Time Warner to Jettison Cable Unit
News Briefing for Wednesday, April 30, 2008 The Cable360 newsroom is outraged by the latest divisive dispatches from tipster Brain Clark and has severed ties with him. Good day.
As expected, Time Warner Inc. announced this morning as part of its first-quarter earnings statement that it will spin off its entire cable unit, Reuters and Bloomberg report. In the statement, Time Warner Inc. president and CEO Jeffrey Bewkes said that a “complete structural separation of Time Warner Cable, under the right circumstances, is in the best interest of both companies’ shareholders.” Insistent calls from investors for Time Warner to completely spin off the cable unit and focus on its content-producing and TV network divisions began in the latter part of Richard Parsons’ term as CEO, and the spin-off seemed to be a forgone conclusion when Bewkes took the post. In the first quarter, Time Warner Inc.’s net profit declined 36% compared to the same period a year earlier, in part because of subscriber losses at its AOL unit. [Reuters | Bloomberg]
The Washington Post got hold of a memo yesterday in which Commerce and Energy Committee staff members wrote that "the bottom line is that the FCC process appears broken and most of the blame appears to rest with Chairman [Kevin] Martin." The memo, sent to committee chairman John D. Dingell (D-Mich.) and Bart Stupak (D-Mich.), chairman of the subcommittee on oversight and investigations, is a by-product of an ongoing congressional investigation into tactics Martin used to pursue his agenda, which has included relaxing media ownership rules and enforcing a la carte cable programming. The memo may be a prelude to June hearings on Martin’s reign atop the FCC. [Washington Post]
Microsoft is expected to make an announcement today concerning its quest for possession of Yahoo, the Wall Street Journal reports. The most likely move would be to nominate a proxy board of directors and appeal directly to Yahoo shareholders. [Wall Street Journal]
Blockbuster may invest in the premium channel being formed by Viacom’s Paramount Pictures in partnership with MGM and Lionsgate, the Wall Street Journal reports. Blockbuster, which used to be owned by Viacom, would get digital rights to the channel’s content as part of the rumored deal. [Wall Street Journal]
SNL Kagan projects in its report "Cable Looks for Phone Share Gains Amid Change" that the telcos’ share of the residential wireline phone market will decrease 23% over the next five years, after declining from 90% to 74% over the last two years. Cable’s telephony service is partly responsible for that shift, but the greater threat to the telcos’ hold on that market—and to cable’s share of it as well—is probably the preference of the younger demographic for relying solely on mobile devices for phone service.
FX ordered 13 episodes of the drama series Sons of Anarchy, starring Charlie Hunnam and Katey Sagal. The series is from The Shield‘s executive producer Kurt Sutter. Production is scheduled to begin in June and the series is slated to premiere on FX in September.
If you are a college student, or the parent of one, don’t assume that an e-mail with “Confidential” in the subject line is spam. It may just be a subpoena related to a lawsuit over illegal file sharing. [University Daily Kansan]
Cable’s failed wireless joint venture, Pivot, was a misstep, but not a pointless mistake, FierceIPTV says. [FierceIPTV]
Comcast has transplanted its tree-planting ways in Rockford, IL. [Rockford Register Star]
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