Multiple Platform Approach Driving Recovery at Gemstar

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Shares in Gemstar-TV Guide International Inc. gained nearly 20 percent last week after the company said it would entertain putting itself on the block and had hired UBS Investment Bank and legal advisers Wachtell Lipton Rosen & Katz to explore the possible sale.


The Los Angeles-based media company said that its board authorized the company and its advisers to explore strategic alternatives intended to maximize shareholder value.


“The company has made significant improvements throughout its businesses and the board is very pleased with the growth and strategic direction under CEO Richard Battista,” said Anthea Disney, Gemstar’s chairwoman. “We are now poised to investigate the range of available strategic alternatives for continuing to build shareholder value.”


It’s been a good few months and a very strong first quarter for the company, which has been driven by its interactive program guides for cable and satellite TV. The company is expanding its programming guide services across media platforms, which is why it acquired Burbank navigation software company and competitor Aptiv Digital for $16 million in the quarter. Last week, Gemstar partnered with technology provider Maven Networks to power TV Guide’s online video. Maven will serve as the engine for more than 300 video players at TVGuide.com. TVGuide.com recently relaunched the site to focus more on broadband video. The site will also use Maven to manage the publishing and workflow for the Web video and to create and update the user experience, Maven said,


Gemstar reported a 295 percent jump in first-quarter profit along with a 9 percent jump in revenue back in May. Some analysts said last week the decision to explore a sale could have been driven by News Corp., which has a 40.9 percent ownership stake and control of four of nine seats on Gemstar-TV Guide’s board. Shares in Gemstar are currently trading at $6.10. and have gained nearly 70 percent so far this year.



New Hand at WPT

Los Angeles company WPT Enterprises Inc., which produces entertainment content and programming based on gaming themes, has launched its online real money and play-for-fun gaming site, WorldPokerTour.com.


The new site will take the place of WPT’s original gaming site, WPTOnline.com, and offers poker games including No Limit, Texas Hold ‘Em, Omaha, Seven Card Stud and Holdem Blackjack, as well as specialized tournaments.


WPT is the creator of the “World Poker Tour,” a television show based on a series of high-stakes poker tournaments that airs on the Travel Channel in the United States and is scheduled to begin broadcasting on cable network GSN in early 2008.


About five years ago, the appearance of televised poker spawned a poker and card-themed popularity boom and turned online gaming into a multi-billion dollar business. But TV poker quickly reached the saturation point, and the overall ratings for the genre are way down. That’s not the biggest problem, however.


Congress last year passed legislation forbidding gaming sites from collecting funds from U.S. citizens for gambling considered illegal by local or national laws, effectively closing off the biggest market for expanding online casinos and gaming sites.


And earlier this year, seven high-profile professional poker players filed a motion for summary judgment against WPT in Los Angeles federal district court, alleging multiple violations of federal antitrust laws by conspiring with the casinos to eliminate competition.


WPT’s recent earnings reflect the tough times. The company reported a first quarter loss of $2.3 million (11 cents per share), versus net income of $3.6 million (18 cents). Revenue for the company fell 20 percent to $3.7 million.


WPT shares were holding up, however, trading in the mid-to-low$4 range last week, down from a 52-week high of $5.81.



BroadWeb Looks East

Early this month, Internet entrepreneur and MySpace founder Brad Greenspan’s company BroadWebAsia agreed to acquire partnership stakes in two of the fastest growing online video sites in China, Mofile.com and Hubotv.com. The two sites together reach about 50 million unique visitors per month.


Over the last year and a half, Los Angeles-based BroadWebAsia has taken partnership stakes in several growing Web sites that target Asians, including search company Bbmao.com, to form the BWA Network, a group of 15 Web sites.


Greenspan cited the projected growth of the Chinese market to more than 250 million users within the next three to four years as well as the advertising potential in entering the deals, and said the goal is for BroadWeb to become “a major player in this explosive growth.”


Right now, Mofile generates 26 million unique visitors per month and Hubotv draws 22 million unique visitors per month.



Eight-Film Package

LitFunding Corp. announced last week that its Hollywood subsidiary, Global Universal Film Group, landed a $100 million private equity deal to produce a slate of eight pictures. The upstart independent studio has signed actors Zack Ward (“Transformers,” “Almost Famous”) and Sean Patrick Flanery (“Boondock Saints,” “Dead Zone”) to direct and star in two of the features.


Ward, whose TV credits include “Deadwood,” “Titus” and “Lost,” will direct and star in a project based on his original screenplay, “Frontman.” The film will be shot entirely in Louisiana under a special credits program negotiated by Global.


The studio will also produce Flanery’s original screenplay, “Sunshine Superman.”


Global Universal Film Group principals include President and Chief Executive Jackelyn Giroux, Chairman and Chief Financial Officer Gary Rasmussen and Head of Development Peter Liapis.



Staff reporter Anne Riley-Katz can be reached at

[email protected]

or at (323) 549-5225, ext. 225.

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