Mecom investor sells 14% stake

Mecom investor Invesco, which joined a shareholder rebellion to oust chief executive David Montgomery, has sold its 14% stake in the pan-European newspaper group.

Invesco's exit will fuel speculation that Montgomery may look to engineer a way to stay on at the company he founded a decade ago in a different role.

In September Invesco, the investment fund manager and Mecom's second-largest shareholder, supported a move by Aviva and Legal & General to try and replace Montgomery with Patrick Tillieux, a former senior executive at broadcasters SBS and ProSiebenSat.1, and introduce a new strategy to focus on its flagship Netherlands operation.

The rebel shareholders, which at the time jointly controlled more than 50% of Mecom, succeeded in forcing Montgomery into what was called a "planned retirement" after the company's pre-close trading statement in January. Plans to install Tillieux and change strategy were dropped as a result.

Invesco's sale of its stake in trading yesterday, which one source said was to a number of "blue chip institutions", leaves the rebels with less than 30% and in a weakened position to force any further changes in Mecom strategy.

Aviva, thought to be the most dissatisfied of the investors and leader of the rebellion, is the largest shareholder with 17.5%. L&G is third largest with 10%.

Invesco has been decreasing its stake since around early July, when it controlled more than 18%. The sale of its remaining stake is thought to be the single biggest trade in Mecom shares in at least three years.

At the time of his planned departure Montgomery said he still had the "complete confidence" of the board, which subsequently said it would start a process to "find the person best qualified to succeed" him.

Montgomery is currently battling unrest at Dutch subsidiary Wegener, which accounts for more than 40% of Mecom's total revenues and 88% of operating profit, over the sudden departure of chief executive Joop Munsterman.

Senior executives at the company have claimed that at several meetings Montgomery has said he will remain at the company. Mecom declined to comment.

In Mecom's most recent results, for the first six months of the year, the company showed signs of an improved financial performance, beating analyst expectations with pre-tax profits of £24.6m.

It is thought that Mecom's performance has shown continued improvement, which Montgomery is likely to use as evidence that the strategy is working and he should stay at the company.

A group called Governance for Owners, which controls a stake of about 14% in Wegener, requested an extraordinary general meeting, which is due to take place on 22 December.

BBC to Sell Discovery Its Stake in Joint Venture

PARIS — Discovery Communications, the U.S. operator of science and entertainment television channels, stepped up its expansion plans Monday, saying it had agreed to buy out the BBC’s 50 percent stake in their international joint venture.

Discovery said it would pay $156 million to BBC Worldwide, the commercial arm of the publicly financed BBC, for its half ownership in the venture, which operates the Animal Planet channel in Europe, Asia and Latin America and the Liv network in Latin America.

At home in Britain, the BBC has come under pressure from commercial rivals and some politicians over the breadth of its ambitions in areas ranging from magazine publishing to the Internet. The BBC Trust, which oversees the broadcaster, last year urged the BBC to focus on developing channels that bear the broadcaster’s own brand name, like BBC America.

John Smith, chief executive of BBC Worldwide, said the talks with Discovery on the sale of the stake predated the BBC Trust report, but said the proceeds would be spent on marketing and distribution of its own branded channels, as well as programming for them.

The BBC and Discovery extended one part of their partnership, under which Discovery invests in BBC science and nature programs like “Life” and “Planet Earth,” and acquires the U.S. rights to them. The BBC previously sold its 20 percent stake in the U.S. Animal Planet channel to Discovery.

For Discovery, full ownership of Animal Planet and Liv will provide greater latitude to revamp their programming, said Mark Hollinger, chief executive of Discovery Networks International. Discovery has been trying to broaden the audience for channels like Liv, previously known as People+Arts, by adding more entertainment shows.

“The BBC has been a great partner, but when you own something 100 percent you can do things that you can’t if you are in a partnership,” he said.

Discovery has struggled to develop “flagship” networks that could help generate more lucrative advertising and distribution deals internationally, Mr. Hollinger said. In an effort to build audiences, Discovery introduced its TLC channel, which is popular with women in the United States, in dozens of other countries this year.

Following the review by the BBC Trust, BBC Worldwide is also moving to sell a stake in its magazine business, as well as its 50 percent share in UKTV, a group of British channels that are available on cable, satellite and other digital TV systems. BBC Worldwide’s commercial activities contributed £73.6 million, or $118.6 million, to the BBC’s budget in its latest financial year.

Mr. Hollinger is one of several candidates to buy the stake in UKTV, which the BBC jointly owns with Virgin Media, the biggest British cable company.

“We are looking at that portfolio; it’s a great portfolio,” he said. “It’s hard to know how it will turn out.”

