***UPDATE: Cumulus Media’s $1.3 billion buyout offer from an investor group consisting of the company’s CEO and Merrill PE peeps has sent shares (Nasdaq: CMLS) up over 30% and shares in the rest of the radio sector soaring. Cox is by far the greatest residual radio beneficiary, however, without necessarily the strongest fundamentals, leading one to think that something might be up.***
A reader tipped us off to the following – why on earth is Cox so huge this morning? Cox Radio (NYSE: CXR) is up over 9% on no available public information. The last major thing that happened to Cox is a BBB- Fitch rating and “positive” outlook a week and a half ago. The company is expected to release earnings on August 1.
Any insider traders want to throw us some scraps? Comment or tips at dealbreaker.com.
Cox Radio Climbs Above 50-Day Moving Average [TradingMarkets.com]
UPDATE: Cumulus Media In Pact For Sale To Investor Group [Dow Jones via CNN Money]
Media
McClatchy still won’t comment on its mysterious share price jump since the market opened on Wednesday. That’s right, McClatchy won’t comment on the dearth of company news, the kind of dearth that drives a share price up more than 4% at day’s end. After retracting a bit this morning, McClatchy (NYSE: MNI) shares are up almost 1.5% today, nearing the midday peak of yesterday’s surge. Granted, McClatchy reached a new 52 week low at market close on Tuesday, and has to double (almost) to reach its 52 week high, but publishing stocks have been hammered for a variety of legitimate reasons. McClatchy’s sales are down 6% this year and ad revenue is down over 7%, like other publishers struggling to go digital.
The lead rumor is that McClatchy is planning to dump the rest of its stake in CareerBuilder. Still no word on who’s pumping, and who’s dumping?
Extra! Extra! McClatchy for sale? [Media Biz via CNN Money]
Hollywood has had a decent summer so far, amidst sequel saturation. Fortunately for the movie biz, the sequel influx has been void of any huge flops, although offerings have underperformed slightly.
Although the industry is still in denial about the margin squeeze created by the astronomical budgets of this round of sequels, without any major hitches, many insiders were still optimistic that Hollywood could have a record-breaking $4bn summer. That is until the cruel box-office foiling Deus Ex Machina of Evan Almighty flooded theaters last weekend.
Evan Almighty is the first real major studio flop of the summer. The Universal Pictures release cost over $175mm to make and brought in just $32mm in its opening weekend. Who would have thought that a film in which the US is subject to a Biblical style flood in which the majority of jokes consist of wacky CGI animal high jinks would fail?
The “Almighty” franchise’s first installment (Hurricane Katrina, according to Pat Robertson), Bruce Almighty, cost $84 but made $68mm on opening weekend and $242mm in domestic revenue at run’s end.
Universal can at least boast the one success of the summer with Knocked Up (containing a premise about as realistic as Evan Almighty), which cost less than $30 to make and has made $109mm in a month.
So far in 2007, Hollywood box-office revenue is up 3.5% on flat theater attendance, causing analysts to lower estimates of that record-breaking $4bn summer.
Third Time’s No Charm For Summer Blockbusters [Wall Street Journal]
Fox and CBS rejected a new Trojan commercial that has the audacity to suggest that people have sex with condoms in order to avoid pregnancy rather than die of Super AIDS. When you’re doing as well as the big networks, you can certainly afford to turn down those revenue streams. Fox actually admitted rejecting the ad for the aforementioned reason, while CBS was more vague about how the ad was inappropriate “even with late-night-only restrictions.” Here’s the ad, created by the Kaplan Thaler Group:
For those of you on networks with firewalls tighter than CBS margins, the commercial features anthropomorphic pigs hitting on girls at a bar. One little piggy goes to a bathroom machine to procure a Trojan condom and turns into humanized hot stuff that blondes want to have sex with. The tagline is “Evolve. Use a condom every time.” Fox and CBS disagree. One Fox exec commented:
We simply did not want this ad to air because of insurmountable logistical problems. For starters, pigs have these really long corkscrew shaped members, which no Trojan condom is equipped to sheath. No, not even a Magnum. Also, female pigs can have up to 30 minute orgasms, which is a completely unrealistic expectation for any male. Besides, have you seen Knocked Up? When you’re not disease-ridden, there’s no reason to use a condom. Babies are precious.
