Media news/analysis in brief - (April 13, 2005)

by: David Strahlberg

Companies mentioned below:

  • Martha Stewart Living Omnimedia (ticker: MSO)
  • Lion's Gate Entertainment (ticker: LGF)
  • Blockbuster (ticker: BBI)
  • Imax Corp. (ticker: IMAX)
  • Dreamworks (ticker: DWA)
  • Time Warner (ticker: TWX)
  • XM Satellite Radio (ticker: XMSR)
  • Martha Stewart was denied her request to have the conditions of her home confinement relaxed.  She wants to devote more time to her company and business pursuits.  Stewart will still be required to wear an electronic monitoring device on her ankle and will be allowed to spend 48 hours per week outside of her home.  In denying the request, Judge Miriam Cedarbaum called the logic circular, saying that Stewart knew the conditions of her sentence when she agreed to work on two new TV programs so she cannot use them as an excuse to have her sentence reduced.  Quick comment:  Stewart says that she wants to spend more time on her business pursuits for the sake of her company.  Her company would be better off today (and she wouldn't have gone to jail) had she been focused on her business a few years ago, instead of trying to pick up some extra cash by trading her Imclone shares.
  • Blockbuster's largest shareholder, Carl Icahn, has nominated himself and two others for spots on the company's board of directors.  The other nominees are Edward Bleir, former President of Warners Bros. Entertainment's marketing division and Strauss Zelnick, former CEO of BMG Entertainment.  Quick Comment:  Does BBI have any age restrictions for its board members?  Icahn is 69 and Zelnick is 75 (Bleir is 47).  Shareholders have to wonder of these men are looking for a quick buck or if they are willing to really help BBI fix its long term problems.
  • Lion's Gate Entertainment will hold a minority stake in a new distribution company being formed by former executives, Brad Pelman and Laurie May.  The new firm, called Maple Pictures, will help distribute LGF content in Canada.
  • Imax Corp. signed an agreement with Korea's CJ CG to install four theater systems in Korea during the next two years.

    CJ CGV, a subsidiary of CJ Entertainment Co., operated 50 theaters and 338 screens in Korea.  CJ Entertainment is a shareholder in Dreamworks SKG.

  • Time Warner’s AOL unit and XM Satellite Radio announced a partnership in which both companies will share content for each other’s platforms.  AOL users will gain access to 20 XM channels in additional to its own slate of 130 channels.  AOL also plans to launch a premium service with 70 XM channels (pricing has not yet been determined).  XM will also add AOL Radio content to its users.   Quick comment:  the purpose of this deal is to provide more content for AOL (in order to justify its price) and to expose XM to AOL’s user base.