March 14, 2013
Outdoor Channel Holdings said on Wednesday that it had accepted a $220.7 million takeover bid from Kroenke Sports and Entertainment, turning down an earlier offer from the media investor Leo Hindery Jr. Under the terms of the bid, Kroenke will pay $8.75 a share in cash. That is 15.9 percent higher than Outdoor Channel's stock price on March 1, the last day before Kroenke publicly disclosed its interest in bidding. It is also higher than the $8 a share offered by Mr. Hindery's firm, InterMedia. Kroenke appeared as a bidder after controversy emerged over the earlier bid by Mr. Hindery, a major Democratic fund-raiser. Mr. Hindery had drawn scrutiny for his bid for the Outdoor Channel, known for its hunting and fishing programming.
The merger proposal by Mr. Hindery's InterMedia Outdoors vehicle has won the donor no favors among fellow Democrats who support tighter gun-control laws. But it also generated criticism among conservatives like Andrew Franklin, an Outdoor Channel shareholder who publicly wondered whether Mr. Hindery would alter the tone of the television channel's programming if he faced political pressure. By going with Kroenke, which is run by E. Stanley Kroenke, the owner of the St. Louis Rams and the Denver Nuggets - and a staunch Republican - Outdoor Channel's board appears set to avoid that controversy. "Our board of directors has unanimously determined that the proposed all-cash merger with K.S.E. offers superior value for our stockholders," Thomas E. Hornish, Outdoor Channel's chief executive, said in a statement. "We are pleased that Kroenke Sports and Entertainment has agreed to purchase Outdoor Channel." The deal with Kroenke is expected to close in the second quarter, pending approval by regulators and shareholders. Outdoor Channel was advised by Lazard and the law firm Wilson Sonsini Goodrich & Rosati. Kroenke was advised by Allen & Company and the law firm Wachtell, Lipton, Rosen & Katz. New York Times
The jury is out on whether the stimulus-funded expansion of Internet broadband in Colorado has wasted money, but it's certainly the right question to ask.
It has been dismaying to read about the government paying to install duplicative fiber-optic lines when this grant was intended to light up parts of the state that do not get high-speed Internet. We understand how some overlap may be necessary as the network expands like a spider web to cover the state. However, officials with EAGLE-Net, the quasi-government agency in charge of a $100.6 million federal stimulus grant, have done a lousy job explaining the logic behind the way it has gone about high-speed Internet expansion. That's assuming it's defensible.
The grant, one of the largest in the country when it was awarded in 2010, was intended to connect 230 institutions to high-speed Internet. The idea was that once the government did the heavy lifting of laying fiber-optic lines in rugged mountain terrain and the far reaches of the Eastern Plains to connect schools and other educational institutions, private companies would build out the system from there, enabling business and residences eventually to benefit from this "middle mile" project.
According to a story in last Sunday's Denver Post by Andy Vuong, 104 institutions can have access to the EAGLE-Net system, but only 39 are connected, and those have multiple contracts for Internet access. Only 21 institutions that could have access are on the Western Slope - and just two are getting services. That track record is part of what has prompted scrutiny of the project, and deservedly so. We think those running EAGLE-Net ought to address these issues:
- Give the public a firm schedule about which of the so-called community anchor institutions will be connected and when.
- If there is duplication, note it and explain why additional fiber is a wise investment.
- EAGLE-Net is six months from its supposed completion date. Will the project be finished on time and - given the $96 million spent so far - on budget? If not, officials need to ask the federal government for an extension and provide an explanation.
- EAGLE-Net should address the issue of compensation for its employees and oversight of expenditures in general. The Post reported the entity has had three chief executives and two chief financial officers, each earning more than $200,000. Why?
The grant for broadband expansion in Colorado provided an opportunity to achieve a laudable goal - bringing a modern platform for communication to poorly served or unserved communities. Its aim was to go places that private business had found too costly to connect. Policymakers cannot allow such an opportunity to go to waste. Denver Post editorial
Fox News may soon have some company on the cable news dial.
The San Diego family behind niche cable channel WealthTV is partnering with the Washington Times to launch a 24-hour conservative-leaning cable news network. To be called One America News network, the channel will be a combination of straight news reporting and conservative political talk shows, according to Charles Herring, president of One America News. It plans to launch on July 1, with expected distribution between 10 million and 15 million homes, Mr. Herring said, well short of full distribution of more than 90 million homes.
Mr. Herring said that his family's company, Herring Broadcasting, is investing "hundreds of millions" of dollars into the new channel, which he says will provide a much-needed alternative in the current news landscape. "If you take a typical channel on any of the leading video providers, and you try to determine which ones are providing credible news, you get about eight or nine news channels that skew to the left-for example, MSNBC skews left, and some argue that CNN skews left," Mr. Herring said. "There is only one that skews right on political talk shows, and that's Fox. We are going to open up another front and give independents, libertarians and all kind of different voices under the conservative umbrella an opportunity to express themselves." A Fox News spokeswoman didn't respond to a request for comment. Fox News is owned by News Corp., which also owns The Wall Street Journal. Spokeswomen for MSNBC and CNN declined to comment.
One America won't be the only newcomer trying to reach this audience. Glenn Beck's online television channel, The Blaze, has been distributed on Dish Network and has been pushing for wider cable and satellite distribution. One America will be owned by Herring and headquartered in San Diego, where WealthTV is based, initially with a relatively lean staff of between 30 and 40 people. It will use the Washington Times as its Washington bureau, leasing studio space in the newspaper's headquarters and turning to Washington Times reporters as on-camera experts. The Times will also help sell advertising in return for a cut of the ad revenue. "This gives us more exposure on a nation-wide basis," said Larry Beasley, the president and CEO of the Washington Times. "And it fits right into our conservative values and conservative views."
The Herring family got into cable television after it sold electronics businesses it had owned in 2000, making "in the low hundreds of millions of dollars" from the transaction, Mr. Herring said. It launched WealthTV in 2004 but it so far has achieved only limited distribution, being available in about 16 million homes. Given that experience, Mr. Herring is taking the long view on profitability. "This new channel will have very modest affiliate fees associated with it," he said, referring to the per-subscriber fees that channels demand from cable carriers. "Getting the carriage is very difficult, so we will be subsidizing the channel, and it will be a number of years before it's profitable." Wall Street Journal; more in Washington Times
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