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With new Charter Spectrum distribution deal, Paramount breathes a sigh of relief

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With new Charter Spectrum distribution deal, Paramount breathes a sigh of relief

Paramount Global and Charter Communications have agreed to a new distribution deal for Paramount’s CBS network and cable channels, easing a concern that had threatened to complicate the media company’s sale talks.

The last three-year contract covering CBS and Paramount’s 25 cable networks expired April 30, but the two sides continued negotiations, sparing Charter’s Spectrum customers from another disruptive blackout. Last summer, a breakdown in separate talks between Charter and Walt Disney Co. resulted in Disney channels, including ESPN, going dark for 10 days for Spectrum subscribers.

While Paramount has less pull than Disney, the company still benefits from the strength of its CBS network and its entertainment schedule; news programs, including “CBS News Sunday Morning” and “60 Minutes”; and sports, including golf and the NFL.

As part of the deal, the companies said ad-supported versions of Paramount+ Essential and BET+ Essential would be included at no additional cost to Charter’s Spectrum TV customers. Charter also will make Paramount’s direct-to-consumer products available for purchase to its Internet-only customers.

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“This innovative deal celebrates our mutual commitment to deliver flexibility, choice and value for audiences everywhere, and we look forward to bringing even more of our fan-favorite programming to Spectrum customers through our direct-to-consumer streaming services for the first time,” Ray Hopkins, Paramount’s president of U.S. Networks Distribution, said in a statement.

The Charter deal marked the first major accomplishment for Paramount since Chief Executive Bob Bakish was ousted late last month and three division leaders, comprising the “Office of the CEO,” began running the company.

For investors, it was a shot of good news during a turbulent cycle as Paramount board members have been mulling whether to pursue a complicated and controversial two-phase merger with David Ellison’s Skydance Media or accept a separate buyout bid from Sony Pictures Entertainment and Apollo Global Management.

Sony and Apollo have offered $26 billion, including the assumption of debt. Sony and Apollo are known to be cost-conscious buyers; they want to scrutinize Paramount’s financial picture, including details of the Charter distribution pact, before arriving at a valuation, according to people close to the process who are not authorized to comment publicly.

Both Charter and Paramount had plenty to lose if they had been unable to reach a new agreement.

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Charter’s stock has tumbled more than 25% year-to-date, weighed down by concerns about weakness in its broadband internet and wireless phone business, as well as further erosion in pay TV subscribers — a trend that has had wide-reaching financial implications.

Audiences have been migrating away from general-entertainment cable channels, including BET, MTV and Nickelodeon, making them less valuable to distributors such as Charter.

Analysts have long viewed Paramount’s channels as among the weakest in the industry because they largely run low-cost reality programming, a genre that television executives say has suffered from oversaturation and higher-end competition from streaming companies, such as Netflix.

Recent Nielsen ratings shows how Paramount’s cable channels have fallen out of favor with audiences. Only three of the company’s channels — TV Land, TV Land Classic and Nick at Night — rank in the Top 20, in terms of total viewers. TV Land plays reruns of series including “King of Queens,” “Seinfeld” and “Everybody Loves Raymond.” Comedy Central and the Paramount Network lag behind, rounding out the Top 30.

Connecticut-based Charter’s executives, including Chief Executive Christopher L. Winfrey, were loath to agree to a new pact that would significantly raise fees for subscribers who continue to pay for their channel bundles. Winfrey also has demanded that programmers give Spectrum customers access to subscription services that provide network programming.

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“From the outset, Paramount has embraced Charter’s goal of evolving the video distribution model, and we have appreciated their willingness to collaborate on a solution that benefits our mutual customers and the video industry as a whole,” said Tom Montemagno, Charter’s executive vice president of programming acquisition.

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Steve Ballmer: NBA owner in search of a miracle

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Steve Ballmer: NBA owner in search of a miracle

He sits in a conspicuous baseline seat, where he cheers like nobody’s watching.

The large balding man in long sleeves roars with every splashed basket, gestures with every scintillating pass, face reddening, arms flailing, celebrating so hard he once ripped a hole in his dress shirt.

He could be any die-hard Clippers fan, with one exception.

He owns the team.

Steve Ballmer is the perfect symbol of the power of Hollywood hope, the strength of California dreaming and the resilience of those who come here searching for a miracle.

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Discover the changemakers who are shaping every cultural corner of Los Angeles. This week we bring you The Money, a collection of bankers, political bundlers, philanthropists and others whose deep pockets give them their juice. Come back each Sunday for another installment.

Ranking eighth on the Forbes 500 list with an estimated net worth north of $120 billion, Ballmer could afford to buy any sports team in any league.

He chose to buy the Clippers, spending $2 billion in 2014 for a perennial loser and one of five teams to never reach the NBA Finals.

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“A team comes up for sale in a city I love that’s near me?” said Ballmer, 68, a former Microsoft executive who lives in Washington state. “You say, ‘OK, but it’s the Clippers,’ and my theory is, you can do anything if you put your mind to it.”

