More cracks are appearing in the newspaper industry. Things have become so tough that the Associated Press has agreed to slash $9 million from its membership fees. With newspaper’s reeling from depressed advertising revenue, they are looking to save money wherever they can, and have been clamoring for a break from the AP.

PaidContent’s Staci Kramer talked to AP chief revenue officer Tom Brettigen about the cuts. Here’s what he said about how AP will make up for the drop in income.

“We have a lot to make up. We’ve been working on the revenue side; this undoubtedly is going to require some work on the cost side. For a company where the costs are primarily its people, it’s going to mean having to look at some positions.” AP already has a hiring freeze; now it’s looking at staff cuts. “It’s too early to be specific. It is a peculiar situation where we reduce the costs to the newspapers, which means we may be more than likely to make cost reductions. It will affect the news report as little as we can possibly make it.”

Keep an eye on:

• Major Hollywood studios said they would accept the intervention of a federal mediator to help break a nearly 4-month-old deadlock in contract talks with the Screen Actors Guild (Reuters)
• Ticketmaster Inc’s purchase of a big stake in a powerful artist-management company on Thursday signals more industry consolidation as it vies with Live Nation Inc for dominance in live entertainment (Reuters)
• Chinese Internet search leader Baidu posted a 91 percent rise in quarterly net profit, after a surge in Web usage tied to the Beijing Olympics, and said it expects continued strong revenue growth (Reuters)

(Photo: Reuters)

Step off — CBS and Viacom are not for sale!

That comes courtesy of Sumner Redstone, who should know since he holds a controlling stake in both of the media companies. Here’s what he told the Wall Street Journal in an interview:

Asked whether he would consider selling one of the companies, Mr. Redstone said: “Not a chance. I will not sell Viacom and I will not sell CBS. They’re two great companies.” He added: “We have no intention to sell any more stock and I’m decisive about that.”

Redstone’s interview with the Journal should help clear the air on much recent speculation about the future of Viacom and CBS — both suffering badly in the stock market. In the last month, shares of Viacom have dropped about 30 percent, while CBS shares have fallen a staggering 45 percent.

Stock slide aside, the chatter about a possible sale really began when Redstone had to sell a bunch of non-voting stock earlier this month to help pay off debt at his privately held National Amusements. Now he’s trying to rework some of the convenants related to that debt.

About talks with lenders he says: 

“I have every reason to have some confidence” that we will be able to reach a deal with the banks, Mr. Redstone said. “I have no guarantee though…of course, anything is possible: The world might end tomorrow.”

Ummm, let’s hope not.  

Keep an eye on:

• Ticketmaster agreed to acquire what is widely regarded as the music world’s most powerful artist-management company and install the management company’s boss at the helm of the combined (WSJ.com)
• Rupert Murdoch has raised objections with Michael Wolff and his publisher about portions of a new book, “The Man Who Owns the News: Inside the Secret World of Rupert Murdoch” (NYTimes.com)
• A rift is developing between Martha Stewart and Wenda Harris Millard, the new co-chief executive of her company (NY Post)

(Photo: Reuters)

Will Ticketmaster's new duet fend off a hot rival and help it rise above an economic climate that makes pricey concert tickets seem like an extravagance?

The ticketing giant has announced a complex deal to acquire top artist-management agency Front Line, home to artists including Christina Aguilera, the Eagles and Neil Diamond. Front Line honcho Irving Azoff will run the combined company -- raising questions about how Ms. Aguilera's manager will negotiate her ticketing fees with himself.

Ticketmaster already owns a minority stake in Front Line, and will pay $123 million to Warner Music Group for an additional 30 percent stake, as the Wall Street Journal was the first to report.

As the music industry has crumbled, the concert business has been one of the sole bright spots in recent years. But with a global recession getting top billing and upstart rival Live Nation scooping up exclusive deals with artists like Madonna, it could be a tough act for Ticketmaster to follow.

Are you less likely to go to concerts now that the economy is looking grim? Leave you answer in the comments section.

DEALS OF THE DAY

** New Zealand's Port of Tauranga is expecting rival Ports of Auckland to bid for its container business, it said, as a declining shipping business has port operators looking at consolidation.

