Here’s the latest on Sumner Redstone: On CBS’s earnings call he reiterated that negotiations with lenders regarding National Amusements’ debt situation were moving forward.

“We are making very good progress with our creditors, and as I have also said before, we have not, since our original sale, sold a single share of CBS or Viacom, and our lenders are not urging us to do so,” he said.

He also told investors that the CBS dividend cut — they slashed it by 82 percent to 5 cents — wouldn’t mean a thing as far as National Amusements’ debt talks go (How the dividend cut will impact Redstone himself is another matter. Last year, he took home more than $80 million in dividend payments).

“Now with respect to the CBS dividend, I can tell you that the topic has been discussed with the lenders, and it will not impact the successful conclusion of the discussions. So that’s the update, and again, because of the ongoing nature of the discussions, I must decline to further comment,” he said.

Redstone may not be commenting further, but there is certainly some chatter about what’s happening with National Amusements. People familiar with the matter tell us that National Amusements is close to putting several hundred movie theaters up for sale.

Here’s the upshot:

An official sales prospectus on the theater chain is expected to go out any day now and bankers are reaching out to potential buyers to get them to sign confidentiality agreements, the sources said.

All U.S. theaters except those in the New England region are expected to go on sale, along with theaters in Latin America and possibly those in the United Kingdom. The theaters in Russia will be excluded from the sale, the sources said.

National Amusements operates more than 1,500 movie screens in these countries. The New England region and Russia account for roughly 300 screens. Citigroup Inc will handle the sale, the people said.

A sale could help National Amusements pay off the $800 million in bank loans it has due — or at least part of the payment. Analysts figure the theater chain could fetch up to $500-700 million. It’ll be up to Redstone to figure out how to make those numbers work.

Keep an eye on:

• Walt Disney Co will streamline some behind-the-scenes operations, including menu planning and ride design, at its two U.S. theme parks to try to offset the effects of the global economic downturn (Reuters)
• Entertainment industry jobs in the Los Angeles area will fall further in 2009 after an annual decline in 2008, according to a research report (Reuters)
• The New York Post faced widespread criticism for a cartoon it published that some say compares President Barack Obama to a chimpanzee (WSJ.com).

CBS reports its quarterly earnings later today and expectations are… well… low. That’s not surprising to anyone who has watched a parade of bad numbers coming out of the other big media companies this quarter. Viacom. Time Warner. Walt Disney. News Corp. There were few positive notes in any of them.

CBS isn’t likely to break that streak.

So the big questions on the minds of analysts and investors when it comes to CBS are 1). Will it take another big writedown after the $14 billion impairment charge it took last quarter and 2). Will it cut its dividend?

We explored the dividend issue in a piece last week, pointing out that CBS is facing a big debt payment, dwindling cash flow, and must contend with an awful advertising environment. It needs to conserve cash, and could have no option but to cut its dividend (some are calling for it to abandon the payment altogether).

Today, UBS analyst Mike Morris issued a research note ahead of CBS earnings that addressed the dividend question. Here’s what he wrote:

Perhaps more important is the potential for a change to the company’s dividend policy. Currently CBS shares pay a dividend of $1.08 annually for a yield of 20.5% at the current $5.25 share price. As we have previously noted, we view a dividend cut as possible given our estimate of lower cash flow in 2009 and management’s commentary on the 3Q08 earnings call that the dividend is a function of free cash flow. However, we believe that the size of a dividend cut may surprise investors (we expect a cut to $0.30 per share annually, which would imply a 5.7% yield at current levels).

If CBS does cut its dividend either this afternoon or in the coming days, it will be interesting to watch the reaction of investors. The dividend has been a big reason for buying CBS stock. Still, investors realize that companies, including CBS, are well-advised right now to keep some spare cash on hand, so may be accepting of a dividend cut. But how much is the right amount? Cutting it to 50 cents annually? 30 cents? Zero?

(Photo: Reuters)

CBS has made a big deal about its dividend. Just three months ago, Chief Executive Les Moonves made clear his commitment to the quarterly payout to shareholders, who, by the way, have seen the stock fall nearly 75 percent in the last 12 months. Yep, 75 percent.

“The dividend is front and center in our strategy to return value to our shareholders” Moonves said on a late October conference call.