As the richest owner in North American professional sports, he had the wealth and influence to move the bedraggled franchise to a city far away from the big brother Lakers, perhaps even into his adopted hometown of Seattle.

‘It was clear to me, we had to have our own home, our own identity.’

— Clippers owner Steve Ballmer

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Yet he doubled down and not only kept the Clippers in town but spent another $2 billion to build his own arena: the glitzy Intuit Dome, which is scheduled to open in October in Inglewood.

“It was clear to me, we had to have our own home, our own identity,” Ballmer said.

Cynics would describe his ownership of the Clippers as charity work, but his real philanthropy has had an even larger impact in the region, with his Ballmer Group investing hundreds of millions of dollars in everything from inner-city businesses to the renovation of 500 Clipper Community Courts in diverse pockets of the city.

Steven Ballmer

“Impacting kids is the kind of thing that pulls at my heart,” Ballmer said. “A fan will tell me that he drove past a Clipper court and I’ll think, that’s really, really, really cool.”

Ballmer is accessible, generous and, most of all, the head cheerleader for a drowned-out swath of a Lakers-owned city.

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“I love our die-hard fans,” he said. “I love the culture of c’mon, we have a chip on our shoulder, we’ve got something to prove, we’ve never done it before, c’mon!”

It is a Thursday afternoon early in the 2023-24 NBA season and Steve Ballmer is shouting into the phone, because of course he is, the sound of undying faith, the voice of a true believer, c’mon!

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Occidental trustees vote against divesting from Israel-linked companies

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Occidental trustees vote against divesting from Israel-linked companies

Occidental College’s Board of Trustees voted this week not to divest from companies with ties to Israel, saying the move would further divide the campus and limit freedom of expression.

In a letter to students, faculty and staff on Monday, Occidental Board of Trustees Chair Lisa H. Link acknowledged the devastating effects of the Israel-Hamas war but said that taking a position on a complex geopolitical situation could alienate certain members of the community and undermine its diversity.

“The diversity of community members’ opinions was a compelling reason to refrain from acting on the proposal, as the Board believes a decision in favor of the proposal would be divisive and damaging to the College community,” she said.

The divestment proposal set forth by leaders of the Occidental chapter of Students for Justice in Palestine in May called for the college to identify and disclose any investments in four manufacturing companies that have provided arms and equipment to the Israeli military.

The board said Occidental’s endowment does not include direct investments in any of the four companies.

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Indirect investments in the Israel-linked companies make up less than 0.1% of the college’s endowment assets and are managed by third parties that restrict the college’s ability to divest from specific parts of a fund, Link said.

“The Board believes it is not in the best interests of the College, or our current and future students, to jeopardize the endowment by divesting from managed funds that have minimal exposure to certain companies,” she said in the letter.

The board’s vote on the divestment proposal hinged on students taking down their pro-Palestinian encampment, not impeding commencement and not returning to occupy a space on campus without prior approval.

The board held the vote after Occidental’s school year ended in early June.

Matthew Vickers, a co-organizer of the encampment and spokesperson for Occidental’s Students for Justice in Palestine, said he was disappointed by the board’s decision but not surprised.

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“Based off of the pressure from Zionist parents and off-campus organizations such as the Brandeis Center and [the Anti-Defamation League] and personal political biases of the Board of Trustees, they caved in to rejecting divestment,” he said.

The Louis D. Brandeis Center for Human Rights Under Law and the Anti-Defamation League filed complaints with the U.S. Department of Education’s Office for Civil Rights in May against Occidental and Pomona College, accusing the universities of permitting discrimination and harassment of Jewish students on their campuses.

Occidental Hillel directed inquiries to Director for Religious and Spiritual Life Susan Young, who declined to comment on the board’s decision not to divest and the alleged antisemitism on campus.

Although the board’s vote came after many students had vacated campus for the summer, Vickers said students who are still in L.A. are planning to hold actions on and off campus to protest the board’s refusal to divest.

On UCLA’s campus, students continue to stage pro-Palestinian protests into the summer, erecting a new encampment on Monday that resulted in about two dozen arrests.

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“People are still galvanized and willing to continue the struggle,” Vickers said.

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With 'Inside Out 2,' Disney's Pixar looks to get its blockbuster mojo back

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With 'Inside Out 2,' Disney's Pixar looks to get its blockbuster mojo back

For decades, it seemed that Pixar couldn’t lose.

Starting with “Toy Story” in 1995, the Emeryville, Calif.-based computer animation studio rolled out hit after hit, with movies that achieved critical acclaim as well as box office riches.

But after the COVID-19 pandemic struck, even the once-unflappable Pixar fell victim to the doldrums plaguing the entertainment industry and the company’s own missteps.

