AFTRA says it is 'making progress' in AMPTP talks

Actors union moving forward in talks with producers

By Leslie Simmons
May 15, 2008, 08:05 PM

As AFTRA and the Alliance of Motion Picture & Television Producers continue their negotiations, the union sent its members an e-mail newsletter Thursday indicating that though it's limited in what it can divulge about the current talks because of a media blackout, the union is "making progress."

The e-mail, sent by AFTRA president Roberta Reardon, said that 31 working performer members are part of the prime time negotiating committee, chaired by Matthew Kimbrough. The committee has been "laboring diligently and responsibly in talks with the (AMPTP) regarding a new three-year agreement to Exhibit A of the Network Code," Reardon wrote. "We're making progress -- and the negotiating committee will be providing you with an update very soon."

Talks between the two sides started up May 7 after formal negotiations between SAG and the AMPTP ended without a deal the day before.

Exhibit A of the Network Code covers prime time TV dramas and sitcoms repped by AFTRA, including "Rules of Engagement," "Cashmere Mafia," " 'Til Death" and "Reaper."

The current contract expires June 30.

SAG-AMPTP TALKS TO CONTINUE

Raising hopes that some progress is being made in talks between members of the Screen Actors Guild and the Alliance of Motion Picture and Television Producers after all, the two groups announced on Friday that they would return to the bargaining table.

The Screen Actors Guild has agreed to return to the bargaining table on May 28, or perhaps earlier, following the presumed conclusion of current negotiations between the American Federation of Television and Radio Artists and the Alliance of Motion Picture and Television Producers.

SAG officials are due to provide members with an update on their position on the remaining issues facing the negotiators at a "town hall" meeting on Monday.

Localism's National Consequences

Financial fallout for networks seen as likely result of FCC requirement

By John Eggerton -- Broadcasting & Cable, 5/12/2008

A TV industry trying its best to keep up with nimble new-media competitors may have an expensive new albatross to deal with: the FCC's series of proposals to promote localism.

Among the proposals the commission offered up last December was one requiring TV stations to locate their main studios in their cities of license. A But network executives fear that the industry has already spent billions on new facilities now in jeopardy if the FCC forces stations to move those facilities back to their home markets. The moves could lead to a hefty tab for those stations.

The FCC had initially adopted this home-market requirement to make sure viewers had easy access to their local station and its management. But the commission loosened the rule in 1987 during its Reagan-era broad deregulation of the industry, and further loosened it in 1998, allowing stations still more flexibility.

The FCC justified its 1998 decision by arguing that stations were more easily reachable by virtue of “mass transit and modern highways.” Today, the Internet makes the link between viewers and stations, wherever they're located, virtually instantaneous.

The FCC is also requiring stations to put their public files online, rather than make viewers visit the station to peruse them.

The commission has not indicated any definite return to the old rule, but is considering it. That alone is enough to alarm skittish broadcast executives already dealing with a down economy and the expense of the switch to digital, particularly since FCC Chairman Kevin Martin has backed other localism proposals in the media ownership review.

The FCC's more relaxed 1998 ruling permitted broadcasters to consolidate facilities, according to a veteran communications attorney intimately familiar with the issue. But while that was economical, it also proved a target for anti-consolidation activists.

“We seek comment on whether we should revert to our pre-1987 main studio rule in order to encourage broadcasters to produce locally originated programming,” the FCC posed in its Jan. 24 localism order, “and seek comment on this, and on whether accessibility of the main studio increases interaction between the broadcast station and the community of service.”

One of the companies that took advantage of the 1998 rule change was ABC, which told the FCC two weeks ago it had spent $100 million on new facilities for TV station KABC Los Angeles, locating the studio in nearby Glendale. And with no mention of grandfathering existing stations in the proposal the FCC has floated, broadcasters are worried they might have to spend millions more to move.

Disney called the new suggestion an “irrational” proposal, adding that, “Forcing KABC to change locations after its staggering investment—all made to better serve the Los Angeles community—would be arbitrary and capricious.”

Allbritton's WJLA Washington moved to new digs in nearby Roslyn, Va., just across the Potomac River, in 2002. “We did a real estate search; the FCC rules permitted us to move,” says senior VP Jerald Fritz. “If I have to move a couple of hundred yards, it's going to cost me millions of dollars. And to what end?”

Not to grandfather existing facilities would punish all the companies that built those facilities based on the old FCC rules. Would the FCC really create such an ex post facto nightmare? “I have no idea,” says the communications attorney. “I have given up thinking what they could or could not do.”

And for the stations that have moved or consolidated, “It would cost [each one] millions and millions of dollars,” he adds. “The burden would be horrendous. They would have to find a building or build one, and the one that they had built would be empty space they couldn't use.”

National Association of Broadcasters spokesman Dennis Wharton calls derailing the studio proposal a “huge priority” for the association. He points out that more than 120 House members and 28 senators have sent letters to the FCC expressing their concern, which he calls “reflective of the broad, bipartisan concern of members of Congress.”

Wharton points out that Post-Newsweek built its main studio in Miami outside the hurricane zone so that it could continue functioning in the event of a storm. “What is more important here,” he posits, “having a studio in the hurricane zone or actually staying on the air and saving lives?”

John McCain’s record as it stacks up against our key issues

As the Democratic primary winds to a close, we thought it would be a good time to start looking at John McCain’s record as it stacks up against our key issues:

• Collective bargaining and the Employee Free Choice Act
• Health care reform that reduces employers’ demands for concessions
• Retirement security that protects our pensions
• Fair trade

I'm interested in hearing what CWA members think about John McCain. What are the most common things you hear about John McCain from your co-workers and friends? Please send in your comments:

http://www.cwavotes.org/feedback

We’ve asked our folks to look into the McCain record, and I’ve been disappointed that this patriot has consistently voted against our key issues.

On collective bargaining, John McCain voted for a National Right-to-Work for Less law that would attempt to eliminate unions altogether. He voted against the Employee Free Choice Act and has said unions have "serious excesses."

On health care, John McCain wants to tax union members $3,000 for our negotiated benefits. He may say he supports tax cuts, but we’re paying more for our health care because of them – and there is no relief in sight at the bargaining table.

On retirement security, John McCain voted to privatize Social Security and trust Wall Street with our retirement. He voted to raise the age of eligibility for Medicare from 65 to 67. He voted against pension protections and against allowing the government to negotiate for lower prescription drugs for Medicare.

And on fair trade, McCain says he supports free trade and most favored nation status to China. That has resulted in nearly 2 million lost jobs – mostly from manufacturing. He opposes tougher sanctions and inspections to keep us safe from toxic toys and food made in China. And he supports Bush’s economic policies that have us borrowing billions from China.

John McCain may appear to be a good guy, but his voting record is out of touch with working Americans.

Let me know what you think and what you’ve been hearing about John McCain:

http://www.cwavotes.org/feedback

This is a big year for us. We’re bargaining for 55,000 workers at Verizon and 20,000 workers at Qwest, along with the hundreds of other contracts across the country.

Our ability to bargain good contracts is influenced by the political climate and growth in the union movement. That’s why we’ll be spending the upcoming weeks and months talking about John McCain, and providing new opportunities for members like you to get involved and help in the elections this fall.

In Unity,




Jeff Rechenbach
Executive Vice President
CWA

'Newsday' Sale Not Enough To Plug Tribune Debt

By Mark Fitzgerald
Editor And Publisher

Published: May 12, 2008 12:45 PM ET

CHICAGO Tribune Co.'s $650 million sale of Newsday Monday gives the Chicago media giant some breathing room on its $12.8 billion in debt -- but not much more.

Thanks largely to the $8.2 billion in debt it took on to go private in the deal engineered by real estate mogul Sam Zell, Tribune faces a debt service bill of $1 billion this year. And that doesn't include a $650 million payment due in December.

