Marketplace: News Archives

Monday, October 23, 2000
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It's Monday, the 23rd of October. I'm David Brown sitting in for David Brancaccio

Breaking up may be hard to do, but the nation's largest phone company has practice in this department. Reports suggest AT&T is on the brink of what would be its 3rd breakup in the last 20 years. Ma Bell's Board of Directors has been meeting today and though the talk is taking place behind closed doors, the buzz is all about a plan to separate the company's divisions as a way to boost its stock price. From New York, Marketplace's Jessica Smith has more.

Smith: "According to news reports, AT&T's latest plan to split itself up is called Project Grand Slam. And this faltering telecommunications giant could use a home run to save its stock price, which has plummeted more than 50 percent from its high this year, of $61 a share. Investors have sliced more than $70 billion off the company's market value. They're put off by AT&T's slowing consumer long distance business, which has dragged down the overall company's growth. So executives may split off long distance into a separate firm, and possibly do the same with other divisions like broadband cable, and wireless."

Cleland: "Past breakups have been positive. This one is not as clear-cut as the ones in the past. Because it's not going to be as clean and it's going to be more difficult to implement, probably."

Smith: "Independent analyst Scott Cleland says he's not sure what the plan means for investors in one of the country's most widely held stocks."

Cleland: "Past breakups of AT&T had very clear business lines that were stand alone and able to perform on their own. And the ones that are going to be created from this breakup are more financially engineered."

Smith: "One question is which of the prospective baby AT&Ts will shoulder the more than $50 billion in debt the company has accumulated, largely during its cable buying spree. In New York, I'm Jessica Smith for Marketplace."

After nearly six months, it looks like the longest strike in Hollywood history soon will be, well, history. Marketplace's Beatrice Black reports on a tentative agreement in a long running dispute over how advertisers pay actors who do commercials.

Black: "Advertisers may be making commercials with union actors again as soon as next week. Negotiators for the two sides struck a deal last night in New York after breakthroughs on the key issues of cable and the Internet. The unions, the Screen Actors Guild and the American Federation of Radio and TV Artists, won hotly sought jurisdiction in Internet commercials. At a press conference in New York this afternoon, chief union negotiator John McGuire described the Internet agreement as an important precedent."

McGuire: "The key aspect has been recognized by the industry."

Black: "In the area of cable, actors had been demanding pay-per-play payment, similar to the way it works on network TV. The ad industry won a flat fee payment system, but advertisers did agree to come up some on those payment amounts. The union boards are scheduled to vote on the proposed contract this week. Thumbs up and the strikers can go back to work. It won't be a wrap however until the approximately 135,000 union members ratify the contract. That could take several weeks. The positive news from the commercial actors front has Hollywood heaving a sigh of relief. The settlement bodes well for smoother sailing in talks with unions for TV and movie actors and writers whose contracts expire next year. From the WHYY Arts Desk, I'm Beatrice Black for Marketplace."

And that's the top of our news for Monday, October 23rd.