** The Australian government has approved a takeover of St George Bank , the country's fifth-biggest lender, by larger rival Westpac Banking Corp , Treasurer Wayne Swan said.

** Norway's oil group Det norske oljeselskap ASA said it was selling its 10 percent stake in Yme field licences to Polish peer Lotos .

** Volkswagen Chairman Ferdinand Piech expects the takeover by Porsche to move ahead smoothly and played down in a newspaper interview any differences in his extended family that owns Porsche.

** The European Commission will approve an Italian investor group's takeover plan for struggling airline Alitalia but not a 300 million euro ($386 million) state loan, la Repubblica newspaper said.

** Russia's flag carrier Aeroflot has asked the transport ministry to support its takeover of airline S7, which may bid for Austrian Airlines , Interfax reported, citing Aeroflot.

** Interactive entertainment company Bright Things Plc said it signed a relationship agreement for its social network site SocialGo with widget maker WidgetLaboratory LLC, sending shares up nearly 67 percent.

** Greek lenders Piraeus Bank and Proton Bank said their boards had agreed to cancel a share swap agreement, after Proton said it would seek to take part in a government bank rescue plan.

** U.S.-Swedish bourse operator Nasdaq OMX has won final approval to buy Nordic power exchange Nord Pool's international business, Nord Pool said.

Live Nation said on Tuesday it has signed a global ‘360-degree’ deal with Canadian rock band Nickelback covering the band’s touring, recording and merchandising.

The deal was said to be in the $50 million to $70 million range over the course of the three-album/three-tour deal, according to a source.

The deal could cause some blushes at Warner Music Group. Back in December 2006 Warner paid around $73.5 million for a 73.5 percent stake in Nickelback’s label Road Runner Records — no doubt with hopes to sell many more Nickelback albums for years to come.

But Nickelback, which has sold more 26 million albums to date, still has two more albums to deliver for Road Runner and a greatest hits package,  so there’s every chance that the band’s best album years will be behind it. So this could instead end up being an expensive deal for Live Nation.

Live Nation never confirms how much it agrees to pay for its comprehensive partnerships with major artists. A deal with pop veteran Madonna, another soon-to-be former Warner artist, was reported to be around $120 million spread over ten years. It also has agreements with Jay-Z and more recently Shakira.

Live Nation management’s bet is that its comprehensive 360-degree deals will allow it to make profits in other areas beyond the recording and thereby spread its risk a little wider than a traditional recording and publishing company. The entire music industry is watching closely to see if this gamble works.

 Keep an eye on:

• NFL football team Pittsburgh Steelers is secretly being shopped to potential buyers  (WSJ)
• Washington Post appoints former Wall Street Journal editor Marcus Brauchli as its new editor (New York Times)
• Conde Nast Publications is to shut down Golf for Women (WSJ)

(Photo: Reuters)

Things have gotten tense over at Live Nation. An internal feud at the concert promoter could end with Chairman Michael Cohl resigning.

The Wall Street Journal says Cohl is currently negotiating his resignation, having fought with Chief Executive Michael Rapino for weeks over so-called “360 deals.” In such deals, Live Nation gives superstars hefty upfront payments in exchange for financial rights in nearly all their business. Think Madonna and U2 and Jay-Z.

It seems, according to the reports, fairly simple: Cohl wants to sign more of these deals and Rapino wants the pace of these signings to slow; the board tells them to work out their differences; Cohl heads out the door.

Still, there is the fundamental question of whether these “360 deals” are good business or not. As the New York Times points out, the “deals were expensive for Live Nation - a reported $120 million for Madonna and $150 million for Jay-Z - spurring many industry executives and analysts to debate whether the company was paying too much.”

While Cohl could be gone as soon as next week, it will take some time to sort through which executive had it right.

