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The global theater industry may be set for a shake-up at the top. 

Why it matters: Vue International is said to be pursuing a bid for Cineworld. If its takeover attempt is victorious, a combined company would surpass AMC as the world's largest theater chain by number of screens.

Driving the news: Sky News reported yesterday that Barings and Farallon Capital Management are backing Vue as it bids for the beleaguered theater chain currently in bankruptcy.

Vue, which operates theaters mostly in Europe and is Cineworld's biggest competitor in the U.K., would gain its first U.S. presence — and it would be a hefty one via Regal Cinemas, the country's second-largest chain. 

"While it would therefore be premature to speculate about any acquisitions at this stage, we continually evaluate a range of possible opportunities," a Vue spokesperson tells Tim.

The big picture: AMC has been the top theater chain since 2016, but outside of picking up stray theaters — which it tried to do last year with Cineworld —  there aren't many obvious M&A candidates to reclaim the top spot.

After using its status as a meme stock to raise cash during theater closures and avoid Cineworld's bankruptcy fate, AMC is still trying to find new ways of raising capital, such as converting its APE shares into common shares or raising the price of movie tickets.

AMC's stock price is trading roughly where it was before it rode the meme stock wave in 2021.

Last year, CEO Adam Aron said investors should no longer look at AMC as just a theater company and that it would make more investments such as its stake in gold and silver mining company Hycroft. 

What's next: Non-binding bids for Cineworld are due by Thursday, and the company has its next day in bankruptcy court on Feb. 21. 

Vue is vying with 30 other potential buyers that Cineworld has gauged interest in. Cineworld's legacy lenders are also a potential bidder as they negotiate a possible debt-to-equity agreement.

1 big thing: Vue from the top 

Lee Enterprises is telling some employees that they will need to take a two-week, unpaid furlough or accept a salary reduction, according to an internal memo obtained by Axios.

Why it's the BFD: Since thwarting a hostile takeover from Alden Global Capital last year, Lee's struggles have deepened, Kerry and Sara Fischer write, prompting some Lee staffers to wonder if hedge fund ownership would have been better.

Catch up quick: Alden Global Capital, a hedge fund known for slashing costs at local papers, dropped its bid for Lee Enterprises last year following a bitter legal battle.

Lee laid off hundreds of employees across its local papers and at the corporate level amid the takeover drama.

The big picture: The cost-cutting measures, and the latest forced furloughs, have caused employees to wonder if they would have been better off on Alden's payroll.

"Alden is clearly horrible and a terrible owner, and for me, what is frustrating is it feels like Lee has done their best impression of Alden's cost-cutting since Alden made that buyout attempt," says David Carson, vice president of United Media Guild and a staff photographer at the St. Louis Post-Dispatch.

"Nearly three years into the new regime, it's becoming apparent that it might as well have been Alden, as Lee Enterprises is following the same playbook," wrote Jim Heaney, a reporter with the Investigative Post, a watchdog news outlet in Western New York, and a former investigative reporter with The Buffalo News.

Lee declined to comment. Alden did not immediately respond to a request for comment. 

Details: In an email sent yesterday, staffers at Lee-owned Richmond Times-Dispatch were told that all of their mandatory furlough time must be scheduled by the end of February.

Employees will continue to receive their benefits throughout the furlough period, and deductions for those benefits will continue to be taken out of their paychecks, the email read.

"In order for Lee to comply with federal wage and hour laws, you are not allowed to do ANY work while out on furlough," read the email. "Please do not read or respond to emails or voicemails, do not return calls and do not come into the office. Do not attend any function as an official representative of the paper."

Lee, one of the last remaining independent newspaper companies, has been rolling out furloughs across its newsrooms. Staffers at The Roanoke Times, the Globe Gazette and the Lincoln Journal Star were told earlier this month.

2. The BFD: Lee Enterprises' post-Alden fate

Illustration of a skull and bones made out of newspaper

Data: Yahoo Finance; Chart: Axios Visuals

Not all Lee staffers have been informed of furloughs, however, including some of Lee's unionized newsrooms.

Lee has not approached the unions of three Virginia papers that are represented by Washington Baltimore News Guild, local representative Paul Reilly tells Axios in an email.

United Media Guild, which represents staffers at the St. Louis Post-Dispatch and The Southern Illinoisan, also has not been notified of furloughs, says Carson. 

"In the past, we have agreed to it. I'm not sure which way members [would] vote on it this time," Carson says in a phone call. "During COVID, we took a two-week furlough, and I think people were like, 'OK, I understand what's going on. I understand the economic pressure.'"

"Being a journalist at any newspaper company now kind of feels like you're in an abusive relationship sometimes," Carson says. 

Between the lines: The St. Louis Post-Dispatch recently let go of its librarian, the last remaining staffer of its once "robust" library and research department, Carson says.

"The size of our news staff at the Journal Star is now less than half of what it was when I started in 2014, even though the issues and people we are covering are increasingly complex and nuanced," Lincoln Journal Star reporter Chris Dunker says over text. 

