vurbano said:
Wow, the link won't work, Here, Voom/E* stuff at the bottom, in bold
A Sirius stake for Viacom?
Oppenheimer analyst says it could happen
By David B. Wilkerson, CBS.MarketWatch.com
Last Update: 11:08 PM ET Jan. 5, 2005
SAN FRANCISCO (CBS.MW) -- Oppenheimer & Co. analysts on Wednesday said Viacom could consider buying a stake in Sirius Satellite Radio in exchange for letting radio host Howard Stern jump to Sirius before his contract with Infinity runs out, in 2006.
In a research note outlining the firm's picks for key themes to watch in 2005, Oppenheimer's Peter Mirsky told clients he sees a possible scenario in which Viacom Chairman Sumner Redstone would accommodate the outspoken and controversial Stern to secure a stake in the upstart Sirius (SIRI: news, chart, profile), which has been one of the most talked-about stocks in the media industry for several months.
Sirius shares rose about 200 percent, to the $9 level, between October and December, fueled by the signings of Stern and radio legend Mel Karmazin, who was named its new CEO, before leveling off.
An investment in Sirius or rival XM Satellite Radio might make sense for two reasons, Mirsky said. "It gives Viacom (VIA: news, chart, profile) (VIA.B: news, chart, profile) a stake in a technology that ad buyers are using as a stalking horse against broadcast radio and it brings a fast-growing investment into the fold."
Mirsky added that he doesn't know to what extent there might be bad blood between Redstone and Karmazin; Karmazin left as Viacom's chief operating officer in June, the result of what many observers believed to be a power struggle. Both men have denied there is any rancor.
Viacom has stated its intention to divest some of its Infinity radio stations in an effort to focus on its top 21 markets.
The traditional radio industry has seen slowing advertising growth for several quarters, and increasing competition from satellite radio, MP3 players, video game players and other devices has raised some questions about the medium's future.
Stern has made no secret of his advocacy of satellite radio, mentioning it on his radio program on many occasions.
Infinity Chief Operating Officer Joel Hollander discussed his reaction to the threat from satellite, Stern and the divestiture strategy in a presentation to investors last month. See full story.
Merrill Lynch analyst Jessica Reif Cohen, who also issued a 2005 outlook Wednesday, said she thinks Viacom won't be content to stop at the sale of 40 to 45 radio stations, as she had previously estimated. She now says as many as 70 to 75 stations could be jettisoned, which would be a greater boost to the company's stock. (Viacom is a significant shareholder in MarketWatch Inc., the publisher of this report.)
Turning to cable, Oppenheimer's Thomas Eagan said he believes that video-on-demand will experience faster growth than digital video recorders (such as TiVo) this year.
Though Rupert Murdoch-controlled satellite giant DirecTV (DTV: news, chart, profile) is rolling out DVRs with its set-top boxes that will hold up to 100 hours of stored content with a lot of bells and whistles, cable can use VOD to let consumers "choose and then control the viewing of movies, series and special events from a vast library of titles," Eagan said.
Comcast will be among the most aggressive in the VOD arena. Under a deal with Sony (SNE: news, chart, profile) (JP:6758: news, chart, profile), it will have access to Sony's newly-acquired MGM library, which includes more than 4,000 titles.
"Very soon, our customers will have at their disposal, older library titles, every month, 100 free movies, that will be replenished, 5 percent, every month," said Dave Watson, executive vice president of operations at Comcast, at a New York investment conference in December. See full story.
However, Reif Cohen points out that several issues between studios and cable operators are holding back VOD as a mass appeal item, including pricing, how the revenue between the entities will be split, and how much time should elapse between the arrival of a movie on home video and its debut on VOD.
Among other deals the Oppenheimer analysts expect to see:
-- News Corp. (NWS: news, chart, profile) will buy back the 18 percent of Fox Entertainment it doesn't already own, says Mirsky, because it no longer needs the spin-off to unlock the value of its film and television assets or offer an investment vehicle for people who only wanted to invest in its U.S. assets.
"These goals are largely obviated by News Corp.'s recent incorporation in the U.S.," he said. Another reason for such a move is that Fox shares tend to trade at a significant discount to News Corp. shares, a pattern that has been consistent since Fox was spun off from News in 1998.
-- Independent film studio Lions Gate Entertainment (LGF: news, chart, profile) will be purchased, with possible suitors including Time Warner, NBC Universal, Fox and Viacom, said Mirsky. "With MGM sold, Lions Gate is the last large, independent film library remaining," he said. Its film and television library includes more than 8,000 titles.
NBC Universal, in the analyst's view, will become a bigger player than it has been since NBC's acquisition of Vivendi's (V: news, chart, profile) film and television assets closed in mid-2003.
With the powerful financial backing of parent General Electric (GE: news, chart, profile), he said, NBC Universal could potentially acquire content, though buys of Cablevision's Rainbow Media cable networks or John Malone's Discovery Networks, as well as distribution assets, such as No. 2 satellite provider EchoStar Communications (DISH: news, chart, profile). "We would not be completely surprised to see an NBC-Universal IPO in the near future, either," Mirsky said.
-- Also, speaking of EchoStar, Eagan is convinced that the company, led by its mercurial chairman, Charlie Ergen, will buy Cablevision's Voom satellite for between $125 million and $175 million.
Cablevision (CVC: news, chart, profile) said last month that its planned spinoff of Rainbow Media Enterprises - which includes Voom, cable networks AMC, Women's Entertainment and the Independent Film Channel; and the company's Clearview Cinemas unit -- has been postponed for the third time this year.
The reality may be, said Eagan, that Cablevision has decided to sell the satellite, and Voom's current orbital slot complements EchoStar's existing orbital locations.
Your thread title had me going for a minute! 
