Sumner Redstone, the executive chairman of both CBS (NYSE: CBS) and Viacom (NYSE: VIA), has been having a difficult time during the recession. Because of financial pressures, he's been forced to sell stock assets to cover some of his debt problems. Now comes word that he's jettisoned his controlling stake in Midway Games (NYSE: MWY).

Redstone, according to The New York Times, divested himself of his Midway investment. And what a miserable investment it was. If you've followed the story of Midway Games at all, you know it's been nothing but a loser. Losses, revenue declines, and questions about the quality of the publisher's software pipeline seemed to always plague the earnings reports.

Redstone's stake was once worth $700 million. Know what he sold that stake for? $100,000 plus the assumption of debt valued at $70 million. Talk about a lousy loss. Midway just couldn't compete against the likes of Activision Blizzard (NASDAQ: ATVI) and Electronic Arts (NASDAQ: ERTS). You've got to wonder what Redstone saw in the company.

There's good news and bad news for shareholders of Disney (NYSE: DIS). The good news, according to data published in this Hollywood Reporter article, is that the latest Disney Channel movie, Camp Rock, achieved better ratings than the first High School Musical movie. Rock attracted 8.9 million eyeballs while the first Musical brought in about 7.7 million viewers. The bad news is that Rock unfortunately couldn't match the success of the second Musical project, which captured the attention of over 17 million viewers.

This movie is extremely important. Disney execs want to find out if they truly know the formula for creating new fads for the kids. This is definitely a strong start, although I thought the movie's ratings might come a little closer to the second Musical film since all we've been hearing about lately is how hot the Jonas Brothers act is right now. It at least should have brought in over 10 million viewers.

I don't know, maybe it's me, but I just don't feel the same kind of buzz for this project as I do for the Musical franchise. Here comes the interesting part: Can Disney grow the movie from here? That will depend on how fickle the Disney Channel audience actually is. Don't fool yourself, the powers that be at Disney are under pressure to form a suitable pipeline of intellectual properties to replace the aging Musical and Hannah Montana brands. Make no mistake, they are aging quickly, as these kinds of things don't have terribly high half-lives.

Shareholders will want to see the Jonas Brothers and Camp Rock really grow into a merchandising phenomenon in the coming months. No matter what, though, the cable channel is a great asset, and it is a strong competitor of Viacom's (NYSE: VIA) Nickelodeon network.

Disclosure: I own Disney; positions can change at any time.

I really want to turn bullish on Midway Games Inc. (NYSE: MWY), but there's no way I can do that right now. The company's stock is below $3 a share, and it's there for a reason. But, let's first look at a couple positives from the software publisher's latest earnings release. Net revenues shot up 170% to $29.9 million in Q1; that beat expectations, according to Briefing.com. And the net loss per share also beat expectations by a penny -- it came in at $0.29 per diluted share on an adjusted analysis.

But, that net loss is worse than the previous year's net loss of $0.20 per diluted share, also adjusted. Like I say, someday I want to report that Midway has turned the corner and is a buy. I simply can't do that, even though I recently bought the publisher's catalog title Rampage: Total Destruction for the Nintendo Gamecube and am having a great time with it -- guess it goes to show that you can't always judge a company's stock by the fact that you enjoy its products. One thing that Midway needs to do is perhaps seek some synergy from Viacom, Inc. (NYSE: VIA)'s MTV and Nickelodeon channels. Sumner Redstone is, after all, the controlling shareholder of Midway. Granted, THQ Inc. (NASDAQ: THQI) deals with the Nickelodeon characters at the moment, but in the future, Redstone needs to figure out a way to use his media assets to promote Midway and perhaps funnel some licensing deals to the publisher. MTV is certainly doing well with its own video-game ambitions via Rock Band, which is sold by Electronic Arts Inc. (NASDAQ: ERTS).

One thing I must point out is that, since my last article about Midway, the stock is up. This was mentioned to me by a reader. So, in objective trading terms, if you went against my opinion, you would have made money, no question. However, I have to stick to my guns and say that I personally wouldn't play the volatility in Midway's shares. Yes, you could luck out with it, maybe Redstone will come along one day and buy out the remaining shares at a big premium (doubtful, at least the big-premium part). I wouldn't want to speculate on such an outcome; I am still content with my Activision, Inc. (NASDAQ: ATVI) shares as a way to play video-game investing.

Disclosure: I own shares in Activision; positions can change at any time.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

My son is an Elmo addict. He has Elmo clothes, Elmo books, and Elmo toys. He insists on listening to an Elmo CD whenever he rides in my car and watches the furry Muppet almost every day on "Sesame Street." Oh yeah, he calls his binky Elmo.

And you know what? This doesn't bother me.

