According to these sources, AllThingsD’s contract with News
Corp expires at the end of the year. One of the sources said
Swisher and Mossberg have to deliver a business plan by next
week to Robert Thomson, the former Wall Street Journal managing
editor who will run News Corp’s publishing unit as CEO after it
is spun off.

The fact that AllThingsD’s contract is up this year is well
known, and the sources said the website is receiving a lot of
“inbound interest” from potential buyers parallel to its talks
with News Corp.

Among the names mentioned by one of the sources as having
reached out to AllThingsD was Conde Nast, where Swisher recently
agreed to work as a contributing writer for Vanity Fair, and
Hearst.

The sources also speculated that former Yahoo and
News Corp executive Ross Levinsohn might be looking at the
website given his new role as Chief Executive of Guggenheim
Digital Media, which according to the press release announcing
his hiring, comes complete with “significant capital to acquire
and invest in new media companies.” The private equity shop
already owns Billboard, Hollywood Reporter, and Adweek.

AllThingsD has reported that AOL expressed interest in
acquiring it in the past, but said those talks “were preliminary
at best.”

Calls to AllThingsD were referred to a News Corp
representative who declined comment. A Conde Nast representative
declined comment. Calls to Hearst were not immediately returned.
Calls and emails to Ross Levinsohn were not returned.

While AllThingsD is recognized as the brainchild of Swisher
and Mossberg, News Corp actually owns the website and its name.
However, according to provisions in their contract, Swisher and
Mossberg have approval authority over any sale, one of the
sources said.

Technically, News Corp could retain the AllThingsD’s name in
the event of a sale, forcing Swisher and Mossberg to start a new
venture under a different brand name. But historically in these
types of situations a deal is usually worked out to allow the
founders to take the company name with them as part of a
settlement.

The sources described the website and conference business
combined as profitable. AllThingsD was first launched as a
conference, “D: All Things Digital” in 2003, and a website
followed.

It has grown into a technology industry must-read, and
features the conference division known for snagging A-list
corporate executives for interview sessions. Apple’s
Steve Jobs, Facebook founder Mark Zuckerberg, Microsoft
founder Bill Gates, and virtually every other major
technology executive has spoken at the D Conference.

Earlier this week, AllThingsD’s well-regarded media writer,
Peter Kafka, led a media-centric conference for the website that
included panels with Intel’s Erik Huggers, Live Nation
CEO Michael Rapino, and Netflix’s programming
boss Ted Sarandos, among others.

The website has two more conferences on the agenda for this
year: a mobile one that was postponed until April due to
Hurricane Sandy, and the main D Conference in May.

The sources described the relationship between News Corp and
AllThingsD as amicable but stressed.

“Like all partnerships, there could be more cooperation
between the two,” said one of the sources. “There is tension
between AllThingsD and the Wall Street Journal, for example.”

As a result of management changes, over the last few years
the website has reported to numerous Wall Street Journal and
News Corp executives, among them Gordon Crovitz, Les Hinton, and
now Lex Fenwick and Robert Thomson.

Should the two sides reach a deal on a new contract,
AllThingsD would be included as part of the publishing unit in
the News Corp split, one of the sources said.

(Reuters) – AllThingsD, the widely read technology blog run by Kara Swisher and Walt Mossberg, has begun discussions with owner News Corp about extending or ending their partnership, sources familiar with the situation told Reuters.

According to these sources, AllThingsD’s contract with News Corp expires at the end of the year. One of the sources said Swisher and Mossberg have to deliver a business plan by next week to Robert Thomson, the former Wall Street Journal managing editor who will helm News Corp’s publishing unit as CEO after it is spun off.

The fact that AllThingsD’s contract is up this year is well known, and sources said the website is receiving a lot of “inbound interest” from potential buyers parallel to its talks with News Corp.

Among the names mentioned as having reached out to AllThingsD were Conde Nast, where Swisher recently signed to work as a contributing writer for Vanity Fair, and Hearst.

Sources also speculated that former Yahoo and News Corp executive Ross Levinsohn might be looking at the website given his new role as Chief Executive of Guggenheim Digital Media, which comes complete with “significant capital to acquire and invest in new media companies.” The private equity shop already owns Billboard, Hollywood Reporter, and Adweek.

AllThingsD has reported that AOL expressed interest in acquiring it in the past, but said those talks “were preliminary at best.”

Calls to AllThingsD were referred to a News Corp representative who declined comment. A Conde Nast representative declined comment. Calls to Hearst were not immediately returned. Calls and emails to Ross Levinsohn were not returned.

While AllThingsD is recognized as the brainchild of Swisher and Mossberg, News Corp actually owns the website and its name. However, according to provisions in their contract, Swisher and Mossberg have approval authority over any sale, the first source said.

Technically, News Corp could retain the AllThingsD name in the event of a sale, forcing Swisher and Mossberg to start a new venture under a different brand name. But historically in these types of situations a deal is usually worked out to allow the founders to take the company name with them as part of a settlement.

Sources described the website as profitable. It has grown into a technology industry must-read, and features a popular conference division known for snagging A-list corporate executives for intimate interview sessions. Apple’s Steve Jobs, Facebook founder Mark Zuckerberg, Microsoft founder Bill Gates, and virtually every other major technology executive has spoken at the D Conference, as it is known.