"Does it help Tribune? Yes. Is it the last asset sale? No," said David Novosel, a Chicago-based analyst for Gimme Credit, an independent research firm on corporate bonds. "So while its good news from Tribune's perspective, it certainly doesn't solve all their problems."

Novosel said he was pleasantly surprised by the price, which was $50 million more than he expected. But in a telephone interview, he repeated a theme he has sounded in notes to investors: Tribune debt is at distressed levels, and continuing assets sales are a must.

"I would say it is not on the verge of bankruptcy," Novosel said, "because I think the assets sales will get them over the hump near-term. Can I see them going on the verge in mid-2009? I would say yes."

Another balloon payment from the going-private debt comes due in mid-2009.

This is the biggest asset sell-off so far for Tribune Chairman and CEO Zell, who at first vowed not to shed any properties except the Chicago Cubs Major League Baseball team and its Wrigley Field home.

Tribune earlier this year sold a studio production lot in Hollywood for $121 million.

It is also apparently accelerating what had been a slow pace in selling the Cubs. The team, the stadium and naming rights could bring as much as $1 billion.

In the $650 million Newsday deal, which is fashioned as a joint venture to defer capital gains taxes, Tribune will receive $612 million in cash plus $18 million in rent prepayments on certain property leases. Its continuing 3% equity stake in Newsday is valued at $20 million.

Cablevision Announces Purchase Of Newsday

This story was reported by MARK HARRINGTON, ELLEN YAN, JAMES T. MADORE and THOMAS MAIER |It was written by HARRINGTON. E-mail mark.harrington@newsday.com

May 12, 2008

Cablevision Systems Corp. is expected to announce this morning an agreement to acquire Newsday from Tribune Co. in a $650-million deal that would create a regional news and advertising giant with a powerful grip on Long Island.

Charles Dolan, Cablevision's founder and chairman, who has long had an interest in Newsday, said in an interview last night that a few details were still being ironed out. He declined to discuss his plans for Newsday but said he would soon.

"I think they're just finishing things and we should hear something shortly," said Dolan, 81. "They have an infinite reservoir of minor details that they need to address ... There's a group and they're working very hard on it, and we're anticipating they'll be through shortly if they're not through already. I hope we'll be talking soon."

The agreement, which a source said was signed last night, calls for the creation of a joint venture in which Cablevision owns 97 percent of Newsday and its subsidiaries, with Tribune Co. retaining the remaining 3 percent, according to a source familiar with the transaction.

The deal will be financed with $650 million in Cablevision bonds underwritten by Bank of America. Cablevision would pay Tribune $612 million in cash and $18 million in rent payments for Newsday properties that Tribune will continue to own. In addition, Tribune's stake in the partnership is valued at $20 million, the source said.

The purchase is expected to be completed in late July or early August, the source added.

"This agreement enables us to maximize the value of Newsday and still retain an interest in this valuable asset," said Tribune chief executive Sam Zell. "The newspaper has a unique circulation base and a tremendously strong brand. I expect them to grow and flourish as a result of this new partnership."

The Chicago real estate magnate bought Tribune last year when he took the company private and created an employee stock ownership plan. However, this saddled Tribune with billions of dollars in additional debt that had led it to sell off assets, such as Newsday.

Cablevision, a latecomer to the bidding for Newsday, beat News Corp. chief Rupert Murdoch, one of the world's most influential media moguls. He bid $580 million for the newspaper and dropped out on Saturday, saying a deal had become "uneconomical." Daily News owner Mortimer Zuckerman also bid $580 million. Spokespeople for the Daily News declined to comment yesterday.

Cablevision would take possession of Newsday's print, online and affiliated media operations, including the commuter daily amNewYork and weekly shoppers in the Star Community Publishing family. Tribune would retain Newsday real estate, including the paper's Melville headquarters, printing operations and affiliated properties.

Spokesmen for Cablevision, Tribune and Newsday declined to comment. A source close to the cable operator said, "We see this as an excellent fit with Cablevision assets."

The source said Cablevision is interested in Newsday's advertising operations, including classified sales, and envisions using the newspaper to expand the amount of local advertising Cablevision sells on the hundreds of channels on its system.

Cablevision also sees opportunities to expand its Internet operations with Newsday content and brand.

The deal realizes a long-held ambition by Dolan to own Newsday. He and his son, James Dolan, Cablevision's chief executive, hand-delivered the $650-million bid to Tribune chief executive Sam Zell less than two weeks ago, a source said.

One person familiar with Cablevision's thinking said the combination of Newsday into Cablevision provides the company with a trove of ammunition needed in its battle with Verizon, which is crisscrossing the region with a fiber optic-based television network called FiOS.

Dennis Grabhorn, president of the Graphic Communications Conference, Local 406, which represents Newsday print-shop, delivery and editorial workers, said yesterday he had not heard from Cablevision officials. "We'll have to sit down and negotiate with them," he said, noting the current union contract extends to 2010. Though wary of dealing with owners outside the newspaper industry, Grabhorn said he was open to the new owners. "Maybe the Dolans might surprise me," he said.

Cablevision's ownership of Newsday would likely bring financial relief and perhaps more investment in the operations after years of cutbacks because of Tribune's fiscal problems, said Christopher Marangi, an analyst with Gabelli & Co. The firm, with an 8 percent stake in Cablevision, has advised against the sale as a distraction from Cablevision's long-term cable and television strategy.

Despite cutbacks, Newsday continues to be among the region's most profitable newspapers, earning almost $90 million last year on sales of $500 million. The New York Post is said to lose $50 million a year, while the Daily News is believed to be marginally profitable.

Marangi yesterday acknowledged Charles Dolan may have been smart to bid on Newsday at a time when the price for all newspapers is low because of the economy's downturn.

"It may be a savvy play - that newspapers aren't dead yet and he may know more than we think," Marangi said. "This should take some of the monetary pressure off of Newsday. They are not as leveraged and constrained as Tribune is."

NBC Makes A Leap To 24-Hour Local News Channel

A media critique by Wayne Friedman , Friday, May 9, 2008
MediaPost's TV Watch

ARE LOCAL TV STATIONS' PROGRAMMING operations in trouble? Apparently, yes. What's the answer? Do more -- a lot more.

You can easily make a case that the Internet and other digital options are eating into local TV stations' advertising revenues.

So NBC figures to grab more --- not less -- shelf space. It will be starting up a local 24-hour digital news operation under the NBC banner through its New York City outlet, WNBC's new digital signals. It'll run on local cable systems' digital tiers.

Local TV digital signals will be the new world of programming homesteading. Right now filling 24 hours of content is a tough chore, costing a lot of money. But with news you can extend more easily into a 24-hour channel. Cable news networks in the '80s, like CNN, started this way.

In this DVR world, you don't want to time-shift news. You want news immediately -- and refreshed, with updated leads to stories you might have missed.

A 24-hour local news network would draw more viewers --albeit in sorter 10 minute to 15 minute increments -- just as national TV cable news cable channels have been doing for the last two and half decades.

NBC isn't the first to do this. Some cable operators have been into the 24-hour local cable TV news world for some time -- including Cablevision System's longtime News12 channel in the New York metropolitan area.

NBC, with a brand name already in place, seems to have an advantage over other cable news networks.

But is the move too late?

"In order to remain successful, local stations must put the appropriate weight on the additional platforms beyond their core television station," said John Wallace, president of NBC Universal's Local Media Division, which includes the NBC owned stations, in a release.

Wallace may have really meant, in order to survive.