Sesame Street, which has been on the air for about 40 years, is still a quality show. It teaches kids the alphabet, how to count and other important lessons in an entertaining manner. The show has some aspects of Saturday Night Live to it with clever bits like having Oscar the Grouch host something called the "Grouch News Network," which featured CNN's Anderson Cooper.

I realize that his Elmo fascination won't last. My son recently discovered Mickey Mouse on one of Walt Disney Co.'s (NYSE: DIS) cable channels. Eventually, Mickey will give way to Dora the Explorer and SpongeBob SquarePants on Viacom Inc.'s (NYSE: VIA) Nickelodeon.

Toymaker JAKKS Pacific (NASDAQ: JAKK) lost the expectations game earlier this week, my friend. Wall Street was looking for more in terms of earnings per share than the company was apparently able to deliver. Was JAKKS playing around too much these last three months? Who knows -- this business can certainly be fickle, after all.

For the first quarter, JAKKS saw its revenues increase over 5% to nearly $131 million. Earnings per diluted share came in at $0.03 if you take into account litigation expenses, restructuring charges, etc. On an adjusted basis, JAKKS earned $0.13 per share, compared to a year-ago adjusted earnings of $0.14 per share. According to Briefing.com, this was $0.06 less than what the Street wanted.

JAKKS, which competes with Hasbro (NYSE: HAS) and Mattel (NYSE: MAT), didn't have a great quarter, it's true. But I've always found this company and stock to be an interesting one, as it seems to do well over time with its various licensed products, such as merchandise based on some Disney (NYSE: DIS) brands, including Hannah Montana, and toys based on Viacom's (NYSE: VIA) Nickelodeon channel.

Whenever the stock is on a pullback, it always catches my attention (although, I should point out, I have never owned it). In addition, the balance sheet appears to be in good shape: there's a nice amount of cash and cash equivalents at $238 million, long-term debt has remained stable, and the accounts receivable line is down.

JAKKS is still forecasting $2.91 per diluted share for the current fiscal year. Given the share price as of this writing, the P/E ratio on the stock remains compelling.

Disclosure: I own shares of Disney; positions can change at any time.

Is Viacom (NYSE: VIA) green with envy over Disney's (NYSE: DIS) High School Musical? Probably; and who could blame the powers that be over at Viacom for exhibiting such a sin?

The Hollywood Reporter recently discussed plans made by Viacom's Nickelodeon cable channel for a project dubbed Spectacular! Here's all you need to know about it: it's a musical movie that takes place in -- are you ready for this, you'll never guess in a million years -- a high school. Talk about a coincidence; I'm sure this has absolutely nothing to do with the success of High School Musical.

In case you can't tell, I'm being sarcastic. It has everything to do with Disney's Musical franchise -- Disney has made millions upon millions off the concept.

Here's the problem for Viacom: shouldn't the media conglomerate be zagging while Disney zigs? In other words, Viacom may be putting too much faith into the belief that a hard formula has been established -- that formula being kids-cable-channel-movie + high-school-setting + catchy-musical-tunes = profitable-long-term-franchise.

Earlier in the week, CBS Corporation (NYSE: CBS) sent out its earnings broadcast. Now it's time for Viacom, Inc. (NYSE: VIA) to tell investors how things are doing. CBS and Viacom, as I'm sure you know, used to be part of the same media conglomerate, but they went their separate ways to see if being apart would help shareholder value. So it's always fun to compare the two when they release their numbers (check out Brent Archer's coverage of CBS' quarter and his feelings in terms of stock strategy).

For the fourth quarter, Viacom, which competes with companies like The Walt Disney Company (NYSE: DIS), News Corp. (NYSE: NWS), General Electric Company (NYSE: GE)'s media asset NBC Universal, and Time Warner (NYSE: TWX), was expected to earn $0.83 per share. Earnings from continuing operations came in at $0.83 per diluted share. That was quite a nice rise compared to the $0.69 per diluted share from continuing operations booked one year ago. Plus, the revenue increase for the current quarter was a nifty 19%. For the full year, earnings from continuing operations rose a more subdued 10% to $2.41 per diluted stub; this performance was accomplished on a revenue gain of 18%.

Both media networks -- Viacom owns the MTV suite of cable channels -- and filmed entertainment -- Viacom owns Paramount -- posted strong double-digit revenue gains for the quarter and year. Drivers included films by DreamWorks Animation SKG, Inc. (NYSE: DWA), which the company distributes -- those films would be Shrek the Third and Bee Movie. Also, Transformers helped to power results. Another product that tuned up the quarter was Rock Band. It was developed by Harmonix, which Viacom purchased for its MTV unit, and it is distributed by Electronic Arts (Nasdaq: ERTS). It's a rocking competitor to Activision's (Nasdaq: ATVI) Guitar Hero concept.