Earlier this week, AllThingsD’s well-regarded media writer, Peter Kafka, led a media-centric conference for the website that included panels with Intel’s Eric Huggers, Live Nation CEO Michael Rapino, and Netflix’s programming boss Ted Sarandos, among others.

The website has two more conferences on the docket for this year: a mobile one that was postponed until April due to Hurricane Sandy, and the main D Conference in May.

Sources described the relationship between News Corp and AllThingsD as amicable but stressed.

“Like all partnership, there could be more cooperation between the two,” said one source. “There is tension between AllThingsD and the Wall Street Journal, for example.”

As a result of management changes, over the last few years the website has reported to numerous News Corp executives, among them Gordon Crovitz, Les Hinton, and now Lex Fenwick and Robert Thomson.

Should the two sides reach a deal on a new contract, AllThingsD would be included as part of the publishing unit in the News Corp split.

(Additional reporting by Jennifer Saba; Editing by David Gregorio)

(Reuters) – Time Warner Inc is in talks to sell the majority of its magazine division to Meredith Corp, according to a source familiar with the situation.

The source, who asked not to be named, said the talks are in the early stages and were “very fluid.” The valuation being ascribed to Time Inc, the nation’s largest magazine publisher with titles such as Time, Sports Illustrated and People, ranges from $2 billion to $3.5 billion.

A report in Fortune magazine, one of Time Inc’s titles, said a meeting with a potential buyer was scheduled for today.

A Time Inc representative did not immediately return a request for comment. A representative for Meredith declined comment.

Under one scenario being discussed, Meredith would acquire all the Time Inc titles outside of news and sports. These would include In Style, Real Simple, and People, all of which fit with Meredith’s strategic focus on magazines oriented toward women.

The source said Time Warner sees an upside in retaining Time, Sports Illustrated and Fortune, iconic brands among the leaders in their categories. The conglomerate thinks it also could leverage those titles into ancillary businesses such as conferences.

In another potential scenario, both Meredith and Time Inc would contribute magazines to a newly formed independent company in which each would hold a stake, said the source, who added that a private equity firm could also be brought in to help capitalize that type of venture.

Magazines and newspapers are dealing with declining advertising revenue as more readers and advertisers migrate to digital formats.

In 2012, revenue at Time Inc dropped 7 percent to $3.4 billion on declines in advertising and subscription revenue. Operating income fell 25 percent for the same period.

Time Inc announced in January it planned to cut about 500 jobs, or about 6 percent of its workforce.

(Additional reporting By Jennifer Saba in New York; Editing by Gerald E. McCormick and David Gregorio)

(Reuters) – Comcast Corp clinched full control of NBC Universal for $16.7 billion on Tuesday, the latest in a series of deals that have taken the cable operator from humble roots in Tupelo, Mississippi, to Manhattan’s iconic Rockerfeller Center.

The nation’s largest cable operator unveiled plans on Tuesday to buy out General Electric Co’s remaining 49 percent stake in the NBC Universal joint venture. That gives it full control of one of the industry’s largest and most profitable stable of cable networks, as well as the NBC broadcast network with its recognizable peacock logo.

Combining properties such as USA Network, Universal Studios and more than 22 million cable subscribers, the deal completes a 50-year transformation for Comcast, which was founded by Chief Executive Officer Brian Roberts’ father, Ralph, in 1963.

Comcast bought 51 percent of NBC Universal in 2011 after winning antitrust approval from the Justice Department. Tuesday’s deal comes at least two years sooner than planned and creates a $39 billion business owed primarily to the success of marrying cable distribution with cable programming. The rational behind the deal differentiates Comcast from rivals such as Time Warner Cable Inc, which separated content from distribution.

“The reality is content has gotten stronger and stronger and safer and safer, so Comcast should be trading at a premium to the cable operators. They are an integrated media and entertainment company. They are not just a cable operator,” said John Tinker, an analyst at Maxim Group.

In addition to the main deal, which pushed up Comcast shares about 7 percent in after hours trading, Comcast will also gain full control of the floors NBC uses at 30 Rockefeller Plaza in New York City and CNBC’s headquarters in Englewood Cliffs, New Jersey, for about $1.4 billion.

Comcast said it would fund the deal with $11.4 billion of cash on hand, $4 billion in senior unsecured notes to be issued to GE, $2 billion in credit facility borrowings and the issuance of $725 million in subsidiary preferred stock to GE.

“Given that media stocks have gone up quite a bit, it’s a very attractive price, a fair price because we had a formula buyout,” Roberts, who is also chairman of the company, said in an interview with Reuters.

Separately, Comcast said it would increase its dividend by 20 percent and it would buy back $2 billion in stock this year. GE also said it would accelerate its own share buy-back program to $10 billion this year.

“People may have their own opinions on whether it’s good or bad strategically, but it doesn’t leave any unanswered questions financially. For a transaction of this nature and this size, it’s a relatively low-risk structure,” Brean Capital analyst Todd Mitchell said.

Since reaching the deal to sell its majority stake in NBC Universal, GE officials have made clear they eventually planned to exit the entertainment business entirely. So the moves announced on Tuesday culminate a long-planned exit from the entertainment business.

Comcast shares rose to $41.75 after the market close from $38.97 in regular trading.

