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NEWS Tuesday 27th August - Monday 2nd September 2002
Scroll down page or click below for news - latest first
| Tuesday | |||||
No news posted Monday 26th August due to UK public holiday
Friday 30th August 2002
ITV Digital liquidation looms
Morrison departs Granada
US cable share 53%
Disney on DTT
3G future for Hutchison
ABC, CBS HDTV
Liberate preliminary financials
ITV Digital liquidation looms
At least 750,000 - and up to two million - UK owners of digital terrestrial set tops from the collapsed ITV Digital can expect demands for payment to keep their boxes to view the BBC's new DTT service Freeview which launches in October with 24 channels.
Administrator Deloitte & Touche which is putting the company into liquidation initially appeared to abandon moves to get a buyer for boxes in consumers' homes. In fact the logistics seemed (and still seem to many) so unlikely, that in the days before its collapse some viewers took out ITV Digital subscriptions on monthly payment plans as a way to get a free DTT box. The boxes would need to be collected, former subscribers may not be home - or have moved, and the sets themselves could be lost or broken - as well as being up to three year old second-hand electronic products in need of reconditioning, thus few expected any company to take on the 'ownership'.
However, the Guardian newspaper now reports that at least two potential buyers are negotiating with the Deloitte & Touche administrator, Nick Dargan, who expects to conclude a deal over the next two weeks.
However it is suggested that any potential purchaser could plan to persuade box owners to pay a small fee to keep their heavily subsidised devices - which would have to be less than the new Freeview BBC boxes which are expected to cost about £100 (E156). The BBC has already ruled out buying the abandoned boxes.
Cable company NTL bought ITV Digital's subscriber list - though appears to have had less success converting former subscribers than satellite operator BSkyB, and intellectual property rights to ITV Digital's only real success, the monkey character, have also been sold prior to the September 4/5 auction, but no buyer has been named. The auction is being run by Wyles Hardy and Co and DoveBid.
"The auction marks the last stage of the ITV Digital administration prior to the company being placed into liquidation," said Dargan. The company itself is being put into liquidation in October.
Some E3 billion is owed to creditors, with ITV Digital Holdings - the parent company of ITV Digital, fully owned by shareholders Carlton and Granada - the biggest creditor, owed E630 million. The Football League is still owed E280 million on its E493 million contract, BSkyB is owed E330 million and transmission tower company Crown Castle is owed E260 million with small creditors and subscribers making up the remaining E360 million owed. However the auction is unlikely to raise even a small fraction of this total.
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Morrison departs Granada
Steve Morrison has confirmed that he is quitting UK terrestrial broadcaster Granada at the end of September, as reported in ATV (See News Archive).
Morrison is not being directly replaced, as it is assumed that Granada is probably some 18 months away from merging with network rival Carlton Communications.
Instead Granada has appointed Sir George Russell, a former Deputy Chairman of Channel 4 and Chairman of ITN, as non-executive deputy chairman - reportedly to alleviate shareholder concern that Chairman Charles Allen's more prominent role would give him too much power within the group. Russell will, "play a significant role in assisting the board to manage the regulatory issues and industry consolidation opportunities created by the new communications bill," said the company.
Under the terms of his two-year contract Morrison is entitled to an exit package worth over E1million, but given the losses sustained by the group, particularly the ITV Digital collapse, he may take a lesser sum to avoid aggravating investors. Some of Morrison's executive powers have been delegated to Mick Desmond, the Managing Director of broadcasting and enterprises, and Simon Shaps, the Managing Director of content.
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US cable share 53%
In the US advertising supported cable TV channels have won 53 per cent of prime-time audience over the summer according to Nielsen Media Research figures, their best share ever.
The seven broadcast networks - ABC, CBS, NBC, Fox, WB, UPN and PAX - often schedule repeats over the summer, benefiting cable, but this year is cable's best, up from last year's 49 per cent.
Two years ago, 16 per cent of homes had 100 channels to choose from, but that is forecast to hit 40 per cent in the next year, with some commentators pointing out the fact that seven broadcast networks can still get close to 40 per cent of the audience (39 per cent) as being the amazing statistic.
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Disney on DTT
Disney is reportedly considering the launch of its first ever wholly owned free-to-air channel outside the US, on the UK's planned digital terrestrial service, the BBC/Crown Castle-owned Freeview.
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3G future for Hutchison
Hong Kong's Hutchison Whampoa continues to prepare for the roll out of third generation mobile telecoms networks in Europe, this week confirming plans to buy assets from the collapsed Italian mobile operator Blu.
Canning Fok, Hutchison's Managing Director, said that the company planned to spend E58 million buying cellular sites from Blu.
Earlier this month the European Commission gave Blu's shareholders the go-ahead to break up the company as they had been unable to find a buyer for the whole operation.
Telecom Italia Mobile is making an offer of at least E18m for the company's shares and some assets and said other Blu assets would be transferred to Vodafone-controlled Omnitel, Hutchison and rival operator Wind.
