You don’t need a particularly good crystal ball to foresee that big media are in for a bad year (at least). But Wall Street singled out Sumner Redstone’s Viacom and Rupert Murdoch’s News Corp. for special treatment this morning, by whacking estimates for the next few quarters. The short story: The lousy ad market will be even worse than people think.
You think you got a good deal on an HDTV last week? Talk to Mark Thomas, who just picked up videogame company Midway games for 99 percent off on Friday. The seller: Sumner Redstone, who is desperately trying to sell off everything except his shares in CBS and Viacom in order to restructure a looming debt load.
The founder and chairman of CBS and Viacom says he won’t sell shares in his company to pay off his creditors. But no one believes that. But there doesn’t seem to be any alternative. Redstone’s National Amusements holding company has $1.6 billion in debt, $800 million of which comes due next month. Best to get it over with now, says analyst Rich Greenfield.
A rumored Election Day mass firing doesn’t materialize. But there will be plenty of budget-tightening at Sumner Redstone’s cable networks.
CBS chairman Sumner Redstone’s message to investors: Don’t worry, I’m done selling shares in my beaten-down media properties. But Redstone, who has already had to sell $233 million worth of CBS and Viacom stock earlier this month, wouldn’t discuss his current debt troubles with analysts during this morning’s earnings call.
CBS has had plenty of bad news lately–a tanking ad market, a huge write-down, Sumner Redstone’s worrisome debt problems–but it got to offer at least one piece of good news in its quarterly earnings report this morning. CNET, the tech-focused Web publisher it bought this summer for $1.8 billion, turned in a decent performance.
Peter Kafka has been covering media and technology since 1997, when he joined the staff of Forbes magazine. Most recently, he has been the managing editor of the tech and media Web site, Silicon Alley Insider.
Here is a statement of my ethics and coverage policies. It is more than most of you want to know, but, in the age of suspicion of the media, I am laying it all out.
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