LONG-HELD AMBITIONS

Comcast turned its attention to NBC after a failed $54 billion hostile takeover attempt of Walt Disney Co in 2004 that ultimately led to the resignation of that company’s CEO, Michael Eisner, after more than 20 years on the job.

While Comcast held the title of the nation’s leading cable operator by a wide margin, its status as a content player was always second tier, with middling networks such as E!, G4 and Golf forming the basis of its channel portfolio.

A source familiar with the situation said talks accelerated in July 2012 when NBC Universal sold its stake in A&E Television Networks for $3 billion. Comcast and GE were debating how to use the proceeds, with Comcast wanting to keep the cash in the company while GE wanted a dividend.

When it first bought NBC Universal, Comcast tread lightly, in part to smooth the way for regulatory approval. Among the concessions it offered to help seal the original deal was to adopt a hands-off policy towards the news division to ensure its independence, ensure diversity by agreeing to carry networks aimed at minority audiences and remove itself from management decisions regarding online video site Hulu. Comcast owns a passive stake in Hulu, with News Corp and Disney controlling the website’s management.

Comcast also agreed to ‘net neutrality’ provisions to ensure traffic to competitor websites was not interfered with and to make NBC’s programming available to other cable and satellite TV distributors on equal terms.

Because the Justice Department looked at the 2011 transaction, this one would not need to be investigated, said Richard Brosnick, an antitrust expert with law firm Butzel Long.

“The only way that the government would look further at this is if Comcast violated its consent decree,” said Brosnick.

A source close to Comcast said the company did not anticipate it would be required to file for antitrust approval with either the Justice Department or the Federal Communications Commission.

Comcast has slowly but steadily replaced NBC’s former regime with its own people since closing the deal. Steve Burke, the longtime top lieutenant to Roberts at Comcast, runs NBC Universal. Former CEO Jeff Zucker is gone. So too is former NBC Entertainment chief Jeff Gaspin and longtime sports producer Dick Ebersol, among others.

In February, Steve Capus announced he was leaving as head of NBC News. That decision, according to sources, was motivated in part by Comcast’s installing one its executives, Patricia Fili-Krushel, into the newly created position of chairman of NBC Universal News Group and making Capus, along with CNBC president Mark Hoffman and MSNBC president Phil Griffin, report to her.

Indeed, the only executives that still remain from the old regime are the leaders of cable networks and Universal Studios head Ron Meyer, who ranks as the longest-serving movie studio chief in Hollywood. On the cable side, in addition to Hoffman and Griffin, Bonnie Hammer now runs all of NBC’s entertainment-oriented cable networks and Lauren Zalaznick leads its digital operations. Bob Greenblatt, the former head of Showtime, now runs the NBC broadcast network and Mark Lazarus leads the sports division.

In addition to the GE deal, Comcast reported a 6 percent rise in fourth-quarter earnings on Tuesday. In its cable business, it lost a better-than-expected 7,000 net video customers. For the year, NBC Universal’s revenue rose 5 percent to $6.01 billion.

Morgan Stanley served as Comcast’s financial adviser and Davis Polk & Wardell was its legal adviser. J.P. Morgan was financial adviser to GE and Weil, Gotshal & Manges was the legal adviser.

(Reporting by Scott Malone in Boston, Jennifer Saba in New York, Diane Bartz in Washington and A. Ananthalakshmi in Bangalore; Writing by Ben Berkowitz.; Editing by Edward Tobin, Dan Grebler and Andre Grenon)

The nation’s largest cable operator unveiled plans on
Tuesday to buy out General Electric Co’s remaining 49
percent stake in the NBC Universal joint venture. That gives it
full control of one of the industry’s largest and most
profitable stable of cable networks, as well as the NBC
broadcast network with its recognizable peacock logo.

Combining properties such as USA Network, Universal Studios
and more than 22 million cable subscribers, the deal completes a
50-year transformation for Comcast, which was founded by Chief
Executive Officer Brian Roberts’ father, Ralph, in 1963.

Comcast bought 51 percent of NBC Universal in 2011 after
winning antitrust approval from the Justice Department.
Tuesday’s deal comes at least two years sooner than planned and
creates a $39 billion business owed primarily to the success of
marrying cable distribution with cable programming. The rational
behind the deal differentiates Comcast from rivals such as Time
Warner Cable Inc, which separated content from
distribution.

“The reality is content has gotten stronger and stronger and
safer and safer, so Comcast should be trading at a premium to
the cable operators. They are an integrated media and
entertainment company. They are not just a cable operator,” said
John Tinker, an analyst at Maxim Group.

In addition to the main deal, which pushed up Comcast shares
about 7 percent in after hours trading, Comcast will also gain
full control of the floors NBC uses at 30 Rockefeller Plaza in
New York City and CNBC’s headquarters in Englewood Cliffs, New
Jersey, for about $1.4 billion.

Comcast said it would fund the deal with $11.4 billion of
cash on hand, $4 billion in senior unsecured notes to be issued
to GE, $2 billion in credit facility borrowings and the issuance
of $725 million in subsidiary preferred stock to GE.

“Given that media stocks have gone up quite a bit, it’s a
very attractive price, a fair price because we had a formula
buyout,” Roberts, who is also chairman of the company, said in
an interview with Reuters.

