Happy Monday! Your stock rating has just been cut

nyse.jpg It wasn’t exactly an auspicious start to the week for entertainment companies.

Right out of the box, Lehman Brothers analyst Anthony DiClemente cut his rating on News Corp, Disney, CBS and Time Warner. Not one of them is now rated above “equal weight” by the broker.  And he stuck the whole entertainment sector with a negative rating.

What’s the deal, DiClemente? Well, he points out that television and film companies are barreling toward the same sort of problems that have created such headaches for the music business. Remember how the major music labels seemed so ill-prepared for that whole Internet thing?

“In reality, while there are many obvious differences between music/audio and movie/video media forms, the core properties of video distribution and consumption are not different enough from music content to continue to justify why movie/TV content will be spared fragmentation,” DiClemente wrote.

DiClemente tried to give the movie and TV business the benefit of doubt.

“In our research of the entertainment industry to date, we have been increasingly eager to study and learn the reasons why widespread digital distribution of films and TV shows is not likely to eventually cause massive disruption to traditional forms of entertainment delivery. We have been largely unsuccessful in building compelling logical arguments in support of the continued growth for the movie/ TV content owners
in a digital environment. To us, the dual concerns of 1) deteriorating economics to the content-owners of legal online distribution; and 2) rampant piracy concerns are together too significant to ignore.”

Bloomberg, a stake of one’s own

When we heard that Merrill Lynch wasn’t ruling out a sale of its stake in newswire and financial information service Bloomberg LP, we had to wonder who would want it. Morebloomberg.jpg to the point, we had to wonder who wouldn’t. As our story explained, Bloomberg probably (though we can’t say for sure) is a lucrative enterprise that any investor would want to profit from.

As it turns out, wanting something is fine, but just because you want something doesn’t mean you’re going to get it. Here’s the problem: at an estimated $6 billion, Merrill’s Bloomberg stake is way too expensive for most media companies. Not only that, the companies who could afford it — private equity and sovereign wealth funds — are unlikely to raise the cash to take a shot at it. The reason? They like the control that money brings, and with Bloomberg that’s not going to happen.

I spent some time with a high-level (and of course anonymous) source who knows how things work at Bloomberg, and here’s what that source had to say about it:

Bud’s advertising: Drink it in while it lasts


What would a combined InBev/Anheuser-Busch do with advertising? It’s one of the questions already being tossed around in the wake of InBev’s $46 billion bid for the brewer of Bud and Bud Light.

One obvious problem for Anheuser-Busch, which spends about $475 million each year on advertising, is that their marketing focuses heavily on the idea of being an All-American beer and company.

That may not play so well when you’re owned by a company based in Belgium, we reported.

Pearlstine to make the most of Bloomberg

pearlstine.jpgIt looks like Norman Pearlstine couldn’t resist the glamorous life of journalism. After two years in the private equity business at the Blackstone Group Carlyle Group (D’oh!), Pearlstine is joining Bloomberg LP as “chief content officer,” where, as Bloomberg said in a press release, he will work with “Editor-in-Chief Matthew Winkler to seek growth opportunities for its
television, radio, magazine and online products and to make the most of the
existing Bloomberg News operations.”

Pearlstine used to be the editor-in-chief of Time Inc for 11 years, and before that spent 23 years at The Wall Street Journal. More details on his CV, directly from the release :

He was the paper’s top news executive for nine years, serving as Managing Editor and then Executive Editor. He previously worked as the founding editor and publisher of The Wall Street Journal/Europe, the first Managing Editor of The Asian Wall Street Journal, and the Tokyo bureau chief.