Here are some of the day’s stories on the media industry:

Bernstein Research Criticizes Media CEO Pay (B&C)
“The Bernstein report notes that the top earner among media executives in 2008 was CBS Corp. CEO Leslie Moonves, who was paid total compensation of $31.9 million last year. He is followed by Disney CEO Robert Iger, who earned $30.6 million; News Corp.’s Rupert Murdoch, who took home $27.5 million; and Viacom’s Philippe Dauman was paid $23 million. Time Warner CEO Jeff Bewkes took home the least of the top five, at $19.9 million,” writes Claire Atkinson.

Media General posts quarterly profit, ad sales fall (Reuters)
Robert MacMillan writes: “While Media General, which publishes The Tampa Tribune, Richmond Times Dispatch and other papers, reported a 26 percent drop in newspaper ad revenue, the company said classified and retail ad declines were less steep than in recent quarters. Media General reported second-quarter net income of $20.6 million, or 90 cents a share, compared with a loss of $532.2 million, or $24.12 a share, a year ago.”

Philadelphia Newspapers to Release Reorganization Plan (E&P)
“[U.S. Bankruptcy Judge] FitzSimon had given the company until Aug. 31 to present its plan. Company officials did not reveal any new details, but had previously revealed that the plan involved raising $50 million in new capital and negotiating with lenders to reduce the company’s $300 million debt.”

Report: Internet use in Asia, Africa, and Mid-East set to soar (CSM)
“A new report from Forrester Research estimates that approximately 2.2 billion people will be online over the next few years – an increase of over 45 percent. Analysts at Forrester forecast that, by 2013, 43 percent of that 2.2 billion will be based in Asia, with 17 percent in China alone,” writes Matthew Shaer.

In other news:

• Boston Globe Media Launches Nontraditional Marketing Division (E%P)
• Gray Gets Nod To Manage Young Stations (TV Newsday)
• Fitch Gives Upgrade To Cablevision As Earnings Rise (WSJ)

[Picture: Les Moonves, CEO of CBS Corp arrives at the Sun Valley Inn in Sun Valley, Idaho July 9, 2009. REUTERS/Rick Wilking]

Gawker/Valleywag created a bit of stir on the blogosphere Monday with its report that Yahoo was in talks to buy blogging startup Tumblr for “low to mid-eight figures,” or as much as $50 million.

From the post:

We hear the talks are serious, led by Tapan Bhat, a fast-rising executive in charge of Yahoo’s homepage and other key properties — but as with any acquisition talks, they could fall apart.

We figured Yahoo’s new CEO Carol Bartz was too busy figuring out where Yahoo should seek growth and how to stem the leaky ship to pursue an acquisition. Sure enough, Silicon Alley Insider knocked down the Valleywag story by getting Tumblr founder David Karp on the record:

We called David and he said the rumor is categorically false. “We’re just hearing about this now,” he said.

Speaking of acquisitions, it seems like no one’s doing too well with the stuff they’ve bought. Just a couple of days ago, News Corp wrote down the value of its $5.6 billion 2007 acquisition of Dow Jones. And yesterday, Cablevision said it would write down its acquisition of Newsday by $375 million to $450 million. As you may remember, Cablevision bought the Long Island paper just last year for $650 million.

• The recession has taken a heavy toll on sales of celebrity gossip magazines, but magazine circulation in general has held up well, according to the Audit Bureau of Circulations. (NYTimes)
• Google has developed a free Web service called PowerMeter for consumers to track energy use in their house or business. (NYTimes)
• DirecTV Group added more subscribers than expected during the fourth quarter but rising marketing costs and other expenses dragged down its quarterly profit. (Reuters)
• Omnicom Group shows more resilience to budget cutbacks than Wall Street had expected, but profit still falls 14 percent. (Reuters)

Does Ivan Seidenberg, Verizon’s top executive, fancy himself the next media mogul with a pro-sports team, a la Mark Cuban, the Dolan family and Paul Allen?

He hinted as much at the Dow Jones Media and Money conference  conference in New York. The trouble is the team he mentioned — The New York Knicks — are owned by Cablevision, a chief rival of Verizon. So pretty much kiss that idea goodbye.

Seidenberg hinted at the very, very unlikely possibility of buying the Knicks during a back and forth at the conference Michael Burgi of MediaWeek. Burgi asked Seidenberg to discuss his “content strategy.”

“People keep asking, when are you going to go vertical and add a lot of content?” Seidenberg said. “Content gets to the customer in a lot of (ways). We like to think of ourselves as bundling it, packaging it, formatting it, helping to store it if that’s what you need, helping to send it … to your PC, to your television (and so on).”

