Conan O’Brien could well be headed to Fox after making it clear to NBC that he will not go graciously into the later night. But a channel-changing question that is making the rounds has more to do with what the drama unfolding between O’Brien and former Tonight Show host Jay Leno says about NBC and its agreed joint venture with Comcast. If nothing else, the lack of replacement programming for the slot Leno is vacating, and the purported profitability NBC still enjoyed by having a cheaper, single-star variety show in a traditionally pricey prime-time slot, raise an obvious question — why the rush?
John Hudson at the AtlanticWire does a nice job of collecting some thoughts on pressure that was probably building from Comcast, from angry affiliates who wanted Leno and his show’s crummy ratings out of that vital pre-news slot, to improving PR.
Whatever his motives, Warren Buffett’s influence can be seen in Cadbury’s share price, which have dipped below the level of Kraft’s $17 billion bid for the first time. The sagging share price shows, among other things, that the market believes Kraft is more likely to make its 50.1 percent acceptance rate without having to aggressively raise its bid.
Analysts still see Kraft having to sweeten the deal, but not as much as they had previously suggested. Also weighing on Cadbury’s stock is the cold water splashing over prospects for a rival bid from Hershey. Cadbury said it was not looking for a white knight bidder and analysts are not convinced Hershey can finance a takeover.
The Treasury, as major shareholder of such credit boom casualties as Citigroup and General Motors, showed with its $3.8 billion infusion into GMAC that it can still be counted on to safeguard the financial system from systemic collapse. The auto-loan company, which had dutifully spread its wings into mortgages in the housing boom, wound up becoming a bank to qualify for TARP bailout funds a year ago — the day after Christmas 2008, to be precise. How could Treasury say no?
Now taxpayers are plonking another $3.8 billion into GMAC to help cover mortgage losses. That gives us another majority shareholding in a company that could not have survived to pay its bills, workers and its executives without aid. No, it’s not much in terms of the government’s balance sheet. But it should rankle in Congress when lawmakers come back from holiday.
The turnaround of Pilgrim’s Pride may have been long by 2009 standards, but as Emily Chasan reports creditors probably made out better from the chicken producer’s reorganization than any other bankruptcy in the past year.
On Monday, just over a year after the company entered bankruptcy protection, it emerged with new ownership, new management, and a new business plan, proving the traditional route through bankruptcy is not quite dead. Unsecured creditors got paid back in full, in cash, and stockholders — who usually get wiped out in bankruptcies — got a 36 percent equity stake in the reorganized company.
Comcast’s deal to buy a majority stake in NBC Universal from General Electric should put to rest fears at the cable operator that King Content will kill its business. But even if it becomes a thoroughfare of programming genius, the new venture will still have to convince a skeptical marketplace. The train wreck of Time Warner-AOL threw the idea of new media into financial purgatory.Just how the venture will wring savings from its disparate businesses and avoid suffocating regulatory scrutiny are issues that could also create Comcastic headaches. Robert MacMillan points out on our Mediafile blog, with a sensible dose of skepticism, that the new venture is affirming its commitment to local news, in effect, promising to keep the garden hoses pumping even as it primes for a media gusher with big-ticket programming.Still, while making a new media juggernaut could still turn out to be a pipe dream, Comcast CEO Brian Roberts (pictured above) cannot be faulted for allowing his company to get stuck in a dumb pipe nightmare.
Following in the greatest of capitalist traditions, the Oracle of Omaha announced plans to buy up the shares he doesn’t already own in one of the country’s biggest railroads, Burlington Northern Santa Fe. And in an egalitarian, if unexpected, move, he said he would split his Class B stock to the tune of 50-to-1, making it possible for just about anyone to own Berkshire Hathaway’s traditionally lofty shares.The railroad purchase is a bet on the future of America, Buffett said, and it’s his biggest acquisition ever. It values the railroad at $34 billion, and the price of $100 a share is a premium of nearly 32 percent. The premium vaults the railroad into the top spot by market cap, surpassing Union Pacific.Buffett also owns stakes in other railroads, so it will be interesting to see if his move stirs any antitrust comments from Washington. Idiomatically, there is something profoundly rural in the Americana of Buffett’s latest bet; much more so than Berkshire Hathaway’s mainstay insurance business.
By dithering over the $7 billion sale of Sun Microsystems to Oracle, and delaying all those magical synergies, rationalizations and economizations, EU authorities are forcing Oracle to synergize, rationalize and economize just to maintain some semblance of value.Sun is blaming fresh plans to slash about 10 percent of its global work force on European antitrust regulators, who have not yet cleared the transaction. Don’t be too surprised if the bulk of the firings are targeted in Europe.Oracle CEO Larry Ellison recently said Sun is losing $100 million a month because of uncertainty about the computer maker’s future. Rivals IBM and Hewlett-Packard are taking advantage by poaching Sun’s customers with steep discounts.”Sun’s business is really hurting,” said Cross Research analyst Shannon Cross. Analysts had widely expected thousands of Sun employees to lose their jobs, but not until Oracle closes the deal.At this rate, Oracle may end up with a black hole.