Hutchison plans to roll out 3G mobile phone networks internationally in a venture to be called '3'. It owns 3G licences in Australia, Austria, Denmark, Hong Kong, Ireland, Israel, Italy, Sweden and the UK but is also looking at buying another licence in Finland (see below).
Hutchison says it will offer a service in the UK before the end of this year, despite all the set-backs that the technology has encount.
Hutchison Whampoa owns 65 per cent of 3 while Japan's NTT DoCoMo holds 20 per cent and KPN Mobile, in the Netherlands, has a 15 per cent share. The latter, however, recently put its shareholding up for sale.
Hutchison Whampoa has offered to acquire the Finnish mobile operations of Swedish operator Telia through its Hi3G subsidiary which handles its existing Nordic holdings
The bid would include Telia's UMTS licence; Telia had planned to dispose of its Finnish mobile operations to get approval from the EU for its planned merger with Sonera.
Radiolinja and DNA are also reported to be interested in Telia's assets but both hold 3G licences so may be excluded from bidding.
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ABC, CBS HDTV
In the US the ABC network plans to use high definition broadcasting for 13 hours a week of scripted series and theatrical movies during the 2002 to 2003 season through a partnership with Zenith Electronics Corporation.
Broadcasts will use 720 progressive format high-definition including Dolby Digital 5.1-channel surround sound.
ABC has broadcast several movies and sporting events in HDTV since making the service available occasionally in November 1998.
For the fourth consecutive year CBS, plans to broadcast a majority of its primetime schedule in high definition, including all 18 of its comedies and dramas.
Zenith Electronics Corporation has expanded its sponsorship of the primetime HD shows, and Samsung Electronics America is a new sponsor of CBS high-definition primetime.
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Liberate preliminary financials
Liberate Technologies has updated its estimate of pro forma revenues, which it says reflects the impact of financial restructuring and lower capital expenditures in the cable and telecommunications sectors. The company also provided new guidance for the rest of its fiscal year to reflect the acquisition of Sigma Systems Group.
Based on preliminary estimates, Liberate says it expects its pro forma revenue for its first quarter ending August 31, 2002 to be approximately E12 to E14 million, compared with earlier guidance of E20 to E22 million, and its pro forma basic net loss per share to be in the range of E0.12 to E0.19, compared with earlier guidance of E0.06 to E0.08.
Liberate says its estimated first-quarter cash burn rate (excluding one-time expenditures for the Sigma acquisition and the re-purchase of shares from Cisco Systems) will be approximately in line with its prior estimate of E25 million.
Liberate says it is further streamlining its organisation to focus on products and services that its customers expect to deploy in the near future. Consequently Liberate is to take an associated restructuring charge this quarter of approximately E2 million to E3 million and expects to realise significant cost savings beginning in its next fiscal quarter.
"We are committed to achieving profitability and prudently using our significant cash reserves to build our business and drive shareholder value," said Chairman and CEO Mitchell Kertzman. "We are realigning our business and leveraging our expanded product and service offerings to facilitate three critical areas of service growth for network operators: video, voice, and data."
Liberate expects to achieve pro forma profitability during the second half of its fiscal year 2003, which extends from June 1, 2002 through May 31, 2003. The company anticipates that its cash and cash equivalents and short- and long-term investments will be no lower than E240 million when the company crosses into cash-flow break-even (which will likely trail pro forma profitability by approximately one quarter).
Final first quarter results will be announced on September 26, 2002.
In a pro forma revenue guidance of new revenue targets, Liberate forecast:
Second Quarter Ending November 30, 2002:
Pro forma revenues in the range of E17 million to E19 million.
Third Quarter Ending February 28, 2003:
Pro forma revenues in the range of E21 million to E24 million.
Fourth Quarter Ending May 31, 2003:
Pro forma revenues in the range of E25 million to E28 million.
Underlying assumptions include: Liberate will be receiving significant and growing revenue contributions through the remainder of its fiscal year from the infrastructure products and services previously offered by Sigma Systems. (Because the Sigma transaction closed late in the current quarter, these products and services are making only a relatively small contribution to revenue in the current quarter.)
By Liberate's third and fourth fiscal quarters, European network operators will resume significant deployments of interactive television software, following the conclusion of debt restructuring and industry consolidation, and North American network operators will begin volume deployments and a resumption of capital investment.
Liberate will continue to effectively manage its expenses throughout the remainder of its fiscal year.
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Thursday 29th August 2002
12 bid for Finnish DTT
ITC Ad standard revised
EuroNews boosts Dutch audience
S-A PowerVu ups capacity by 1/3
Microsoft TV IPG gets ACADIA Validation
Granada boss to quit
Sky's price rises
NTL keeps it Real
Controls on viewer profiling
12 bid for Finnish DTT
By Goran Sellgren
Twelve applications have been received by the Finnish Ministry of Communications which announced three new licences in the country's year old DTT system open for tender last May. A decision is on the awards is due by October.
When the tender was put out in May the government particularly urged international operators to apply, in order to 'boost a necessary competition.' These requests have been answered, with five out of the twelve applications from non-Finnish operators.