Burgi then asked whether Verizon was actually interested in creating content.

 “No,” Seidenberg answered. “Having said that, if somebody came up with the perfect killer service, that we could invest in, we can do it. It’s not necessarily a strategic imperative that we do it — we’d do it to annoy the hell out of everybody.”

At that point, Seidenberg said that it wouldn’t be in the shareholders’ best interest to buy just any content, but if the right thing came along he’d look at it. And here’s the killer quote…

“If I could buy the Knicks and fix them, I would do it. But we can’t do it.”

(Allow me take a moment with a message for Mr. Seidenberg. Millions of Knicks fans — especially rabid, win-starved ones like yours truly – would welcome, how do I say it, new leadership for the legendary team. We have not had a winning season since 2000-2001. You’re a local product. I can tell that you’re are fan, too. So, hey, don’t give up the dream. That’s all.)

(Photos: Reuters)

General Electric’s problems – it warned yesterday that turmoil in the global credit markets could drive profit down as much as 12 percent — have once more put the spotlight on its media unit, NBC Universal.

Forever, it seems, media observers and Wall Street bankers have been talking about whether or not NBC should be sold by majority-owner GE. For its part, GE and its leadership — most notably CEO Jeff Immelt — repeatedly respond that NBC isn’t going anywhere.

As The Hollywood Reporter points out, GE’s latest troubles have nothing to do with NBC.  The article reports that Immelt called NBC a “great media franchise” during his rounds yesterday.

During a conference call with Wall Street analysts, Immelt was asked three times if he would spin off GE Capital, prompting him to quip later on CNBC: “At least it took over from, ‘Are we going to spin out NBC?’ “

That’s not to say that NBC isn’t facing challenges of its own.  NBC Universal CEO Jeff Zucker told a conference on Friday that local TV stations have been profoundly impacted by the economic downturn, according to Reuters.

“We haven’t seen an advertising slowdown on a national level yet in the United States but obviously we’re concerned about it, and I think if you’re not concerned about it you’re in denial,” he added.

Reuters later spoke to Zucker on the sidelines and came up with these tidbits…

1.  Zucker isn’t interested in Rainbow Media
2.  He’s “pleased” with NBC Entertainment co-chairman Ben Silverman
3.  And he’s still not into “wanton spending on pilots.”

Keep an eye on:

• Microsoft Corp Chief Executive Steve Ballmer said on Thursday he still sees a “certain buoyancy” among technology and telecommunications customers worldwide, despite recent U.S. economic woes (Reuters)
• Cablevision’s largest shareholder yesterday ratcheted up the pressure on the controlling Dolan family (NY Post)

(Photo: Reuters)

The Wall Street Journal took the wraps off its new luxury magazine yesterday –  a big glossy that appeals to those polo players and yachtsmen who weren’t sweating out $4/gallon gasoline this summer.

Check out the demographics of the average WSJ.  magazine reader: Carries household assets of $2.9 million, spent 26 days golfing last year, took seven leisure trips and still managed to squeeze in 16 days of sailing. That’s 16 days of sailing.

The New York Times this morning reminds us that even the launch event was a bit on the posh side:

Reflecting the magazine’s high style, its unveiling was held at the Pierpont Morgan Library over a breakfast that included smoked salmon, caviar and raspberry parfait, with a digital slide show and executives reading from teleprompters.

Robert J. Thomson, managing editor of The Journal, poked a little fun at the pomp, saying, “This being convention season, histrionics are the order of the day.”

But who’s to say that News Corp isn’t on to something here? The magazine expands the Journal’s advertising base, and truth be told, most believe that luxury goods are holding up much better than other parts of the economy right now. In its first issue, WSJ. pulled in 51 advertisers — 19 of which are new to the paper.

Ken Doctor, news industry analyst for research firm Outsell Inc, described it to the Associated Press as “smart positioning” by the newspaper:

 ”You’ve got to pick your spots even in the bad market and you have to be positioned for the rebound.”

As for the magazine itself, we’ll be interested to hear the reaction of readers  — those who aren’t too busy tacking or jibing to browse through the first issue. In the meantime, Editor and Publisher’s Fitz & Jen blog describes the inaugural cover this way:

 A woman outfitted in a dress made entirely of Wall Street Journal newspapers. It’s a curious choice. The model is certainly stylish and attractive enough and the garment isn’t half bad considering its made from newsprint. BUT it conjures up images of bums curled up on park benches using newspapers for cover.

And homeless definitely don’t fall into the magazine’s choice demographic.