Forbes Goes Outside the Family for President, CEO

In a major break with tradition, Forbes Media named publishing vet Mike Perlis as its new president/CEO—marking the first time a non-Forbes family member is running the 93-year-old company.

Steve Forbes, the chairman and editor in chief of Forbes Media, will give up the CEO title. His brother, Tim Forbes, will relinquish the COO title while remaining chairman of Forbes Digital, a member of the Forbes Media Board and what Steve Forbes called “one of the company’s chief strategists.”

Perlis most recently was a general partner at SoftBank Capital, a venture cap firm focused on digital businesses after a traditional print media publishing career that included stints as president, CEO of Ziff-Davis Publishing and president of the Playboy Publishing Group. His appointment begins Dec. 1.

The brothers reportedly started looking for new leadership early this year.

“This is an unprecedented time in the media business that demands bold moves,” Steve Forbes said in an announcement.

It’s been a year of major changes for Forbes during turbulent times for its print business. Earlier this year, the company bought True/Slant and hired its founder Lewis D’Vorkin to overhaul the namesake magazine and Web site by giving advertisers and unpaid contributors a bigger voice.

What to Expect as News Corp. Dives Into Business of Education

Hearst Magazines Chairman Cathie Black got most of the attention last week when she was named the next New York City schools chancellor, succeeding Joel Klein as the head of a $23 billion public-education system with 1.1 million students. But Mr. Klein's new job at News Corp., advising Chairman-CEO Rupert Murdoch on getting into the education industry, may eventually prove more captivating, both for education and the media business.

Ms. Black, after all, is going to build on eight years of work by Mr. Klein and Mayor Michael Bloomberg, who will still make the big calls on public education. But Mr. Klein is going to seek opportunities in education, an occasionally polarizing area where some people don't like to see private companies tread, for News. Corp., an occasionally polarizing media behemoth whose assets include Fox Broadcasting, Fox News, 20th Century Fox and The Wall Street Journal.

Hearst's Cathie Black Named New York City Schools Chancellor

Succeeds Joel Klein, Who Jumps to News Corp. as Special Adviser to Murdoch
Although the Washington Post Co. set a precedent for a big media outfit getting involved with education, News Corp. is likely to do it very differently. The Washington Post Co. makes most of its revenue, 62%, from its Kaplan education division, and most of its education revenue from higher education programs offering bachelor's, master's and other degrees and certificates.

But the higher-education business is poised to contract as a result of government regulations focusing on excessive student debt loads, said Ariel Sokol, an analyst covering the Washington Post Co. for UBS. "I sincerely doubt that you're going to see new entrants in this space any time soon," he said.

And, of course, Mr. Klein has spent his tenure as schools chancellor working on education from kindergarten through 12th grade. So it's most likely that Mr. Murdoch and News Corp. are eying the same turf, where the business opportunities include charter schools, virtual schools and technology-based teaching and learning aids.

The immediate best bet is that News Corp. will seek possible investments in technology platforms that schools, public or private, can adopt to help students learn -- a kind of paid-content business, which is one of Mr. Murdoch's big media priorities.

Mr. Klein referred to those kinds of products last week during the press conference introducing Ms. Black as his successor. "As recently as yesterday I was in Brooklyn, looking at a really great learning platform that our kids are engaged with and that our teachers love," he said. He was visiting a kindergarten in Brooklyn that uses Time to Know, a digital curriculum system offered by a private company of the same name.

"To me that's the future and I want to be at the center of it," Mr. Klein said. "That's why I've accepted an offer from News Corp. to become an executive vice president in the chairman's office and a member of their board of directors."

Whether outsiders will welcome News Corp. into the education business is another question. "There is a reasonable debate to have on education, about what we need to do, about the federal government's role in the process," said Ari Rabin-Havt, VP-research and communications at Media Matters, so relentless a critic of Fox News that George Soros gave it $1 million last month explicitly for that reason. "Fox News as an entity gets in the way of those debates."

Fox News host Glenn Beck has certainly criticized the school system. "Sell a car if you have to," he told viewers earlier this year. "Get your kids out of this indoctrination or our republic will be lost."

European Broadcasters Channeling Fear

PARIS — If there is one thing that European commercial television broadcasters like less than a recession, it is that other “R” word — regulation.

The industry has rebounded from the economic downturn, with advertising revenue recovering to prerecession levels, according to the Association of Commercial Television in Europe, an industry group based in Brussels.

As other media reel from technological changes, television keeps going strong. Yes, the traditional broadcasters — commercial and publicly financed networks — now have to share audiences with hundreds of new digital channels, but overall viewership keeps climbing. It has crept up to an average of more than three and a half hours a day across Europe, according to the television association. More and more viewers pay, too: British Sky Broadcasting, the satellite broadcaster, recently reported that it had reached its long-term goal of 10 million subscribers.

