Bruce Rosenblum is leaving

There are only so many chairs. Disney's internal reorganization has claimed its first high-profile internal head.

Who's out? Disney Media Networks co-chair Ben Sherwood told staff in a memo obtained by NBC News that Bruce Rosenblum, who joined Disney as president of business operations at Disney-ABC TV, is leaving the company. Rosenblum was once head of TV at Warner Bros.

Who's in? It seems that the creation of a new direct-to-home division run by Disney's Kevin Mayer meant that Rosenblum's role was no longer necessary, according to a source familiar with the situation who was not authorized to speak publicly. Rosenblum will also be stepping down as a board member at online video platform Hulu, with Mayer taking his spot. Mayer also takes over his ad sales purview, while Sherwood is getting responsibility for distribution deals with cable operators.

What does it mean? As the Wall Street Journal points out, Rosenblum was brought in to free Sherwood to focus on creative execution. Where Fox's well-regarded production chiefs Dana Walden and Gary Newman will end up remains a question. The two just extended their contracts another year. Of course, the big caveat here is whether Comcast's planned bid pushes Disney out of the picture.

The known unknowns... The proposed Fox/Disney merger means plenty of uncertainty for executives and well as creatives. The deal already resulted in high-powered TV producer Ryan Murphy joining Netflix.

 

 

 

 

 

Look out, Disney: Comcast says it's working on an all-cash bid for Fox assets

Comcast confirmed on Wednesday that it is working on a plan to challenge Disney's $52.4 billion bid for major parts of Rupert Murdoch's Twenty-First Century Fox empire.

Comcast, which owns NBCUniversal, did not detail the size of its potential offer but said it would be in cash and worth more than Disney's bid, which is in stock, Comcast said in a press release.

Fox shareholders are set to consider the Disney offer in a matter of weeks. Comcast's statement on Wednesday effectively put Fox shareholders on notice that Comcast is seriously interested in buying up Fox's entertainment assets, including its movie studio and some cable channels.

Read more here.

HBO's "Succession" party arrives just in time for real-life media intrigue

HBO revealed its latest drama series, "Succession," on Tuesday night at its New York City headquarters with an event for guests including cast member Brian Cox, CNBC's Carl Quintanilla and New York Post columnist Richard Johnson.

The ten-part series follows a family-owned media business run by an aging — but still firmly in charge — dad. But it isn't about Rupert Murdoch.

The first episode sees three of the four adult kids, two men and a woman (echoes of James, Lachlan and Liz?) maneuvering to take on the top slot at the family company, with the expectation that Dad's going to step down soon. Only he doesn't.

But, again, it's not about the Murdoch family, says HBO.

The first son is poised to take charge but he overbids for a company, and the dad, Logan Roy (note the Scottish name), tells him he's not ready. The other son is laid back and affable and has seemingly relinquished his place at the table after clashing with a senior executive. There's a family trust that Dad is trying to expand and needs his three kids to agree on. But in return, they each want a piece on the empire.

HBO chief Richard Plepler told us that we have to watch all the episodes to see the bigger picture, noting that its about all the stories of the big families who run media.

HBO's timing couldn't be better given the ownership shifts at Fox and the drama that has put CBS and Shari Redstone back in the headlines.

Consumers love streaming services, still don't love pay TV and ISPs

Netflix, Sony Playstation Vue and Amazon's gaming service Twitch earned the highest scores in this year's American Customer Satisfaction Index 2018 Telecommunications Report. The group's annual report, which shows consumer sentiment on internet, phone, and TV companies, included streaming services in its annual ranking of telecommunication services for the first time.

And they dominated. 

The three got a score of 78 and were followed closely by Apple iTunes and Microsoft Store, which each scored 77. In third place was YouTube Red, another streaming subscription service which is re-launching Tuesday as YouTube Premium. (Read Fortune's bleak assessment of its chances for success.)

Netflix rivals Amazon Prime, Hulu and Walmart's Vudu came in tied for fourth place scoring 75. The Index has CBS All Access fifth, followed by HBO Now and Starz.

American consumers are much less satisfied with their broadband providers and pay-TV services than they were last year, according to the report. The index shows a 3.1 percent decline for both categories versus last year. Internet service providers fell to a score of 62 as did the pay-TV category.

AT&T U-verse scored a 70; Verizon logged a 68; Dish Network earned a 67; Comcast Xfinity received a 57; and Frontier Communications got a 56. Comcast is the parent company of NBCUniversal.