Discovery, Eurosport, and MTV Europe are all new to the Finnish arena. CanalPlus applied in the first round of licence awards some years ago, received a licence and in the end decided to hand it back, due to the minimal interest from the Finnish public when DTT was officially introduced in Finland a year ago. Now CanalPlus is reapplying for a licence that it previously had.
The fifth non-Finnish applicant is NonStop Television, part of Millennium Group, a new Swedish-based media operator, which, among other things, has the Nordic representation for American entertainment station E! TV and its sister channel Style. NonStop is also involved in movie distribution and sales.
Among the domestic applicants for the three licences three want to start regional television services, two intend to focus on home-shopping and games (one of which is MTV3, Finland's biggest commercial TV station), one wants to create a service for working life and job centres, and one applicant is seeking to start an educational service. This is despite the fact that Finland's biggest educational publisher, WSOY - part of the Sanoma media empire - had a licence for just such an operation in the original round, but decided to hand that licence back, judging the business potential as 'hopeless.'
The Ministry of communications had earlier declared that it will give priority to applicants that "will extend the scope of the offers of Finnish DTT and that will increase the interest of the public." Applicants' willingness to get off to a rapid start is also going to affect the decisions of the Ministry.
ITC
Ad standard revised
The UK TV content regulator, the ITC, which sees its revised Advertising
Standards Code come into effect on Monday 2 September, published its new
code yesterday (28/8/02) following what the it described as "an extensive
consultation process with broadcasters, advertisers and other interested
parties."
The ITC's industry Code has to be complied with by the ITV companies,
Channel 4, Channel 5, BskyB and some other cable and satellite channels
as part of their licence commitments. This code - along with the ITC -
is designed to operate as a backstop compliance procedure to prevent harmful,
offence and misleading television advertising. The Code has now been revised
to make its organisation clearer, providing guidance on underlying principles
and the reasoning behind them.
"Our aim has been to seek views on the current rules and to incorporate
best practice and recent developments into the Code," explained ITC Director
of Programmes and Advertising, Sarah Thane. "The basic policies remain
very much as they were, and as our research indicates viewers want them
to be, but we have sought to put them into a more user-friendly format."
ITC licensees and the Broadcast Advertising Clearance Centre have been
notified and the ITC will be offering industry seminars later this year
to answer any questions relating to the Code and the revisions.
The text of the revised Advertising Standards Code can be accessed on
the ITC website (www.itc.org.uk).
EuroNews boosts Dutch audience
Pan-European news channel EuroNews, has renewed its contract with Holland-based cableco UPC (United Pan-European Communications) and extended its contract with The Netherlands' third cable operator Casema.
EuroNews will consequently become available to about 500,000 new analogue households covering all of Rotterdam and The Hague as from Monday, September 2nd.
UPC, Europe's biggest cable operator, has 2.2 million Dutch subscribers, of whom more than 1,000,000 can now watch EuroNews, including Amsterdam and Rotterdam. Casema has 1.3 million subscribers in The Netherlands, and now more than 300,000 can watch EuroNews, including The Hague.
S-A PowerVu ups capacity by 1/3
Scientific-Atlanta says its powerful new PowerVu advanced modulator (model D9390T) with 8PSK Turbo Code - available next month (September) - will speed up bit rates, enabling it to increase the number of channels that can be delivered by a single transponder.
As a result operators will be able to offer more digital services and programming, such as HD and IP data, while also conserving their bandwidth. A performance comparison conducted by Scientific-Atlanta reports that changing from QPSK to 8PSK using Turbo Code in an existing network, increased throughput by more than 30 per cent.
Transponder space is thus freed-up for additional programming, or leasing of the extra space to generate more revenue.
SA says that combining the PowerVu professional receiver (model D9224) with the PowerVu advanced modulator delivers a powerful end-to-end solution to maximise bandwidth and lower the cost of delivering more digital programming.
Higher order modulation use often results in the need to change the antenna system at every downlink site, but S-A says that by using Turbo Code error correction with Reed-Solomon encoding, its new solution will allow the downlink to use the existing antenna, eliminating the cost associated with installing a new antenna.
"We knew that transponder availability and bandwidth constraints were making it difficult for our customers to roll out a number of new channels and services," said Dean Rockwell, Vice President and general manager of Media Networks at Scientific-Atlanta. "The new PowerVu solution will let our customers take advantage of 8PSK technology to boost the number of channels they can deliver using existing bandwidth. This reduces transponder cost, significantly increasing their ability to expand services."
The PowerVu professional receiver, which is now available, features the ability to receive digitally encrypted video, audio, utility data, IP data, VBI, teletext and conditional access.
Microsoft TV IPG gets ACADIA Validation
Microsoft Corp has certainly not abandoned its ambitions for the box in the living room and this month announced that Motorola Broadband Communications Sector's Horizon Developer Program has validated Microsoft's new Microsoft TV Interactive Program Guide (IPG) for use on Motorola's DCT1000 and DCT1200 set-tops.
The Microsoft TV IPG is also ACADIA-validated for the Motorola DCT2000, described as the industry's most widely deployed digital set-top.
