It is always sunny in Philadelphia as reruns of FX comedy go for big bucks

It just got a little sunnier in Philadelphia.

No, we're not talking about the Phillies being on the verge of making the World Series for the second year in a row. News Corp.'s Twentieth Television has just sold reruns of the FX sitcom "It's Always Sunny in Philadephia" to Viacom's Comedy Central for roughly $400,000 per episode plus some commercial inventory, people familiar with the deal say.

For a cable comedy, that is a pretty healthy price tag. Throw in the commercial time and the value of the deal could end up being being north of $700,000 per episode for Twentieth Television and the creative team behind the show. Of course, that is also dependent on the economy and what is happening in the advertising market when Comedy Central starts running the show.

While the $400,000 cash part of the deal still pales compared with what a hit comedy in broadcast television can get in rerun sales (Lifetime paid Twentieth Television about $800,000 per episode for reruns of "How I Met Your Mother"), the gap is definitely narrowing.

Furthermore, the cost of producing an episode of "It's Always Sunny in Philadelphia" is nowhere near what a typical episode of "How I Met Your Mother" or NBC Universal's "30 Rock" runs, meaning that the little sitcom that could -- which is off to a strong start this season -- could end up turning a very nice profit.

While FX looked at buying the reruns, Twentieth Television, by selling to Comedy Central, doesn't have to worry about any producers thinking it cut a sweetheart deal within the company. That has been a problem in the past, as actors Alan Alda and David Duchovny and producer Steven Bochco sued News Corp. claiming just that over rerun sales of "M*A*S*H," "The X-Files" and "NYPD Blue," respectively, from Twentieth to FX.

-- Joe Flint

Photo: FX's "It's Always Sunny in Philadelphia." Credit: Craig Blankenhorn / FX

Fox shutting down reality cable channel

Reality as a genre may still be hot, but it's not enough to sustain a cable channel.

News Corp. is shuttering its 4-year-old Fox Reality Channel (what, you mean you didn't know there was a Fox Reality Channel?). The channel, which was available in about 50 million homes, never really established itself in the ratings but did provide a home for reality reruns such as "The Amazing Race" and "Beauty and the Geek." It had a handful of original shows as well. News of the decision was broken by The Wrap.

Although the channel will go away next March, Fox is keeping the real estate and will look to launch a new channel in its place, possibly with an outside partner, per The Wrap. After all, you don't just walk away from 50 million homes. Because of the leverage Fox has with its stronger cable networks, including FX, it was able to get a decent license fee of about 9 cents per subscriber for Fox Reality even though its ratings didn't really merit that cost, according to Kagan Media. 

A Fox spokesman said, "With the changing cable landscape we've made a strategic decision to shift some resources and refocus on emerging channels. However, Fox Reality Channel will remain on on our lineup for at least the next several months."

If Fox Reality wasn't emerging and it sure wasn't established, then what was it?

Guess we'll never know.

-- Joe Flint

Cox's Travel Channel is on the road and in search of a buyer

Will rock and roll chef Anthony Bourdain come work in the commissary as part of a deal?

That might be what some of the major media conglomerates kicking the tires of Cox Communications Inc.'s Travel Channel are wondering. The auction for the channel, whose biggest show is Bourdain's "No Reservations," is underway and the usual suspects are taking a look. Among those interested in the network are NBC Universal, Scripps Network and even News Corp., according to Bloomberg. The price being bandied about is in the neighborhood of $700 million.

That may seem low compared with recent cable network deals such as the $3.5 billion that NBC and private equity firms Bain Capital and Blackstone Group shelled out for the Weather Channel last year and the $925 million that NBC paid for Oxygen two years ago.

Of course, the economy was in better shape then and both those networks are more well-known than the Travel Channel. Also, the Weather Channel has a strong Internet presence and NBC desperately wanted to combine the network with its own digital weather channel. Oxygen was also a good fit with NBC's Bravo. NBC probably sees the Travel Channel as a good compliment to the Weather Channel and even MSNBC.

Scripps is interested in the Travel Channel because it would dovetail with its other lifestyle networks including The Food Network (which Los Angeles Times parent Tribune Co. also has a stake in), Home & Garden and Fine Living.

The Travel Channel has done a nice job of boosting its ratings over the last few years. Its audience is still small, but it's growing. In prime time, the network this year has averaged 485,000 viewers, a 25% gain from 2004. In demographics, it has risen 35% among adults ages 25 to 54 in the last year and its median age is 45, a drop of four years from 2008. Bourdain's show draws close to 900,000 viewers per episode. Its other popular shows include "Man v. Food" and "Bizarre Foods with Andrew Zimmern." For a channel about travel, it sure has a lot of shows about food.

