Tuesday, November 13, 2007
By Peter Kaplan
WASHINGTON (Reuters) - The head of the U.S. Federal Communications Commission on Tuesday proposed that the agency relax its ban on the cross-ownership of newspapers and broadcast stations in the 20 biggest U.S. cities. FCC Chairman Kevin Martin said the "relatively minor" rule change would help bolster the newspaper industry by allowing owners in the top markets to buy a TV or radio station. The plan is less ambitious than a 2003 FCC proposal to scale back the ownership restrictions, which was struck down by the federal courts. Martin said it was the only change he would seek.
"I think this is a balanced approach," Martin said. Martin outlined the proposal first in a column published in Tuesday's edition of the New York Times. The agency issued a formal announcement later on Tuesday morning.
"A company that owns a newspaper in one of the 20 largest cities in the country should be permitted to purchase a broadcast TV or radio station in the same market," Martin wrote his newspaper column. "But a newspaper should be prohibited from buying one of the top four TV stations in its community." Long-standing FCC rules restrict media cross-ownership and ban ownership of a newspaper and a TV or radio station in the same market, unless the FCC grants a waiver.
Consumer groups and Democrats on the FCC have expressed reservations about easing ownership rules, fearing that more consolidation in the industry would eliminate independent voices and degrade local news coverage.
If cross-ownership limits were eased or lifted, it could help some investors, such as real estate tycoon Sam Zell, who is leading a proposed leveraged buy-out of media group Tribune Co. Zell wants the FCC to reaffirm waivers that allow Tribune to cross-own daily newspapers and broadcast outlets in some markets.
Martin said the proposal would strike a balance between protecting the quality of local news coverage while preventing too much concentration of ownership. Allowing cross-ownership would not be a problem in the 20 biggest markets, Martin said, because there are a large number of outlets for news and opinion in those markets. Martin recently said he wants the agency to wrap up its examination of media ownership and reach a decision by December 18 on whether to ease limits on how many media outlets a company may own in a single market.
However, two senators have threatened to introduce bipartisan legislation that would impose a 90-day delay on any FCC decision to ease media ownership rules. The bill planned by Sens. Byron Dorgan, a North Dakota Democrat, and Trent Lott, a Mississippi Republican, would require the FCC to study the issue for at least 90 more days.
(Reporting by Peter Kaplan; Editing by Brian Moss)
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By Mark Clothier and Mary Jane Credeur
Nov. 13 (Bloomberg) -- Home Depot Inc., the largest home- improvement retailer, reported lower profit and cut its full- year earnings forecast after the U.S. housing slump reduced sales of kitchen cabinets and appliances.
Home Depot said it will take a ``cautious stance'' on completing its $22.5 billion share buyback because of the volatility of credit markets and housing sales. Third-quarter revenue of $19 billion missed the $19.3 billion average estimate of analysts in a Bloomberg survey. Chief Executive Officer Frank Blake is spending more than $2 billion this year to improve customer service and the appearance of stores in a bid to reverse market-share losses to Lowe's Cos. Sales have declined for two straight quarters amid the worst housing slump in more than a decade.
``It'll take Blake about five or six quarters to turn the corner,'' said Burt Flickinger, managing director of Strategic Resource Group in New York. Net income fell to $1.1 billion, or 60 cents a share, in the quarter through Oct. 28, from $1.5 billion, or 73 cents a year ago, Atlanta-based Home Depot said today in a statement. Revenue a year earlier was $19.6 billion. Excluding the sale of its HD Supply unit, Home Depot said profit was 59 cents a share. On that basis, earnings met the average estimate by analysts in a Bloomberg survey.
Home Depot lowered its full-year earnings forecast from continuing operations to a decline of as much as 11 percent. Previously, it expected a drop of 7 percent to 9 percent.
`Continue to Deteriorate'
``We are facing a tough environment as housing indicators continue to deteriorate,'' Blake said in the statement. ``Our financial performance in the third quarter reflects these tough conditions.'' Sales at stores open at least a year fell 6.2 percent, the sixth straight decline. David Schick, an analyst with Stifel Nicolaus & Co., estimated a 6 percent drop. The company has bought back $10.7 billion, or about half, of the $22.5 billion in shares that it plans to repurchase. The buyback is being paid for with proceeds from the HD Supply sale, cash and bonds. Home Depot said it will take a ``cautious stance'' on completing the remainder of the buyback because of volatility in the credit markets and the ``challenging'' housing market. Home Depot added 43 cents, or 1.5 percent, to $28.89 at 8:22 a.m. before the start of regular New York Stock Exchange trading. The shares are down 29 percent this year before today, headed for their third straight annual decline. Sales of previously owned U.S. homes dropped in September to an annual rate of 5.04 million, the fewest since records began in 1999, the National Association of Realtors said Oct. 24. Housing starts fell to a 14-year low. Eleven analysts who cover Home Depot suggest buying the stock, while 10 say ``hold'' and one says ``sell,'' Bloomberg data show.
----With reporting by Ken Prewitt in New York.