NBC Plans 24-Hour News for the New York Region

By BILL CARTER

Published: May 8, 2008

The New York Times

NBC Universal announced on Wednesday plans to start a 24-hour local cable news channel similar to New York 1. It will de-emphasize the identity of NBC’s flagship station, WNBC, Channel 4, rechristening it a “content center” and making it one part of a larger media presence.

The new channel will provide the first 24-hour local news coverage of the New York region, including New Jersey and Connecticut.

NBC’s plan calls for rebuilding Channel 4’s newsroom and melding its content closely with the new channel, as well as an existing locally oriented Web site and video displayed in places like gas pumps and taxi back seats. NBC will even take WNBC’s name off the Web site, wnbc.com, simply calling it NBC New York. Local news will still be shown on Channel 4.

The 24-hour news will be available to customers who have digital service on cable systems in the New York area, including Time Warner, Cablevision and Comcast. It is expected to begin in November.

NBC broke the news of the restructuring to WNBC employees at a staff meeting on Wednesday morning, led by John Wallace, formerly president of NBC’s owned-and-operated stations but now president for local media, a change in titles that signifies how the network is de-emphasizing local broadcasting.

Among other things Mr. Wallace planned to tell employees that the moves would not necessarily entail layoffs, but would require extensive retraining for many producers and other employees, who may have to work different shifts.

If the plan is deemed a success — and Mr. Wallace said that should be clear by the second quarter of next year — NBC will begin to take the same steps with the other stations in cities like Los Angeles, Chicago and Philadelphia.

NBC owns 10 stations; those in Miami and Hartford are for sale. The reasons for reshaping WNBC are tied to the coming expansion in digital capacity for local broadcasters, as well as the sharp decline in profitability for local stations.

Digitization will enable stations to add numerous channels to their broadcast spectrum. (NBC may also add a channel devoted to local lifestyle coverage, which would include real estate listings and restaurant reviews.)

Mr. Wallace said that local television “has a perception issue right now as to whether it is a sustainable business long term.” Once a huge generator of cash for media companies, local stations now have an “eroding and aging” audience and have become “slow-growth business,” Mr. Wallace said, adding that their revenue growth averages between 1 percent and 3 percent.

“We look at our content, and we believe it’s relevant content,” Mr. Wallace said. “It’s just not convenient because of the way people’s lives have changed with technology.”

Although WNBC will continue to broadcast local news, Mr. Wallace said the new structure “will be organized around the content, not the show,” with effort concentrated on creating many news segments instead of one news program. The Channel 4 news will be simulcast on the new 24-hour news channel, which will be called New York’s News channel.

Providing round-the-clock live news will not require NBC to hire more employees for the new channel; it plans to rely instead on expanding the duties of its present staff members, which Mr. Wallace called “a work-flow change.” He said, “There will be no added staff. We’ll just use them differently.”

Producers, for example, whose previous focus had been “getting the show on the air at the assigned time,” will be retrained to produce video segments instead of shows, with the goal being to spread the segments across various local NBC platforms, be they the news channel, the Web site or the taxis.

Mr. Wallace said that he was unsure how WNBC employees would react to the redefinition of their roles and the need to be retrained, though he expected “some natural resistance that comes with any type of change.” He added, “It’s exciting, but it’s going to take a lot of heavy lifting because it’s a change in culture.”

NBC also is announcing a plan to relocate its non-NBC operations, including the main offices of cable channels like USA and Bravo, out of the NBC Universal headquarters at 30 Rockefeller Center, where it said it is running out of space, to a new, still unselected, office building.

All NBC operations, like NBC News and late-night shows like “Saturday Night Live,” will remain at Rockefeller Center.

Tribune Adds Six Flags CEO To Board

Associated Press 05.09.08, 3:50 PM ET

CHICAGO -Tribune Co. on Friday named Mark Shapiro, the chief executive of amusement-park operator Six Flags Inc., to its board.

Sam Zell, chairman and chief executive of the media conglomerate, said Shapiro was a good fit because the company has been on a "roller coaster ride" for the last few years and added he also has broadcasting and entertainment experience.

Shapiro was elected at the company's annual meeting on May 7.

The board also elected Gary Weitman senior vice president of corporate relations.

Tribune co. owns the Los Angeles Times, Chicago Tribune, Newsday and other newspapers. It also has a broadcasting division that operates 23 television stations.

On Wednesday the company reported a first-quarter gain of $1.82 billion from continuing operations Thursday due to a change in tax status but said revenue declined 8 percent as newspaper ad sales continued to slump.

Tribune Co. posts $1.82 billion gain on change in tax status, but revenue slides 8 percent

CHICAGO: Tribune Co. reported a first-quarter gain of $1.82 billion from continuing operations Thursday due to a change in tax status but said revenue declined 8 percent as newspaper ad sales continued to slump.

The newly private media conglomerate released quarterly numbers that were consistent with Chairman and Chief Executive Sam Zell's comments last month about the rapid deterioration of its revenues, which have prompted him to consider selling more assets than originally planned.

The huge, tax-related gain compared with first-quarter earnings of $11 million a year ago. It resulted almost entirely from an income tax adjustment of $1.86 billion related to the company's change in tax status at the beginning of the year to a subchapter S corporation.

Tribune, however, had a loss from continuing operations before income taxes of $30 million down from income of $31 million in the same period of 2007.

"Print ad revenues continue to be challenged by the weak economy's impact on real estate and classified advertising," Zell said in a statement. "Broadcasting operating results are notably more stable."

He said the company continues to make significant progress on its strategy to transform operations.

Tribune's advertising revenues were down 15 percent in the quarter, contributing to an 11 percent drop in operating revenues from its publishing division, to $823 million (€536.26 million) from $926 million a year earlier. That unit, which consists of the Los Angeles Times, the Chicago Tribune, Newsday and other newspapers, saw operating profit decline 74 percent to $37 million (€24.11 million).

Circulation revenue decreased 3 percent.

The broadcasting and entertainment division, which includes Tribune's 23 television stations, had a 3 percent increase in operating revenue to $292 million, led by higher national advertising revenue for TV. Operating profit more than doubled to $135 million from $61 million.

Tribune is moving toward sales of both Newsday and the Chicago Cubs baseball team.

http://www.tribune.com0 comments

LATV Strikes Major Affiliation Deal With Tribune

LATV Adding New York, Chicago and Dallas as Digital Multicast Affiliates
Tuesday April 29, 7:00 am ET Media Giant Partners with Bilingual Network in the Number-One, Number-Three and Number-Six DMAs

LOS ANGELES, April 29 /PRNewswire/ -- Just days before its one-year anniversary as the nation's first bilingual/bicultural entertainment and music network distributed via digital multicast, LATV announced today a distribution partnership with Tribune Broadcasting, bringing major stations in New York, Chicago and Dallas into its affiliate fold.

The addition of the number-one, number-three and number-six designated market areas (DMA) places LATV in front of nine million additional television households. This brings the total number of households reached to 32 million in the United States and Puerto Rico. It also places the network in nine of the top 10 Hispanic television markets and six of the top DMAs.

In less than one year, LATV's affiliate roster has jumped from five stations to 33 across the nation. Now, the Tribune deal offers us distribution in three of the most sought-after television markets in the country, said Howard Bolter, LATV president and COO. Tribune had many emerging network options available to put on their digital multicast spectrum and chose LATV, validating our rapid and successful rise in the TV landscape. They are a first-class media company and we look forward to working with them as partners.

The new Tribune Broadcasting affiliates are: New York (WPIX), Chicago (WGN) and Dallas (KDAF).

New York is the number-one DMA, and the number-two Hispanic market. Chicago is the number-three DMA and the number-five Hispanic market. Dallas is the number-six DMA as well as the number-six Hispanic market. All three stations are CW affiliates. Adds Mr. Bolter, "These agreements are especially valuable because just as we have negotiated in many of our past deals, the affiliations are with the top stations in each of the markets."