From a business standpoint, there's room for growth. Media consulting firm SNL Kagan said the fees that the Travel Channel charges cable and satellite operators amount to only 6 cents per subscriber per month. For 2009, it is projected to have net operating revenue of $185.8 million, advertising revenue of $128.2 million and cash flow of $69.1 million, according to SNL Kagan. Cox,which doesn't own any other national cable networks, ended up with Travel Channel two years ago as part of its deal to sell its stake in Discovery Communications. 

When a channel goes on the market, everyone takes a look, so don't read too much into Rupert Murdoch's News Corp. also expressing interest. What's notable is that Time Warner Inc.'s Turner Broadcasting, which went after the Weather Channel big time, has decided to pass.

But there's still plenty of time for Turner to try to make a reservation with Bourdain.

-- Joe Flint

Photos: Travel Channel's Anthony Bourdain, pictured at top, and Andrew Zimmern. Credit: Travel Channel

Hey, Peter Chernin, what's cooking?

In his post-News Corp. life, the entrepreneurial Peter Chernin is cooking up more than just movies and TV shows.

The veteran media executive-turned-independent producer is quietly moonlighting as a restaurateur in Martha's Vineyard, where he and his wife, Megan, have become part owners of a tony eatery called State Road. Located in the dry town of North Tisbury (BYOB.), the newly renovated, farmhouse-style restaurant, with wood tables, Edison bulb chandeliers and a stone fireplace, opened in June and features herbs and vegetables from its own garden. Other culinary delights include fried artichokes with yogurt and lemon sauce; mussels in a light, Thai-style coconut sauce; encrusted rack of lamb with spaetzle and spinach; and a fig and apricot brioche bread pudding with creme fraiche ice cream.

Like many well-heeled industry folks, Chernin spends a good chunk of every summer in the Vineyard, where he and his wife have kept a home for many years and, in fact, are luxuriating there as we speak.

Though Chernin declined to come to the phone to chat about his epicurean pursuits, a recent W Magazine blog rumored that President Obama and the first lady, who will vacation on the island this summer, may head to State Road, which is "said to be backed by a powerful crew" of investors that includes not only Chernin but also Comcast Corp. Chairman and Chief Executive Brian Roberts.

So, how's the chow? "Overall, it is a most welcome addition to our up island community," writes one patron in an online review. "Presently, I would rate it as a 7.5 out of 10."

Now, we'll just have to see what kind of ratings Chernin's forthcoming TV shows and movies get.

Speaking of the former News Corp. president's new Fox-based production venture, at this month's "Possible Dreams" auction to benefit Martha's Vineyard Community Services, Chernin offered a one-month internship to "one lucky student (over 18)," including "the chance to work on a new TV show or film and a private lunch at the studio with Peter," whom the program billed as "the ultimate Hollywood pro."

Oh, and by the way, Mr. or Ms. Lucky, "transportation, lodging and meals not included."

Geez, Peter, couldn't you have forked over a little dough from that lucrative production deal Rupert Murdoch served you?

-- Claudia Eller

Top photo: Inside the restaurant. Credit: State Road. Bottom: Peter Chernin. Credit: Matt Sayles / Associated Press.

MySpace likes ILike

News Corp.'s struggling social networking site MySpace today announced it has a deal to acquire ILike, an application that helps users of social networks share music recommendations and playlists.

The combination would bring together MySpace, a site emerging and established artists have long used to promote their music, with an application that allows people to introduce their friends to new music.

“The iLike acquisition advances our relentless pursuit of innovation and the need to create new distributed social experiences in music and beyond,” MySpace Chief Executive Owen Van Natta said in a statement. “We are deeply committed to bringing world class talent into all areas of the company and this acquisition demonstrates our focus on this objective.”

The acquisition comes as ILike has been poised to introduce its own music store, in cooperation with all four major music companies. Brothers Ali and Hadi Partovi founded ILike in 2006. In two years, it has attracted 55 million users -- including users on rival social networking site Facebook. It is unclear what the acquisition would mean for Facebook.

“Combining MySpace’s existing platform, reach and resources with ILike’s syndication network and social discovery tools creates the potential for truly exciting innovation," said ILike President Hadi Partovi.

Van Natta said the acquisition would have no immediate impact on ILike users.

