The Chrysler Bankruptcy

When President Obama outlined his plan to restructure Chrysler under bankruptcy-court protection, we shared his view that keeping a company “afloat on an endless supply of tax dollars” was no solution to the cratering of even iconic American companies.

We also admired his supreme confidence that the Chrysler bankruptcy will be a quick, official and controlled process. We just wished we were as confident as the president.

If the process is prolonged, the costs and complexity would likely ensure that the company would never emerge from bankruptcy proceedings, with dire implications for employment and economic recovery.

For the administration, the Chrysler bankruptcy filing became inevitable when a holdout group of the carmaker’s lenders rejected the government’s final offer to settle their debts, for about 33 cents on the dollar. The United Auto Workers union had already agreed to concessions to help keep the company afloat, as had large banks who hold most all of the company’s debt. Chrysler and the Italian carmaker, Fiat, had also agreed to a partnership that would enable Chrysler to tap into Fiat’s technology, designs and management.

By pushing the matter into bankruptcy court, the administration is assuming that the judge will also reject the holdouts’ demands. That would allow for a quick restructuring while keeping intact the previous agreements with the union, the big bank lenders and Fiat. In short order — 30 to 60 days by the administration’s estimate — Chrysler would emerge from bankruptcy with all the pieces in place to become in Mr. Obama’s words, “stronger” and “more competitive.”

There are reasons to hope it will work out that way. In particular, a judge may be unwilling to favor the dissident bondholders when other significant stakeholders have been able to come to agreement outside of court.

But short “prepackaged” bankruptcies generally succeed when all of the difficult issues are resolved ahead of time, requiring only a judge’s official approval. The judge in the Chrysler case may not see the remaining issues in the same cut-and-dried way that the administration does. Quickie bankruptcies like the one the administration envisions for Chrysler have also never been attempted for a company as big and multifaceted as a carmaker. If the Chrysler bankruptcy case does not proceed apace, the administration will need a new plan — and fast — to avoid pouring taxpayer money into a restructuring that may never yield the desired result.

If the bankruptcy succeeds, there is no guarantee that the Chrysler and Fiat partnership will succeed. A recent report by Fortune magazine detailed the likelihood of culture clash in a Chrysler-Fiat combination, given the companies’ complexity and different national identities. Remember the disastrous Daimler-Chrysler marriage?

It will also take some time, probably at least a couple of years, before the Chrysler and Fiat partnership yields any new cars. In the meantime, Chrysler’s own brands like Dodge and Jeep have been badly damaged by the company’s failing fortunes.

The Chrysler bankruptcy filing is a bold move for the administration, a refusal to blink when confronted with what it perceived as unreasonable demands. The object of the game — a strong and competitive Chrysler — is far from achieved. NY Times

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Vote Set for Actors Union’s Deal With Studios

The Screen Actors Guild has scheduled a vote on a proposed two-year deal with the major Hollywood studios.

Ballots will be mailed to the union’s 120,000 members on May 19, with a return deadline of June 9. Members will vote on a tentative contract that covers movies and prime-time television shows.

With membership still fragmented over Internet compensation proposals, actors are bracing for a final battle.

A minority faction called Membership First has announced its plans to fight ratification.

The union’s board approved the deal 53% to 47% earlier this month.

Talks on a contract covering movies and prime-time TV shows ran long past the contract’s expiration last June.

(Copyright 2009 by The Associated Press.  All Rights Reserved.)

Keeping the News Crawl Running During Ad Breaks

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IN theory, cable networks that keep their news and information tickers rolling during commercial breaks could upset advertisers, which might feel that viewers are being distracted from their message. But media agency buyers and creative executives say they embrace the concept.

“If you are continuing to provide the viewers with information they want to see as the program goes to commercial, they are going to stay with it and not flip the dial,” said Steve Grubbs, chief executive of OMG Entertainment and Sports Group North America, part of the Omnicom Group. “And as long as the information on the screen with the commercial is not overly invasive, it is not going to detract from creative or from the viewer seeing the commercial at the same time,” he said.