LATV offers top bilingual/bicultural entertainment programming, and our affiliation with LATV affirms our commitment to providing the highest quality content for our audience, said Tribune Broadcasting's Vice President of Strategy and Administration, Gina Mazzaferri.

In addition to the Tribune Broadcasting stations, LATV most recently announced the affiliation of San Francisco-Oakland-San Jose (KTVU-TV, FOX), a Cox-owned station, and Jacksonville, FL (WJXT, independent), LATV's fifth Post-Newsweek affiliate.

The Tribune agreement takes us over the top as a network with a national footprint. It is real watershed moment for us as more and more media companies are realizing that we have the right product, at the right time, with the right technology, said Starrett Berry, LATV VP, Affiliate Sales.

LATV currently has 33 affiliations across the country in 19 of the top 25 Hispanic television markets. LATV is also carried on basic cable through its affiliates and in Los Angeles on KJLA via cable, broadcast and DBS.

About LATV:

Headquartered in Los Angeles, LATV is the nation's first bilingual/bicultural entertainment and music network distributed via digital multicast. A pioneer in bicultural youth broadcasting, LATV has been in the Los Angeles market since 2001 and launched nationally on April 23, 2007. Post-Newsweek Stations, Inc. is an investor in the national network and has a minority ownership interest in the Company as well as a seat on its Board of Directors. Targeting the 18- to 34-year-old Latino, The LATV programming bouquet offers a range of content that includes multi-genre music, lifestyle and entertainment.

The network is ad-supported and offers an array of programming that is original and exclusive. The company also owns LatiNation, LLC which nationally syndicates the programs American Latino TV and LatiNation. For more information, visit LATV online at http://www.latv.com.

     For more information about LATV, please contact:
    Maite Saralegui
    maite_saralegui@yahoo.com
    323.650.2236

Disney Moves Ugly Betty Production to N.Y.!

ABC sees N.Y. savings too attractive to keep 'Betty' in L.A.

The production is planning to move, sources say, drawn by the state's recent huge increase in the amount of a film tax credit.

By Maria Elena Fernandez and Meg James, Los Angeles Times Staff Writers
May 7, 2008

ABC's "Ugly Betty" is about to get a make-over that has nothing to do with Betty's bushy eyebrows or shiny braces.

The production is planning to pack its designer bags and leave Los Angeles for the Big Apple, where the fictional Mode magazine where Betty works as an assistant to an emotionally needy editor is supposed to be based. Cast and crew members learned of the move at a meeting Monday, according to several people who were briefed on the situation. About two-thirds of the show's 150 crew members, including directors, set designers and carpenters, are expected to lose their jobs.

Walt Disney Co.'s ABC Studios, which produces the program, is planning to move the production to New York to take advantage of a hefty increase in the state's film tax credit. A show such as "Ugly Betty" costs about $3 million an episode to produce and could save a significant amount by tapping into the tax incentive.

ABC executives declined to comment. A studio spokeswoman would not confirm the location switch.

It was unclear Tuesday whether other established TV shows would follow suit.

Two weeks ago, New York's governor signed into law a bill that tripled the amount of the state's film tax credit. Feature films, television series, pilots, and TV movies and miniseries that complete at least 75% of their stage work at a qualified production facility are eligible for a 35% refundable tax credit.

The Empire State kicked off its "Made in NY" incentive program in 2005, and since then has seen a surge in production. In 2006, the city hosted 34,718 location shooting days, a 49% increase over the 23,321 shooting days in 2004.

"Ugly Betty" wraps filming for this season Friday and cast members were told to expect to be in New York by June 30 to begin production of the show's third season.

Although the show's pilot episode was shot in New York, ABC decided to locate the show in L.A. to save money. A Hollywood studio lot has been the show's home for the last two seasons.

On Tuesday, some actors found it difficult to concentrate on their scenes after learning that they would have to move across the country to keep their jobs, according to people close to them.

maria.elena.fernandez@

latimes.com

meg.james@latimes.com

SAG backs off on DVDs

SAG Relaxes some demands as talks continue with AMPTP

By Leslie Simmons
The Hollywood Reporter
May 4, 2008, 06:08 PM

Corrected: May 5, 2008, 09:25 PM

SAG and the Alliance of Motion Picture & Television Producers will return once again to the bargaining table Monday for what will likely be two days of intense negotiations on the actors' contract, which expires June 30.

Although SAG has scaled back some of its demands, including its initial proposal to increase DVD/home video residuals, both sides still remain apart on several issues, including new media.

Friday was to have brought about a temporary halt to the talks, which began April 15, between the union and the producers, with SAG's sister union AFTRA waiting in the wings to start its formal talks on the prime time/TV contract Monday.

But Friday, SAG and the AMPTP announced that they had agreed to continue their formal talks through Tuesday. AFTRA has agreed to start up its talks on Wednesday.

While some have tied the extension to SAG's decision to scale back demands on DVD residuals, sources say that was not the core reason to continue talks and that both sides just wanted to "keep the talks alive."

Still, the extension offers a glimmer of hope for the negotiations, which seemed to have taken a turn for the worse on Wednesday when the AMPTP sent its members a six-page missive indicating there was little both sides have agreed upon.

The studios have so far held the line with other unions in terms of not changing the 22-year-old DVD/home video model. SAG's national executive director and chief negotiator Doug Allen and president Alan Rosenberg have been outspoken about their desire to make gains on the DVD formula. Both have been adamant that they won't follow in the steps of the WGA, which took the issue off the bargaining table in order to move forward in the talks.

The AMPTP has rejected SAG's demand to double the DVD residuals, which it estimated would cost producers $500 million. The producers also took issue with proposed wage hikes they claim could increase as much as 200%.

SAG is now seeking a 15% increase in DVD pay, an indication that Allen and Rosenberg are not giving up just yet. Given the studios past position on increasing the model, however, it's unlikely the AMPTP will budge now, one source close to the negotiations said.

SAG also scaled back its demands for increases in extra and guest star pay.

"That's still on the table," one source said. "There's still not a whole lot that's off the table."

SAG and the AMPTP also are hashing out dozens of changes by the actors union to the new-media formulas already approved by the WGA and AFTRA's Network Code.

Warner Bros. to Take Over Daytime Programming for The CW

Sitcoms from Warner Bros. Domestic TV to air on Warner Bros.-CBS joint venture from 3:00 to 5:00 p.m.

By Ben Grossman -- Broadcasting & Cable, 5/5/2008 1:01:00 AM

Warner Bros. Domestic Television Distribution will supply programming for The CW’s 3 p.m. to 5 p.m. weekday block, according to a pending deal between the corporate cousins.

Beginning this fall, The CW, jointly owned by CBS and Warner Bros., will air Telepictures Productions’ rookie court show Judge Jeanine Pirro from 3 to 4, followed by a comedy block featuring The Wayans Bros. and The Jamie Foxx Show.

Eventually, The CW would like to have two full hours of first-run product in the block by next year. WBDTD and The CW originally discussed doing that immediately, but decided to just start with one hour for now.

While the network does promote prime time in the block, CW executives know the daytime court audience is not exactly the core Gossip Girl viewership. The daytime block marks one-third of the 30 hours the network programs.

But CW chief operating officer John Maatta says the move gives CW affiliates stronger programming in the block, which leads into comedies on most stations at 5. “Mainly we hope this will help our stations, which ultimately will help us,” he says. “This is an affiliate play for Tribune and our other stations.”

WBDTD president Ken Werner says the block is a perfect transitional lineup for the stations, which have early afternoon talk shows (like Maury and Jerry Springer) and court shows until 3, and then go into comedies at 5.