"Solutions like the Microsoft TV IPG give consumers even more ways to enhance their TV-viewing experience with their Motorola set-tops," said Carl McGrath, Vice President and General Manager of Motorola Broadband's digital consumer gateways business. "This can translate into reduced churn and new opportunities for broadband network operators. We congratulate Microsoft on this latest achievement."
The Microsoft TV IPG is designed to improve consumers' digital TV experience by providing quick scrolling and channel tuning, to make it faster, easier and more intuitive for users to find their favourite TV shows and customise their television viewing. Microsoft says it is fast, responsive and bandwidth-efficient, leveraging the broadband network operators' broadcast infrastructure to deliver TV listings and advertising.
Microsoft plans to integrate future versions of the Microsoft TV IPG with third-party video-on-demand (VOD) systems.
"Achieving this additional Motorola ACADIA validation for the Microsoft TV IPG provides network operators with a cost-effective, easy-to-deploy digital TV solution for leading Motorola set-top boxes in the field," said Alan Yates, General Manager of Microsoft TV marketing at Microsoft.
* The ACADIA Application Integration Center, a wholly owned subsidiary of Motorola Broadband, is the supporting facility for the Horizon Program. It provides resources and expertise to take applications and other software solutions from prototype to commercial deployment. ACADIA is an independent development and integration entity, with a staff completely dedicated to supporting Motorola's Horizon Program. ACADIA validation is described as a benchmark for broadband network operators as they choose the software, content and applications to deliver to their subscribers.
Granada boss to quit
UK ITV giant Granada is expected to see its chief executive Steve Morrison (59) quit this week.
Following the collapse of ITV Digital, the resignation of Stuart Preeble, and the subsequent poor performance of ITV (E264 million half-year loss announced in May at Granada) and the heavy criticism its management have received in the press, many ITV investors wanted heads to roll higher up. Following the "early retirement" of Morrison after a 28-year career at Granada with agreed severance terms between Morrison and the Chairman, Charles Allen, it remains to be seen if this move will sate the 'blood lust' of investors.
It had been mooted that Morrison would work with Granada's education arm but it is now suggested that he will sever all links with the group. His departure had already been anticipated in any merger with Carlton Communications.
Allen is reported to be taking hands-on control, with a senior non-executive director being appointed to ease shareholder fears that he might have excessive influence.
Dawn Airey, Chief Executive of Channel 5, had been sought to run the ITV network, though she has said she would want firm control to take the post (Seen News archive).
Morrison began his career as a journalist and joined Granada from BBC Scotland in 1974, becoming a producer and director of current affairs flagship World In Action. By 1987 he had risen to become the director of programmes. Morrison was appointed Chief Executive of Granada Media Group in 1996. He led the group's flotation on the stock market after it demerged from Granada's catering business in 2000.
Sky's price rises
BSkyB plans to raise prices for its six million pay-TV subscribers in a package shake-up reports the Guardian newspaper.
A new general entertainment channel - Sky One Extra - is forecast to be included in the basic package from January with the cost rising by £1 (E1.56) per household, boosting revenue by £75 million (E117 million) - almost all of which would be profit.
Sky is also working on a general entertainment channel for Freeview, probably seeking ITC approval to drop Sky Travel, the new BBC-led digital terrestrial service to replace ITV Digital.
NTL keeps it Real
UK cableco NTL has extended its agreement to use Real Media Europe's OpenAdStream platform to deliver interactive adverts to subscribers across its broadband cable network. Real Media Europe is a division of 24/7 Real Media.
Following on from a trial between the two companies, the two-year deal sees NTL using Real Media Europe's Open AdStream serving and management tool to deliver interactive advertsing over NTL's digital TV broadband network, and to operate NTL's digital programming guide, its interactive games and e-mail.
NTL says it has a million digital TV subscribers, and around 300,000 customers connected to its broadband network, equal to 37 per cent of the broadband market.
Controls on viewer profiling
In a move that could have implications for the PVR market, and the TV-consumer data industry, Internet ad-serving firm DoubleClick is to start allowing Web users to view some of the records it compiles through the use of cookies as part of a settlement with regulators in ten US states.
New York Attorney General's office described the feature as a 'cookie viewer,' which will show the categories in which DoubleClick has placed individuals, based on information about their surfing habits. DoubleClick uses the category system to sell advertising targeted to particular interest groups.
However Wired magazine reports that it DoubleClick officials declined to provide a timeframe for the service so it's not clear when the cookie viewer will actually be available.
Privacy activists have long been pushing for greater disclosure by data collectors - including the interactive TV industry.
Wired quotes Jason Catlett of JunkBusters, a site that helps consumers avoid unwanted direct marketing, "It's vaporware so far, but it's the first announcement that they're providing a little bit of access," describing the plan a "significant step" for DoubleClick, the largest server of online ads and an extensive user of cookies.
The principle for the move is that individuals have a right to know when and how they're being profiled. However, DoubleClick intends to provide information only about the categories of sites that users visit, rather than access to all profile data.