ESPN, for the most part, runs just its BottomLine ticker, which displays game scores and statistics, across the bottom of the screen during commercials. CNBC runs stock tickers across the bottom and top of the screen, and it also runs more detailed stock information along one side of the screen. Some networks, like CNN, run on-screen data only occasionally, like on election nights.

While some advertisers might privately grouse about having to pay for a commercial and not being the sole occupant of the screen, most say that the added content, particularly on CNBC and ESPN, is beneficial, because viewers over all tend to change channels and leave the room during commercials.

But their enthusiasm comes with a caveat. Running the ads with the tickers rolling reduces the space for the ad itself, which can create some headaches for creative agencies. Advertisers may have to produce two spots, one in a 4-by-3 ratio, for traditional analog television, and one in a 16-by-9 ratio, for high-definition sets, even if they would prefer to produce a single spot.

The kinds of commercials that work best on screens like those featured on ESPN and CNBC are referred to as “center cut” safe — ensuring that all the important information in the high-definition spot is centered, so if a network decides to air it in an analog-sized window, nothing will be left out.

All of this takes additional time when shooting and in postproduction, adding to the cost.

“The future is 16-by-9 for all commercials, but that is still a long way off,” said George Dewey, executive creative director at McCann Erickson, part of the Interpublic Group of Companies.

Ron Nelken, executive vice president of content at Leo Burnett USA, Chicago, part of the Leo Burnett Worldwide division of the Publicis Groupe, added, “When you have to constantly take into consideration that the main activity in the commercial is centered while you are shooting and editing the commercial, it slows up the process and hurts creativity.”

And the extra time to shoot and then finish this kind of commercial in postproduction adds to the cost. While Mr. Dewey did not say what those additional costs were, one production executive at another agency, who did not want to speak for attribution because he is not authorized to speak about financial details, said it could amount to a few thousand dollars.

“It’s not going to break the bank, but right now with everyone looking to pinch pennies, even that amount of money can become an issue over time,” he said.

But despite the extra work and costs, Mr. Nelken says he realizes why, at least for now, it has to be done.

“It’s a trade-off,” he said, referring to making commercials that are compatible with data-heavy networks. “At least it’s keeping people from switching channels during commercials, and that’s a good thing for the clients.”  NY Times

My (Short) Acting Gig Since Leaving College

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I usually don’t even mention my work, but I wanted to share my few seconds of fame I got during the swine flu outbreak.

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(Possible) Brush With American History

Downtown Las Vegas is looking for people who want to relive the groovy days of 1969, 40 years after the Woodstock music festival.

The Fremont Street Experience is paying tribute to 1969 all summer with free rock concerts, plenty of tie-dye T-shirts and peace symbols to trigger memories of a year many people say resonates with them to this day.

(Copyright 2009 by The Associated Press.  All Rights Reserved.)

 

Memorable (Car) Chase for Sure!

Big Rig Chase Brings Pause to Specter News

cnn_4-28.jpgAt 3pmET today, Fox News and CNN began covering a high speed pursuit along busy I-75 north of Atlanta. This pursuit was unique on several fronts – a big rig was being chased, and its driver was clinging to the back, presumably having been carjacked.

Also rare, was CNN’s airing of the chase live. The network has historically left the reporting of high speed pursuits to HLN, which also carried the chase live. MSNBC began taking the chase at 3:05pmET after a live interview with Sen. Joe Lieberman about Arlen Specter‘s jump to the democratic party.

It was about that time that CNN stopped airing the chase live. Minutes later, the presumed driver of the truck jumped to safety as the truck rolled to a stop. The suspect was pulled out of the cab surrounded by more than two-dozen officers and taken into custody.

fnc_4-28.jpg TV Newser

Leno Back on the Stage, Joking About his Illness

Jay Leno is back on NBC’s “Tonight” after missing two shows last week because of illness.

In taping his monologue for Monday’s show, the comedian made the most of his absence — and of the swine flu outbreak dominating news headlines.

According to NBC, Leno told the Burbank studio audience he’d had a 103-degree fever and joked that it may have been a mistake to eat the raw pig a friend brought back from Mexico.

Another Leno quip: His HMO was so bad, he said, he was sent to the Burbank Airport baggage area for X-rays.

(Copyright 2009 by The Associated Press.  All Rights Reserved.)