Keep an eye on: 

• Online social network site Facebook.com has launched a version targeting mainland Chinese Web surfers to compete with local and overseas rivals in the world’s largest Internet market (Reuters)
• Viacom Inc’s Paramount Pictures must show it can thrive in the film industry without some of Hollywood’s top talent, if DreamWorks’ Steven Spielberg and others bolt (WSJ.com) 
• After taking on the big and small screens, comic book heroes like Spiderman and Superman may soon be appearing on an even smaller screen — your mobile phone (Reuters)
• Microsoft isn’t about to kickstart a bunch of internet acquisitions after its failed move on Yahoo (FT.com)
• After the departure of former chief executive Victor Ganzi, speculation about who will ultimately succeed him is swirling at Hearst (NY Post)

(Photo: Reuters)

Susan Lyne is leaving Martha Stewart Living Omnimedia, but the shakeup at the lifestyle brand probably isn’t over yet. 

Lyne steered the company through some rough waters as chief executive (let’s not forget she ran things as Martha Stewart trudged off to prison) and now she’ll be replaced by Wenda Harris Millard and Robin Marino. That’s right, Millard and Marino. Co-CEO’s. Two at the top. Power sharing.

How often does that work? ”They are fairly rare and they typically don’t work out to be that great,” said Noble Financial research director Michael Kupinski.

Wall Street’s reaction? Shares fell by about 6 percent yesterday.

Both Millard and Marino joined the company under Lyne’s watch, and have bigtime experience in advertising and retail merchandising. Marino was previously president and chief operating officer at luxury designer Kate Spade, while Millard served as a high-ranking ad executive at Yahoo.

On paper, it would seem a good combination for a media company with footholds in both advertising and retailing. Besides, Millard points out that she and Marino already coordinate closely. “We saw an opportunity for even more collaboration,” she said in an interview with Reuters.

Paul Bernard, who runs executive-coaching and management-consulting firm Paul Bernard & Associates, noted in the Wall Street Journal that the track record of power-sharing deals in the corporate world is “dismal.”

“Inevitably what will happen is someone will be pushed out,” he said.

As one media insider told us yesterday, these sharing things are often an attempt keep everyone happy and onboard — and just as often have the opposite effect.

Keep an eye on:

• A fierce battle has broken out among top executives at Live Nation over the concert-promotion company’s ambitious strategy to reshape the struggling music industry by making wide-ranging but expensive deals with artists such as Madonna and Jay-Z (WSJ.com)
• The Screen Actors Guild on Wednesday continued its campaign against a rival actors’ union’s tentative contract with Hollywood producers (Hollywood Reporter)
• Apple will make less money off each new iPhone, but Wall Street expects only a minor impact on the company’s bottom line as the cheaper price spurs mass-market buying (Reuters)

(Photo of Susan Lyne from Reuters)

The Live Nation touring and merchandising agreement with supergroup U2 could be worth $100 million estimates one Wall Street analyst.

Live Nation, a tour promoter that is evolving rapidly into an all-round music company, has prepped a 12-year deal with supergroup U2 which includes its merchandising, digital, image licensing in addition to its touring but hasn’t revealed how much money will change hands (not to us anyway).

However David Joyce, media analyst at Miller Tabak, ventures that the deal will be in the $100 million range. Joyce, who likes Live Nation’s prospects, has based his guesstimate on the $120 million figure that Live Nation is widely believed to have agreed with Madonna in cash and stock last year.

The Madonna deal was a much more far-reaching partnership that included three albums over 10 years. While the U2 pact doesn’t include recording, it’s a longer term deal with a bigger live act says Joyce.

What does $100 million get you these days? Well for 12 years Live Nation can print as many ‘U2 waz ‘ere 2018 World Tour’ t-shirts as they can sell, and they might be able to convince a few more big pop names to come on board the touring/merchandise all-you-can-eat fiesta now that they have Madonna and U2 on their calling card. But will they make their money back? That’s the big question.

Joyce cautions that the record labels want a piece of the action as well:

“Will the music label companies, facing continued secular decline in their traditional album-selling business, get into the concert promotion, artist merchandising, and fan website business with their currently signed artists, thereby fending off Live Nation’s expansion attempts?”

That appears likely, especially as Live Nation works quickly to formalize deeper relationships with the biggest names in pop and may be willing to pay more than the labels at present. It’s shaping up to be an arms race that could end up getting very expensive.

(Photo: Reuters)