“For more than 10 years, people have been saying television will lose, and that is just not the case,” said Philippe Delusinne, president of the broadcasters’ association.

Yet few high-fives were exchanged last week as members of the association gathered in Brussels for an annual conference. That is because of their fear, justified or not, of regulators and lawmakers at the European Commission in Brussels and in national capitals across the 27-country bloc.

Perhaps their biggest worry is a pending overhaul of European copyright rules. Lawmakers want to make it easier to license television shows and other media for use by online video services, which remain meager across Europe. Some commercial broadcasters fear that a greater availability of online services would weaken one of their biggest selling points — exclusive rights to sports, movies and other popular programming.

The doyenne of Brussels regulators, Neelie Kroes, who is now in charge of the E.U.’s digital agenda, visited the broadcasters’ conference last week, where she made it clear that she took a dim view of complacency.

“The truth is that technological revolutions always pose challenges for gatekeepers,” she said in a speech. “The pattern is the same for the digital revolution as it was with the industrial revolution and the printing press. It is only the scale and pace that is different today.”

Despite their fear of regulators, commercial television companies have not fared all that badly in Brussels of late. Among other things, they have secured a requirement that their archrivals, public broadcasters like the BBC, must demonstrate the “public value” of investments in digital services that could compete with private-sector offerings.

At the national level, commercial broadcasters have had a harder time. Lawmakers in Spain and France, for example, have imposed new taxes on commercial broadcasters to help finance public broadcasting. At the same time, France appears to be backtracking on a pledge to remove ads from public TV, which was expected to direct more ad revenue to the commercial channels.

“When the economy gets difficult it is easy politically to make decisions like this,” Mr. Delusinne said.

But public broadcasters can no longer take their political protection for granted. With austerity the order of the day in European capitals, their financing suddenly looks a lot more precarious than it did two years ago when commercial rivals, reeling from the ad slump, envied their steady revenue.

In Britain, for example, the BBC has agreed to absorb hundreds of millions of pounds in costs previously covered by the government, including the budget for the World Service. The license fee that finances the BBC is set to be frozen at the current level for six years. The broadcaster’s management and journalists have been caught up in a nasty dispute over pensions.

In some other countries, particularly in Eastern Europe, public broadcasters are facing bigger cuts.

Against that backdrop, European commercial channels have a fair amount to celebrate — as long as they keep the volume turned down.

Twitter links users to Apple music social network

Apple announced the Ping social network in September. It works within Apple's iTunes music program and lets users follow artists and recommend songs to their chosen circle of friends.

Twitter said its more than 175 million registered users can now connect their accounts to Ping, allowing them to put song previews and links to buy music from the iTunes store directly in their messages, which are known as "tweets."

Twitter's deal comes after Apple failed to strike a Ping partnership with social networking leader Facebook, which has more than 500 million users.

Apple Chief Executive Steve Jobs told the All Things Digital blog in September that Apple had held talks with Facebook about a deal related to Ping, but the discussions did not produce an agreement.

Facebook declined to comment on Thursday.

Newsweek Site to Shut Down

There apparently isn’t room for two sites at the Newsweek Daily Beast Company. The new joint venture will kill off Newsweek.com, even though its audience is larger than the Beast’s.

Newsweek.com, the offshoot of a 77-year-old brand, has 3.8 million monthly unique visitors to the two-year-old Beast’s 1.5 million, according to Compete.com.

The Beast is the survivor, said Stephen Colvin, the company’s new CEO, “Because the Daily Beast is a very credible and successful news and opinion Web site. And with great vitality and distinct voice.”

The site will publish Newsweek.com-branded content, and Newsweek.com traffic will be directed there.

As expected, Newsweek CEO Tom Ascheim (who, ironically, was brought on to pump up Newsweek digitally) is leaving the company.

The Newsweek, Newsweek.com and Daily Beast staffs will be combined under Tina Brown, the Beast founder who was named the company’s new chief editor. The combined staff will work out of the financial district, where Newsweek was already planning to relocate after its sale to Sidney Harman three months ago. The move is scheduled to take place in a few weeks.

Skepticism about Newsweek and The Daily Beast merger is running high, but Colvin said the two could make more money as a combined entity.

“We’re providing a much bigger platform and access to a very sought-after audience for marketers in the various platforms they want,” he said in a phone call a few hours after the merger was announced. “And that will definitely lead to all kinds of incremental revenue opportunities. And Tina Brown is a very talented editor. There’s no doubt that will lead to circulation growth.”

Jitters about layoffs are running high at Newsweek, whose staff has already been diminished by layoffs and defections since its sale to Harman. Colvin was noncommittal about further cuts. He said while many Newsweek staffers would fit the kinds of hires the Beast was looking to make, adding, “Obviously there will be efficiencies.”