Lately, though, doubts about CBS’s ability to keep up the dividend appear to be spreading (to be fair, a number on Wall Street have questioned the payouts for quite some time).  First, on Monday, Sanford Bernstein  analyst Michael Nathanson cut his rating to “underperform” and warned that CBS might have to “drastically” reduce the dividend.

Now we get the following from Barrington Research’s Jim Goss, who cut his rating on the stock as well as 2009 earnings estimates. Here are some highlights:

Our new estimate progression suggests that it will likely take several years to restore the earnings level we estimate CBS achieved in 2008. Consequently, while we felt the board might be successful in maintaining its $1.06 annual dividend rate through a temporary shortfall in profitability, we now feel the rough patch will be longer, and the high level of dividend payment will become more difficult to justify. The arguments have created a tug of war between an exceptional return of cash to shareholders, versus a more prudent posture that could conserve cash to repay debt. The latter strategy would strengthen CBS’ financial position and reduce risk to its investment grade credit rating.

The weight of these arguments seem to now be stacking up in favor of a reduction, but not elimination, in the dividend rate to a level that provides a still meaningful and above average yield. It is conceivable that the initial market reaction to a cut could be positive. However, since our positive investment thesis was based on the attractive and seemingly sustainable yield that offset a stagnant stock in a depressed ad environment, a reduced yield would undercut our OUTPERFORM rating. We will be more comfortable supporting the stock at a lower yield level as we become more confident that an ad spending recovery is materializing. For now, given our revised view that the dividend is threatened, we feel a MARKET PERFORM rating is more appropriate.

At least the Mentalist is doing well.

(Reuters photo of Simon Baker, star of CBS show ”The Mentalist”)

The financial crisis might have sapped more than its share of 401(k)s, but it’s providing the news business with all sorts of programming ideas.

The latest is a new personal finance website from CBS Interactive. MoneyWatch.com, which officially goes live on Wednesday, will provide the following things, according to the press release:

• The site will translate the latest financial headlines and break down how they directly impacts the readers’ and their pocketbook. MoneyWatch will provide a bird’s eye view into how the latest financial news affects their salaries, mortgages, 401Ks, and their overall finical well-being.
• With the support of CBS, MoneyWatch experts will react quickly to translate the news on a broadcast level, from national and local TV and radio stations including CBS Early Show and local CBS news affiliates. Unlike other personal finance sites now available, MoneyWatch will have a life across multi-platforms, across the web, TV, and radio, and reach a massive audience.
• Led by Eric Schroenberg, former managing editor of Money Magazine, MoneyWatch will help people who feel responsible about their money and believe that making the right decisions about what they have and what they earn is profoundly important. If the crash taught us anything, it’s that the penalty for not knowing what to do with your money has never been higher. MoneyWatch.com is spin-off from its sister site, BNET, one of the fastest growing business sites on the Web.

The announcement comes on the heels of Fox Business Network’s announcement that it will start a Saturday morning four-hour call-in program for folks worried about their money, and joins a host of other “what it means for you”-style sites dealing in personal finance, such as FiLife.com.

You may think there are one too many purveyors of financial advice out there, but who ever objected to getting a second (or third) opinion?

UPDATE: We missed this one from Hearst-Argyle Television, but thought it worth chucking into the mix. This is from a couple days ago:

With a special news series to be launched this evening throughout its station group, Hearst-Argyle Television, Inc. will seek to establish a new template for local TV journalism on economic issues.

The ongoing series, “Project Economy” will appear throughout 2009 on Hearst-Argyle Television’s TV stations, and associated websites, stretching from Portland, Maine, to Honolulu.

The on-air/online series will address not only money-saving tips but will document job-seekers’ paths to finding employment and report on local businesses’ struggles to weather the recession. Local stories will be supported by national reporting provided by Hearst-Argyle’s Washington, DC, bureau.

Since we’re coming up on year’s end, it’s worth a quick review of the television season so far. It has stunk. There. That’s about all you need to know.

Don’t take our word for it, look at the weekly Nielsen numbers that came out yesterday. The lone exception is CBS, which continues to hold up relatively well in the face of all the challenges facing the TV market.

Here’s the Hollywood Reporter’s roundup:

Following its 12th consecutive weekly victory in total viewers, CBS became the first major broadcast network this season to move into positive year-to-year territory since premiere week.