The kind of personalised profiling of advertising recipients that Doubleclick intended is virtually the same as that suggested by some proponents of interactive TV - hence a similar ruling can be expected in the future when TV takes the same steps as online.
Wednesday 28th August 2002
RTL sales switch
Jan Stenbeck successors appointed
ProSieben investment welcomed
US favours Vivendi demerger
Vivendi loan's downside
RTL concentrates on Ch5
3G mast-sharing expected
Liberty/Callahan Alliance
new CEO for Teleste
Irdeto's Chinese win
RTL sales switch
The RTL sales house IP Deutschland its family and kids oriented channel Super RTL, have prolonged their existing sales contract for another three years.
The extension will run from January 1, 2003 until December 31, 2005. The contractees did not announce any further details. It is no longer a company requirement that German RTL branded channels will remain with IP.
RTL II has said that it is not extending its contract with the sales house. The background is that RTL II co-shareholder Herbert Kloiber, who recently relaunched the Tele 5 free to air network, seems to have been working behind the scenes to summon all small channels to create a third TV advertising sales body for small channels. It's no surprise that small digital pay TV channels on the Premiere platform are not satisfied with the service of SevenOne Media, the ProSiebenSat.1 sales house that conducts sales for Discovery and Fox Kids. The two Universal channels have been sold by Universal for some time now.
Also Premiere boss Georg Kofler, a former head of ProSieben, has said that he will sell the advertising for his channel within his own organisation. He still is close with former SevenOne boss Michael Woelfle who is working behind the scenes to launch his own new organisation. However it appears that this company will not target regular sales houses, but a service provider able to will offer specialised sales services such as centralised research or spot distribution. Nothing has been inked yet, but at least everybody in the business is talking to everybody again.
Jan Stenbeck successors appointed
By Goran Sellgren
Last Thursday (22/8/02), days after the sudden death of Swedish media tycoon and industrialist Jan Stenbeck, the inner circle of 'Our group' - as the feared and admired Stenbeck used to call his empire - gathered together with the four children of Stenbeck at his farm in Luxemburg to decide on the future management of the crisis-ridden conglomerate.
The share- value of the 'group' has gone down by several hundred per cent in the last half year. The unexpected death of this high-profiled aucocrat - who held tight and sole control of the empire he inherited 30 years ago and transformed into a modern media operation - made the shares of all the six main operations of the group fall even deeper. Stenbeck was the Chairman in all his groups.
It was stated early on that successors to Stenbeck on the six chairs would all be sought within the existing boards, to avoid losing momentum. Appointing external people would require extra meetings of the boards, considered too time-consuming in this emergency situation. None of the companies have their next ordinary general board meetings before next spring.
It was therefore no surprise when Pelle Toernberg, 46, was appointed the new Chairman of the group's leading media operation, Modern Times Group, MTG. This former journalist, with no business background whatsoever, was involved early on by Stenbeck. In 1989 Toernberg and a journalist colleague, Robert Aschberg (still active in the company) formed production company Strix, with personal financial and moral support by Jan Stenbeck, to help produce for the fledgling TV3, Stenbeck's first TV operation.
Stenbeck soon discovered Tornberg's talents as a leader (and soon also became his master's main play-mate). A few years into the Ninties Toernberg was given the role of supervising all media operations at Stenbeck's crown jewel, Kinnevik, where he also became deputy MD. When MTG was formed in 1995 he became its first MD. A year ago Toernberg was moved by Stenbeck to the helm of new publishing group, Metro International, currently publishing free commuter tabloids around the world and still heavily in debt.
Due to the present major financial problems of Metro International the appointment of a new Chairman will not be official until some time next week.
Bruce Grant, an American IT and management executive, has become the new Chairman in Tele2, considered the most successful and promising of all Stenbeck's creations. He also sits on the boards of Metro, Tele2, Kinnevik and US-based Great Universal. He is 43 and has worked with Jan Stenbeck since 1997.
Ulf Spaang, 54, is the new Chairman of Kinnevik, having joined its board in 1998. He is deputy MD at Skandia, one of the biggest Scandinavian insurance and financial groups.
Invik is another important and powerful spider in the strange and complicated web of Jan Stenbeck. Called the 'power investment group', it will be steered by Johan Bjoerkman, 58, another outsider, who had his first assignment from his childhood friend Stenbeck in 1998, when he was elected onto the board of Invik.
Vigo Carlund is a true veteran in 'the group.' He started his career in the Sixties as a chauffeur for Stenbeck's father Hugo and has gradually worked himself towards the very top. For the last few years he has been MD of Kinnevik. At the age of 54, he now also becomes Chairman of Transcom, one of the smaller pieces in the big jig-saw.
Haakan Ledin, 64, takes over at Millicom, a cellular phone operation with a focus on underdeveloped countries, and the major financial problem of 'the group', hence possibly the first to have to be divested. He has a background at Ericsson and has had executive functions in many of the company's operations.
Nothing has been officially said about Stenbeck's four children, even though his eldest daughter, Cristina, born in 1977, was publicly appointed 'crown princess' by her eccentric and powerful father a couple of years ago. Everyone now expects her to be 'schooled in' by the all male members of inner circle of 'the group'.