Separately, Comcast said it would increase its dividend by
20 percent and it would buy back $2 billion in stock this year.
GE also said it would accelerate its own share buy-back program
to $10 billion this year.

“People may have their own opinions on whether it’s good or
bad strategically, but it doesn’t leave any unanswered questions
financially. For a transaction of this nature and this size,
it’s a relatively low-risk structure,” Brean Capital analyst
Todd Mitchell said.

Since reaching the deal to sell its majority stake in NBC
Universal, GE officials have made clear they eventually planned
to exit the entertainment business entirely. So the moves
announced on Tuesday culminate a long-planned exit from the
entertainment business.

Comcast shares rose to $41.75 after the market close from
$38.97 in regular trading.

LONG-HELD AMBITIONS

Comcast turned its attention to NBC after a failed $54
billion hostile takeover attempt of Walt Disney Co in
2004 that ultimately led to the resignation of that company’s
CEO, Michael Eisner, after more than 20 years on the job.

While Comcast held the title of the nation’s leading cable
operator by a wide margin, its status as a content player was
always second tier, with middling networks such as E!, G4 and
Golf forming the basis of its channel portfolio.

A source familiar with the situation said talks accelerated
in July 2012 when NBC Universal sold its stake in A&E Television
Networks for $3 billion. Comcast and GE were debating how to use
the proceeds, with Comcast wanting to keep the cash in the
company while GE wanted a dividend.

When it first bought NBC Universal, Comcast tread lightly,
in part to smooth the way for regulatory approval. Among the
concessions it offered to help seal the original deal was to
adopt a hands-off policy towards the news division to ensure its
independence, ensure diversity by agreeing to carry networks
aimed at minority audiences and remove itself from management
decisions regarding online video site Hulu. Comcast owns a
passive stake in Hulu, with News Corp and Disney
controlling the website’s management.

Comcast also agreed to ‘net neutrality’ provisions to
ensure traffic to competitor websites was not interfered with
and to make NBC’s programming available to other cable and
satellite TV distributors on equal terms.

Because the Justice Department looked at the 2011
transaction, this one would not need to be investigated, said
Richard Brosnick, an antitrust expert with law firm Butzel Long.

“The only way that the government would look further at this
is if Comcast violated its consent decree,” said Brosnick.

A source close to Comcast said the company did not
anticipate it would be required to file for antitrust approval
with either the Justice Department or the Federal Communications
Commission.

Comcast has slowly but steadily replaced NBC’s former regime
with its own people since closing the deal. Steve Burke, the
longtime top lieutenant to Roberts at Comcast, runs NBC
Universal. Former CEO Jeff Zucker is gone. So too is former NBC
Entertainment chief Jeff Gaspin and longtime sports producer
Dick Ebersol, among others.

In February, Steve Capus announced he was leaving as head of
NBC News. That decision, according to sources, was motivated in
part by Comcast’s installing one its executives, Patricia
Fili-Krushel, into the newly created position of chairman of NBC
Universal News Group and making Capus, along with CNBC president
Mark Hoffman and MSNBC president Phil Griffin, report to her.

Indeed, the only executives that still remain from the old
regime are the leaders of cable networks and Universal Studios
head Ron Meyer, who ranks as the longest-serving movie studio
chief in Hollywood. On the cable side, in addition to Hoffman
and Griffin, Bonnie Hammer now runs all of NBC’s
entertainment-oriented cable networks and Lauren Zalaznick leads
its digital operations. Bob Greenblatt, the former head of
Showtime, now runs the NBC broadcast network and Mark
Lazarus leads the sports division.

In addition to the GE deal, Comcast reported a 6 percent
rise in fourth-quarter earnings on Tuesday. In its cable
business, it lost a better-than-expected 7,000 net video
customers. For the year, NBC Universal’s revenue rose 5 percent
to $6.01 billion.

Morgan Stanley served as Comcast’s financial adviser and
Davis Polk & Wardell was its legal adviser. J.P. Morgan was
financial adviser to GE and Weil, Gotshal & Manges was the legal
adviser.

(Reporting by Scott Malone in Boston, Jennifer Saba in New
York, Diane Bartz in Washington and A. Ananthalakshmi in
Bangalore; Writing by Ben Berkowitz.; Editing by Edward Tobin,
Dan Grebler and Andre Grenon)

No replacement has been named for Capus, president of NBC
News since 2005, according to a company memo obtained by
Reuters. In a statement, Capus said it was “now time to head in
a new direction.”

Three sources close to NBC said his departure had been
rumored around the halls after Comcast reorganized the
news division in July, bringing in Patricia Fili-Krushel to head
the news unit’s business operations. After that change, these
sources said, Capus’ departure became a matter of when, not if.

Prior to Comcast’s takeover, the three heads of NBC’s news
operations – Mark Hoffman at CNBC, Phil Griffin at MSNBC and
Capus – all reported directly into Jeff Zucker, who was not only
NBC’s chief executive but also well-versed in hard news.

“There was a natural flow to the news division under Zucker.
They all spoke the same language,” said one of these sources.
“No disrespect to Pat, but she’s not viewed as a news person.”

Indeed, both Capus and Zucker basically grew up with each
other at NBC, spending about 20 years together at the network.
Capus did not say what his next move would be. Zucker, the
executive who promoted him seven years ago at NBC, is now the
worldwide president of CNN, owned by Time Warner Inc.