The block had consisted of comedies including All of Us, What I Like About You and Reba.

“If you look at the available audience, the combination of court with some iconic stars in sitcoms seems like a smart strategy,” Werner says.

The Wayans Bros. and Jamie Foxx are also probably better fits with the stations’ daytime audience, and are both well known to the former UPN stations that are now carrying The CW.

Maatta says the network looked at several first-run genres including court, talk and game shows, and talked to several potential partners. But keeping the pipeline in the company through a barter arrangement made financial sense and he was happy with the product WBDTD offered him.

“Obviously our partners at Warner Bros. have expertise in the genre,” Maatta says.

The new court show will originate in Chicago. Fellow gaveler Greg Mathis (Judge Mathis) will consult and his executive producer, Bo Banks, will handle the same duties for Pirro.

WBDTD previously had a show featuring Pirro, the former Westchester County (N.Y.) District Attorney and regular contributor to Fox News Channel in development. But until now the company never found a launch vehicle that made economic sense.

Telepictures president Hilary Estey McLoughlin hopes Pirro’s personality and experience, which includes a recent run for New York State Attorney General, will help her stand out in the crowded court genre.

And Werner is unconcerned by a perceived glut of court shows.

“All of court is down, but when you find a personality you think will work, you place that bet,” he says. “More often than not those bets have worked out for us.”

Great Comment

Hey-

Thanks for all that you've been doing to keep us informed about the Tribune "management" krew (notice the Mardi Gras connection). Just a note on what I see happening to the lifers here at PIX-

I'm sure you've seen the movie "Shawshank Redemption". There is a terrific but ultimately sad moment when the character named "Brooks", played by James Whitmore, gets released from Shawshank. Because he's been in prison for most of his life he is terrified of the world outside. We hear his voice describing the "modern world" as too fast, too rude, too lonely. He's confused. He pines for the life, security, and the friends he knew. Yeah it was prison but he felt safe and vital. "Brooks" then takes matters into his own hands.

Later, the character "Red", played by Morgan Freeman, finds himself in a similar situation but his resolution is quite the opposite. He says, "Its time to get busy living or get busy dying". He picks the former.

What I'm getting at is this; as Warden Sam has "done the right thing" and set everyone "free" to build a better life for the company and themselves, initially you'd think that everyone would be happy and grateful. Instead of relishing this freedom, instead of feeling liberated to do the things that are necessary to live and grow, everyone is afraid, no terrified, of Zell's "new world" the world outside our prison.

No preparation, no transition, no soft landing, just "here ya' go, (as you are kicked down the stairs) FREEDOM- good luck!" (bus fare and cheap suit not included).

And this is what Zell and his krew want. They want people to be terrified, confused, and professionally suicidal. Its a total shell game, a misdirection of epic proportions. Only Sam ain't no magician, he's a grave dancer.

What to do? Act like "Red"; hold your head high and get busy living. Don't let anyone dance on your grave because you're not dead. Do your job well but when you walk out the door leave it all behind. Do those things that you've been meaning to do and lighten your load. Drive that convertible up the coast, fix up your boat, walk barefoot on the beach. Let the crippled yahoos make fools of themselves but show them no pity for they are like "Brooks", they're getting busy dying. If you're going to live to work (as Zell wants you to) then do something that helps people because if you are living to work then you are busy dying. Just ask the grave dancer.

Yours-

Maxwell

ps

The tag line form Shawshank is "Fear can hold you prisoner. Hope can set you free."

pps

this link you sent me from LA Observed is spot on:

"While we're on the subject, my un-profound biases are that innovation is essential to the success of any business, especially the news business these days. Smart innovation by smart, informed people is good. Innovation for the sake of innovating is usually not smart".

$650M Cablevision bid for Newsday coming soon

BY JAMES T. MADORE and MARK HARRINGTON james.madore@newsday.com;mark.harrington@newsday.com
10:43 PM EDT, April 30, 2008

In a bid that would leapfrog two competing offers from a pair of New York tabloid tycoons, Cablevision Systems Corp. is expected to make a $650-million offer for Newsday before week's end, possibly with a new Long Island partner, sources familiar with the cable operator's offer said yesterday.

A formal bid from the Bethpage company is expected in the next few days, according to sources familiar with talks between Sam Zell, chief executive of Newsday's parent, Tribune Co., and News Corp. chairman Rupert Murdoch.The bid, if tendered, and successful, would add a $70-million premium to separate $580-million offers made by Murdoch and Daily News owner Mortimer Zuckerman.

Cablevision is not working with The New York Observer in moving forward with its bid, though that may change in the future, a source familiar with the offer said.

Cablevision founder Charles Dolan spoke by phone yesterday with Observer officials, and the two companies decided mutually not to move forward together for now, the source said.

Spokesmen for Cablevision and Tribune declined to comment, as did Observer president Robert Sommer. News Corp. and Daily News spokesmen also have declined to comment.It is expected that Dolan would seek talks with a Long Island partner on the Newsday bid, a source familiar with the company's offer said. Dolan is reportedly looking for a partner that would share his television-centric view for a combined Cablevision-Newsday operation.

Cablevision's bid is expected to offer a joint-venture component that would allow Zell to structure the deal to avoid the heavy tax burden of an outright sale, the sources said. Murdoch and Zuckerman's bids were structured similarly, leaving Tribune with a roughly 5 percent stake in Newsday for over 10 years.

The size of Cablevision's offer got the attention of Zell, said the sources familiar with the Zell-Murdoch negotiations. "You cannot ignore a $70-million gain, but my guess is Rupert will top this," one of the sources said. "He has wanted Newsday for a while because some type of union would stop the hemorrhaging at the [New York] Post."After Murdoch's reported handshake agreement with Zell for Newsday and its subsidiaries about 10 days ago, sources said Zuckerman then matched the bid, adding that his was more attractive because it didn't face a high hurdle with the Federal Communications Commission.

But a source with knowledge of the Zell-Murdoch talks said Zell wasn't convinced that Murdoch couldn't persuade regulators that owning Newsday would keep more journalistic voices in the metro area by bolstering the New York Post.

"Sam has great confidence in Rupert. He thinks he can sway the FCC," the source said.One expert watching the negotiations said he expects Murdoch to top any Cablevision offer."Murdoch wants Newsday in the worst way, so I would not be surprised this escalates to a higher number," said Kevin Kamen, president of media appraisal firm Kamen & Co. Group Services in Baldwin.

Kamen had predicted a "low $600 million" offer from Cablevision in a Newsday story this week. Now, he said, bidding could top $675 million."This is a horse race now," said Kamen, adding, "I don't think we've heard the end of Zuckerman" as well.

Mr. Nice Guy Speaks, Again.

Zell urges "cleansing," not sympathy, on housing

by Peter Viles, The Los Angeles Times
Photo: Charles Rex Arbogast / AP

I now understand Sam Zell's strategy to revive newspapers: He's going to provide all the content himself. Here's Zell's analysis of the housing market today, filed by Tom Petruno on his Money & Co. blog:

"What this country needs is a cleansing" in the residential market, Zell said. "We need to clear out all of those people who should never have been in houses in the first place and who for sure shouldn't be getting sympathy."

He blamed another Sam -- Uncle in Washington -- for encouraging homeownership at any cost in recent years. The rise in the U.S. homeownership rate from 63% to 69% during the boom was totally unjustified, Zell said, other than by "the political impetus of, 'Let's put more people into homes they can't afford."

COMMENT:

This is the same guy that bought the Tribune company with very little of his own money. In other words, he put very little down while utilizing creative financing to get the deal done. Now Sam's having trouble making the loan payments. Isn't this the same buying method that started the current housing crisis in the first place?

TV crew members still feeling effects of writers strike

Many can't find work with production down, and their bills are piling up. Some are facing foreclosure and bankruptcy.