-- Dawn C. Chmielewski

Photo: MySpace CEO Owen Van Natta. Credit: Jacob Mosur / Los Angeles Times.

MySpace losses lead way down for News Corp. [Updated]

News Corp. had a brutal quarter ending June 30, as the company swung from $1.1 billion in net income a year earlier to a net loss of $203 million.

The biggest contributor was the conglomerate's Fox Interactive Media division, whose biggest asset is the troubled MySpace. Admitting that the once red-hot social networking site is no longer worth what it used to be, News Corp. took a $403-million impairment charge in the quarter, which it attributed primarily to Fox Interactive Media. It also had $228 million in costs related to restructuring, aka layoffs, for which it again placed most of the blame on MySpace.

Though News Corp. doesn't break down MySpace results specifically, it's the biggest contributor to the conglomerate's "other" category, which saw its adjusting operating loss grow to $137 million from $59 million last year.

Revenue for the conglomerate was $7.67 billion in the quarter, down 11% from last year.

The company's best-performing division this year continues to be cable, with Fox News leading the way thanks mainly to higher affiliate fees from the cable and satellite systems that carry it. Operating income at Fox News Channel alone was up 50% during the quarter, News Corp. said. For the full cable unit, which also includes FX, the Big Ten network, and international channels, operating income was up 39% from last year to $434 million.

The 20th Century Fox film and television studio saw operating income decline 8% to $203 million, primarily due to lower DVD sales for older television shows. News Corp. also had to cover initial marketing costs for several strongly performing summer movies, including "X-Men Origins: Wolverine," "Night at the Museum: Battle of the Smithsonian," and "Ice Age: Dawn of the Dinosaurs," all of which will generate most of their revenue in the current quarter and the next one.

Network television continues to be a tough business for News Corp., as the division's operating income fell 66% to $95 million. Local television fared worst, as the conglomerate's stations saw operating income fall 67%. The Fox network also dropped by an unspecified amount, however, as advertising revenue declined and programming costs increased.

Print media wasn't too pretty either, however. News Corp.'s newspapers division reported a 63% drop in adjusted operating income to $96 million. That reflected significantly lower advertising revenue in the U.K., Australia, and from the U.S.-based Dow Jones group, which includes the Wall Street Journal.

For News Corp.'s full fiscal year, which also ended June 30, revenue fell 8% to $30.4 billion and the company swung from a $5.39-billion net profit to a $3.38-billion net loss.

[Updated at 3:20 p.m.: On a conference call with analysts and media, News Corp. CEO Rupert Murdoch and Chase Carey, the company's newly installed president and chief operating officer, addressed three of the hottest topics in the media business:

- Murdoch stated bluntly that he intends to build pay walls around all of his news websites, including FoxNews.com and sites attached to newspapers in the U.S., Britain and Australia. "The Wall Street Journal is the world's most successful news site," he said of the only major News Corp. paper that already charges an online subscription fee. "We intend to use our profitable experience there throughout News Corp. to increase revenues from all our content."

- Asked about the fast-growing $1 per night DVD rental kiosk company Redbox, Carey had criticisms similar to those voiced by other Hollywood executives such as Time Warner CEO Jeff Bewkes: "Having our [movies] rented at $1 in the rental window is grossly undervaluing our products," Carey said. "We are actively determining how to deal with it."

-  Carey wasn't too enthused about TV Everywhere, Bewkes' initiative to make consumers use a password to prove they subscribe to a cable or satellite service before watching cable TV programming online.

"TV Everywhere has benefits, but it's probably more defensive than offensive," he said. "We need to likewise create offensive ways to create incremental value for our products."

News Corp., of course, joined with NBC Universal to create Hulu, which streams many broadcast and some cable television shows for free on the Web.]

Update (7:30 PM): This post has been updated to fix an in correct number for the decline in operating income for News Corp.'s television group. The post previously, incorrectly, said 51%.

--Ben Fritz

Greg Meidel takes reins at News Corp.'s Twentieth Television

TV industry veteran Greg Meidel has been named president of News Corp.'s television syndication unit,  Twentieth Television. He is succeeding Bob Cook.

The move, which had been anticipated by Company Town, marks a return for Meidel, who used to run Twentieth Television in the 1990s. Since then, he has held senior posts at Universal and Paramount and most recently was running News Corp.'s MyNetwork TV, a programming venture that has recently scaled back its ambitions.

