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U.S. Senators want to know more about AT&T's work with Michael Cohen

AT&T spends a lot of time and money polishing its brand and its reputation. It was ranked 49th in Fortune's Most Admired List, and number one in the global telecommunications category earlier this year.

So Chief Executive Randall Stephenson must be concerned about the negative publicity surrounding the company's $600,000 payment to Michael Cohen, President Donald Trump's personal lawyer.

Stephenson, who is waiting for a Federal Judge to rule that AT&T can proceed with its acquisition of content giant Time Warner, must have hoped that parting ways with Robert Quinn, the company's Washington D.C. chief, last week would at least help the company get back on the right track.

But on Monday, a group of Senate Democrats dug in, sending a letter to AT&T looking for more details of on the who-knew-what-when.

At the time Cohen began as a consultant, AT&T was seeking approval of its $85.4 billion acquisition of Time Warner, which months later was met by a Justice Department lawsuit. President Trump has said he did not believe the merger is in the public interest and has been highly critical of CNN and its chief executive Jeff Zucker. In April, Trump sent a tweet suggesting Zucker's job was in jeopardy.

The letter to AT&T was signed by Sen. Elizabeth Warren, D-Mass., Sen. Richard Blumenthal, D-Conn., and Sen. Ron Wyden, D-Ore. The Senators want to know if there's a pay-to-play going on. Take a look at the intriguing question number eight. Read the letter here

Wyden also sent a letter asking Novartis, which also paid Cohen, for details of their relationship. 

AT&T said it was aware of the letter and will be issuing a response. 

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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.

Week in review: the TV upfront season in focus

This week, hundreds of advertisers came to New York to enjoy the thrill ride that is the broadcast network upfront season, featuring presentations of new fall shows — and in the process, promising to spend more than $9 billion on TV ads.

Programming themes: More reboots ("Murphy Brown"); shows with a deep emotional connection a la "This is Us ("A Million Little Things"); more actors of color, and more shows made by women.

Is TV money shifting to digital? Yes and no. Money that sloshes around in the year-round ad market is called scatter. Some of that money is now going to digital players such as Hulu so that advertisers can secure premium online shows, said two ad agency sources, who asked not to be named so that they could discuss financial matters. But even so, there's the same money in the marketplace as last year, the sources said.

The main concern: There are fewer viewers watching on traditional TV. But networks are arguing there's more viewing happening across the board.

The problem, according to TV companies, is that TV measurement needs to change. Time Warner-owned Turner took aim at measurement firm Nielsen.

"We are in a new era of media, and it's time to retire the Nielsen television metric," Turner President David Levy said at his company's upfront. "While it undoubtedly served its purpose, it no longer fully captures how to successfully measure an audience in today's landscape."

What's new this year: Fox and NBC said they will sell less commercials to keep viewers watching. Networks are trying to get credit for things such as co-viewing and out-of-home viewing of their shows to aggregate the uncounted audiences.

Quote of the week: "Les sends his regards," said Kelly Kahl, president of entertainment at CBS, of his boss, CBS CEO Leslie Moonves, who is in the midst of a face-off with the company's controlling shareholder. "But the number of questions he couldn't answer outnumber the ones he could, so he thought it was a good idea to sit this one out."

Buzzword of the week: OTT. David Cohen, president at media buyer Magna, said he heard the phrase (shorthand for internet-delivered TV) numerous times: "If this was a drinking game, I'd be horizontal by Friday."

What the advertisers say: Chris Geraci, OMG's president of media investment, said that network TV is consistently overshadowed by the digital migration but noted that "network TV remains the engine room of the entertainment industry."

Magna's Cohen added: "The increasing cost for fewer consumers is something that, as time goes on, the math equation is harder to understand. It's the genesis of why everyone is looking to aggregate [audiences]."

When it comes to exploiting successful shows down the line, Hollywood's independent production companies are now in a weak position. Deadline's Nellie Andreeva writes: "It took a couple of years, but we arrived to a point this year where broadcast networks own or co-own every new scripted series on their schedule that is not a revival."

Fox News names Suzanne Scott as chief executive

Hoda replaced Matt at "Today," and Christiane replaced Charlie at PBS. Now, Fox News has introduced a female management team.

On Thursday, the Rupert Murdoch-backed cable news network named former programming president Suzanne Scott as its new chief executive. She has been with Fox News since the beginning almost 22 years ago.

The chief executive slot has been officially vacant since the late Roger Ailes was ousted in mid-2016, although 21st Century Fox executive chairman Rupert Murdoch had effectively taken charge after that.

According to a press statement on the appointment, Scott is credited with creating a number of new  shows on the network that are fronted by women, including: "Outnumbered Overtime" with Harris Faulkner, "The Story" with Martha MacCallum, and "The Daily Briefing" with Dana Perino. "The Ingraham Angle" was also launched on her watch.

Her appointment caps a period of intense change at the flagship cable network of parent company 21st Century Fox. Fox News has weathered the ouster of its number one draw, Bill O'Reilly, and the departure of Megyn Kelly along with some advertising boycotts.

The Fox News management team is now almost entirely women. A year ago, it drafted a new head of ad sales, Marianne Gambelli. and tapped a new chief financial officer, Amy Listerman. Last month, Fox News appointed a new general counsel, Lily Fu Claffee. Dianne Brandi, who is the firm's executive vice president of business and legal affairs, is on temporary leave, though Buzzfeed reports she is back working at the company. One man survives — Jay Wallace was named Fox News president in today's announcement.