Keep an eye on:

• The New York Sun, a daily newspaper launched six years ago as an often conservative-leaning alternative to The New York Times, may stop publishing by the end of September unless it gets $10 million (Reuters)
• New York cable TV operator Cablevision Systems Corp has started rolling out a free Wi-Fi network for subscribers who want to access the Web via laptops and other wireless devices (Reuters)
• CNBC has entered into an alliance with LinkedIn under which the financial news channel will air content generated by the professional networking site’s 27 million members (Reuters)

(Photo of WSJ. magazine courtesy of Dow Jones and Co)

Cablevision has a new(ish) big stakeholder and things could get interesting as it is activist investor Harbinger Capital. According to a regulatory filing Harbinger now owns a combined 11 million shares in Cablevision through two funds as of June 30th, making it the 5th largest external stakeholder in the New York cable operator.

Harbinger, lest we forget, has been shoving around the media companies in which it has snapped up stakes to find to boost share prices, notably with New York Times and Media General earlier this year.

Harbinger will be joining Mario Gabelli (pictured left), of Gabelli & Co, which owns around 20 million Cablevision shares and has been very loudly pushing for the company to consider selling assets such as its cable networks. Gabelli wants Cablevision to use the funds from such an asset sale to buy back stock. Other big name Cablevision shareholders are ClearBridge Advisors (part of Legg Mason), T Rowe Price and London-based Marathon Asset Management.

Richard Greenfield of Pali Research, who brought the Harbinger filing to our attention, makes an interesting point that the top five stake holders now own 108 million of the total 295 million float. The Dolan family, who control the company, own around 72 million.

In Greenfield’s view:

This fact will help propel Cablevision shares if they begin to buy back shares in the fall.

We thought we had a big story on our hands this afternoon when an email popped up in our Inbox proclaiming: “Newsday TV”.

Finally, Cablevision Chief Executive Jim Dolan is sticking it to the Doubting Thomases of Wall Street by serving up the synergies between his recent acquisition, the Long Island newspaper Newsday and his 3-million strong subscriber base of cable TV customers and cable networks, we thought.

It wasn’t anywhere close to what we imagined.

Yes, Cablevision has launched a new interactive Newsday channel. But the interactivity pretty much ends with an on-screen subscription form letting cable customers order up a Newsday subscription on TV screens and charged to cable bills.

From the Cablevision release:

Located on Channel 611, the Newsday channel features both 7-day and weekend delivery options (Thursday, Friday and Sunday), and promotional information on the paper’s various sections and benefits, including local news, sports, Long Island Home, area coupons, the Explore LI feature section and classifieds. Also available through the channel are long-form videos of some recent Newsday stories, and information on the paper’s “Newsday Insider” benefit program for subscribers.

Meanwhile Wall Street cable analyst Craig Moffett of Bernstein Research not only thinks there’s little obvious strategic sense in the Newsday acquisition for Cablevision but that the Dolans, who control the cable operator, probably paid $150 million too much for the paper in May.

In his latest client note titled “Toys in the Attic…What’s Cablevision Really Worth?” Moffett says Cablevision is conservatively worth at least $45 a share compared with its current price of around $28.

In the breakdown of Cablevision’s assets Moffett values Newsday at just $505 million - a 20 percent discount in just three months.

No wonder top Cablevision stakeholder and activist investor Mario Gabelli wants improved corporate governance on big decisions and is calling for a sale of some of Cablevision’s asset’s to help boost the share price.

(Photo: Cablevision)

 NBC is putting up big numbers so far in the Olympics.

Start with the opening ceremony. While some complained that the event couldn’t be seen live in the United States, the move to delay the broadcast and run it during prime-time paid dividends. Some 34 million viewers tuned in, up about 35 percent since the last summer games.

Indeed, helped by the splashy opening ceremony and the star power of swimmer Michael Phelps, NBC is setting the stage for what could be record Olympic viewership in America.  Over the first two days of its coverage, NBC has attracted a record 114 million total viewers - 4 million more than Atlanta in 1996 and nearly 20 million more than Athens in 2004.

Those numbers suggest that Web coverage hasn’t taken away from NBC’s TV audience.

As the Wall Street Journal writes:

In the first two days of the games, 90% of viewers watched the Games on TV alone, with nearly 10% watching on TV and online, according to Alan Wurtzel, NBC’s president of research. Only 0.2% watched on the Internet alone, Mr. Wurtzel said.

“The streaming will not diminish the ratings,” said Neal Pilson, a sports-media consultant who advised the International Olympic Committee in negotiations for broadcast rights. “It encourages viewers and provides them with information. There will be no dilution or fragmentation of the national audience.”