The sources said it would not be a surprise if Capus
eventually resurfaced in a new position under Zucker at CNN.
Earlier this week, Mark Whitaker, the managing editor at CNN,
announced his resignation to make room for Zucker to install his
own team. Prior to his joining CNN, Whitaker worked at NBC News
under both Capus and Zucker.

Fili-Krushel said in a memo to staff on Friday that until a
replacement for Capus is found, NBC News will operate under an
interim structure with various executives reporting to her. She
will start the search for a successor in coming weeks, with
Capus helping with the transition.

Two other sources said that internally the view recently has
been that Antoine Sanfuentes, an executive who oversees NBC
News’ Washington bureau and the Sunday political talk program
“Meet the Press,” was being groomed to replace Capus.
Fili-Krushel said in her memo that Sanfuentes will report to her
and serve as interim managing editor responsible for editorial
decision making.

The first sources said they had expected Capus to announce
his departure at the end of last year to coincide with the
announcement that Jim Bell was leaving as executive producer of
the “Today” show to assume the newly created role of full-time
executive producer of the Olympics.

Ultimately, he decided to trigger his departure by
exercising an “out” clause built into his most recent contract,
according to one of the first three sources.

Capus commanded the loyalty of the NBC News staff,
particularly the on-air talent and producers, all of the five
sources agreed. News of his resignation came as an unexpected
blow to them, despite the apparent grooming of Sanfuentes.

RECENT STRUGGLES

NBC News has been the one part of the network’s news
operations to show slippage in the last year. CNBC ranks as by
far the leading business news network. MSNBC has not only
surpassed CNN to become a strong No. 2 among general cable news
networks, but it has also closed the gap with long-time leader
Fox News.

“Pat Fili-Krushel has a strong vision of the integration
that is required to make the full array of NBC programming fire
on all cylinders in unison. She also understands the need to
complement both the owned station and Comcast cable group goals
to leverage all to best advantage,” said Magid & Associates
consultant Steve Ridge.

NBC News has ranked as the leader among network news
broadcasts in both the morning and evening for much of Capus’
eight-year run as president. Two of the first three sources said
he deserves credit for maintaining the “Today” show as the
dominate morning news program, “NBC Nightly News” as the leading
evening news broadcast, and “Meet the Press” as the marquee
Sunday news program. But over the last year, Capus’ fiefdom has
taken a few hits, most notably at the “Today” show.

The “Today” show has been in a back-and-forth ratings war
with ABC’s “Good Morning America” ever since ABC snapped
NBC’s 16-year unbeaten streak last year. “NBC Nightly News” is
averaging 8.76 million total viewers, ahead of “ABC World News”
and “CBS Evening News.” “It has seen less ratings success with
the news magazine “Rock Center with Brian Williams,” which
debuted in 2011 and after being bounced around the schedule,
will move to Friday nights on Feb 8.

NBC News also came under fire last spring when it decided to
edit a call to police from George Zimmerman, the Florida man who
shot Trayvon Martin. The editing made it appear that Zimmerman
told police, without being prompted, that Martin was black when,
in fact, the full tape revealed that the neighborhood watch
captain did so only when responding to a question posed by a
dispatcher.

NBC has since been sued by Zimmerman in a defamation
lawsuit.

Al Jazeera’s acquisition of Current TV is basically a
pay-for-distribution play. The Qatar-backed network plans to
replace Current TV in the more than 40 million homes where it is
currently distributed with its own news network, tentatively
dubbed Al Jazeera America. The new network’s success is
predicated on maintaining, if not increasing, that level of
distribution.

One person with knowledge of cable TV deals said pay-TV
operators will definitely seek more favorable terms from Al
Jazeera since, “no one wanted to carry Current TV and they want
to carry an Al Jazeera channel even less.”

For instance upon learning of deal, which closed on
Wednesday, Time Warner Cable immediately said that it
would terminate its contract with Current TV, meaning its
customers would not be seeing the new network to be named Al
Jazeera America.

On Thursday, however, the company, which ranks as the
nation’s second largest cable provider with 12 million
subscribers, walked back from that stance a bit.

“We are keeping an open mind, and as the service develops,
we will evaluate whether it makes sense, for our customers, to
launch the network,” Time Warner Cable said in a statement.

Al Jazeera has been trying to break into the U.S. cable
market for years, but the network has so far failed to gain
significant distribution largely for political reasons. The
Pan-Arab network had been viewed by many as being anti-American
particularly at the height of the U.S. War in Iraq.

Cable industry sources interpreted that statement to mean
that Time Warner Cable would be open to distributing Al Jazeera
America, just not at the same 12 cents per subscriber per month
that Current TV was receiving, media consultancy firm SNL Kagan
said.

By comparison, SNL Kagan said Fox News averages 89 cents per
subscriber per month, while CNN gets 57 cents and MSNBC collects
18 cents.

Sources said that Dish Network Corp, DirecTV
and Comcast Corp are locked into programming
deals to carry Current TV for the next few years.

But sources said the distributors, each of which held
ownership stakes in Current TV, plan to re-evaluate their
agreements once they expire.

Dish, run by billionaire Charlie Ergen, is likely to be a
big obstacle that Al Jazeera will have to successfully overcome.

Dish is no stranger to dropping channels.

