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The list of potential suitors for the Tribune Co. is starting to read like a supermarket tabloid about celebrity couples.  The Tribune Co which owns a range of media and entertainment properties including the LA Times, Newsday, more than 20 TV stations, the Chicago Cubs, and sizeable investments in Food Network, Career Builder, Topix and others,  has had itself on the market since around September 2006 around which time S&P lowered the company’s credit status to “junk.”  

Since special committee was formed by the Board of Directors to oversee the process, rumors and reports have put Tribune in bed with virtually every private equity company from the Blackstone Group to the Carlyle Group.   Billionaire moguls have also been rumored on the dance card.  Last month the Financial Times reported Rupert Murdoch’s News Corp was interested in taking a substantial minority stake.  The Wall Street Journal separately reported investors Eli Broad and Ronald Burke had submitted a bid.  Now the Chicago Tribune is reporting that Chicago local, and real estate mogul, Sam Zell is trying to structure a deal.

Why is this deal so hard to get done?  The simple answer is some combination of three things Click to Read More

Google the Gatekeeper?  Is Google trying to become the defacto middle-man for advertising placement across both new and traditional media?  Will a prospective company be able to go to Google a year from now and order advertising placement as if at a buffet: “give me 2 radio spots, 1 tv hit, and a ¼ page in these three papers alongside these keywords and this text placement?”

The answers are probably no, but with increasing efforts to participate in placement of tradition media advertising – including in radio (through acquisition of dMarc), print (partnerships with newspapers), and television – alongside its dominant Internet search advertising services, these seem questions worth asking.  It’s almost impossible not to speculate about them.

Today, adding fuel to that kind speculation, Google announced the acquisition of Adscape Media, a small one year old startup that was focusing on providing advertising for the video game industry (termed “in-game” advertising).

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Lionsgate (NYSE: LGF), the maker/distributor of television, movie and music content including popular programming like Showtime’s Weeds, announced results of Q3 on Tuesday (year end results due in early April) .  

For the quarter ended Dec 31, 2006, revenues were up 11% to $254.5m.  Operating income was up 270%.  International revnue was up 90%.  Home movie and theatrical operations saw single digit revenue declines but free cash flow increased by well over 100% to $50.7m

Sequels do out later in the year to its Saw and Hostel movie franchises are expected to provide solid growth for the company.  Rumors of the company being a potential acquisition target are encouraged by their positive growth.

More detailed press coverage on Lionsgate’s finances can be found at:

Yahoo Finance
Google Finance
Marketwatch

Apple and Lionsgate announced an agreement earlier this week to add titles from the Lionsgate library to the movie and television content available on iTunes.   From an analysts perspective there isn’t a tremendous amount to comment on regarding the announcement, but the deal is a notable achievement for Apple in their efforts to increase their content pool. 

Lionsgate has acquired a large and diverse film library which includes movie titles ranging from Academy Award winner Crash to horror franchises like Saw as well as television hits.  Facing competition from Wal-mart, a multitude of internet-video startups, and joint ventures like Amazon-Tivo, having these titles will help Apple remain competitive with downloadable video.

Tax breaks, subsidies, cheaper labor, lower overhead – manufacturers have long found overseas production to be cheaper.  Software developers have also drawn the same conclusion and shipped some of their development to overseas firms from Ireland to India.   Why not the same for digital animation?

A recent article in Forbes suggests Imagi, a Hong Kong based Computer Graphics animator is trying to be an “Asia’s answer to Pixar.”  I don’t entirely agree.   The facts in the article lead me to believe that recently appointed CEO Douglas Glen is positioning Imagi to be both an offshore partner of choice for CG Animation as well as a standalone animation studio.  I think the company is going to go after both contract work and the development of their own franchises.

Glen is no stranger to off-shoring, nor its benefits.  Prior to taking the helm at Imagi in September 2006, Glen worked at toy giant Mattel where he was president of a media division responsible for software and electronics.  Mattel often relies on contracted Asian manufacturing.  Glen was also an executive at Sega of America handling game development – and the gaming industry has a well publicized history of moving production to Asia in recent years but keeping creative control elsewhere. With his background, I’d also expect Glen will insure Imagi has a hand in the lucrative licensing market that surrounds big league animation franchises

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Today eBay closed its acquisition of online ticket reseller Stubhub. Less closing costs and fees, the deal, which was announced on January 10th closed at a purchase price of $307m with approximately $21m of net cash.

The purchase, unlike many that have followed since eBay’s shrewd acquisition of Paypal in 2002 for $1.5b, seems a natural fit to eBay’s core retail/auction business lines. Stubhub, which was founded by two classmates from Stanford’s GSB (who held approximate 25% of outstanding shares at the time of the sale), acts as a middle market for for person to person resale of event tickets. It has market-leading position in the growing market for secondary sales of event tickets. (IAC’s Ticketmaster is the leader in primary sales and MusicToday, which is owned by Live Nation, dominates the sale of Direct-to-Fan ticketing)

In December, 2006 the Stubhub site was the 5th most visited ticket vendor with 2.1m unique visitors according to ComScore Networks. (The Top 4: Ticketmaster with13.3m, Moviefone with 12.8m, Fandango with 5.4m and Movietickets.com with 4.8m). For the prior fiscal year, Stubhub’s revenues were close to $100 and earnings (EBIDTA) were approximately $10m. Those numbers puts the transaction price at a rich multiple of approximate 30x revenue. That’s a big premium, arguably too much of one, but compared to the purchases Click to Read More

The following is a copy of an essay Steve Jobs, Chairman of Apple, posted last week on Apple’s website about issues of DRM with music downloads. There has been a lot of commentary, including my own, on what Mr. Jobs had to say. It’s an eloquent, detailed speech worth reading. I am reprinting Mr. Jobs words here only to keep them available in the event that the link to them on Apple’s website is not maintained.

Steve Jobs
February 6, 2007

With the stunning global success of Apple’s iPod music player and iTunes online music store, some have called for Apple to “open” the digital rights management (DRM) system that Apple uses to protect its music against theft, so that music purchased from iTunes can be played on digital devices purchased from other companies, and protected music purchased from other online music stores can play on iPods. Let’s examine the current situation and how we got here, then look at three possible alternatives for the future.

To begin, it is useful to remember that all iPods play music that is free of any DRM and encoded in “open” licensable formats such as MP3 and AAC. iPod users can and do acquire their music from many sources, including CDs they own. Music on CDs can be easily imported into the freely-downloadable iTunes jukebox software which runs on both Macs and Windows PCs, and is automatically encoded into the open AAC or MP3 formats without any DRM. This music can be played on iPods or any other music players that play these open formats.

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