Not all television execs had the same reaction, and the new ad will air on ABC, NBC, MTV, Comedy Central, Adult Swim and other cable networks. Fox and CBS did not reject Trojan’s prior campaign, which took a “people who have sex outside of wedlock probably have HIV unknowingly so you should wrap it up” angle.
Ads that suggest that people occasionally have sex in non-missionary positions for non-procreative purposes are having a tough time airing, unlike shows that encourage infidelity and promiscuity like Fox’s “Temptation Island.” The 2004 Viagra campaign that featured the tagline “Remember when you used to be called Wild Thing?” was pulled by Pfizer after criticism from the FDA. The FDA said the ads were misleading consumers into thinking that Viagra gives you super huge rock hard erections instead of helping the balance of old men.
Trojan commands 75% of the $416mm annual condom market. Yes, sadly (especially given how expensive the things are!) the condom market is only $416mm and only 1 in 4 sex acts involve one.
Pigs With Cellphones, but No Condoms [New York Times]
Yet.
Homer Plackmeyer, 102, takes his job as paperboy seriously [St. Louis Post-Dispatch]
The FCC in recent years has tried to implement a no tolerance policy when it comes to network and affiliate on-air expletives, with the number of violations and fines reaching a peak in 2004 when networks were fined almost $8mm.
The debate came into focus when a US soldier stationed in Iraq swore on the air during a broadcast… no, actually that happened on Studio 60 (damn your apt social commentary Sorkin!). No, actually that happened in real life (damn you ripping off what happens in real life Sorkin!) when PBS decided to show the documentary Operation Homecoming: writing the wartime experience, laden with obscenities that US soldiers who appear in the film use to describe their experiences in Iraq.
Another “highlight” in the reel of FCC violations is when Bono swore at the 2004 Golden Globes, in an incident that wasn’t fined but used by the FCC as a springboard to fine anyone who can’t hit the high note in “I Still Haven’t Found What I’m Looking For,” but can still hit the middle C in f*ck.
The networks recently challenged FCC profanity rules, claiming that inadvertent profanity didn’t violate decency standards. A panel of the US Court of Appeals for the Second Circuit in New York ruled in favor of the networks and stated that the FCC didn’t articulate a reason for amping up the profanity patrol. The FCC, and Jesus, are upset, while the networks, especially Fox, are celebrating, according to the Wall Street Journal:
Fox Broadcasting Corp., a News Corp. unit, said it was “very pleased” with the court’s decision. “Viewers should be allowed to determine for themselves and their families, through the many parental control technologies available, what is appropriate viewing for their home,” Fox said in a statement.
Broadcasters Win Profanity Ruling [Wall Street Journal]
CBS has always had a crush on Time Warner’s CNN, but the network’s overtures have always been brushed off, after sending several “Do you like me? Circle one:” notes in the past. CBS just sent another note, and Time Warner circled the same response, and even underlined it for emphasis. CBS tag-teamers Sumner Redstone and Leslie Moonves talked about how CNN would look nice in CBS blue at the annual shareholder meeting. A Time Warner spokesperson issued the following response, “CNN is not for sale and is doing very well as part of Time Warner. Please suck it.” Struck by Fox envy, the last time CBS made a push for CNN was in 2003.
If there’s no chance of an acquisition happening, why did CBS float the idea? According to media investor Harold Vogel, “It’s a trial balloon to see if anyone bites on the idea; they’re shaking the tree a bit.” The most recent public proclamation of CNN love may be CBS’ way of waving the white flag after the failure of the “Couric is magic” news revitalization strategy. From Variety:
With “The Early Show” averaging 3 million viewers and “Evening News With Katie Couric” last week dipping below 6 million, it’s more difficult than ever for the Eye to establish its own next generation of stars to replace Bob Schieffer, Leslie Stahl and company.
CBS still pondering CNN pairing [Variety Business]
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