Tech wrap: AT&T, T-Mobile pull plug on mega-merger

AT&T said it had agreed with Deutsche Telekom to drop its $39 billion bid to buy the German company’s U.S. wireless unit amid increasing regulatory obstacles to the planned deal. AT&T said in a statement on Monday that it will enter a roaming agreement with Deutsche Telekom. AT&T’s plan to buy T-Mobile USA, first announced in March, has met with opposition from the U.S. Department of Justice and the Federal Communications Commission.

The upstart wireless company that is being bankrolled by Philip Falcone’s $5 billion Harbinger Capital Partners hedge fund could run out of money during the second quarter of 2012, according to the company’s financial statement. LightSquared, which registered a $427 million net loss during the first nine months of this year, may not be able to “continue as a going concern” unless it can raise additional capital and financing, the statement reviewed by Reuters said.

Prince Alwaleed bin Talal, the Saudi billionaire and an investor in some of the world’s top companies, has bought a stake in microblogging site Twitter for $300 million, gaining another foothold in the global media industry. The Twitter stake, bought jointly by Alwaleed and his Kingdom Holding Co investment firm, was a secondary market transaction, meaning that Alwaleed and Kingdom bought the Twitter shares from existing shareholders, rather than making a direct investment, according to a person familiar with the matter.

The precipitous decline in the price of Research In Motion stock has left the market capitalization of the BlackBerry maker below the value of its cash, receivables and other current assets. Shares in the Canadian smartphone maker fell another 4 percent, to less than $13, on the Nasdaq on Monday. They have lost more than half their value since the day before reporting second quarter earnings back in September. The fall gives RIM a market capitalization of less than $7 billion. RIM last week said it had current assets – which include short-term investments and discounted inventory – of $7.2 billion.

Zynga shares fell as much as 13 percent below their IPO price, in their second trading session, as investors worried about the online game publisher’s growth prospects. “Investors aren’t interested in Zynga – not at these prices,” said Sterne Agee analyst Arvind Bhatia. “The demand post-IPO is what drives the stock price and it’s just not there.” With these latest losses, Zynga has a market value of $7.8 billion, down from $8.9 billion when it went public.

Cablevision also joins Time Warner Cable with HBO Go offer

True Blood actors Stephen Moyer and Anna Paquin (Photo: Reuters)

After months of speculation we now know ad nauseum that cable markets of New York and Los Angeles will soon have HBO Go, HBO’s much acclaimed online video service. New York cable operator Cablevision said on Monday it will start offering HBO Go to its HBO subscribers in the next few months. Time Warner Cable, which dominates the New York City and Los Angeles markets, made a similar announcement late on Friday.

It’s worth repeating that HBO Go’s slick Web service and extensive library of exclusive TV shows and movies is only available to verified paying HBO cable subscribers and not as a standalone service. But even then it is significant for the strategy of HBO parent — Time Warner — to counter Netflix’s rise by offering a more flexible and mobile HBO service wherever and whenever subscribers want it.

The delays to offering the service to Time Warner Cable and Cablevision subscribers, was down to money (Quelle surprise!). While cable operators recognize the importance of offering additional value to programming packages by putting authenticated programming online — beyond the traditional TV package — they don’t always feel they need to pay too much extra over what they already pay.

Fox/Cablevision still talking, FCC also talking. Yet no change on Day 4.


So you know the story well by now: Fox Networks’ Fox 5 and My 9 channels have been off the air  for Cablevision’s 3 million odd homes in the New York area since midnight on Saturday morning because both sides have been unable to reach a carriage deal. As a result New York football fans have missed a key Giants game versus Detroit Lions (pictured)  and could miss more if this continues. As you might expect, the argument between Fox and Cablevision is over money.

Since then both sides have exchanged barbs and made various claims about who’s to blame — which is standard practice in a programming fee dispute. But FCC Chair Julius Genachowski appears to have had enough according to this statement:

“I am deeply troubled that Cablevision and Fox are spending more time attacking each other through ads and lobbyists than sitting down at the negotiating table.  The time for petty gamesmanship is over.

Wednesday media highlights

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.”

Looks like Yahoo’s not buying Tumblr

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:

Dear Ivan Seidenberg: It’s me, Knicks Fan

Quentin Richardson (front) from the New York Knicks falls out of boundsDoes 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.”

NBC: Local ads bad, Silverman fine, and Rainbow is no-go

zucker1.jpgGeneral 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.

Who has time to read with all that sailing?

wsj.jpgThe 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:

Cablevision gets big new stakeholder, a Harbinger of things to come?

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.

gabelli.jpgHarbinger 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.

Cablevision/Newsday synergies? Not quite

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.

newsday-tv-landing-page.jpgYes, 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.