Multi-vehicle pile-up on Madison Avenue

Dimming prospects for an auto bailout spell trouble for the folks on Madison Avenue. Already, sources say that General Motors is taking a hard look at all of its advertising contracts – held by Interpublic and Publicis — to see if they should be renewed as they come up.

That’s a pretty big deal, given that GM forked out about $1 billion in ad spending for the first six months of the year. And overall, domestic automakers spent about $2.8 billion on advertising in the first six months of 2008, down 17 percent, but was still one of the 10 largest U.S. advertising categories.

If you want to know how dependent the advertising industry is on the auto industry, take a look at Advertising Age, which has a in-depth feature on it. The upshot:

If one or more of Detroit’s carmakers goes away, gets smaller or goes into bankruptcy, “all media companies need to be concerned and there will be an impact on agencies, which derive a substantial amount of their income from [Detroit],” warned Bob Liodice, president-CEO of the Association of National Advertisers. “These are substantial, heavyweight players. You’ve got some of the largest marketing spending companies in America.”

Keep an eye on:

    Ziff Davis Media announced Wednesday that it was ending print publication of its 27-year-old flagship, PC Magazine, and would take the title online only (NY Times) Ben Silverman, the co-chairman of NBC Entertainment and NBC Universal Television Studio, has joined the board of the Peacock Equity Fund (The Hollywood Reporter) Google is shutting down Lively, the virtual world that could be embedded into other Websites (TechCrunch) Publicis hopes it can beat the advertising market in terms of revenue growth and margin in 2009 (Reuters)

(Photo: Reuters)

NBC, Fox join forces in Philly

Want proof that Philadelphia is still the City of Brotherly Love? NBC and Fox are joining forces in Philadephia to gather and distribute video coverage to other local media.

The service will be managed by Fox Television Stations and NBC Local Media, which hope to roll the program out to other markets. For now, local media in Philadelphia will have access to the news service’s video footage — presumably at a cost.

Here’s how the companies described it in a release:

NBC Local Media and the Fox Television Stations will provide newsgathering and transmission resources to the local news service: including a helicopter, personnel and equipment, while also maintaining their own separate capabilities. The news service management will independently identify the stories to be covered each day and make arrangements to gather and transmit the video back to each of the stations. The stations will each decide how the material is to be used in their own newscasts, using their own writing and editorial voice. All employees involved in the local news service will remain part of their respective companies.

Sell NBC Universal? You gotta be kidding!

NBC is once again stuck in last place in prime-time ratings; its much-hyped Olympic coverage is over, so are the elections; advertising across media is under pressure; and dishing out $67 to hang at the Universal Studios theme park probably isn’t as appealing when you could soon lose your job, house, car, etc.

Still, NBC Universal would seem more secure within parent General Electric than it has been for some time. Indeed, most of the talk about a possible sale has faded away. Here’s what analysts told us for a recent article.

“I’ve struggled with it forever, in terms of why GE has it, especially now in a situation like this where ad revenues are down,” says Mike Gandrud, senior analyst at Optique Capital Management. 
“I’d love to see them do something with it … Do I expect it to happen? No.”

It’s budget cutting time


In the media world, it looks like it’s time for a trim. Whether that’s jobs, travel expenses, or anything else, budgets are coming down… With the economy in the sick ward, what did we expect?

Yahoo is among those expected to outline ways to cut expenses, including further job cuts, a source tells Reuters. The announcement will likely come when it reports quarterly results on Tuesday:

The Internet company will discuss the scale and timing of the future layoffs, but specific details on the exact jobs to be eliminated will not be disclosed, the source said.

National Amusements: Time to talk to the bank

redstone2.jpgAnother day, another twist in the latest Sumner Redstone drama. This time, the media mogul’s company, National Amusements, announced that it’s having sit-downs with its lenders over some debt covenants? What are the covenants? And how much debt to they cover? Nobody outside of the company seems quite sure at this point.

What we do know, is that all of this has been caused by the sharp drop in CBS and Viacom shares — since they are worth far less as assets than they were a a month ago, we assume that some debt-to-assets ratio has become a problem.

What does this mean for Viacom and CBS? Not much, in the short term. Stock of both were steady to slightly higher in early trade. But it does underscore what’s at stake for Redstone, and probably turns up the heat on the companies to perform better and get the stock price moving higher.

Fox Biz throws CNBC’s Cramer under bus

If you didn’t know better, you’d think CNBC was running for office and Fox Business was the down-in-the-polls attack dog. 

That’s the feeling you get watching Fox Business’s latest TV ad, which throws CNBC star and stock picker Jim Cramer under the bus and urges viewers to, you know, kick CNBC to the curb. YouTube Preview Image

Truth is, Fox sort of IS behind in the “polls” — its rating are still a fraction of CNBC’s, even though the global financial crisis has been on the front page for weeks. The New York Times, citing Neilsen data, says viewership exploded to 81,000, on average one day earlier this month. Fox Business had never previously drawn an audience large enough to be “statistically reliable” by Nielsen.

Olympics help boost NBC Universal’s profit (Update)


General Electric posted its quarterly earnings this morning — and that means it’s time to think about NBC Universal.

Aided by the Beijing Olympics, GE Chairman and CEO Jeff Immelt said that NBC Universal’s profit rose 10 percent as the media business “continued to see signs of strength.”

“Cable and films had a solid quarter, and the success of the Beijing Olympics showed the value of the network model,” he said in a statement.

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.

NBC’s super ad sales


NBC’s sports department is having quite a year. We all know about the Olympics, but now it appears they are raking in money for the 2009 Super Bowl.

The broadcaster said yesterday that it has sold 85 percent of its commercial time for the game — and a dozen spots have gone for $3 million.

It’s worth remembering that there was some snickering when word spread that NBC wanted to sell time for $3 million. I mean, come on! $3 million? In this economy?

So what’s the outlook for media?


For the media business, the next couple of days will likely set the tone for the remainder of the year. Why? Because just about everyone who is anyone will be speaking at a Merrill Lynch conference out in California.

We’re talking about CBS, News Corp, Liberty Media, Time Warner, NBC Universal, etc. You get the picture.

We suspect the catchphrase of the conference will be something like “cautious.” It’s highly unlikely that executives will tell us the media industry is awful, terrible, or horrible.