ProSieben investment welcomed
by Dieter Brockmeyer
The insolvency administrators of Kirch Media, the bankrupt core business of Germany's media conglomerate KirchGroup intends to allow investment in the company's TV assets, which are bundled into the 52.5 per cent stake in ProSiebenSat.1.
This was confirmed by the group on Monday (26/8/02) and is meant to make investment more attractive to investors. Additional core features from the Kirch assets - such as the huge program library - could be added at a later state. The ProSieben asset is the company's most valuable by far since it is profitable and the controlling stake is much higher since the public floated stake is only preferred stock with no influence on the company's decisions. Among those said to be interested in the opportunity of investing directly in in ProSiebenSat.1 is Italy's Mediaset, but reportedly, 'only if the price is right'.
In the meantime, according to German news reports, 75 year old Leo Kirch and his disciple Dieter Hahn are back on the 'dance floor'. They intend to take over the Swiss-based Kirch Sports AG which holds the global rights for four major sports events, including the 2006 world soccer championship to be held in Germany. For that he needs to cash in his 40 per cent stake in the German publishing group Axel Springer AG.
Kirch has the right to sell that stake until the end of August. Then it goes to Deutsche Bank to pay for a E750 million loan the bank gave to Kirch. To gain some time Kirch is said to have sued the bank for renaging on this agreement. Since the trial is due on September 10, the bank can't do anything before that date. The German publishing group WAZ has already confirmed its interest in the Springer stake. However, the publisher's widow Friede Springer, who controls over 50 per cent of the group, is deliberately avoiding the competitors' proposal. She has to agree to any new investor.
US favours Vivendi demerger
There are calls by senior executives for a demeger of the E10 to 15 billion Vivendi Universal Entertainment from its French parent. The media conglomerate was formed last year by merging Universal Studios Group (Universal Pictures and various theme parks), with cable channel assets acquired from Barry Diller's USA Interactive for E11 billion last December.
The FT reported one exec as saying, "At the moment, there are a lot of assets that don't fit together, hoping for synergies from the Internet that just don't exist."
Now Vivendi Universal is said to be considering a demerger of the 86 per cent-owned division, as part of the second phase of Vivendi's E10 billion disposal programme.
Diller is expected to emerge a key player in any demerger as he is a 1.5 per cent stake holder, Chairman and Chief Executive of VUE, and USA Interactive. He is expected to play a major role in any demerged entity.
While the move would be expected to include most of the division's assets, beyond just the studios, it appears that executives are undecided whether Universal Music Group should form part of any demerged entity, as it is both separate, but complementary to the rest of the organisation.
On a pro forma basis, VUE reported 21 per cent revenue growth in the first half. Operating income grew by 36 per cent, primarily due to Universal Pictures.
Vivendi loan's downside
Vivendi's new Chief Executive Jean-Rene Fourtou is seeking an extension to the company's E2 billion rescue loan facility from a group of seven banks to plug a E1.4 billion funding gap to ensure it avoids any default.
Vivendi Universal shares have fallen 80 per cent since the start of the year and the company reported an E12.3 billion first half loss, with an announced debt of E19 billion (E35 billion including Vivendi Environnement). If the company agreed a new E2 billion loan - likely to be collateralised - it would also have to renegotiate terms for payment of some E10 billion of its existing borrowing.
Vivendi is seeking to agree a new facility ahead of its September 25 board meeting when Fourtou puts forward his restructure plans.
The FT reports that the seven banks involved in refinancing talks - BNP, Societe Generale, Credit Lyonnais, Credit Agricole, Credit Suisse First Boston, Citibank and Deutsche Bank - are expected to be awarded advisory work on Vivendi's E10 billion disposal programme in return for agreeing the facility.
RTL concentrates on Ch5
Bertelsmann-owned RTL of Germany, the pan-European broadcaster plans to increase investment in Channel 5 in the UK rather than make any takeover bid for either of the country's main terrestrials, Carlton or Granada.
Didier Bellens, Chief Executive of RTL, said that it would increase its investment in Channel 5's programming, seeking to double the station's audience.
During the Edinburgh Festival, former UK TV presenter Chris Evans said that he is in talks with venture capitalists over purchasing a stake in Channel 5. RTL owns 65 per cent of Channel 5, and publishing group United Business Media holds the other 35 per cent. It is this latter share, valued at E312 million to E468 million that Evans is reportedly interested in buying.
* File-swapping Internet pioneer Napster sees its remaining assets acquired Bertelsmann for just E9 million - on top of E85 million already lent to the company.
3G mast-sharing expected
The European Commission is expected to gramt mobile phone operators mmO2 and T-Mobile permission to share the costs of building their third generation mobile infrastructure in the UK.
German group T-Mobile and the UK company mm02 would combine operations in Germany and the UK, and thereby save up to E5 billion.
Preliminary regulatory approval has been given for cooperation in Germany and the two are optimistic that UK approval will also be forthcoming in the next few days.