Meidel will have his work cut out for him as the syndication business has become increasingly less lucrative over the last 10 years. TV stations are struggling financially, which means they have less to spend on daytime shows that Twentieth produces such as "Divorce Court" and "Are You Smarter Than a Fifth Grader?"

-- Joe Flint

Photo: Meidel courtesy of Fox

MySpace Music's Courtney Holt hints at new features

MySpace Music has come in for criticism from the labels, whose executives have publicly (and privately) said it has been slow to find ways to make money on its massive community of music fans.

Recently, through, MySpace Music is showing flickers of life.

Since the site’s launch in September 2008, it has grown from 4.2 million users to 12.1 million, ranking it ahead of other popular music sites like MTV Networks Music and the Internet radio site Pandora. It's gaining traction with people ages 12 to 24, who are more than twice as likely to visit the site than the average Internet user.

MySpace Music chief Courtney Holt hinted at Fortune's Brainstorm Tech conference in Pasadena today that new features are coming.

Holt said the recent executive restructuring at MySpace -- which saw the departure this spring of co-founder Chris DeWolfe -- has brought in a new team that's focusing on better integrating music throughout the social networking site.

MySpace Music is working on giving greater reach to online music taste-makers -- Holt dubbed them "social DJs." The site is trying to find new ways to highlight these arbiters, who influence their friends, so it can reach even more people.

"MySpace is trying to figure out how to give them more power," Holt said.

New artist tools are also in the offing.

Holt didn't announce a timetable for making available such long-promised features as as selling concert tickets or merchandise, but he did talk about the opportunity to promote live performances, where 50% of tickets go unsold. This is especially a problem for middle-tier artists who have moved beyond small clubs but are not filling up arenas.

"The No. 1 reason is lack of awareness," Holt said, "No. 2 is price."

-- Dawn C. Chmielewski

Filing: Chase Carey's bonus at News Corp. could reach $25 million annually [Updated]

 

If you're dining with Chase Carey, he can afford to pick up the tab.

According to just filed documents with the Securities and Exchange Commission, Carey received a $10 million signing bonus to rejoin News Corp. as deputy chairman and chief operating officer. That's on top of his annual base salary of $8.1 million per year over the next five years.

Carey, the filing says, is also eligible for a performance based bonuses that could hit as much as $25 million annually. His bonus for his first year back, which started today, will be no less than $5 million. Carey's bonus will be performance based and determined by News Corp.'s year-over-year increase in adjusted earnings per share

If Carey resigns "without good reason" he will get at least two years salary and some of his bonus money. If Carey is terminated within the next 12 months, he walks with $10 million in cash.

The jet is also ready for Mr. Carey. His deal calls for use of a corporate or charter jet for business and pleasure. He also gets a car allowance.

On the downside, he's not getting paid any extra to be on News Corp.'s board of directors.

As for outgoing COO Peter Chernin, final details of his new six-year deal have not been hammered. However, he too gets to keep using the corporate jet and gets a car and use of the screening room.

-- Joe Flint

Photo: Chase Carey by Matthew Staver/Bloomberg News

Shake-up at News Corp's Twentieth Television: Cook out, Meidel on deck [updated]

Bob Cook, president of Twentieth Television, the syndication and distribution arm for News Corp.'s broadcast and cable operations, is leaving the company, to form his own company.

Although no replacement for Cook has been named yet, it is expected that Greg Meidel, a veteran television industry executive who currently runs News Corp.'s My Network TV, will get oversight of Twentieth Television as well. My Network TV is the company's small broadcast network, but it has not made much headway in the marketplace and has scaled back its ambitions. A Fox spokesman declined comment, but said a search for Cook's replacement is underway.

For Meidel, a flashy salesman with one of the more arresting heads of blonde hair in the business, taking the reigns of Twentieth is a homecoming of sorts. He ran the unit in the mid-1990s before leaving for stints at Universal and Paramount.

He'll have his work cut out for him. The Wild West heyday of the TV syndication business, where deals would be done on the golf links and in the bar, are long gone. Cable networks, which used to gobble up old episodes of dramas like "NYPD Blue" that first aired on the broadcast networks, now prefer to produce their own shows. Local TV stations no longer cough up the big bucks for sitcom reruns and talks shows, and the ad market is in the tank. Other than that, it's going swell.

Cook said his new company MBN (the initials of his three sons) has already signed a contract with the Fox-owned TV stations to work on developing their digital platforms, His contract at Twentieth is up in November but he anticpates leaving in the next few months once his successor is in place.

-- Joe Flint