Looks like the world is hurting for money, but where the rest of the planet is being stung, La-La Land is getting positively reamed with a pineapple. Recently reader Kevin Waldroup, and show-biz business maven Nikki Finke both mentioned the recent money problems of Sumner Redstone, the octogenarian oligarch behind Paramount, Viacom, CBS, MTV and just about one 
quarter of the media in the world.
His parent company National Amusements has racked up a debt load in the gazillions, his attempts at re-organization are running longer than a Russian novel, speculation about everything from the state of his finances to his senses are running wild, and he's having street-corner fire sales of assets and non-voting stocks like they're going out of style.
And let's not forget Paramount's problem getting outside investors to put their money in their films.
Now he's not the only media company having money related troubles. Read this piece taken from IMDB about Disney:
Here is Disney, a supposedly intelligently run corporation, deliberately pissing off their main source of production financing over something that should have been settled right from the beginning. Now Disney may have some sort of legal case to make based on the letter of their contract with Kingdom, and will allow them to give their CEO a bigger bonus, but they're not asking themselves what it will get them in the long term.
If they did ask that question, they'd know that the answer is nothing but trouble.
Will the people whose money backs Kingdom Films be willing to renew that contract if they feel it got them a royal hosing?
No.
And that's the problem. No one in a position of power in Hollywood is thinking about anything beyond their next quarterly bonus. Hence they forget about the absolute key rule of capitalism: Everyone must walk away happy.
Guess what, no one is happy doing business in Hollywood, because no matter who or what you are, creator, financier, or shareholder, you're going to get screwed because the people in charge are not accountable to anyone for their actions and don't care how much damage they do as long as they get their bloated raises, bonuses, and stock options. Creditors aren't going to cut Redstone any slack, because they don't want to join the legions of the screwed, and nothing is going to change their minds.
They had too long where people were willing to give the screw-jobs a pass because it helped them hide their more practical profits from the tax-man, but these days, if it doesn't put the green in the pocket, it's just not worth the trouble.
It's times like these I feel like a deranged prophet roaming the wasteland calling for sinners to repent, but that doesn't mean that I'm not right. A perfect storm is brewing, and if those who are getting screwed want real change, they should band together and use what power they do have to force it.
Because things can only get worse the way they're going now.
quarter of the media in the world.His parent company National Amusements has racked up a debt load in the gazillions, his attempts at re-organization are running longer than a Russian novel, speculation about everything from the state of his finances to his senses are running wild, and he's having street-corner fire sales of assets and non-voting stocks like they're going out of style.
And let's not forget Paramount's problem getting outside investors to put their money in their films.
Now he's not the only media company having money related troubles. Read this piece taken from IMDB about Disney:
Disney Backer Sues Studio -- 18 December 2008 1:37 AM, PSTNow what does that story tell you about one of the fundamental flaws in the way Hollywood does business?
A dispute between the Walt Disney Co. and its principal financing partner, Kingdom Films, could resolve the question, when is a sequel a sequel? According to today's (Thursday) Los Angeles Times, Kingdom claims that Disney's High School Musical 3 was not a sequel at all, because it was the only one of the HSM movies to be released theatrically, and that it should therefore share in its profits. Disney, however, says that it is a sequel to the Disney Channel HSM movies and therefore exempt from profit-sharing payments to Kingdom under terms of its contract, which excludes theatrical sequels. Likewise, Kingdom also claims it should receive a share of Hannah Montana: The Movie, when it is released next year, while Disney insists it should be excluded. Both the HSM and Hannah Montana franchises are among Disney's most profitable properties. Disney's attempt to exclude them from the deal, Kingdom said, was "part of a concerted effort to eliminate from the slate those films that defendants believe may be profitable as a result of their association with the Disney Channel."
Here is Disney, a supposedly intelligently run corporation, deliberately pissing off their main source of production financing over something that should have been settled right from the beginning. Now Disney may have some sort of legal case to make based on the letter of their contract with Kingdom, and will allow them to give their CEO a bigger bonus, but they're not asking themselves what it will get them in the long term.If they did ask that question, they'd know that the answer is nothing but trouble.
Will the people whose money backs Kingdom Films be willing to renew that contract if they feel it got them a royal hosing?
No.
And that's the problem. No one in a position of power in Hollywood is thinking about anything beyond their next quarterly bonus. Hence they forget about the absolute key rule of capitalism: Everyone must walk away happy.
Guess what, no one is happy doing business in Hollywood, because no matter who or what you are, creator, financier, or shareholder, you're going to get screwed because the people in charge are not accountable to anyone for their actions and don't care how much damage they do as long as they get their bloated raises, bonuses, and stock options. Creditors aren't going to cut Redstone any slack, because they don't want to join the legions of the screwed, and nothing is going to change their minds.
They had too long where people were willing to give the screw-jobs a pass because it helped them hide their more practical profits from the tax-man, but these days, if it doesn't put the green in the pocket, it's just not worth the trouble.
It's times like these I feel like a deranged prophet roaming the wasteland calling for sinners to repent, but that doesn't mean that I'm not right. A perfect storm is brewing, and if those who are getting screwed want real change, they should band together and use what power they do have to force it.
Because things can only get worse the way they're going now.
Hence they forget about the absolute key rule of capitalism
ReplyDeleteThey're lefties. What do they know from capitalism? If everything's a zero-sum game it only makes sense to bargain for what you can personally get away with, and the hell with the other guy.
satellite TV and cable is not in good condition.
ReplyDeleteYou don't need satellite TV when times get tough
Posted by Marguerite Reardon
A year before the U.S. economic crisis came to a head, Debra James of Oakland said she saw the writing on the wall and decided to trim the household budget. Topping the list were things like satellite television.
http://news.cnet.com/8301-1035_3-10125962-94.html