The results so far are likely a big relief for NBC, which, as MarketWatch points out, is hoping for a spillover effect from the Olympics:

The Beijing Games will have far-reaching benefits, NBC fervently hopes. The network believes that the widely watched and discussed Games will serve as the ideal lead-in for NBC’s fall prime-time line-up. In addition, Walt Disney’s ABC morning and evening news programs have been nipping at the heels of NBC’s pace-setting “Today” and “Nightly News” shows.

Keep an eye on: 

• WPP says that German market researcher GfK was misleading the market about its intentions to acquire British rival Taylor Nelson Sofres (Reuters)
• Internet conglomerate IAC/InterActiveCorp is moving ahead with plans for splitting up the company, saying spin-offs of its divisions would occur on August 21 (Reuters)
• A major shareholder says cable television operator Cablevision Systems Corp should sell one of its units to raise cash for an aggressive stock buyback rather than break up the whole business (Reuters)

(Photo: Reuters)

Five percent of AOL may not be what it used to be.

Many thought that was the case, but now even Google says so, conceding in a filing that its stake in Time Warner Inc’s AOL unit may be worth less than the $1 billion the Web company paid for it in 2006. “We believe our investment in AOL may be impaired,” Google said in its quarterly financial filing.

Here’s what people are saying about it.

Silicon Alley Insider:

Of course, we knew that already. The highest estimates of AOL’s value these days usually top out at around $10 billion ($15 billion if Microsoft goes into a testosterone-fueled bidding-war rage). This would put the value of Google’s 5% stake at, say, $500 million to $750 million.

What’s most interesting about Google’s AOL note, however, is that the company believes the impairment may be temporary (expressed below as not believing the impairment is other than temporary). This is a polite way of saying that Google is dreaming that AOL might actually recoup some of its vaporized value someday.

 paidContent:

Translated, it means it Google is does not believe the current value of AOL is near $20 billion. Back in December 2005, Google paid about $1 billion for a 5 percent stake in AOL-though it’s debatable whether Google ever believed AOL was worth that much. It was a defensive move-preventing Microsoft (NSDQ: MSFT) from powering AOL search-so it paid a premium. There’s obviously some legalese here: the asset is still being booked “at cost” on the balance sheet (so no writedown just yet), but this is a new note not present in previous quarters, suggesting there’s been a financial trigger to cause this.

VentureBeat: 

Maybe Google thinks Microsoft or Yahoo will be quick to make a move to buy up AOL’s Internet operations, thus bolstering the investment. (AOL parent Time Warner recently announced it would spin AOL’s dial-up business from the rest of the company - and is likely trying to sell both.) Or maybe Google just doesn’t want to eat the costs at this time. Or maybe it’s thinking about buying AOL at a premium just to avoid the fees.

Okay, that last one is a joke. Any charges Google is assessed for the bad investment would likely be relatively insignificant for the company. Still, any time a company is being looked at for purchase by Yahoo and Microsoft you have to throw Google’s name into the ring as well - especially when it already owns 5 percent of that company.

Keep an eye on:

• Martha Stewart Living Omnimedia has cut 25 people from its payroll despite reporting strong financial results last week (NY Post)
• A decision that may allow U.S. companies to use their websites to release market-sensitive information could hurt firms that distribute press releases and give some investors an edge over others (Reuters)
• DreamWorks SKG is near an agreement to get $550 million in funding from Indian billionaire Anil Ambani, a person with knowledge of the talks tell Bloomberg.

(Photo: Reuters)

Is silver-haired media investor Mario Gabelli playing matchmaker?

In an interview, he says that it’s about time Cablevision get down to business and hook up with Time Warner Cable. Gabelli, who runs hedge fund Gamco Investors,  a top Cablevision shareholder, tells Bloomberg the family run cable operator and networks company should be “making love with Time Warner Cable.”

Gabelli’s proposal goes much further than the potential moves proposed by Cablevision CEO Jim Dolan. Not content with just a stock buyback or a dividend or even just spinning off some businesses, Gabelli suggests Cablevision should do nothing less than break up the company and hand over the cash to shareholders.

It’s no secret how Time Warner Cable has coveted Cablevision’s New York area cable systems. On more than several occasions over the past decade, Time Warner has held talks to varying degrees to snatch the systems.

From Bloomberg: “They have made a commitment to follow through,” said Gabelli, who two days ago called on Cablevision to sell Rainbow and use the money to buy back stock. “If they don’t, there are board seats available.”

We bet he’ll be pressing his case at a series of investors meetings the Dolans are planning to hold with top investors.

And how happy would he be if Jim Dolan came through this time?

Bloomberg: Breaking up the company would be “like hitting a grand slam home run in the bottom of the ninth inning of the seventh game of the World Series,” he said.

(Photo: Reuters)