If approval is confirmed, the two companies have said that they would combine base stations, antennae and network parts to save money - and reduce environmental impact of duplicate masts. MmO2, formerly called BT Cellnet, and T-Mobile, previously One2One, paid E6 billion each for 3G licences in the UK alone. mmO2 estimates that following this agreement its total 3G infrastructure expenditure in the four companies in which it operates - the UK, Germany, Ireland and the Netherlands - will be E4 billion.
The EU previously considered co-operation agreements as anti-competitive, but now - aware of the huge losses incurred by the operatators - the EU has stated that the new cooperation agreements have been drafted in a way that addresses these concerns. The initiative does not cover joint operating strategies such as the pricing of services, which would have faced much tougher regulatory scrutiny - and the operators have been warned against cooperating too closely.
The companies plan to start 3G services in the second half of 2003.
Liberty/Callahan Alliance
Despite being blocked by the German regulator earlier this year, John Malone's Liberty Media remains a player in European cable consolidation, and is once again seeking to bid for Deutsche Telekom's cable television interests, this time linkiing with private equity investor Blackstone Partners and the New York-based Apollo (See News Archive).
Liberty Media has also been reported to be considering a German alliance with fellow American cable investor Callahan Associates. Callahan's cable affiliate in North Rhine Westphalia recently filed for bankruptcy, and the holding company could form the basis for an alliance that would later encompass other Callahan units in Europe, including Telenet in Belgium.
* Liberty Media subsidiary, Liberty Broadband Interactive Television, has bought US interactive television provider Wink Communications for some E100 million following 69 per cent approval for the deal from Wink shareholders.
New CEO for Teleste
Teleste Corporation's Board of Directors has appointed Jukka Rinnevaara (41), M.Sc.(Econ.) as its new President and Chief Executive Officer. He will succeed Timo Toivila and will start in the new position latest on November 1, 2002. Teleste's current CEO, Toivila will remain in his position until Rinnevaara takes up his duties.
Rinnevaara is currently Business Area Manager for ABB Building Systems in Zurich.
Irdeto's Chinese win
Irdeto Access has completed the installation of its large scale Irdeto psys conditional access system at Guangdong provincial CATV as an upgrade of its previously delivered Irdeto M-Crypt system. The installation followed other successful Irdeto psys installations at CSTTC and CBSAT earlier this year.
Irdeto psys, a digital content protection solution enables the convergence
of DVB and IP environments. The system has a high capacity and is capable of handling up to millions of subscribers.
The province of Guangdong, on the southern coast of China, is one of the most economically advanced provinces in China. Guangdong was selected by state authority SARFT to be one of the provinces for digital TV projects after the decision to establish the unified national backbone network and to construct province-wide DTV platforms.
The Guangdong provincial CATV project for Home Banking and Digital TV is reported by Irdeto to have been running smoothly with Irdeto M-Crypt since March 2000. In 2001 Guangdong SARFT made the decision to use one conditional access system throughout the province for the gradual introduction of DTV broadcasting, VOD, Home banking and distance education services to the subscribers in the province.
"We have already had two years of co-operation and experience with Irdeto Access and are impressed with their products and after-sales services," said Feng Xizeng, Deputy Director of Guangdong SARFT.
Graham Kill, CEO of Irdeto Access, added, "We are very pleased that Guangdong SARFT is fulfilling its business plans with the aid of the user friendliness of Irdeto Access' system and our services. In particular our customer support services such as our 24/7 technical support, our approach to combat piracy and our STB integration services provided by our local team played a decisive role in awarding us this deal."
Guangdong province has a population of 68 million with six million CATV subscribers. The initial subscriber base estimated till the end of this year will consist of 300K subscribers, with an estimated increase to 500K by the end of 2002. The phase optical backbone network has been launched in the province covering over 4000 km. The cable broadcasting and television access networks have been fully upgraded to 750 MHz HFC.
Tuesday 27th August 2002
Job cuts at Bertelsmann
Telewest gets bank OK
Randy President for Playboy.com
Tivo losses down, revenue up
Airey's muli-million ITV offer
Job
cuts at Bertelsmann
Gunther Thielen, the new Chief Executive of German media group Bertelsmann,
has launched a reorganisation and downsizing of the company's group headquarters,
which is expected to result in some job cuts.
The move is part of a strategy to boost the autonomy of its operating
divisions, reversing predecessor Thomas Middelhoff's centralisation prior
to a planned 2005 initial public offering.
Thielen said he would reinforce the group's decentralised structure and
"ensure our business divisions continue to have as much creative and decision-making
autonomy as possible."
The chief operating officer post has been abolished, and now the "corporate
executive council" will be dissolved. The changes also see closure of
the "office of the chairman", a 15-strong secretariat set up by Middelhoff,
and closure of BeCapital, an incubator and venture capital arm.
"As a result, staff cuts will be inevitable in these areas," Thielen told
staff in a letter, emphasising, "Decentralisation also means that work
must increasingly be done within the divisions and companies themselves."
The changes are expected to be particularly welcomed at RTL Group - Europe's
biggest television broadcaster and the group's largest unit.
