At Deadline - April 16, 2001

Emap Black Book Shows Lower Cash Flow

Emap USA's black book was discreetly circulated last week, with estimates of the 2000 earnings before interest, taxes, depreciation and amortization (EBITDA) varying widely. Cash flow is said to range from an estimated $50 million to $60 million, according to executives familiar with the sale. The range in cash flow, however, is still far less than the $78 million in EBITDA Petersen Cos. claimed in 1999, when it was sold to Emap for $1.5 billion. AOL Time Warner's Time Inc. and Bertelsmann's G+J USA Publishing are interested in Emap. But both have refused to sign broker Morgan Stanley's restrictive confidentiality agreement until certain terms—which would preclude them for five years from pursuing the acquisition of Emap USA's troubled U.K.–based parent company Emap—were changed. Bids are said to be due by the end of April.



eMadison Entering 'Hibernation'

A letter from eMadison, the Internet–based ad-buying service, was being circulated at press time last week, detailing the company's intentions to either sell its technology or the company itself. The letter stated that its second round of financing had fallen through and that the staff had been cut to 22 people. "We are currently in a 'hibernation' mode," the letter stated.



Twentieth, Marvel Sue Over X's

Twentieth Century Fox last week filed suit to halt production of Tribune Entertainment's new syndicated weekly action hour, Mutant X, claiming the series looks too much like Fox's recent theatrical release X-Men. Marvel Comics, a production partner on Tribune's series, countersued Fox, claiming the TV show's characters are entirely different from those in X-Men. Marvel had earlier sold rights to the X-Men characters to Fox. Tribune officials said Fox's suit is "wholly without merit" and plans to launch Mutant X as planned in the fall.



NYT Co., Dow Jones Set Layoffs

The New York Times Co., which saw its February newspaper ad revenue decline 7.5 percent, said it would make an undetermined number of cuts by offering buyouts throughout the company over the next three months, with possible layoffs at a later date. Cuts will start sooner at its online division, New York Times Digital, where CEO Martin Nisenholtz said staff would be cut this week for the second time this year. Dow Jones & Co. Inc., also based in New York, said Thursday it would lay off 202 employees, or about 2.5 percent of its work force, as part of an effort to cut expenses by $60 million this year.

DOJ OKs News Corp.'s Chris-Craft Buy

News Corp. received approval from the Justice Department last week for its $5.3 billion purchase of Chris-Craft's 10 TV stations. Without the divestiture, News Corp., which owns Fox affiliate KSTU-TV in Salt Lake City, would have owned two of the top four TV stations in the market and controlled more than 40 percent of the market's TV revenue. News Corp. still faces regulatory hurdles from the Federal Communications Commission before it closes on the deal in late June, including whether the Australian company violates foreign ownership rules. The company also asked the FCC for a waiver extension to own two New York TV stations and tabloid The New York Post.



Streamed Radio Stations Yanked Off 'Net

Webcasting came to a screeching halt last week after hundreds of radio stations streaming their signals on the Internet were notified by advertisers and agencies to either block or pull their ads from the Web. The request to stations came after advertisers and agencies were notified March 5 by the Joint Policy Committee of the American Association of Advertising Agencies and the Association of National Advertisers that advertisers must pay an additional fee to the American Federation of Television and Radio Artists if ads run on the Internet. It's the second major financial blow to webcasting. In December, the U. S. Copyright Office ruled that stations streaming music must pay royalties.



McGuirk Adds Turner Sports Post

Terry McGuirk, vice chairman of Turner Broadcasting Systems, has added the title of CEO of Turner Sports to his duties. McGuirk will oversee the sports portfolio, which includes the Atlanta Braves baseball team, Atlanta Thrashers hockey franchise and basketball's Atlanta Hawks.



Addenda: Crown Media Holdings and Hallmark Entertainment Distribution, a subsidiary of Hallmark Entertainment, cut a deal last week in which Crown will acquire approximately 700 film titles from the Hallmark Entertainment library…Arthur Frommer's Budget Travel will raise its rate base for the second time in 2001 to 450,000 from 400,000, effective with its September/October issue. The 3-year-old magazine plans to increase its frequency from six to ten times in January 2002…Paramount Domestic Television's syndicated court show Judge Mills Lane will not return in the fall.