This past summer, for instance, it blacked out four AMC
Networks channels for roughly four months, and Ergen
regularly uses the company’s earnings calls to rail against
rising programming costs.

Brean Murray analyst Todd Mitchell said Dish will likely
pounce on the opportunity to renegotiate terms with Al Jazeera,
now that the format and the owner of the channel have changed.

“Anytime Dish even gets the scent of leverage, something
opens for them to renegotiate, they start to renegotiate,”
Mitchell said. “This is the Dish way. Anytime they get a moment
of leverage, they’ll think ‘let me get you for cheaper,’ and
will start negotiating.”

A Dish spokesman said the carrier “has ongoing relationships
with both Current TV and Al Jazeera and we are evaluating the
future plans for Current TV.”

Comcast ranks as the nation’s largest cable television
provider with about 23 million subscribers. DirecTV, with just
under 20 million subscribers, and Dish Network, with 14 million
subscribers, are the two biggest satellite TV providers. Taken
together, those three companies would account for the vast
majority of the distribution. (Not every subscriber gets Current
TV, as it depends on the programming package they receive.)

The channel will also take over Current TV’s distribution of
Verizon’s FiOS and AT&T U-verse, which together have 8.9
million subscribers.

A DirecTV spokesman declined comment. Comcast said it will
continue to carry Current TV as per its affiliate agreement. A
representative for Al Jazeera said nine operators will carry the
new channel, the largest being Comcast, DirecTV, Dish, AT&T and
Verizon.

PAY TO PLAY

Current TV generated an average nightly audience of just
42,000 viewers, steeply below ratings for Fox News, CNN and
MSNBC, all of which are “fully distributed,” meaning they reach
more than 90 percent of the 100 million pay-TV households in the
United States.

Indeed, part of the reason why Current TV has lasted seven
years amid an environment in which low-rated, independently
owned networks of its ilk are being dropped by pay-TV
distributors is because of the influence wielded by its
co-founder, former Vice President Al Gore.

Though Gore will remain an adviser, Al Jazeera America will
be negotiating new distribution deals largely without his
influence.

Sources said that perhaps the only way for Al Jazeera to
prevent being dropped and ensure distribution is to take a page
from Rupert Murdoch, who 15 years ago, paid operators to carry
Fox News after it was created instead of asking them to pay him.
With Qatar’s financial resources, it reportedly paid a rich $500
million for Current TV, that could be a viable short-term
solution.

“You can buy your way on. It’s not unheard of for networks
to pay cable operators to get on,” said Larry Gerbrandt,
principal of Media Valuation Partners, who added that such a
move wouldn’t be a long-term strategy.

Al Jazeera has not had to offer money for distribution,
sources said.

(Reuters) – Cha-ching!

That’s the sound ringing in the ears of Hollywood studio executives after Walt Disney Co (DIS.N: Quote, Profile, Research) landed a rich deal with Netflix (NFLX.O: Quote, Profile, Research) to stream its movies to television.

Netflix’s arrival as a bidder for the television rights to Hollywood movies means that the studios can now play the company off of traditional pay-TV networks like Time Warner’s (TWX.N: Quote, Profile, Research) HBO to extract higher fees in contract renewal talks.

And Netflix couldn’t have come along at a better time for the studios, which were being threatened with having their fees slashed by the pay-TV networks who have argued for years that they are better served by investing in original programming than licensing movies.

Netflix isn’t the only company to emerge on the scene, either. The streaming video ambitions of Amazon.com Inc (AMZN.O: Quote, Profile, Research), Google Inc (GOOG.O: Quote, Profile, Research) and Apple Inc (AAPL.O: Quote, Profile, Research) set the stage for fierce bidding between these technology giants and the pay-TV networks for the rights to bring Hollywood movies into the living room.

Those technology brethren, however, don’t have the liquidity concerns that, some analysts say, could affect Netflix’s ability to shoulder the costs.

Under the deal’s terms, Disney stands to collect an estimated $350 million a year from Netflix for its movies beginning in 2016, according to Janney Montgomery Scott analyst Tony Wible. Disney only earned around $250 million a year under its previous deal with Starz, the cable network in the process of being spun off from Liberty Media (LMCA.O: Quote, Profile, Research), Wible said.

Licensing movies for streaming access, whether online or on TV, is an important part of the business model for Hollywood studios given the migration of viewers to tablets and mobiles devices and the secular decline in DVD sales.

That Netflix signed the Disney deal this year but isn’t getting access to its films until 2016 underscores its aggressiveness and the importance it places on usurping streaming rights to Hollywood films from pay-TV networks.

“Every other studio is going to want to get in on the action when these kinds of dollars are being offered,” said former Universal Studios CEO Frank Biondi.

Netflix even has set its sights on Warner Bros, the studio owned by Time Warner. Warner’s deal with HBO is up in 2014.

“This gives Warner the opportunity to do other things, to look at this,” Netflix chief content officer Ted Sarandos told the New York Post.

According to a Reuters source with knowledge of the situation, Netflix is talking to Sony, another studio whose films are distributed by Starz, about a deal similar to the One struck with Disney.

Representatives for Sony and Netflix declined comment.