Through Dec. 21, CBS has averaged 12 million viewers, up 1% from last year. NBC, ABC and Fox are each down 9%.

All of the Big Four are still in the red in the adults 18-49 demo, with CBS closest to breaking even at minus 3%.

As we all know by now, everything will probably change on January 13, when American Idol returns to Fox. Perhaps that — or the introduction of midseason shows — will give ratings a broad boost. If not, it’s going to be a long cold winter in the TV business.

Keep an eye on:

• As growth in online advertising slows, some Internet companies are easing the restrictions they impose on the categories and formats of advertising they will accept (WSJ.com)
• FedEx is pulling out of the Super Bowl due to budget worries amid the downturn (NY Post)
• China’s broadcasting watchdog has ordered a crackdown on low-brow confessional talk shows as part of a campaign against base entertainment (Reuters)

(Photo: Reuters)

The divisions are deepening out in Hollywood – and we’re not talking about the standoff between the Screen Actors Guild and major studios. No, we’re talking about Tom Hanks vs Mel Gibson, George Clooney vs Martin Sheen. Actor against actor, start against star. Good stuff.

To be fair, it’s not as though they are hurling rocks at one another. But there are divisions within the ranks of the SAG over whether to authorize a strike. In a petition yesterday, 130 actors — many A-listers — sought to have the union halt the strike authorization vote. The way they see it, the economy is so bad that a strike right now would be too devastating to the industry.

Perhaps they have a point. Hollywood, after all, is still recovering from the writers’ strike. TV ratings are way down, advertising dollars are drying up and consumers are keep a close watch on their budgets. It could be a terrible time for a strike (And we should note that a strike authorization vote is different than an actual strike).

On the other hand, if the SAG fails to pass the strike authorization vote then it will find itself in a very tough negotiating position. More than likely, it would have to accept the studios’ latest offer and hope that it can achieve better terms in the next round of negotiations.

What to do? Fortunately, we don’t have to decide. But let’s hear from you, just for fun.

Would you authorize or oppose a strike vote?

Keep an eye on:

• ESPN.com is counting on less clutter and more advertising options to bolster revenue at a time when its sister cable channels are battling rare weakness (NY Times)
• Employees of CBS Entertainment and CBS Paramount Network TV were let go Monday at the company’s Studio City and Television City lots in California (Adweek.com)
• Apple witnessed flat year-over-year overall sales in the United States for its Macs in November, while sales of rival Microsoft Windows PCs were up 7 percent (Reuters)

(Photo: Reuters)

In case you hadn’t noticed, this isn’t exactly a great environment for wheeling and dealing. That only compounds the challenge CBS CEO Les Moonves faces in trying to reshape his radio division — it’s not like there was a thriving market for radio station M&A before this whole credit crisis.

But give CBS credit. Seems like they came up with an innovative way to swap a handful of their smaller stations for a couple of  larger stations in markets that CBS wants to be in. They struck the deal with Clear Channel, which needed to get something done to satisfy regulators looking at their buyout by Thomas H. Lee Partners and Bain Capital.  

Here’s what the deal boils down to, courtesy of the press release:

In the trade, Clear Channel will obtain CBS RADIO’s KBKS-FM (Seattle), WQSR-FM (Baltimore), KXJM-FM and KLTH-FM (Portland, Ore.), and KQJK-FM (Sacramento, Calif.). In return, CBS RADIO will acquire two stations in Houston, the country’s 6th-largest radio market, KLOL-FM (Mega 101.1) and KHMX-FM (Mix 96.5).

We’ve heard talk that the current economy and credit situation would prompt companies to take a look at different, innovative sorts of deals. This one was done on a small scale, but perhaps a signal of things to come for the media business?

(Reuters photo of Les Moonves)

U.S. shoppers are still spending in a big way — they are just not buying cars, plane tickets, clothing, etc. But they are buying video games.

While most media segments try to maintain stability during today’s economic turmoil, the video game industry keeps on growing, with U.S. video game hardware and software sales up 10 percent last month according to NPD, fueled by record sales of Nintendo’s Wii console and DS hand-held system.

Nintendo’s Wii console sold over 2 million units in November, up from over 800,000 in the previous month.

A separate reports suggests that hard times may favor video games, adults will “turn to
staying in with video games rather than going out on the spend.”

