Seth Gilbert, 02-23-2009
As the President, COO and number two executive at News Corp for the last twelve years, Peter Chernin has long been counted among the most powerful men in the media industry but his position has always had a footnote. Unlike other executives in similar roles, outsiders have rarely considered Chernin a likely candidate to ascend to the company’s CEO throne. The honor of one day leading News Corp, though ultimately a board decision, has generally been assumed reserved for one of Rupert Murdoch’s sons. This lack of upward mobility has fueled consistent rumors about Chernin’s eventual departure. Today, they’re now fact.
Reports are confirmed that when Chernin’s five year old employment contract expires June 30th, it won’t be renewed. Both Chernin and Murdoch have issued memos to staff making the announcement. (The letters are reprinted below in their entirety as is the company’s description of his employment agreement).
Chernin joined News Corp in 1989. After heading up Fox Broadcasting and Twentieth Century Fox, he became President and COO in 1996.
After twenty years at the company, Chernin characterized his decision as a difficult one saying ultimately that he’s “ready for new entrepreneurial challenges.”
Murdoch in a long memo to staff (see below) acknowledged Chernin’s service and hinted a management restructuring will likely follow to streamline reporting between the company’s LA based businesses (Fox) and the rest of its operations. Calling Chernin a “close colleague and an ally,” and deeming his contributions “immeasurable,” Murdoch said “now is also an ideal opportunity to streamline and enhance many of the corporate and administrative functions of the business.”
Click to Read More
Seth Gilbert, 02-17-2009
Over the concerns of some lenders, today Midway Games got a green light from the US Bankruptcy Court for the District of Delaware to continue to run its U.S. operations as usual as it moves forward.
The authorization for the “first day motions” will allow the company to press ahead with the bankruptcy filing Midway completed last week (The complete filing is available here). Payroll, price protection mechanisms and Market Development Fund obligations will be paid from the company’s cash position.
CEO Matt Booty said the company “remains confident in Midway’s ability to use this proven [bankruptcy] process to address our capital structure and explore our strategic alternatives.” He called the approval an “important first step.”
Not all creditors agree. In an objection motion filed last Friday (which is embedded below) several voiced concerns suggesting that the bankruptcy, and the situation that created it, could evolve as an end-run around Midway’s debt obligations for the best interest of its majority owner but to the detriment of the creditors themselves.
Click to Read More
Seth Gilbert, 02-12-2009
On a day when Midway Games failed to find a buyer or new capital, fellow publisher Eidos had better luck. The beleaguered publisher, suffering its own financial woes, revealed new details on a buyout overture first announced in early January. What was initially disclosed as an unnamed suitor turns out to be Japanese publisher Square Enix. The company has made a formal bid of £84.3m in cash (approximately $120 to $122m depending on exchange rates) to acquire the company.
The details to emerge thus far:
Eidos’ board has unanimously agreed to endorse the Square Enix offer. At the offer price of 32 pence per share its represents a 91% premium over the company’s three month average closing price (for the period up to February 11th). The premium is also a 258 % improvement over Eidos’ closing price on January 14th, the last day of trading prior to the company’s announcement it had been approached with a takeover offer.
Click to Read More
Seth Gilbert,
Midway Games fought the good fight, twice extending debt repayment deadlines, but ultimately extensions weren’t a solution. With time again running out, today the company gave in and sought the protection of Chapter 11 bankruptcy. (The full court document is embedded below)
Midway had been under the gun since December when then majority shareholder Sumner Redstone sold off his 87.2% stake in the company. Redstone’s firesale triggered early debt repayment clauses that put Midway on the hook for settlement of more than $150m in outstanding notes that otherwise wouldn’t have been due before 2025.
The default on those loans (which becomes automatic with bankruptcy), in turn, will trigger another $90 million in obligations to Redstone’s National Amusements that are shared with Mark Thomas, the buyer of Redstone’s shares through a participation agreement.
Working with Lazard since November, Midway had hoped to find a way to avoid this. Click to Read More
Seth Gilbert, 02-10-2009
It’s now official. I’s dotted and T’s crossed on the plan. Live Nation and Ticketmaster have agreed to merge. The official press release (PDF) was issued this morning. Substantiating the early reports , here are the facts from the press releases and conference call:
• The companies will combine in a tax free, all stock merger with a combined enterprise value estimated at $2.5b.
• Ticketmaster will receive 1.384 shares of Live Nation for each share of Ticketmaster they own. Pro -Forma, Live Nation shareholders will hold 49.99% of the new company. Ticketmaster will hold 50.01%.
Click to Read More
Seth Gilbert,
For a long time, Live Nation and Ticketmaster were joined at the hip. The nation’s largest concert promoter and the nation’s largest ticket vendor formed an inseparable pair. Then Live Nation, pursuing better margins and greater ambitions of vertical integration, decided to go it alone. The tie was severed, with prejudice. Live Nation began acquiring assets and partners to be more self reliant. It joined with CTS Eventim to begin selling tickets on its own. Ticketmaster spun off from its parent corporation, IAC, and tried to blaze its own path.
Now, not a month into Live Nation’s re- incarnation as both promoter and ticket vendor (ticket sales began in January), and it turns out the old pals are ready to not just rekindle their old relationship, but tie up entirely in a merger.
Last week the Wall Street Journal discovered the two companies were in the late stage of discussions. Widespread reports citing “sources familiar” and “inside sources” predicted a deal would hit the news wires by early Monday.
The Monday news never came. The boards of both companies apparently met late Sunday but failed to hammer out all issues. A second meeting on Monday afternoon is believed to have settled the remaining impasse.
At this point, there’s no official press release nor comment from the companies but reports are starting to circulate that both boards agreed unanimously. (Details will be updated on Metue as they become available).
(UPDATE: As of Tuesday morning, the companies have now confirmed the merger and issued statements regarding the details. A full summary of the deal terms as currently announced is available here on Metue. Other details about the company can be found at the bottom of this article).
What is believed known now: Click to Read More
Seth Gilbert, 02-5-2009
Analysts expected 19 cents per share in earnings. They got 12 cents, and that’s not taking into account an $8.4b writedown. So much for expectations.
Like other major media companies (Time Warner (PDF), and Disney (article) to name a pair), it’s currently a struggle to balance ad inventory against reduced spending. In the face of this, News Corporation reported weak earnings Thursday.
In a statement Rupert Murdoch explained saying the “downturn is more severe and likely longer lasting than previously thought.”
Revenue for the company’s fiscal second quarter came in at $7.87b, down 8.4% and below Wall Street’s expected draw of $8.35 to $8.38b. Factoring in the pre-tax onetime charge related to goodwill and intangible assets, the net loss was $6.4b, or $2.45 a share compared to net income of $832m (27 cents a share) for the same period last year.
The result was News Corps. First loss in more than three years.
Click to Read More