A spokesperson for Fox News said that Brandi is still on personal leave. "We value our relationship with Dianne [Brandi], who provides us with transition services as needed," the spokesperson wrote in an email.

Fox News has paid dearly for the numerous harassment allegations. Regulatory filings note that 21st Century Fox settled a $90 million shareholder action claim related to complaints about the workplace environment. That concluded in February. The company just announced a $10 million settlement with a group of people claiming racial and gender bias.

Meanwhile 21st Century Fox's latest earnings report underscored the continuing earnings power of its cable division, which is driven by Fox News and also houses Fox Business, Fox Sports, FX and National Geographic Channel. Operating income in the cable group rose 16 percent to $1.68 billion in its latest quarter.

GQ pokes some fun at Vanity Fair with its comedy cover

Conde Nast’s GQ just created a cover that’s on its way to being a social media hit. The men’s magazine poked fun at corporate sibling Vanity Fair with it’s latest comedy cover featuring multi-limbed jokers Kate McKinnon, Issa Rae and Sarah Silverman.

The cover references Vanity Fair’s Hollywood issue which, thanks to photoshop, included an Oprah with three hands and a Reese Witherspoon who appeared to have three legs. “Mistakes were made,” reads an amusing commentary on GQ.com, which promises an investigation into the photoflub and a mea culpa on Medium. We reached out to Vanity Fair for comment on whether it’s OK about being the punch line. No word yet.

 

Judge rules in favor of CBS ahead of afternoon board meeting

CBS shares plunged 6.5 percent on Thursday after a Delaware judge denied the company's request for a restraining order against its parent company, National Amusement.s

CBS had wanted to loosen the control of the Redstone family's National Amusements, which had been pushing for CBS to merge with cable programmer Viacom, which it also controls.

The court loss sets up an awkward board meeting today between CBS CEO Leslie Moonves and Shari Redstone, president of National Amusements. CBS had said it planned to vote at the meeting for a company dividend that would dilute the voting power of National Amusements.

Viacom class B shares declined 1 percent.

In a statement, National Amusements said: "We are pleased by the court's decision to deny CBS and its special committee's unprecedented motion to try to deprive a shareholder of its fundamental voting rights. The court's ruling today represents a vindication of National Amusements' right to protect its interests.

"As we intend to demonstrate as the case proceeds, the actions of CBS and its special committee amount to a grievous breach of fiduciary duties and show no regard for the significant risk posed to CBS and its investors."

CBS, in a statement, offered some confidence based on certain parts of the judge's ruling, which said the company could have a case that National Amusements has breached its fiduciary duty.

The CBS statement: "The judge today found that the allegations in our lawsuit 'are sufficient to state a colorable claim for breach of fiduciary duty against Ms. Redstone and NAI as CBS's controlling stockholder.' We could not agree more. While we are disappointed that the judge did not grant a TRO, the ruling clearly recognizes that we may bring further legal action to challenge any actions by NAI that we consider to be unlawful, and we will do so. We remain confident that we will prevail in the lawsuit previously filed by CBS and the members of its Special Committee.

"As previously announced, the CBS Board will hold a meeting at 5PM today to consider declaring a dividend of shares of Class A common stock to all of the Company's Class A and Class B stockholders, as is permitted under CBS' charter. This dividend would more closely align economic and voting interests of CBS stockholders without diluting the economic interests of any stockholder."

Judge says he'll rule Thursday on CBS attempt to escape National Amusements

A Delaware judge overseeing the audacious CBS effort to extract itself from its controlling shareholder, National Amusements, said he would rule Thursday on the case.

Andre Bouchard, chancellor of the Delaware Court of Chancery, said Wednesday that the unusual case had surprised him.

“I’ve never seen anything like what’s transpired here in terms of moving parts,” he said according to an article in the Hollywood Reporter.

The judge said he would rule ahead of a planned CBS board meeting on Thursday and in the meantime granted CBS a request for a temporary restraining order against the Redstone family’s National Amusements, which owns a majority of the voting power in CBS.

CBS surprised National Amusements on Monday with a request for a restraining order and an announcement that the company would seek to dilute the Redstone family’s controlling stake in the company.

In a counteraction on Wednesday, National Amusements changed CBS bylaws to require that 90 percent of directors must vote in order to pass CBS’s planned changes at tomorrow’s meeting. The move effectively blocks CBS's effort to become an independent company. National Amusement’s president, Shari Redstone, is a CBS board member as is her family lawyer, Robert Klieger.

According to Hollywood Reporter, Meredith Kotler, an attorney for National Amusements, said: “My client has a right to get in front of the train and prevent what’s happened. It was an ambush.”

The case has gripped the media and advertising world since the legal battle could result in two possible outcomes: the exit of CBS chief executive, Leslie Moonves, or the dilution of National Amusements' control of the voting shares in the company. That could have wider ramifications for other family-owned companies.

The timing of the case has largely overshadowed CBS efforts to draw media attention to its slate of new shows. Advertisers from around the country gathered on Wednesday afternoon to see the network's upfront show. They are expected to commit billions of ad dollars to the schedule without quite knowing whether Moonves, a legendary programming executive, will be in place.  

Moonves appeared at the CBS upfront to applause from the crowd. He had been absent from the programming press conference earlier on Wednesday. Meanwhile, CBS late night host Stephen Colbert made fun of the legal drama from the presentation.