October
22
Studios in Flux: Redstone Struggles, Industry Speculates
With financial pressure from their owners and stock prices in the toilet, there's movement afoot among the major studios. And much speculation. Here's Fortune's frightening story on NBC Universal owner General Electric, always one of the best-run and most solid of American corporations.
Kim Masters addresses Sumner Redstone's problems with the plummeting stock value of his companies Viacom and CBS. Some people think that the mogul, who's looking vulnerable (and just announced his divorce from his wife), should put the two companies he split, Viacom and CBS, back together again. UPDATE: Redstone swears to the WSJ that there's "not a chance" he will sell any more stock in Viacom or CBS. "I will not sell Viacom and I will not sell CBS. They're two great companies." He added: "We have no intention to sell any more stock and I'm decisive about that."
Loved the LAT's lede on their story about the rapacious Carl Icahn, who's buying up low-priced shares in Lionsgate as he ogles their massive library: "The barbarian is at the gate." There's also speculative talk of debt-ridden MGM being for sale as well, and of an MGM/Lionsgate merger.
Universal is in talks to unload its Rogue genre unit to buccaneer financeer Ryan Kavanaugh's Relativity Media for $150 million. They'll pocket the cash on their three-year investment and still collect a 10% distribution fee.
While I appreciate the shoutout from Patrick Goldstein, he's reporting uninformed speculation that because other latecomer studio specialty units have been downsized or shut down, or Jeff Zucker is calling for $500 million in cuts across all of NBC Universal, that must mean that Universal's Focus Features, which launched Rogue, is next on the cutting block.
That Universal is also going to unload Focus is far from obvious. The subsid has a huge international business; as much PR as Fox Searchlight deservedly enjoys, thanks to overseas business, Focus is just as profitable. In Bruges and Burn After Reading are two 2008 worldwide hits for the label. Universal execs flatly deny that they have any intention of selling the unit.
And closer to home, Peter Bart reflects on the dwindling number of full-on studio Oscar campaigns this year. In a climate where the studios are really up against their bottom lines, for once they may not have to indulge every vanity awards campaign that ordinarily would have been business as usual. Nothing these days, as many hurting Hollywood folks can testify, is business as usual.
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