Comcast-owned (CMCSA.O: Quote, Profile, Research) Universal Studios’ deal to license some of its movies to HBO expires in 2016, Biondi noted. Universal already licenses some of its movies to Netflix, including this year’s surprise hit “The Lorax,” to Netflix.

Signs are already emerging of the pressure Netflix can exert. In August, HBO extended its deal with News Corp’s (NWSA.O: Quote, Profile, Research) 20th Century Fox even though it wasn’t due to expire for three years, Wible said. The new deal gives HBO TV rights to 20th Century Fox movies until 2022, a long-term deal Wible said was designed to keep the studio’s movies away from Netflix.

PAY UP OR GET OUT

The choice pay-TV networks now face is this: pay up for movie rights or invest that money instead in their own original programming. Some have already slashed licensing budgets, believing movies aren’t as popular with subscribers as original shows like HBO’s “Boardwalk Empire” or Showtime’s “Homeland.”

Showtime, for instance, tried to cut the prices it was paying Paramount, Universal and MGM for movies by half in 2009, prompting those studios to join forces to launch their own network, EPIX, instead of accept a reduced fee.

“We changed our strategy a few years back, spent a lot less on motion pictures and more on original production,” said Les Moonves, CEO of Showtime’s parent company CBS Corp (CBS.N: Quote, Profile, Research), at a media conference in New York on December 4. “Out of that came ‘Dexter,’ came ‘Weeds,’ came ‘Shameless,’ came ‘Californication’ and now came ‘Homeland.’”

Starz essentially said in a statement that it let Disney’s movies go – rather then have them stolen away by Netflix – to pursue an original programming strategy.

“Our decision not to extend the agreement for Disney output … allows us the opportunity to implement our plan to dramatically ramp up our investment in exclusive, premium-quality original series, which will best meet the needs of our distributors and subscribers,” Starz said.

That strategy allows pay-TV networks to not only lure subscribers with high-quality shows, but also syndicate to TV stations domestically and overseas: collecting licensing fees for their own content rather than paying for others’.

LIQUIDITY CONCERNS

The Disney deal follows exclusive deals Netflix struck to stream first-run movies from smaller studios like Relativity Media and DreamWorks Animation (DWA.O: Quote, Profile, Research), the latter deal costing an estimated $30 million for the rights to films like “Shrek” and “Kung Fu Panda,” according to Wible.

The deals Netflix has signed have saddled it with nearly $5 billion in commitments to studios over the next three years, according to its filings, prompting some analysts, such as Wedbush Securities’ Michael Pachter, to worry about liquidity.

Netflix needs to spend heavily for newer movies and TV shows to grow its base of 25 million U.S. subscribers, Pachter said.

“They have Amazon, Google, and Apple breathing down their necks and <those companies> won’t let them pay less,” he said. “Netflix has shown this is a business and they have a lot of potential competitors.”

Pachter, however, viewed the Disney deal as a positive sign that the studio is confident Netflix will still be operating in 2016, when the deal starts, since some of the money owed under the Disney contract comes due before then.

Still in its early years, Netflix continues to tinker with a business model that started by mailing DVDs. Besides paying hefty amounts for new films, Netflix itself has gotten into original programming, producing such shows as “Lilyhammer,” which stars former “Sopranos” actor Steven Van Zandt as a former mobster who goes into the witness protection program in Norway. (Additional reporting by Lisa Richwine and Liana Baker; Editing by Nick Zieminski)

(Reuters) – Cha-ching!

That’s the sound ringing in the ears of Hollywood studio executives after Walt Disney Co landed a rich deal with Netflix to stream its movies to television.

Netflix’s arrival as a bidder for the television rights to Hollywood movies means that the studios can now play the company off of traditional pay-TV networks like Time Warner’s HBO to extract higher fees in contract renewal talks.

And Netflix couldn’t have come along at a better time for the studios, which were being threatened with having their fees slashed by the pay-TV networks who have argued for years that they are better served by investing in original programming than licensing movies.

Netflix isn’t the only company to emerge on the scene, either. The streaming video ambitions of Amazon.com Inc, Google Inc and Apple Inc set the stage for fierce bidding between these technology giants and the pay-TV networks for the rights to bring Hollywood movies into the living room.

Those technology brethren, however, don’t have the liquidity concerns that, some analysts say, could affect Netflix’s ability to shoulder the costs.

Under the deal’s terms, Disney stands to collect an estimated $350 million a year from Netflix for its movies beginning in 2016, according to Janney Montgomery Scott analyst Tony Wible. Disney only earned around $250 million a year under its previous deal with Starz, the cable network in the process of being spun off from Liberty Media, Wible said.

Licensing movies for streaming access, whether online or on TV, is an important part of the business model for Hollywood studios given the migration of viewers to tablets and mobiles devices and the secular decline in DVD sales.

That Netflix signed the Disney deal this year but isn’t getting access to its films until 2016 underscores its aggressiveness and the importance it places on usurping streaming rights to Hollywood films from pay-TV networks.

“Every other studio is going to want to get in on the action when these kinds of dollars are being offered,” said former Universal Studios CEO Frank Biondi.

Netflix even has set its sights on Warner Bros, the studio owned by Time Warner. Warner’s deal with HBO is up in 2014.

“This gives Warner the opportunity to do other things, to look at this,” Netflix chief content officer Ted Sarandos told the New York Post.