By Richard Verrier, Los Angeles Times Staff Writer
April 28, 2008

The writers strike ended two months ago. But many in Hollywood remain on the brink.

Some are at risk of losing their homes. Some can't afford groceries. Others have filed for bankruptcy. Still others struggle to work enough hours to hold on to their health insurance.

Across Los Angeles, many crew members who work behind the scenes and on the sets of television shows and movies are still quaking from the temblor of the 100-day writers strike that shut down scripted TV production.

Blame the aftershocks. Networks have sharply curtailed the number of TV pilots this year, continuing a trend toward ordering fewer shows for the new season.

The shows that did return are filming 20% to 40% fewer episodes. And in Los Angeles County, location permits for sitcoms and dramas since the strike ended have plunged 51% and 35% from last year, respectively, according to FilmL.A., which handles film permits.

Although hard figures are not available, union officials say that thousands of crew members who normally would be busy at this time of year are still idled because of the sharp contraction in television production. Some union locals report a quarter of their members are sitting at home.

Karen Hartjen is one. She can't bring herself to open the utility bills lying on her kitchen table in Simi Valley.

The 53-year-old assistant prop master has been out of work since early November, when a string of jobs on TV shows such as "CSI: New York" and "Medium" came to a halt after the writers walked out.

Although Hartjen is accustomed to earning $100,000 a year, she is now $10,000 in debt and her home is threatened with foreclosure. She has turned to her church and the Salvation Army for help with groceries.

"I've been in this business for two decades, and I've never experienced anything like this," Hartjen said. "I'm just fighting for my life."

It will take several more months before TV production -- and the jobs that go along with it -- return to normal levels, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. And that's assuming there is no actors strike. "It's going to be a nerve-racking year for 'below-the-line' workers," he said.


Anxieties build

The downturn comes at a tough time for Hollywood's blue-collar employees, who are grappling with what many economists view as a nationwide recession, as well as a steady drain of film jobs to New Mexico, Louisiana and other states offering production incentives not available in California. Michigan upped the stakes recently by offering film producers 40 cents back for every dollar they spend shooting in the state.

Adding to the anxiety among so-called below-the-line workers -- such as technicians, carpenters and makeup artists -- are fears that they could suffer a double whammy if actors and studios fail to reach a new contract by June 30. Studios, which have spent months preparing for a walkout by actors, began negotiations with the Screen Actors Guild two weeks ago.

The parties a few days ago agreed to extend the talks an additional week. Nonetheless, each side remains far apart on a number of issues, including how much money actors should earn when shows are distributed online.

"Any possibility of an actors strike weighs heavily on the minds of our people," said Ed Brown, business agent for Local 44 of the International Alliance of Theatrical Stage Employees. The local represents set decorators, special-effects workers and prop makers who are among the more than 30,000 Hollywood workers represented by the union.

Brown estimates that about 25% of the local's 5,000 West Coast members are still looking for jobs -- double the normal level for this time of year.

Without any income, they've sought help from charitable groups such as the Writers Guild Foundation, which has raised money for crew members, and the Actors Fund, which provides financial help to economically distressed workers in the entertainment industry. The latter, with help from the Writers Guild Foundation, has provided more than $1 million in assistance to nearly 700 people since November. Recipients receive payments of $500 to $2,000 to help with car payments, mortgage payments or utility bills.

The Actors Fund has been getting about 20 calls a day for emergency help, double the usual volume.

"A lot of people are trying to dig themselves out of a hole," said Keith McNutt, western region director for the Actors Fund. "They're desperate."

The reason: Work has been slow to rebound.


Fewer shows, fewer jobs

Most TV shows couldn't return immediately after the writers reached a new contract with studios because of the four- to six-week period it takes for most shows to complete scripts, rehire crews and prep locations for shooting. When production did resume, there were many fewer shows and thus fewer job opportunities for crew members.

The downturn has been partially offset by a 50% upswing in feature film production, a possible sign that studios are ramping up production to complete films before June 30, when the actors contract expires. Studios have braced for a possible walkout by juggling their slates so that most films would wrap up by the contract deadline.

But the increase has not been enough to fill the paucity of jobs. Indeed, an actors strike would be more debilitating than a walkout by writers because it would shut down most production, a nightmare scenario for people such as Ed Lippman.

"I can't even think what might happen to me if SAG goes out," says Lippman, a location manager. The 16-year industry veteran has been unemployed since November, when his last show, the NBC cop drama "Life," shut down after filming only 11 episodes.

When the strike ended, Lippman figured he would return to work on "Life," but NBC chose not to resume filming until June. For the first time in his career, he wasn't getting any calls for pilot work, and neither were his colleagues.

After maxing out his credit cards, Lippman, 42, did something he never imagined he would do: He filed for personal bankruptcy this month.

"It was hard to accept. I thought, 'How could this happen?' " Lippman said.

Phillip Gordon has been wondering the same thing.

After four months of unemployment, the 38-year-old prop maker and general foreman returned to work a week ago, overseeing construction of the set for the comedy "Mostly Ghostly," an upcoming movie based on the R.L. Stine book series. The job pays $17 an hour, well below his usual rate, and requires a two-hour commute from his home near Palmdale to the set in Playa Vista.

Gordon has little choice. He's four months behind on his variable-rate mortgage. His payments ballooned to $3,700 from $2,700 a month in January, shortly after he lost his job on the set of the next "Star Trek" movie. To stay afloat, he's sold off tools at swap meets and mowed his neighbor's lawn.

"I don't know what else to do," Gordon said.


Benefits could cease

Many crew members are in a race against the clock to keep their health insurance. Union rules require that members work at least 300 hours every six months to maintain their benefits.

After a four-month hiatus, foley artist Dominique Tabach of Valencia recently returned to work part-time on the CBS drama "Numbers." But she has nothing else lined up.

Without additional work, Tabach, 43, is concerned that she won't accumulate enough hours to keep her union health insurance beyond September. The insurance covers Tabach, her 8-year-old daughter and her husband, a former TV executive who recently lost his job.

"There's just not enough TV work out there," Tabach said.

richard.verrier@latimes.com

The End of Network News as We Know It?

Decreases in Ads and Viewers Mean Change Is in the Air for Big Three

By Brian Steinberg Advertising Age

Published: April 28, 2008

NEW YORK (AdAge.com) -- The big three TV network newscasts lost about 1.2 million viewers last year, and advertising on their three big morning news shows fell to an estimated $1.03 billion. The average viewer is 60 years old, and the demographic marketers most want to reach is more likely to be facing a computer screen than a TV screen when the evening news comes on.

Collectively, ABC, NBC and CBS's network newscasts lost about 1.2 million viewers in 2007, according to an analysis of Nielsen data by the Project for Excellence in Journalism

Photo Credit: John Paul Filo

Given that rather sobering picture, maybe the discussion shouldn't be over whether Katie Couric will last at CBS through the election. Maybe it should be whether we need network-TV news at all.

None of the networks was even willing to entertain the suggestion that it wasn't completely committed to its evening newscasts, so this isn't a story about how one or the other is about to close down its news division. But the economic incentive to reshape their news departments is pressing.

Collectively, ABC, NBC and CBS's network newscasts lost about 1.2 million viewers in 2007, according to an analysis of Nielsen data by the Project for Excellence in Journalism, a 5% drop from the year before. Even the audience for the morning news shows -- the most successful of the news departments' endeavors -- fell for the third year in a row, the PEJ study said, down 2% from the year before, its lowest point since 1999.