"The loss in wages adds insult to injury as many haven't received a pay raise in years and are now dealing with inflation the same as everyone else," Dunker says. "We want to serve readers and cover our communities with depth and sensitivity, but [this] corporate model ... is making that almost impossible."

State of play: Lee Enterprises

3. State of play: Lee's woes

Maum Capital Group acquired minority ownership in Globalgate, Lionsgate's local-language film and TV production consortium. https://axios.link/3Sd1cQx

⚽ Sheikh Tamim bin Hamad al-Thani, the emir of Qatar, is expected to bid more than £4b for Manchester United. https://axios.link/40Rl2oe

🏀 NBCUniversal is preparing to make a strong bid for NBA broadcast rights, CNBC reports. Apple and Amazon also have expressed interest. https://axios.link/3RYUrBp

Orange, the French telecom company, is considering stake sales for its MENA mobile towers business, per Bloomberg, https://axios.link/3YrCr59

Roku signed an exclusive programming deal with pocket.watch to bring four children's specials and one series to The Roku Channel. https://axios.link/3E8KnAm

4. Deal flow

Shakeup at Showtime: Entertainment co-president Gary Levine will become senior creative adviser, while Jana Winograde is leaving at the end of the week. https://axios.link/3xpOh3L

COO and CFO Michael Crotty, EVP of nonfiction Vinnie Malhotra, EVP and general counsel Rob Rosenberg, and VP and entertainment counsel Kent Sevener are leaving. https://axios.link/3lwa3jN

MTV exec Nina Diaz expands her role to include chief creative officer and president of content at Showtime, while Keith Cox will be president of scripted.

Sugar23, Michael Sugar's multimedia company, hired Tony Shyngle, former CFO of Here Media, as CFO and Starz's Kristian Talebi as director of financial planning and analysis. https://axios.link/40ULq0n

Marne Levine is leaving Meta as chief business officer later this year. Nicola Mendelsohn and Justin Osofsky will take over her responsibilities. https://axios.link/3HX3RJm

5. Movin' on up (or out)

How Nelson Peltz and Disney's Marvel chief teamed up in proxy fight (WSJ)

"After the interview, Mr. Peltz went on TV to end the proxy campaign, surprising Mr. Iger and Disney, which had been preparing for a lengthy fight," Robbie Whelan writes. 

Microsoft's LinkedIn lays off staff amid hiring slowdown (The Information)

"LinkedIn's job cuts affect staff in its talent acquisition team, a spokesperson said. They come as LinkedIn and the rest of Microsoft slow the pace of hiring, reducing the need for recruiters," Aaron Holmes writes.  

Barney gets makeover as Mattel reboots franchise with new series and films (Variety)

"Along with delivering the Barney toys and the TV series, Mattel also revealed its plans to expand the franchise into film and YouTube content as well as music and a full range of kids' products including books, clothing, and more. Apparel and accessories for adult fans, featuring classic Barney, are also in development," BreAnna Bell writes.

6. Channel surfing

Illustration of a surfer with a television in the place of his head.

Wondering why Turner Classic Movies randomly aired a Dick Tracy special that featured Warren Beatty reprising his role from the 1990 film? 

Why it matters: The one-off special was widely seen as an attempt by Beatty to maintain his control over the film and TV rights to the character, Tim writes.

Details: Last Friday night, TCM aired "Dick Tracy Special: Tracy Zooms In," that featured Beatty — in character as the iconic, yellow-clad detective — discussing the 1990 film and his "current life" with TCM hosts Ben Mankiewicz and Leonard Maltin.

It only got weirder, when Beatty appeared as "himself" and talked to Dick Tracy about the movie — something the fictional Tracy apparently had a lot of problems with.

Catch up quick: Beatty has owned the rights to Dick Tracy since 1985, when he bought them from Tribune Media.

Tribune tried to claw back the rights starting in 2002, which set off a lengthy legal battle that essentially boils down to "use it, or lose it." 

The bottom line: Beatty is using it just enough to maintain ownership. He did an earlier special for TCM back in 2010, which only aired once. 

7. 1 odd thing: Warren Beatty's Dick Tracy gambit 

Screenshot from TCM's "Dick Tracy Special: Tracy Zooms In" 

⚖️ Situational awareness: Gigi Sohn begins her third attempt at getting Senate confirmation to be the fifth FCC commissioner this afternoon, with her nomination hearing today at 11am ET.

The FCC has been deadlocked 2-2 since President Biden took office.

@tim_bays: "Your Place or Mine" on Netflix. Celebrated Valentine's Day on Friday night watching a string quartet play in an old church. So tonight it's just dinner and a movie. 

@kerrymflynn: "Spare" on Audible. My free trial is running out, so I'm speeding through the second half of this memoir. Haven't even gotten to Meghan! 

✏️ Thanks to Michael Flaherty for editing and Katie Lewis for copy editing this newsletter.

Thank you for reading Axios Pro Media Deals! Please ask your friends, colleagues and Warren Beatty to sign up.

February 14, 2023

1 big thing: Vue from the top