S&P downgraded AMC Entertainment to SD from CC on the theater owner’s increasingly precarious cash-poor position amid pandemic-induced shutdowns and audience declines, said the ratings service Friday. Though the $100 million raised in a “debt-for-equity” deal with Mudrick Capital Management gives the chain some “incremental near-term liquidity,” S&P believes that will provide less than a month of additional cash: “We view this transaction as distressed and tantamount to a default because the lender received less than originally promised. ... Monthly cash burn was about $125 million in late 2020, and we have seen no indication that it will materially improve.” The company didn’t comment. The stock closed 17.8% higher Friday at $3.51.
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Blue Origin received FCC Office of Engineering and Technology approval Thursday for special temporary authority for a test launch of its New Shepard reusable space launch vehicle in April or May.
Netflix had 8.51 million global net subscriber additions in Q4, beating its Oct. 20 forecast by nearly 42%, said the company Tuesday. It finished 2020 with 36.6 million net subscriber adds, well above the previous high of 28.6 million in 2018, and 31% above the company’s 2019 performance. The result was 2.9% off the pace of the 2019 quarter, vs. projections of a 32% year-on-year decline. Netflix surpassed 200 million subscribers for the first time. “The big growth in streaming entertainment has led legacy competitors like Disney, WarnerMedia and Discovery to compete with us in new ways, which we’ve been expecting for many years,” said the quarterly shareholder letter. “This is, in part, why we have been moving so quickly to grow and further strengthen our original content library across a wide range of genres and nations.” Netflix is forecasting 6 million paid net adds for Q1, which would be 62% below the level achieved in the 2020 quarter, when COVID-19 lockdowns sent subscriber growth through the roof. The stock was trending 9.8% higher in after-hours trading to $551.35.
The Supreme Court narrowly focused on questions of administrative law rather than diversity, judicial deference or legal jurisdiction during Tuesday’s oral argument for FCC and NAB appeals of the 3rd U.S. Circuit Court of Appeals’ Prometheus IV decision. Broadcast and public interest attorneys were split about what that might portend.
The FCC issued a $233,000 forfeiture against Cumulus and some subsidiaries for violating a 2016 consent decree by allegedly breaking FCC sponsorship ID rules, said an order Thursday. The FCC didn’t reduce the amount of the fine despite Cumulus’s arguments it should, but Commissioner Geoffrey Starks dissented from the order and Commissioner Jessica Rosenworcel concurred. Neither FCC Democrat provided a statement with the order, but Starks’ office said he dissented for the same reasons expressed in his dissent from the original August 2019 notice of apparent liability (see 1908060068). Starks, a former Enforcement Bureau staffer, said then the fine amount was too low, “does not follow well-established Commission precedent” and the "system only works if noncompliance with our consent decrees is strongly punished.” According to the NAL and forfeiture order, seven stations owned by Cumulus subsidiaries violated a 2016 consent decree 26 times by airing ads in 2017 and 2018 without proper sponsorship ID, and waiting eight months to report the violations, the NAL said. The consent decree required violations to be reported in 15 days. The 2016 consent decree was also for sponsorship ID violations, and was part of a $540,000 settlement between Cumulus and the FCC under then-Chairman Tom Wheeler. Cumulus argued the $233,000 forfeiture for the more recent ads is excessive, because it has gone through a bankruptcy and restructuring since the 2016 violations, and that as a large broadcaster the violations represent a small percentage of the ads it airs. The agency didn’t agree. “If a corporate entity chooses to acquire many stations, it must ensure that it scales up its compliance efforts accordingly,” the forfeiture order said. “The Respondent’s implication that it is a drastically different organization post-transfer is belied by the fact that its core senior management remained unchanged by the transfer of control,” the order said. The attorney who signed the consent decree is Richard Denning, who's still Cumulus general counsel, and the CEO remains Mary Berner, the order noted. “Our interest in ensuring compliance with consent decrees and deterring the recurrence of violations of the very same rule at issue supports the upward adjustment in this case,” the order said. Cumulus didn’t comment.
The National Institute of Standards and Technology extended to March 1 its comment period for identifying and estimating cybersecurity threats for enterprise risk management, the agency said Thursday. The original deadline was Feb. 1.
The satellite industry opposes the FCC orbital debris Further NPRM proposal of post-mission disposal bonds (see 2004230040). Satellite Industry Association members told International Bureau staffers the post-mission bond wouldn't be an improvement on existing industry incentives to ensure a safe space environment, but it would incentivize operators seeking "alternative, less burdensome licensing jurisdictions" overseas, per a docket 18-313 ex parte posting Thursday. Joining SIA were Boeing, Eutelsat, SES, SpaceX, Spire, ABS, Planet, EchoStar/Hughes, Lynk, Amazon, Iridium, Telesat, Intelsat, Blue Origin, AT&T, Inmarsat, Astranis and Lockheed Martin. They also said the FCC lacks legal authority for its indemnification proposal, which also is vague and unclear and could send operators to other nations for satellite authorizations. In a separate call with the bureau, EchoStar/Hughes representatives said the indemnification and bond proposals will create costly barriers to entry, and the bond requirement idea "is a solution in search of a problem," since the agency hasn't identified a compliance issue with its current orbital debris requirements.
Patents and trademarks motivated by “non-market factors,” such as subsidies, government mandates, “bad-faith” applications and “defensive countermeasures," can “undermine the reliability” of intellectual property “registries,” reported the Patent and Trademark Office Wednesday. The growing number of “suspect” applications filed in the U.S. from China prompted the agency to “study the reasons for this development.” Though PTO knows of no “public source information” showing what proportion of IP applications in China are motivated by subsidies, “it has observed the impact of Chinese subsidies granted for foreign trademark applications.” After Shenzhen and other cities began offering subsidies for overseas trademark applications, PTO experienced a “surge” in fraudulent applications originating in China, it said. Irregularities can abound, including narrowing the scope of “protections” available to IP owners “engaged in the legitimate sale of goods and services,” it said. “Absent consideration of the role of non-market factors, cross-border comparisons based on the raw number of trademark and patent applications risk overstating brand creation and innovation activity in China.” PTO offered no recommended remedies.
Sonos announced new artist channels and genre stations for Sonos Radio and Sonos Radio HD Wednesday. It’s adding stations from D’Angelo, FKA twigs, Bjork and The Chemical Brothers, including select songs and commentary, and new radio shows from Dolly Parton, Brittany Howard, Thom Yorke and Third Man Records. The Sonos Sound System station will launch new shows, including a podcast about music that’s shaping culture, it said. The first artist station to launch, D’Angelo’s Feverish Fantazmagoria, began streaming Wednesday, with others scheduled to come online over the next few weeks. Sonos Radio is included with Sonos subscriptions globally, preloaded in the Sonos app. Sonos Radio HD offers original content that streams ad-free in CD-quality audio, with skip and repeat capability, for $7.99 per month in the U.S. and U.K.
The Commerce Department's Bureau of Industry and Security renewed its temporary export control on certain artificial intelligence software, extending it a year from Jan. 6, said that day's Federal Register. BIS originally added the software to temporary controls under export administration regulations because it intended to propose it for multilateral control for the 2020 Wassenaar Arrangement. But Wassenaar’s annual plenary wasn't held last year due to COVID-19. BIS said the extension helps the U.S. “continue its effort at the Wassenaar Arrangement in 2021.”