Tim Arango: 'Deconsolidation is the Big Media Story'
The New York Post's media business reporter expects other media giants to follow Viacom's lead and break up. Look for Sony to potentially spin off its U.S. entertainment assets and G.E. to spin off NBC Universal, he says.

By Patrick Phillips
I Want Media, 09/20/05

Tim Arango is on a roll. Last week the media business reporter for the New York Post broke a big story -- that Time Warner is in talks to sell a stake in America Online to Microsoft. Just a few days earlier he had another hot scoop: Viacom and Comcast plan to hook up to create new cable networks together.

Both stories were widely publicized. They were also derided and dismissed by some of the companies and figures involved.

Arango attributes his scoops to his relationships with "people who know stuff." Unlike other New York newspapers, the Post's business section is read by "the Manhattan elite," he claims.

Arango describes Disney as "combative" while Comcast is "impressive." Time Warner is "in the midst of reconfiguring." However, News Corp., the owner of the Post, is off-limits for discussion.

Arango, 31, joined Rupert Murdoch's New York tabloid in September 2002 after reporting for the financial news site TheStreet.com. He is a native of Essex Junction, Vt., and earned his undergraduate degree from Saint Michael's College and his graduate degree from Brown University.

I Want Media: You've been getting some big scoops lately. What's your secret?

Tim Arango: I don't know that I break any more stories than anyone else on the beat. I just happened to have a good one last week, and that's why you're talking to me.

When I got this job the advice I got from Col Allan, our editor-in-chief here, was to get out on the town and have a little fun. And I've taken that advice to heart. It's about cultivating relationships, getting out, getting meals, a few drinks, with people who know stuff.

IWM: How likely is a Microsoft-AOL alliance of some kind?

Arango: I think it's very likely. At least from the Time Warner side, there’s a real eagerness to get some sort of deal done that would create a partnership between AOL and MSN.

IWM: One analyst suggested that "the story was probably floated in an effort to prove to Wall Street that Time Warner can unlock shareholder value without being forced to." What's your take?

Arango: Well, the implication here is that it was some coordinated leak by company officials to get the information out. I'm sure that happens from time to time, but I can assure you the Post is not usually the chosen outlet for such leaks.

IWM: How likely would it be for Time Warner to sell off its Time Inc. magazine publishing unit next year, which you also reported? I mean, "Time" Warner without Time Inc.?

Arango: I don't think it's very likely. There would be a huge tax hit if it were sold. And the division, while struggling somewhat, still generates lots of cash. But it is something that has been considered and will be on the table as [Time Warner CEO Richard] Parsons moves forward with this strategic review he's been talking about.

IWM: What is your assessment of the situation of Time Warner and AOL?

Arango: My assessment is that Time Warner desperately wants to figure this thing out, and at this point in time management's preferred solution is to partner with Microsoft.

IWM: Viacom boss Tom Freston denied your story that Viacom and Comcast plan to create several new cable networks together. He dismissed it as "that scurrilous report in the New York Post." Your response?

Arango: The definition of "scurrilous" is something that's expressed in "vulgar, coarse or abusive language" -- so Freston's statement wasn't necessarily testifying to the veracity of the story. Yet based on the context, it looks to me like he was denying the story -- a curious course of action given that the story was true.

He's a fellow Saint Michael's alum, so I though I'd get a little move love from him. The following day the [Wall Street] Journal followed up with its own piece, and credited the Post. I called Freston's spokeswoman to ask if he thought the Journal's piece was equally "scurrilous" but haven't heard back.

IWM: What's your take on New York Magazine's story last week on the Rupert-Lachlan Murdoch relationship?

Arango: I really [can't] address questions about the Murdochs.

IWM: Of all your scoops, which ones make you the most proud?

Arango: A few that stick out are, obviously, last week's AOL-Microsoft story; talks about NBC Universal acquiring DreamWorks; Time Warner and Comcast teaming up to start a New York Mets network; Sony Music and BMG merger talks.

IWM: How is reporting for the Post different from reporting for TheStreet.com?

Arango: At TheStreet.com everything I wrote revolved around the stock. A lot more of the reporting was done over the phone, given that you often had to file numerous times during the day. At the Post, you file at the end of the day for the next day's paper. So during the day you have a lot more freedom to go meet people, take people to lunch.

IWM: How is your beat different from Post media reporter Keith Kelly?

Arango: Keith covers the publishing industry. I cover the rest of the media business.

IWM: Which media company or media person is the most difficult to cover?

Arango: Disney, probably, has been the toughest to cover because the company's PR folks are so combative. It's tough getting answers to even the simplest questions out of them. It's been hard developing any sort of relationship with that company.

IWM: Which media company or media person do you find to be the most impressive?

Arango: Comcast and [CEO] Brian Roberts have always been impressive to me. Launching a hostile takeover of Disney last year was bold and risky. And when they failed they picked themselves right back up, bought in to MGM, launched a new sports network with the Mets, began revamping OLN to compete with ESPN, and are weighing a number of other moves aimed at making themselves a content powerhouse.

IWM: How is the Post's media reporting different from the New York Daily News'? And the New York Times'?

Arango: The Daily News' business coverage is now almost non-existent, so while the Post and the News are fierce competitors otherwise, our main competition in the business section is the Times and the Journal.

The Times is the Times, an indispensable paper. When it comes to reporting on media, we certainly have a different audience. We view ours as the executives in the industry and the Manhattan elite -- those are the people picking up the Post every day to read the business section and read about the media business.

The Times tries to appeal to a much broader audience, and does so with in-depth, explanatory journalism on big-picture issues, like the DVD format wars or why big media has been cozying up to the video game industry, for example.

IWM: What's the big media story right now?

Arango: The big story, obviously, is the deconsolidation of the industry. After years of getting big, now they are paring down and selling off assets, and reconfiguring the assets they have.

IWM: Will we see more media conglomerate breakups like Viacom?

Arango: In the wake of Viacom's decision, we've seen Clear Channel and Cablevision announce breakup plans, and Time Warner is certainly in the midst of reconfiguring its businesses. Two others to look for are Sony potentially spinning off its U.S. entertainment assets and G.E. spinning off NBC Universal.



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