Films such as “Lightyear” did poorly at the box office, partly due to their timing during the pandemic and a perceived falloff in quality, for which Pixar had long been considered the gold standard. Parent company Walt Disney Co. has cut back spending across the board, resulting in about 175 layoffs at Pixar, largely due to the studio pulling back on series for streaming service Disney+.

Now with “Inside Out 2,” the much-anticipated sequel to 2015’s “Inside Out,” Pixar is looking to make a comeback.

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Hitting theaters this week, “Inside Out 2” is tracking for one of the highest opening weekends of the year so far, with a projected $80 million to $85 million in ticket sales from the U.S. and Canada. Some analysts say the movie could become the first film of the year to clear $100 million in its domestic box office opening weekend. (The movie’s budget is estimated at $175 million.)

“Pixar was the leading edge of creating this art form,” said Ron Bernard, academic chair of animation and motion design at Otis College of Art and Design. “I’m hoping that [“Inside Out 2”] would revitalize the interest in Pixar films.”

“Inside Out 2” continues the story of Riley, now a teenager, who grapples with new emotions such as Embarrassment, Anxiety and Envy alongside longtime pals Joy, Sadness and Anger.

The anticipated numbers are remarkable, considering so many movies this year have come in below expectations on opening weekend, including George Miller’s prequel “Furiosa: A Mad Max Saga” and the Ryan Gosling- and Emily Blunt-led action-comedy “The Fall Guy.” A strong debut will give a jolt of confidence to not only Pixar but beleaguered theaters, whose box office revenues are down 26% so far this year compared with 2023.

Presale numbers are promising. As of earlier this week, online ticketseller Fandango said “Inside Out 2” had already outsold its predecessor in advance ticket sales at five days before opening and is currently the highest advance ticket-selling Pixar film since 2019’s “Toy Story 4” at the same point in the sales process.

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“Enthusiasm for the film is impressive as we prepare to dive back into the beloved world of ‘Inside Out,’” Jerramy Hainline, executive vice president of Fandango, said in a statement.

The overall box office this year has been muted due to the combination of still-slow-to-recover theater attendance, production delays from last year’s dual labor strikes and a handful of high-profile flops. Pixar hasn’t been immune to these larger, industry-wide challenges.

Bad timing doomed Pixar’s “Onward,” which was released in theaters on March 6, 2020, right before the pandemic shuttered cinemas across the nation. The movie went on to gross just $141 million worldwide. It also got mixed reviews by Pixar standards.

The move by studios early in the pandemic to move most theatrical films to streaming services also diminished the cultural effect of new Pixar releases.

“Soul” went directly to Disney+ in December 2020 and to theaters in some select countries; it wound up winning Oscars for animated feature and original score. 2022’s “Turning Red” also got sent to Disney+ first, despite theaters having reopened by then.

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Exhibitors and cinephiles grumbled that Disney was training family audiences to stay home and stream new movies, rather than load up the minivan and trek to theaters.

“When a movie is a hit in theaters, you can’t do better,” said David A. Gross, who publishes FranchiseRe, a movie industry newsletter. “The theatrical release is the locomotive pulling the train.”

The studio also had some creative stumbles. 2022’s “Lightyear” bombed after replacing Tim Allen with Chris Evans as the voice of Buzz Lightyear. Last year’s “Elemental” had a slow start but eventually made about $496 million worldwide. It got decent — but not stellar — reviews.

Pixar’s quality also suffered from Disney’s orders across the board to produce more content for its streaming service, experts say. Churning out so many films and animated series led to creatives being spread thin at Disney studios, including Pixar, Lucasfilm and Marvel.

But the studio is also a victim of its own success. Disney’s 2006 acquisition of Pixar for $7.4 billion is widely credited with reviving Disney’s animation business. Pixar movies of the past regularly hit $750 million at the global box office, making even “Elemental” seem like a flop in comparison.

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“There’s nothing wrong with that at all, it’s just the Pixar standard is so incredible,” Gross said. “Pixar has such a remarkable track record, and they’ve set such a high standard for the industry and for themselves.”

The original “Inside Out” generated $858 million in global sales after opening with $90 million in the U.S. and Canada. Pixar’s best-performing movie, 2018’s “Incredibles 2,” tallied $1.24 billion worldwide.

More broadly, families were slow to return to theaters due to health concerns as well as the ease of watching movies in their living rooms. But they are coming back. Last year’s animated “The Super Mario Bros. Movie” from Universal Pictures and Illumination Entertainment brought in $1.4 billion worldwide.

Box office watchers are hopeful for an animation-heavy slate toward the end of this year, with “Despicable Me 4,” “Moana 2” and “Sonic the Hedgehog 3.”

While “Inside Out 2” will be a major test for Pixar, the next question, Gross said, will be whether the studio can recapture its old magic with a new story — not a sequel or spinoff. Its next opportunity to answer that is in June 2025, when Pixar is slated to release “Elio,” an original movie about a young boy’s intergalactic adventure.

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