Posts Tagged ‘Kraft Foods’

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 25 15 First full day in Delhi…

March 25, 2015

It is late afternoon in Delhi and I am just back at India International Center where I am staying, after spending the afternoon with my friend Raja Choudury. We made a drive past Connaught Place where I commented that it was much better looking than I remembered it. He said yes, they had done much to clean it up over the last years. It was, twenty years ago, one of the great shopping areas of Delhi but it also looked like a rundown claptrap of a place. Now it is white and shiny again.

We went on from there to the Oberoi Hotel where we lunched at Taipan, a dim sum restaurant on the top floor with views out across Delhi, the sky tinged with the pollution for which the city is famous. It was a long and leisurely lunch; with Raja catching me up on the work he is doing, including the launching of a new web adventure, onegreatidea.com.

This was the first time that Raja and I had met in person. We have known each other for years. He encountered me on LinkedIn and asked me for some help with a project that he was working on, which I was, luckily, able to provide. We have continued talking and skypeing but in all this time we haven’t met each other in person so today was a good day.

Tomorrow, all of India will come to almost to a halt. It is the day of a cricket game between India and Australia and is, according to reports, the biggest game in years. A huge number of Indians are going to call in sick. It’s the game NOT to be missed, a bit like asking people to work during the Super Bowl in the U.S.

So I should be able to get around quite easily tomorrow. I am going to delve into my tour books and determine what I would like to see. Today, I visited India Gate and drove by the President’s House and the Houses of Parliament, great, grand structures built in the last days of the Raj. Back then; I think the President’s House was the Viceroy’s Palace.

It was in the 90’s here but not yet humid so it didn’t feel so bad. In my room, I have the air conditioning running and the fan turning. The IIC, India International Center, is a private club on the nature of the Yale Club or Harvard Club in New York though very Indian in feel. The accommodations are nice if rather Spartan compared with the Oberoi but very adequate with excellent Wi-Fi.

As far as I can tell, I am the only American staying here; the rest are from all over India. In the bar, groups huddle together discussing business or art. Last night, I read and sipped Johnny Walker.

Being in India, I am very careful about the water. No ice cubes. I only drink what can be drunk neat.

This morning there was an Indian paper at my door, mostly filled with news I had read online before going of to bed.

Getting back from tour round Delhi, I went online and found the, to me, blockbuster news that Heinz and Kraft Foods are to merge, becoming Heinz Kraft, in a deal nurtured by legendary investor Warren Buffet with a Brazilian investment company.

My, oh my!

There is a new Steve Jobs biography out, “Becoming Steve Jobs” that is reputedly better than Walter Isaacson’s “Steve Jobs.” He still comes across as monumentally conflicted but a bit more human, according to reviews.

In a case of life imitating art, Jon Hamm, Don Draper in “Mad Men,” has just exited a 30-day program for alcohol rehab. Years of playing the world’s most famous alcoholic may have found its reflection in Hamm’s own life. I wish him well. The last season of “Mad Men” starts soon.

In the category of the world is challenging: The UN last year announced that same sex married couples could receive the same benefits of married straight couples. Russia introduced a resolution to withdraw benefits from same sex married couples. 43 countries, including India, China and the UAE, supported it. It was defeated. 80 countries voted against the resolution and 37 abstained.

The day is drawing to a close as the day begins in America. I am going to work on my speech again and then go read for a while before an early night. I feel good but one more good’s night sleep would be a great thing.