(Reuters)

Keep an eye on:

• DreamWorks Animation launches characters like Shrek and the penguins from “Madagascar” into new lines of business, hoping to grow consistently even during a recession that already is slowing DVD sales. (Los Angeles Times)
• Time Warner names CEO Jeff Bewkes as chairman; Richard Parsons to step down on Dec. 31 (PaidContent)
• CBS Interactive reorganization details (PaidContent)
• Howard Stern contemplates re-signing with Sirius XM (Orbitcast)

(Photo: Reuters)

Media mogul Sumner Redstone appears to be sticking with his decision to not sell more shares in Viacom and CBS. Here’s the Financial Times:

Media mogul Sumner Redstone has reached agreement with his daughter, Shari, to put some of National Amusement’s 1,500 cinemas on the block rather than the entire division, as part of debt-restructuring discussions to avoid selling more shares of Viacom and CBS, according to people familiar with the matter.

If lenders agree, the plan would clear the way to sell a part of the US group and 19 theatres in the UK. A prospectus is not expected to be released until early January, one person familiar with the discussions said.

It was not immediately clear how much the proposed partial sale would fetch. The entire chain is valued at $500m to $700m by analysts and at about $1billion by Mr Redstone.

This comes after National Amusements sold its stake in video game company Midway for $100,000 and a big tax writeoff.

As you’ve read here before, Redstone is trying to restructure about $1.6 billion in debt. Half of that, as the FT notes, is due December 19 (only 15 more shopping days until debt day!). Redstone is in this position after he blew a debt covenant that was tied to Viacom’s and CBS’s market value. Both stocks took a dive, which forced Redstone into selling $233 million in non-voting shares of both companies, the FT reported.

Meanwhile, we asked Regal Entertainment CEO Mike Campbell if he would be interested in buying National Amusements’ theater chain If Redstone does put it on the block. Cambell said their domestic theaters would be a good fit — but noted that the credit crunch could hinder financing.

Keep an eye on:

Our Reuters Media Summit: We’re heading into the last day, but have a look at our interviews with Sirius XM CEO Mel Karmazin, Microsoft videogame executive Shane Kim, Professional Golfers Association Commissioner Tim Finchem and more. We’ve been running Summit blog entries here on Mediafile, but they’re all in one convenient place at the Summit Notebook site too.

You can’t have too much Michael Wolff. Here’s Wolff in a video interview with me.,

Former New York Governor Eliot Spitzer, who resigned earlier this year after patronizing a prostitute, is entering the journalism world with a column at Slate.com, the online magazine owned by The Washington Post Co. Reported by Reuters, but broken by the New York Observer’s John Koblin.

(Photo: Reuters)

Are people going to watch more TV because they’ve no money to go out? According to media buying and planning agency MPG — a subsidiary of Havas, the world’s sixth-largest ad firm — the answer is no, unless the TV networks come up with better shows.

“That’s inventory for us, that’s our supply,” MPG Chief Operating Officer Steve Lanzano told the Reuters Media Summit in New York. “The thing is, there are no hit shows out there on the big networks,” he added. “And if there’s no supply in the marketplace, that just makes it harder and harder for us.”

With the economy seizing up and people seeking more stay-at-home entertainment, this could be the perfect time for the big networks to hook people on to some new shows and boost ratings. That would bring in advertising revenue at a time when many advertisers are scaling back spending.

But the networks don’t seem quite up for it yet, Lanzano said. ”"They need hits and nobody has them right now.”

Fox, Lanzano said, was a bit edgier than the others. “Clearly, they have these must-see shows that they’ve been able to promote.”

Meanwhile, CBS — which probably has the largest number of total viewers — could do with some younger programming, Lanzano said. “Have they been able to lower their age a bit?”

As for NBC, “they’ve been fortunate because of Sarah Palin.” Shows like 30 Rock and of course, SNL, have gotten a boost because of Tina Fey’s turn as the former Republican vice-presidential candidate, but with Jay Leno going off the air soon, they might be stuck looking around for another winner.

ABC has done well with younger viewers, but still needs a big audience winner to bring home the big bucks, Lanzano said.

Only the cable channels have met with some success in churning out hit shows, he said. “To some degree you see the breakout hits are on the HBOs and the Showtimes because their hands are not tied.” Cable channels also give their shows more time to grow, unlike the networks, which try too many different things in hopes of a quick hit.