A handful of market developments lead the way
“The future is purchased by the present,” Samuel Johnson wrote in 1751, when he was a struggling writer working on the dictionary that would make him a literary legend.His observation, made in one of more than 200 essays he wrote for the twice-weekly British periodical the Rambler, is particularly applicable to the world of business. Consider how a certain wily Australian media baron forged the template for today’s showbiz congloms with his purchase in 1985 of seven major-market TV stations from John Kluge’s Metromedia and, in a separate deal, a 50% stake in 20th Century Fox Film Corp. Johnson’s dictum is a good reminder that at any given time in the noisy media landscape, there’s inevitably a handful of market developments that are truly poised to point the way to the future. The biggest challenge for journos (or 18th century essayists) is to sort through reams of spin to identify those promising prospects. In that spirit, here are my best guesses about a few stories worth paying close attention to in the coming year, and a few (short) rants about stories that have already soaked up way more ink than they deserve. • Spectrum, spectrum spectrum. A battle royale is brewing among key showbiz, digital and telecommunications constituencies about the FCC’s plan to auction off spectrum bandwidth now held by TV stations to telecom providers to allow providers to expand broadband services across the country. It’s wonky stuff, but it promises to raise billions for the federal government and pit Big Media against Big Wireless, with pols taking sides and entrepreneurs naturally looking for ways to profit from the upheaval. The first question that needs to be settled is whether or not there really is a looming spectrum drought on the horizon, as FCC topper Julius Genachowski has been warning for years. It’s the media biz’s version of the debate over global warming — a polarizing subject that ought to be easily settled by facts, not science fiction. • Corporate hoarders. Some of showbiz’s biggest congloms have a lot of cash on the books, notably News Corp., Time Warner and CBS Corp. What are they going to make with all that hay? Even Wall Street is getting bored by the play-it-safe route of stock buybacks. • War chests. Although M&A and private equity dealmaking activity has been subdued in recent years, two brand-name biz personalities have been collecting intriguing stashes of cash. Peter Chernin’s Chernin Group has raked in an estimated $300 million this year in combined investments from Providence Equity and Qatar Holding. So far, Chernin Group has made mostly small investments in digital businesses and Asian markets. Hard to read the tea leaves there so far. The same goes for Ryan Seacrest. In January, his bustling production banner earned an equity investment from Clear Channel, and he separately pacted with Thomas H. Lee Partners and Bain Capital to earmark up to $300 million for acquisitions and biz development projects. Seacrest has significantly beefed up his exec staff and talent roster during the past year, and he became an investor in Mark Cuban’s new-model AXS cabler. There will be more to come along those lines. (He made a run at Dick Clark Prods. earlier this year.) On the flip side, there are always a few stories that drag out long past their relevancy-expiration date. • The Tennis Channel. Yes, the indie cabler’s fight with Comcast is a significant test of an FCC access rule designed to police the Big Media gatekeepers from squashing the potential of the little guy by relegating them to Siberia in terms of placement on their systems. But enough already with the rulings, the appeals, the appeals of the appeals and the amended complaints. This story needs to take a long walk off a short tier. • Nicollette Sheridan vs. “Desperate Housewives.” The show’s over, and so is this case, hopefully. • Retrans ruckus. The cable lobby’s push to “reform” the FCC’s retransmission consent rule. Local affiliate stations deserve payment from the MVPDs who carry their signals, especially as they typically draw more viewers than many other channels. To invoke one of Samuel Johnson’s contemporaries, let’s allow Adam Smith’s invisible hand of the free market to dictate those carriage terms.