Sumner Redstone: World could end tomorrow!

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.”

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.

What’s new with the Redstone family?

sumner.jpgThe Redstone family knows drama. Late last week, Sumner Redstone’s family holding, National Amusements, announced that it was making a substantial stock sale in each of its key holdings, CBS and Viacom to comply with debt covenants. 

But the sale raised questions about whether some of the proceeds from the sales were actually earmarked to fund and expansion of National Amusements movie theater business, as reported by the Wall Street Journal.

Sumner Redstone’s daughter, Shari, who runs National Amusements, issued a statement to the Wall Street Journal denying that the stock sale had anything to do with expanding the theater business.

Advertising powerhouse considers advertising

google.jpgCould we soon see a flashy Google advertisement on TV? It’s possible, according to a Wall Street Journal article, which says that the search advertising powerhouse has quietly approached several ad agencies about efforts to promote some products.

The article names agencies Wieden + Kennedy and Taxi as two agencies that have had discussions with Google, which, recall, has relied far more on word of mouth advertsing than most companies its size.

But don’t hold your breath for a massive advertising campaign from Google involving TV, radio, billboards, etc etc. As the article points out:

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.

Cable TV ads didn’t crater in Q2 – Pali

It looks like cable networks advertising held up quite well, despite investors fears, says Pali Research’s Richard Greenfield.

“We are encouraged that all but two reported double-digit increases in advertising revenues; particularly in light of the weakening economic environment,” he writes on his blog, citing quarterly earnings reports. He expects growth to slow in the third quarter and a pick-up in the fourth.

His comments echo those of Gabelli & Co associate portfolio manager Larry Haverty, with whom we spoke right after Viacom reported a sharp fall-off in second quarter ad revenue at MTV Networks.

Google, Viacom privacy accord leaves unanswered questions

masks.jpgGoogle and Viacom reached a late night accord on safeguarding the anonymity of Google YouTube viewers. Google will no longer have to hand over the user names and IP addresses of its viewers.

But what of the scuffle around the viewership data of Google and YouTube’s own employees? CNET’s Greg Sandoval reported last week the negotiations stalled on Google’s unwillingness to turn over information on its own employees, citing unnamed sources.

In other words, how would Viacom’s $1 billion copyright infringement suit against Google turn out if the data showed YouTube co-founder Chad Hurley viewing and uploading “Colbert Report” videos?

Viacom bets “iCarly” is next tween queen

Miranda Cosgrove, the star of Nickelodeon’s “iCarlyDoes “iCarly” have that Hillary Duff-stuff? Is she serious like Miley Cyrus?

Viacom’s Nickelodeon and Sony Music are betting big that 15-year-old “iCarly” star Miranda Cosgrove will be the next “tween” media goldmine, stepping into the shoes of Duff (she of the “Lizzie McGuire” series, multiple films, and music releases) earlier in the decade, and current golden goose Miley Cyrus, aka “Hannah Montana.”

The challenge is significant if Nickelodeon can steal some tween thunder from Walt Disney, which is home to both the Lizzie McGuire and Hannah Montana franchises, and the future home to a show by hot boy band The Jonas Brothers .

Attention shoppers: Madison Ave. thanks you

walmart.jpgMadison Avenue should breathe a sigh of relief, thanks to the retail sector. Big U.S. retailers posted slightly better-than-expected sales last month, which may give them confidence to keep their advertising budgets intact.

Like everyone else, advertising executives have watched the economy, falter a development that could threatens to crimp marketing spending. By and large, admen say, spending had held steady, with some weakness in financial services and other areas.

But Madison Avenue is hardly in the clear — just look at the mounting troubles in the auto industry, which has banked on SUV sales, as evidenced by General Motors’ announcement earlier this week about plant closures and job cuts.