According to a Reuters source with knowledge of the situation, Netflix is talking to Sony, another studio whose films are distributed by Starz, about a deal similar to the One struck with Disney.

Representatives for Sony and Netflix declined comment.

Comcast-owned Universal Studios’ deal to license some of its movies to HBO expires in 2016, Biondi noted. Universal already licenses some of its movies to Netflix, including this year’s surprise hit “The Lorax,” to Netflix.

Signs are already emerging of the pressure Netflix can exert. In August, HBO extended its deal with News Corp’s 20th Century Fox even though it wasn’t due to expire for three years, Wible said. The new deal gives HBO TV rights to 20th Century Fox movies until 2022, a long-term deal Wible said was designed to keep the studio’s movies away from Netflix.

PAY UP OR GET OUT

The choice pay-TV networks now face is this: pay up for movie rights or invest that money instead in their own original programming. Some have already slashed licensing budgets, believing movies aren’t as popular with subscribers as original shows like HBO’s “Boardwalk Empire” or Showtime’s “Homeland.”

Showtime, for instance, tried to cut the prices it was paying Paramount, Universal and MGM for movies by half in 2009, prompting those studios to join forces to launch their own network, EPIX, instead of accept a reduced fee.

“We changed our strategy a few years back, spent a lot less on motion pictures and more on original production,” said Les Moonves, CEO of Showtime’s parent company CBS Corp, at a media conference in New York on December 4. “Out of that came ‘Dexter,’ came ‘Weeds,’ came ‘Shameless,’ came ‘Californication’ and now came ‘Homeland.’”

Starz essentially said in a statement that it let Disney’s movies go – rather than have them stolen away by Netflix – to pursue an original programming strategy.

“Our decision not to extend the agreement for Disney output … allows us the opportunity to implement our plan to dramatically ramp up our investment in exclusive, premium-quality original series, which will best meet the needs of our distributors and subscribers,” Starz said.

That strategy allows pay-TV networks to not only lure subscribers with high-quality shows, but also syndicate to TV stations domestically and overseas: collecting licensing fees for their own content rather than paying for others’.

LIQUIDITY CONCERNS

The Disney deal follows exclusive deals Netflix struck to stream first-run movies from smaller studios like Relativity Media and DreamWorks Animation, the latter deal costing an estimated $30 million for the rights to films like “Shrek” and “Kung Fu Panda,” according to Wible.

The deals Netflix has signed have saddled it with nearly $5 billion in commitments to studios over the next three years, according to its filings, prompting some analysts, such as Wedbush Securities’ Michael Pachter, to worry about liquidity.

Netflix needs to spend heavily for newer movies and TV shows to grow its base of 25 million U.S. subscribers, Pachter said.

“They have Amazon, Google, and Apple breathing down their necks and won’t let them pay less,” he said. “Netflix has shown this is a business and they have a lot of potential competitors.”

Pachter, however, viewed the Disney deal as a positive sign that the studio is confident Netflix will still be operating in 2016, when the deal starts, since some of the money owed under the Disney contract comes due before then.

Still in its early years, Netflix continues to tinker with a business model that started by mailing DVDs. Besides paying hefty amounts for new films, Netflix itself has gotten into original programming, producing such shows as “Lilyhammer,” which stars former “Sopranos” actor Steven Van Zandt as a former mobster who goes into the witness protection program in Norway.

(Additional reporting by Lisa Richwine and Liana Baker; Editing by Nick Zieminski)

Zucker, former head of NBCUniversal and current producer of
Katie Couric’s talk show “Katie,” will succeed Jim Walton, and
will report to Phil Kent, chairman and CEO of CNN parent
company, Turner Broadcasting System. Walton had said in July he
was leaving the network.

“Outside of my family and the Miami Dolphins, there is
nothing I am as passionate about as journalism,” said Zucker in
a statement. “I spent the most rewarding years of my career as a
journalist.”

Zucker, who will be based at CNN in New York, gained a
reputation as a news-producing whiz when he worked with Couric
on NBC’s “Today” show.

He remained involved in decisions about programming and the
strategic direction of NBC News, MSNBC and CNBC even after he
was named CEO of NBCUniversal, a source close to him told
Reuters earlier this week, when news first broke of his imminent
appointment at CNN.

Zucker was heavily involved in a decision to move MSNBC hard
left to counter Fox News, the source told Reuters, though that
didn’t imply he would move CNN in a more partisan direction.

Since its beginnings as the first 24-hour cable news
network, CNN has tried to hold the middle ground in its news
coverage, a position that some blame for an erosion of its
ratings.

As CNN’s viewership declined, ratings increased for rivals
Fox News and MSNBC, which blend news with opinion and political
commentary.

CNN has lagged Fox News Channel and MSNBC in prime-time
viewers for more than a year. On a regular news night, CNN draws
fewer than 1 million U.S. prime-time viewers, compared with
about 2.7 million for Fox News Channel and about 1.5 million
viewers for MSNBC, according to ratings data.

Zucker is now tasked with improving the performance of a
network that saw its prime time ratings hit a 21-year low during
the second quarter of this year.

Though CNN remains profitable, Chief Executive Jeff Bewkes
of Time Warner, the parent company of Turner and CNN, said in
August he was unsatisfied with the network’s low ratings and
that he would seek to turn it around with more compelling
programming that would remain non-partisan.