Posts Tagged ‘David Zaslav’

Letter From New York 05 26 15 Of mergers and mania, notes from the media world…

May 26, 2015

The sun has darted in and out behind clouds all day. I woke up fairly early but had decided not to take my regular train into the city but the one after that; after a long Memorial Day weekend, much spent on the deck watching the creek flow by, I got up, had my morning cup of coffee and started perusing the news.

Pushing to the head of the news today was that Charter Communications will acquire Time-Warner Cable in a deal that is worth about 78 billion dollars, only a few weeks after Comcast withdrew its bid for Time Warner Cable because it looked like it would not receive regulatory approval.

This time the chances are better. Why? It’s not Comcast that is doing the acquiring but Charter. Comcast also holds lots of other assets besides its cable assets, including a small company called NBC Universal.

In the interesting and byzantine world of cable, Charter’s largest shareholder is Liberty Media, a company controlled by John Malone, a cable pioneer who built the nation’s largest cable company, TCI, and sold it to Bell Atlantic back in 1994 for $55 billion.

John Malone’s TCI financially backed and gave carriage to a number of struggling cable networks, including Discovery which has gone on to being its own small behemoth.

In those days, he earned the sobriquets of “Darth Vader” and the “King of Cable.” He dominated the cable business from his office in Denver. Liberty Media is a conglomerate with interests in lots of companies here and abroad. John Malone is personally worth about $8.6 billion and is the largest landowner in America.

The combined companies will be the number two cable and broadband supplier in the country, after Comcast. But the fact that it will only be number two and won’t control about 50% of broadband connections is what will make it easier for regulators to say yes to this while having said no to Comcast.

In the days when cable customers are beginning to shift their loyalty to streaming services such as Netflix, cable operators are seeking partners to bulk up to face the challenge.

Recently, European operator Altice purchased Suddenlink, a smaller cable company. It will be interesting to see who is where when the music stops.

The music stopped for ITV’s purchase of The Weinstein’s TV division. Too caught up in the movie business of the Weinstein brothers and ITV has no appetite for the film business.

This story is days old but keeps repeating. Media bosses make good paychecks, especially if you work with a company that has John Malone on the board. Several of the companies that Liberty is invested in have CEO’s who have rich compensation packages.

David Zaslav of Discovery Communications, in which Liberty has an interest, is the highest paid exec of a publicly traded company. He earned something like $156,000,000 last year, after extending his contract.

Breathtaking.

As we move into the negotiations for advertising next year, in what is called “the upfront” there are a couple of trends to be noted. One is that traditional TV dollars are down while digital is growing strongly, 21%.

Big brands are having a tough time in packaged goods. Consumers are beginning to gravitate to smaller brands that feel more “authentic” than say P&G or Clorox. It’s going to be a tough fight out there over the next few years for the hearts and minds of consumers, particularly in latching on to young consumers who are consuming media in such different ways.

Kellogg is pulling advertising from YouTube until they get better numbers, a blow for the service. They want someone like a Nielsen to come in and verify the numbers. The trend is growing and Kraft Foods is saying its probably going to follow suit with some platforms.

Branded entertainment is growing but is still a fraction of traditional advertising. It’s still hard to get some buyers to buy.

Cowen and Company, a research company, is predicting that by 2020 Netflix will have one hundred million subscribers and about 17 billion dollars in revenue, domestically and internationally.

They have just acquired all the 1990’s episodes of “Bill Nye The Science Guy.” Go Netflix.

Being a Netflix fan I will probably go home after a bite or two at a favorite place and watch something off the service.

Have a good evening everyone!

Letter From New York 03 17 15 The many aspects of nature…

March 17, 2015

Happy St. Patrick’s Day!

This is an odd day for me, always has been, as I am of German/Scandinavian descent and so there isn’t a lot of resonance in my background with the day. And the feel of the bacchanal that accompanies the day was far from the emotional bandwidth that resided within my family of origin. We were good German Catholics.

If you are celebrating today, be careful. Apparently tomorrow is a great day for dentists, having to deal with the results of fistfights from tonight.

It’s been a grey, grey, drear, damp day in Claverack with sudden bursts of sun breaking through the dark clouds for a few seconds, teasing one to hope for more.

Just back from a walk around from the neighborhood, I immediately went online to see if there were any updates on the Israeli election. There aren’t any yet. It’s a tight election and tomorrow we may know more but there are likely weeks of wrangling ahead to see who can actually form a government. Poised for the first time to be a power are Israeli-Arab voters who have joined together their numerous small parties under a single banner for this election.

Netanyahu has claimed they are coming out in droves and has said it is US money that is hiring buses to bring them to the polls. It has brought accusations of racism upon Netanyahu.

The result of this bitterly fought election, as ugly as anything American politics serves up, is important to America. Israel and the US have been historically close and I believe the majority of Americans would like to keep it that way but right now the relationship is frayed.

Chris Borland, a player for the SF 49ers, has decided at 24 to retire rather than to face the possibility of permanent brain damage. He is one of the best rookie players in the league.

Every year during “The Upfront,” billions of dollars are exchanged between networks and advertisers, buying great swaths of advertising inventory in exchange for what is hoped will be an advantageous price. NBC is facing a particularly trying Upfront this year with lingering problems from the Brian Williams situation, Today being in second place among the morning shows and has a ratings slump occurring at MSNBC.

It will be very interesting to see how the Upfront plays out this year. Discovery’s head, David Zaslav, has announced that he thinks this year will be “tepid.” Money is beginning to move toward digital alternatives.

I follow this because this was once part of my life, when I worked at A&E and Discovery.

Veering from advertising to humanitarianism, the island nation of Vanuatu is beginning to run out of food and supplies. While the death toll has been low so far, communications are still down and needs are going up. One organization ramping up to help is Save the Children, http://www.savethechildren.org/.

Living alone, as I do, gives one a great deal of time to think. My friend, the writer Howard Bloom [“The Lucifer Principle” and others], calls nature a “bloody bitch.” And when I consider situations like Vanuatu, I have to agree. It will be years for it to recover. 40% of its income comes from tourism, cruise ships stopping by mostly. That is indefinitely suspended.

Nature is wonderful and awe inspiring. It is also destructive and capricious.

Right now a vast solar storm is occurring. If it gets bad enough, you might see damage to satellites, overloading of power grids and other fun things. And should you be living in the high latitudes, it will also be beautiful to behold.

Do you remember the movie “The Breakfast Club?” It was released thirty years ago and there was a special screening of it last night at the SXSW Film Festival. Amazing; seems like yesterday. Its stars Molly Ringwald and Ally Sheedy were there, also a little in disbelief that it had been thirty years.

Twenty years ago, Microsoft gave us Internet Explorer. Now they are going to kill it off and will launch a new web browser, specifically oriented to mobile users and integrating Cortana into it [their version of Apple’s Siri]. It doesn’t officially have a name but is codenamed Project Spartan.

Now I must finish up and go to the drugstore to pick up a prescription so I can keep getting everything together for India.