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Telewest gets bank OK
UK number two cableco Telewest has been given the go-ahead by its banks for talks with its bondholders on a planned debt for equity deal to slash its E8.3 billion debt.
The company's bank syndicate, owed E2.8 billion, has pledged to waiver a E3.53 billion syndicated loan so that it can proceed with a debt-for-equity swap, allowing it to start formal talks with the owners of bonds with a face value of E5.64 billion. Restructuring at the group is expected to last around five months and could be transformed to include a rescue deal with ten per cent stakeholder John Malone's Liberty Media.
UK number one cableco NTL is has already agreed an E11 billion debt for equity swap with its bondholders and expects to finish its recapitalisation by early October. If Telewest completed a similar deal, the debt loads at the companies could be low enough to allow the two to complete a long mooted merger.
Europe's largest cable group UPC and the telecoms equipment maker Marconi are pursuing similar deals, leaving existing shareholders to face huge losses.
"Telewest has secured the necessary waivers and consents from its bank group to permit it to enter into discussions with, among others, its bondholders concerning a possible reconstruction of its balance sheet," the company said.
Telewest had been prevented from entering deals with its bondholders that would damage the lenders' prospects of getting their money back.
The new Managing director Charles Burdick said that Telewest was moving toward a debt-for-equity swap, saying early this month, "It is becoming more and more likely."
The company's high revenue growth encouraged bankers' confidence in Telewest's recovery prospects.
Ahead of the restructure the company has appointed a new finance director, Mark Luiz, the company's Chief Operating Officer, to take over the role vacated by Charles Burdick, who quit became Managing Director of the group last month.
Luiz, who had been running Telewest's cost reduction programme, inlcuding 1,500 job cuts, will now oversee the operational side of the business, such as sales and customer care. Burdick will be negotiating an overhaul of Telewest's debt-laden balance sheet.
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Randy President for Playboy.com
Randy A Nicolau has been appointed President of Playboy.com Inc where he succeeds Lawrence R Lux.
Nicolau's marketing background was described by Playboy Enterprises Inc as a "direct fit" with how the company wanted to grow. Nicolau, 32, has been with Playboy.com since last year as senior vice president responsible for marketing, e-commerce and subscription services.
Prior to joining Playboy, Nicolau served as senior vice president of sports site Small World Media Inc, marketing consultant for cursor-software company Comet Systems Inc and chief executive of Bridgepoint Marketing LLC.
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Tivo losses down, revenue up
Digital video recorder maker TiVo Inc reported a smaller net loss for its second quarter on 22/08/02 as revenue grew sixfold.
Revenue guidance for fiscal 2003 was increased while its operating-loss estimate for the year was lowered - with shares rising 14 per cent on the announcement.
Net loss for the fiscal quarter ended July 31 was E3 million, compared with a year-earlier net loss of E34.5 million. The company reported adding 42,000 subscribers in the quarter, to reach a total of 464,000.
The highpoint was that revenue in the quarter reached E23.9 million, compared with E4.1 million a year earlier. Two weeks ago, TiVo said revenue would be E23 million to E24 million, twice its previous expectations, because of revenue from a licensing deal.
For the current quarter, TiVo said it expects revenue of E12.5 million to E14 million, an operating loss of E13 million to E16 million and net activations of 40,000 to 50,000 units.
For fiscal 2003, Tivo now expects revenue of E57 million to E62 million, compared with its prior view of E50 million to E60 million. It expects an operating loss of E64 million to E72 million, compared with a prior expectation of E65 million to E80 million in operating losses.
For the year net subscriber additions of 250,000 to 275,000 are predicted, to reach a total of 630,000 to 655,000 subscribers by the year end.
Auditors KPMG discovered some accounting errors in the treatment of non-cash, non-operating items related to convertible notes issued in August 2001. TiVo said the restatement will not affect the company's current reported cash, revenue or operating loss. TiVo also said it would file amended annual and quarterly reports with the US Securities and Exchange Commission after making the changes.
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Airey's muli-million ITV offer
UK terrestrial Channel 5 Chief Executive Dawn Airey is reported by the Guardian to be considering a multimillion pound offer to head up ITV.
Airey is reportedly willing to take the post of Director of Channels at ITV Ø on condition that she gets complete control of the channel and a guaranteed substantial exit package if a unified ITV is taken over within a few years.
ITV is said to have offered Airey - who earns around E470,000 a year at Channel 5 - a pay deal worth between E3 million to E4.7 million including the exit clause. Meanwhile, RTL, the majority shareholder in Channel 5, reportedly offered a salary boost, a hike in her programming budget, and 'shadow share options' in Channel 5, effective if the channel is sold or floated. This is because Carlton and Granada could merge over the next two years and a unified ITV could then be taken over by a European or US-based media group.
Carlton's Clive Jones and Granada's Mick Desmond, who took over as joint managing directors following the resignation of the chief executive, Stuart Prebble, earlier this year, would make way for Airey if she was appointed.
has been offered by ITV.
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No news posted Monday 26th August due to UK public holiday
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