The CBS Corporation set records in the fourth quarter for operating income and adjusted operating income but still fell short of some analysts’ expectations, leading to a decline in its share price in after-hours trading, Bill Carter writes. The adjusted net earnings of $414 million produced earnings of 64 cents a share, also a quarterly record for CBS. The company announced an additional stock buyback of $1 billion, bringing the amount of stock it has committed to repurchasing this year to $2.2 billion. CBS, which is still the most-watched network on television, attributed the gains to a jump in advertising revenue in the last quarter, probably because of election commercials. Simon Schuster, CBS’s publishing unit, remained a troubling area with revenue declining to $215 million from $229 million in 2011.
The Justice Department has approved the merger of Random House and Penguin, which would create the largest book publisher in the world, Eric Pfanner writes. The Justice Department imposed no conditions on Bertelsmann, which owns Random House, or Pearson, the parent of Penguin, but the merger still faces regulatory reviews, most notably by the European Commission. Bertelsmann and Pearson announced their plans to merge the two publishers into a single entity that would have about a quarter of the English-language book market — no money would change hands in the agreement, but Bertelsmann is set to control 53 percent of the new company. Executives say the increased scale will give the publishers greater heft when negotiating e-book deals with the likes of Amazon, Apple and Google and help them develop new digital publishing models.
Print assets have become so toxic that media companies are quarantining them, David Carr writes on the Media Decoder blog. The latest example is Time Warner, which announced Wednesday that it might spin off a large portion of Time Inc., the largest magazine publisher in the country, into a new company with Meredith Publishing. Time Warner is following in the footsteps of News Corporation, whose stock hit a five-year high when the company announced a split between its entertainment and print divisions. Print publishing has lost a lot of significance with advertisers and consumers in the digital age, but investors have a far deeper hostility to the industry. The other two Manhattan magazine giants, Hearst and Condé Nast, are privately held and can afford to play for the long haul; Time Inc. does not have that luxury. Even though the media industry has been in a state of disruption for years, it sometimes takes a signature moment to drive the point home. Time Inc. being pushed out the door like a wayward party guest is a stark reminder of how the game has changed.
Wisk has started a new version of its venerable “ring around the collar” campaign, only this time it is aiming at invisible stains. In a series of online-only videos, a “documentarian” declares a “state of detergency” and confronts consumers at gyms and laundromats with an ultraviolet light, Andrew Adam Newman explains. He holds the light up to clean-looking clothing to show invisible stains, often in the armpits, and asks, “It’s the visible stains that you have to worry about; what about the stains you can’t see?” The videos will start on Tuesday on Web sites like The Huffington Post and NYTimes.com. Laundry detergent formulations have improved so much that many consumers no longer choose specific brands. “There is so little differentiation in the category that you have to step above stains in order to break through,” Lora Van Velsor, Wisk’s director of marketing, said.
The Committee to Protect Journalists reported a rise in the number of journalists killed or imprisoned around the world in 2012, citing government restriction of dissent, draconian laws and outright impunity for the murderers of journalists, Rick Gladstone reports. The committee’s annual Attacks on the Press survey showed that 70 journalists had been killed while doing their jobs in 2012, 43 percent more than in the previous year, and that more than 35 journalists had disappeared. The group said it had identified more than 232 journalists imprisoned in 2012, the most since the survey began in 1990.
Rhythm and Hues, the visual effects supplier behind films like “The Life of Pi,” has filed for protection under Chapter 11 of the United States Bankruptcy Code. The principal filing shows that the company’s main customers — 20th Century Fox, Universal Studios and Warner Brothers — have split in their approach to the company’s financial difficulties, Michael Cieply explains. Fox and Universal agreed to extend credit that will allow the company to continue working on their films, but Warner has demanded “the return of all materials” related to three of its scheduled movies. According to the filings, Warner claims it is owed $4.9 million, which it paid for work that has not been completed. The bankruptcy of Rhythm and Hues, one of the world’s “top eight” visual effects companies according to one of their filings, compounds the financial troubles of the effects industry, which has been impacted by global competition.