Not surprisingly, ad revenue has followed viewers elsewhere. Spending on the three major morning news shows -- ABC's "Good Morning America," NBC's "Today" and CBS's "Early Show" -- fell to about $1.03 billion in 2007 from about $1.05 billion in 2005, according to Nielsen Monitor-Plus. And ad spending on the three major-network evening newscasts tumbled to about $502.8 million from about $538.3 million in 2005.

Target is not at home
The audiences advertisers most want to reach -- upper-income consumers between the ages of 18 and 49 -- are still at work, not sitting in front of the tube, when the news comes on. The average age of the evening-news watcher is 60, according to media agency Magna Global.

"The people that you're after, they are not home watching the 5 o'clock news or the 5:30 news or the 6 o'clock news," said Debbie Basham, senior VP-director of negotiation and activation for Interpublic Group of Cos.' Mullen agency, who oversees local ad buying for the firm. "There are a lot of media plans that may not have news on there, because the people you are seeking are not out there."

Networks have already responded to the squeeze. Based on estimates, PEJ believes total network-news staffing declined 10% between 2002 and 2006, with the number of on-air journalists falling 7% and the number of producers off 12%. According to reports, between 100 and 160 employees at various CBS Corp.-owned TV stations recently were laid off as part of an initiative to meet budget requirements; several of those were high-profile on-air news personnel.

As a result, perhaps, subject focus has begun to shift. During the past several years, coverage of international stories has been scaled back, said Andrew Tyndall, whose Tyndall Report analyzes the content of network newscasts. Despite an initial rush to cover the war in Iraq, he said, that focus has begun to trail off. "Iraq has fallen off the radar" as the U.S. presidential campaign becomes a bigger story, he said. "That change, I don't think, is anything that would have happened 20 years ago."

Public-interest obligations

Optimism seems in short supply among financial analysts. Sharing news operations in far-flung parts of the world seems increasingly likely, said David Joyce, a media analyst with Miller Tabak & Co. News organizations that can amortize costs by creating stories for a number of outlets are probably best off, said Michael Nathanson, a media analyst with Sanford C. Bernstein. "You would think that NBC has a clear advantage because of their link with MSNBC, and CBS and ABC probably will have a harder time long term finding cost synergies," he said.

Digital technology could give these programs new access to younger crowds -- though it's not clear whether increased efforts in that area would ultimately bolster the economics of news-gathering by network or local-affiliate news departments. The belief is TV networks and stations will deliver news in a broader fashion, in a way that is not as heavily dependent on sitting in front of a screen at a certain time of day.

Even as the web beckons, broadcasters still have an obligation to act in the public interest as part of their licenses to use federally owned broadcast signals. Given the new-media landscape, is it possible the three networks eventually will be able to make the case to the Federal Communications Commission that their news divisions would be more effective on other platforms? Digital opportunities abound, including transmitting content across multiple TV channels and streaming reports online.

"One of the big questions will be: What are broadcasters' public-interest obligations in the digital age?" said Scott Cleland of Precursor Group, a media and technology consultancy.

That issue could be one to argue in the not-so-distant future. "I can say with no hesitation that we will see changes within the network-news paradigm over the next few years," said Debora Halperin Wenger, associate professor of convergence and new media at Virginia Commonwealth University.

Those stories aren't just for TV anymore

Even as support for their flagship newscasts gradually erodes, networks and local broadcasters are testing ideas designed to harness digital media's potential. Why wait for 6:30 p.m. to roll around when people are getting their news online all day -- and network-branded newscasts can insert themselves into the equation?

NBC News sees a future in distributing content around the clock, whether it be through online video, a blog written by anchor Brian Williams or its flagship newscast. The news-gathering operation has aligned itself so its work can be used by the evening broadcast, MSNBC or digital properties, said Steve Capus, president-NBC News. The operating idea these days, he said, is "bring it in once and use it as many times as humanly possible, and that is how our newsrooms are set up and ... how the business is set up."

At ABC, the news division can point to its "ABC News Now," which delivers news stories of various lengths to TV, the web and mobile devices. In September, the network deployed seven "digital reporters" in various places around the world, said Paul Slavin, senior VP-ABC News, who oversees its digital operations. These reporters may see their stories on the evening newscast but are focused on delivering content for multiple venues.

Digital distribution also means hunkering down more strongly on certain topics, Mr. Slavin said. "We can't be all things to everyone, but we can have the best investigative unit in the business. ... We can bring a level of reportage and quality to entertainment reporting, law and justice, politics."

CBS also sees a chance to try new things, said Sean McManus, president-CBS News and Sports. Streaming live events online has potential, as does soliciting opinion and user-generated content from viewers. Like ABC's Mr. Slavin, however, Mr. McManus sees a healthy future for the traditional evening news and said a big, recognizable network anchor continues to be an important part of the recipe.

The online business, however, is viewed as its own product when it comes to advertising, one that draws a higher cost per thousand given the difference in reach, though ads on the web versions of the news are much less expensive.

Yikes! Tribune's debt way expensive to insure

TribCo debt expensive to insure

By: Ann Saphir April 25, 2008

(Crain’s) — Tribune Co. CEO Sam Zell last week told investors that despite “significant erosion” in the company’s financials, he’s confident he’ll make good on his $12 billion in debt.

But middlemen who provide these investors with a form of insurance against default — they aren’t buying it.

Bondholders who want to insure their investment in Tribune debt are being asked to pay among the highest rates in the country.

Sellers of so-called credit default swaps — used by bond investors to protect themselves in the event of a company reneging on its debt — are demanding an upfront payment of $6 million and $500,000 a year to guarantee $10 million of Tribune bonds for five years.

Those are “distressed levels,” says Matthew Mish, a credit strategist at Barclays Capital in New York, and they imply a 92% chance of default by 2013. That’s assuming bondholders would get 20 cents on the dollar if the company did default.

“Revenue trends this year to date are significantly worse than we expected,” Mr. Zell said last week on an hour-long call with 350 investors and other interested parties.

Still, he said, a slew of changes — from how ad sales people are compensated to newly hired key officers — are helping to right the ship. In addition, he said, Tribune is moving forward on its planned sale of the Cubs and is considering a sale of Newsday, assets that together are expected to bring in well more than $1 billion.

“From where we sit right now, it does not appear that we will have difficulty meeting our commitments going forward,” Mr. Zell said.

So far, the credit default market doesn’t reflect that optimism, with the cost of insuring Tribune debt hardly budging in the week since those comments.

The reason it’s so costly to insure Tribune debt against default is clear: The company, which took on most of its debt when Mr. Zell engineered a buyout in December, must pay more than $1.4 million in principal by June 2009, on top of an estimated $1 billion in interest expense. The company had $1.16 billion in cash flow last year.

Only a handful of other companies are in the same league, analysts say, and most of them were mired in the subprime mortgage crisis. Credit default swaps for ACA Financial Guaranty Corp. and Financial Guarantee Insurance Corp., both bond insurance companies, and subprime lender Residential Capital LLC, are trading at similar levels to Tribune. Just a notch below, credit traders say, are troubled amusement park operator Six Flags Inc. and Abitibi Bowater Inc., the biggest U.S. newsprint producer.

Abrams' rock and roll speech

Kevin Roderick • Bio • Email
LA Observed

Sam Zell's new innovation guru, Lee Abrams, uses a video on the company site to explain his vision of how the 1950s growth of rock and roll and reinvention of radio informs his dream of what the Tribune's newspapers, TV and websites could become. He says his first few public utterances were misunderstood, and says he's found more creativity in the Tribune's properties than he expected. Here's the Tribune email urging employees to give it a listen:

[STAGE DIRECTION: INVOKE BEST ANNOUNCER VOICE] What does an innovation officer do? What is our chief innovation officer like? Tribune never had one before. Why does it need one now? How is news & information the new rock & roll, really? Coming up next, shocking new video from Tribune Chief Innovation Officer, Lee Abrams.