ASCI

WWE to nab $1 billion deal with Fox: report

Yet again, the rights to a major sports league come up and the owners appear to have chosen to stay with a traditional broadcaster.

The Hollywood Reporter broke news on Monday afternoon that World Wrestling Entertainment is nearing a $1 billion deal with Fox for "SmackDown." The news caused WWE's stock to jump more than 12 percent.

Several reports suggested that Facebook and Amazon were both in the running for the rights. Either Facebook and Amazon names were floated to heat up the bidding, or WWE still feels the big money and big audiences are with a traditional media company.

The billion-dollar price tag covers five years beginning in 2019, which brings the cost to approximately $200 million per year, or around $2 million per hour of programming. That's not cheap for what is essentially "scripted programming." The two-hour weekly programming block is set to move from current broadcaster USA Network, which currently airs both "Raw" and "Smackdown." "Raw" is reportedly staying with USA. USA Network is owned by NBCUniversal.

WWE and Fox each declined to comment.

Hillary Clinton urges Yale class to buy newspaper subscriptions

Who says Hillary Clinton dislikes the media?

Speaking to Yale graduates over the weekend, the former candidate for president urged the class to stop the spread of fake news and help support journalism by paying for it.

"It means calling out actual fake news when we see it and supporting brave journalists and their reporting maybe even by subscribing to a newspaper," she said.

As Michelle Wolf, the comedian who attended the White House correspondents dinner, noted, President Donald Trump's election has been a boon to most of the media business. The New York Times revenue topped $1 billion in 2017. In the final quarter of last year, it signed up 157,000 new subscribers, taking full-year subscriptions to 2.6 million. 

But while national media outlets are faring better, local newspapers have been decimated, even to the surprise of newspaper investor Warren Buffett. Here's how the Salt Lake Tribune  covered news that its owner shed one in three of its newsroom staff last week. 

https://www.sltrib.com/news/2018/05/14/reacting-to-plunging-revenues-salt-lake-tribune-lays-off-a-third-of-its-newsroom-cuts-back-print-offerings/

Royal Wedding ratings are big — and a young cellist tops iTunes

The Music...

Guess who has the No. 1 album on iTunes today? It's the 19-year-old cellist Sheku Kanneh-Mason, who shot to stardom with his incredible rendition of Schubert at the end of the Royal Wedding. Mason's album, "Inspiration," reached number one on Monday morning. 

Spotify reports that Kanneh-Mason saw a 428 percent increase in streams versus a week ago Sunday, while  "The Royal Wedding - The Official Album," has over 100,000 streams globally as of Monday morning.  Streams of "Stand by Me," by Ben E. King, jumped by a third globally versus the previous Sunday, the music streamer said.

TV Ratings...

Bigger than Prince William's. Much bigger than Dad's.

American viewers were much more interested in watching the wedding of Prince Harry to "Suits" actress Megan Markle than previous royal weddings.

Nielsen reported on Sunday that wall-to-wall weekend TV coverage of the event drew 29.2 million viewers. That's a big bump from the 22.8 million people who watched Prince William marry Kate Middleton in 2011. When their father Prince Charles, the future King, married Camilla Parker Bowles in 2005 just 3.65 million viewers tuned into coverage.

Daniel Arkin

'Solo' looks set to avoid disaster, make plenty of cash

“Star Wars” fans had a bad feeling about “Solo."

The production was reportedly troubled. The original directors, Phil Lord and Chris Miller, were fired in the middle of shooting and replaced by Hollywood vet Ron Howard. “Star Wars” die-hards began to fret that the final product would be a mess, maybe even disastrous.

But with just a few days before the movie opens, things seem to have calmed down. (You can breathe now, nerds!) The pre-release tracking suggests “Solo” will open to more than $140 million over Memorial Day weekend — not on par with the opening weekend grosses of “The Force Awakens” and “The Last Jedi,” but close to what “Rogue One” made when it dropped in 2016.

“Solo,” for what it’s worth, also had a respectable Rotten Tomatoes score as of Monday morning: 71 percent with 126 reviews counted. That’s not as awe-inspiring as the 93 percent for “The Force Awakens” or 91 percent for “The Last Jedi,” but it suggests “Solo” will at the very least take fans on a fun (if flawed) ride through the galaxy.