Previously on LA Observed:
Radio vet reacts to Abrams

TV news stations try cooperation

NBC10 and Fox29 will, for a week, experiment with sharing video footage.

By Michael Klein
Philadelphia Inquirer Staff Writer

In an unusual experiment among network-owned local news stations, WCAU (NBC10) and WTXF (Fox29) are sharing some video footage this week.

The arrangement, acknowledging the economics facing media as well as the redundancies in some coverage, is a test to "see if we can cooperate on some newsgathering in the field," according to a memo circulated Monday to NBC10 staff by news director Chris Blackman.

The cooperation, which both stations will assess at the end of a week, extends to events such as news conferences and other planned events that both stations would cover anyway, Blackman said in his memo, adding that "helicopter resources" also would be shared.

An NBC10 spokeswoman said Blackman and general manager Dennis Bianchi were unavailable for comment.

"The last thing we want to do is reduce competition," Fox29 general manager Mike Renda said in a phone interview, adding that sharing non-breaking video would have a "viewer benefit" because it would allow each station to devote more resources to enterprise coverage.

"It's not unlike the pool arrangements that already exist at the network level," Blackman said in his memo.

In the most recent Nielsen ratings, both Fox29 and NBC10 were ranked behind 6ABC and CBS3.

Renda said the idea of cooperation stemmed from a story last month about a man who had stopped his vehicle on the Walt Whitman Bridge. "There were four helicopters up there, and they caused a safety issue," said Renda. This led to discussions between Renda and Bianchi.

Renda yesterday said that Fox29 gave NBC10 video of a fire in Juniata Park on Monday.

If a deal can be reached to make the experiment permanent, some technical issues have to be worked out, Renda said. Fox29, for example, broadcasts locally in high definition or HD; NBC10 does not yet. It also was not clear how the arrangement would affect WPHL (Channel 17), Tribune Broadcasting's outlet known as MyPHL, which gets its news from NBC10.

Paul Gluck, who spent nearly 30 years as a TV news executive in Philadelphia, said he did not think the viewer would lose from such a video-sharing arrangement.

Gluck said the arrangement - which he likened to some "pooling" at noncompetitive events by networks - appears to be "not so much of a news cooperative but a newsgathering cooperative."

"If these organizations are covering broad and general news, fine," said Gluck, executive director of the Rudman Institute for Entertainment Industry Studies at Drexel University. "Let's say they have video of a car on fire. It's incumbent of [each newsroom] to do the digging to the real story of why the car is on fire." The challenge, he said, would be to "manage the different cultures in the newsrooms."

Contact staff writer Michael Klein at 215-854-5514 or mklein@phillynews.com.

Tribune snuffs out smoker's penalty

By Barbara Rose

ChicagoTribune.com

Tribune Co.'s new top managers on Tuesday ended a $100-per-month penalty for employees who smoke and enroll in the company's health plan, saying the fee is "inconsistent with the new culture."

"We'd rather you use your own judgment when it comes to tobacco use, not impose ours upon you," Gerry Spector, executive vice president and chief administrative officer, said in an e-mail to employees.

About 600 of more than 16,000 employees in the plan acknowledged smoking when they enrolled in October. The fee, effective Jan. 1, was adopted before Sam Zell, now chairman and chief executive, led the going-private transaction in December.

Spector's e-mail congratulated those who had quit and gotten their fees refunded.

"Quitting is one of the hardest things you'll ever do," he said. Others will be reimbursed in late May for any fees paid.

Tribune, which owns the Chicago Tribune, will continue to offer a free smoking-cessation program.

—Barbara Rose

Viacom, 5 Hollywood studios to create new TV channel

THE ASSOCIATED PRESS

LOS ANGELES -- Viacom Inc. and five Hollywood studios are joining forces to create a television channel and video-on-demand service, the companies announced Sunday.

The venture, starting in fall 2009, will show movies and television series from Paramount, Paramount Vantage, MGM, United Artists and Lionsgate.

It could provide competition in both programming and viewers to Time Warner's HBO and CBS Corp.'s Showtime.

"This venture has the potential to be a game changer for the industry," Viacom president and CEO Philippe Dauman said in a statement. "We are building an innovative service that will use traditional and new digital distribution technologies to bring great film and television entertainment directly to the consumer."

Viewers will have pay-per-view access to big-budget releases from the studios, such as "Cloverfield," "Iron Man" and "Star Trek." Movies from the companies' archive libraries and new TV series created by the studios also will be featured.

The combined companies have a collection of thousands of films and hundreds of TV shows. MGM owns the world's largest modern film library, comprising titles from United Artists, Orion Pictures and other studios. Paramount has 3,500 motion pictures in its library, including recent blockbusters such as "Transformers" and "Beowulf" and Oscar winners "There Will Be Blood" and "No Country for Old Men."

Viacom owns the content of more than 100 television channels, including MTV, VH1, CMT, Nickelodeon and Comedy Central.

Viacom will provide marketing and other operational support through its MTV Networks division.

Murdoch Acquiring Newsday

By Phil Rosenthal |Tribune media columnist

11:27 PM CDT, April 21, 2008

Rupert Murdoch's News Corp. has an agreement in principle to acquire control of Tribune Co.'s Long Island, N.Y.-based daily newspaper, Newsday, sources said late Monday.

While the sources cautioned terms were not yet final, the complex transaction would have Tribune Co., led by Chairman Sam Zell, selling a majority of the paper to News Corp. for about $580 million, with the deal structured in a way designed to reduce Tribune's taxable capital gains.

Tribune Co. would retain a small stake in the Melville, N.Y., paper and "some of the pieces," including the paper's real estate, a source said.

One source said there was only "clean-up work" remaining and expected an official announcement soon. Another said it could be weeks before a contract is signed and was concerned about requisite regulatory approval, pointing out: "It's one thing for Rupert and Sam to work out an agreement. It's still up to the battery of lawyers to work out the finer points."

A spokesman for Tribune Co. declined to comment. News Corp. spokesmen did not respond to inquiries. Murdoch, whose News Corp. holdď ings in the New York City market include the New York Post, The Wall Street Journal and two television stations, long has coveted the efficiencies that ownership or a partnership with Newsday would provide, predicting they would nudge the Post toward profitability.

Billionaire Zell, who became Tribune Co. chairman and chief executive late last year after engineering a highly leveraged $8.2 billion deal to take private the Chicago-based media concern, parent of the Chicago Tribune, has had to reconsider plans to keep the company's core assets intact in light of the company's worse-than-expected double-digit newspaper revenue declines.

Tribune has a $650 million debt obligation due Dec. 4, as well as about $250 million in medium-term notes due in 2008. The plan is to satisfy those obligations by drawing down a line of credit.

Zell said in a conference call with creditors last week he did not anticipate "trouble meeting our commitments going forward," but he also said the company was now "forced to consider the possible divestiture of some of our assets."

Previously published reports had identified Murdoch's News Corp. and Mort Zuckerman, owner of the New York Daily News, as among those interested in Newsday. Zell noted "keen" interest in the paper, and told the creditors Tribune Co. was still trying to determine whether a deal of any kind made sense.

Newsday had a paid circulation average of 387,563 weekdays and 454,194 Sundays for the six months ended in September, according to the Schaumburg-based Audit Bureau of Circulations. The Post averaged 667,119 weekdays and 405,486 Sundays.

The paper has been part of Tribune Co. since its 2000 acquisition of Los Angeles-based Times Mirror Co. It was cited at that time as integral to a national strategy that gave Tribune, which already owned New York's WPIX-TV, both newspapers and television outlets in each of the nation's three largest media markets.

Many of the anticipated benefits of that synergy were never realized, however.

philrosenthal@tribune.com