JAKKS Pacific (NASDAQ: JAKK) didn't toy around during the holiday quarter -- it got serious and delivered some solid growth. For the fourth quarter, JAKKS increased its top line by nearly 20% to $285.1 million. Earnings per diluted share jumped 45% to $1.06.

The company cited various members of its toy portfolio as drivers for the Q4 season, including those joystick videogames that you plug directly into the TV -- you've got to admit, those are pretty fun, especially the one with Galaxian. Also, the company mentioned that items based on Disney (NYSE: DIS) properties turned out to be big helpers during Christmas. And, yes, they had to mention Hannah Montana -- they have a plug-and-play joystick title based on the pop princess. Sure, she's a fad, but she's still going strong for now.

JAKKS may play in the highly competitive world of toys, but it's definitely doing all right, even as it fights it out in the trenches with biggies Mattel (NYSE: MAT) and Hasbro (NYSE: HAS). It focuses on building little unique niches for itself, and it knows how to effectively work the licensing game; in addition to Disney stuff, JAKKS makes products based on Viacom's (NASDAQ: VIA) Nickelodeon characters and Neopets universe. The stock doesn't look too expensive here, so it's worth a look if you are looking to gain some exposure to retail toys, although I'd probably keep it on a watch list in anticipation of a pullback.

Disclosure: Steven Mallas owns shares in Disney.

All movie studios want to find their own Lord of the Rings/Harry Potter franchise. Disney (NYSE: DIS), for example, seems to be headed on the right track with its Narnia brand. Viacom (NYSE: VIA) made a solid effort this past weekend by releasing The Spiderwick Chronicles to the mass multiplex marketplace -- unfortunately, things didn't turn out so well, at least as I'm seeing it.

According to Boxofficemojo, Spiderwick is in a battle with Disney's Step Up 2 the Streets for second place. The latter is right now estimated to have grossed $19.7 million for the three-day weekend of February 15 through February 17; the former has just over $19 million to its credit. So, Spiderwick could exit its current third-place showing and move up in the rankings, but it won't catch up to the big winner, News Corp.'s (NYSE: NWS) Jumper. I'll tell you, I had no idea this one was going to "jump" -- what a horrible, horrible pun, huh? -- to the top of the box office charts this weekend with a $27 million take.

Final numbers will be coming later today, and we'll get a better indication of how all the movies did once Monday's holiday figures are added; also, the second weekend is always the ultimate tell. But, as of now, I don't think Viacom's Spiderwick fantasy -- which is distributed by Paramount and is co-branded with Nickelodeon Movies -- will approach the economic prestige of Time Warner's (NYSE: TWX) Potter property. Better luck next time.

Disclosure: I own shares in Disney.

Viacom's (NYSE: VIA) Nickelodeon, a television network targeting children, has announced (subscription required) that it will no longer license its brands for food products that are unhealthy.

According to The Wall Street Journal, "Beginning in 2009, Nickelodeon will limit the use of its licensed characters on food packaging "to products that meet 'better for you' criteria as established by marketing partners in accordance with governmental dietary guidelines".

This is the socially responsible thing for Nickelodeon, and every other network targeting children to do. In the midst of a national obesity epidemic, the business world has a role to play curbing unhealthy eating habits. While this may lead to a loss of revenue, in the long-run it could be wonderful for business. Nickelodeon can now brand itself as a healthy network for kids. They could run morning exercise programs for toddlers (Sweatin' to the Nursery Rhymes?). Health-conscious parents will feel better letting their kids watch the network, knowing they will not be bombarded with unhealthy snacks featuring their favorite characters.

Hopefully Nickelodeon will be able to do well by doing good here.

Viacom (NYSE: VIA)'s Nickelodeon network, arguably the top brand in kids' television, will be spinning off two new networks: Noggin, a commercial-free daytime station for preschoolers and N, which targets teens.

This makes sense from a branding perspective -- Having N and Noggin on the same station gave the channel a lack of focus, which often prevents the network from building a core audience. But on a more immediate level, this may not help anything: Does it really make sense to have a 24-hour network for kids who are in school most of the day?

At least in terms of crossover success, Nickelodeon is getting killed by the Disney (NYSE: DIS) Channel, which has had breakthrough hits like High School Musical (Kevin Kelly's favorite movie) and Hannah Montana.

Nickelodeon is too small a part of the Viacom empire for this to have any material effect on the stock price.

There are many of us who are guilty of the following scenario - miss Al Gore on The Daily Show? Or need just one more shot of Justin Timberlake bringing sexy back to the Video Music Awards? Hop on over to YouTube, and you will most certainly find satisfaction.

Today, Viacom (NYSE:VIA), the parent of MTV, Comedy Central, Nickelodeon, and other major networks, is tired of this pattern. The conglomerate has sued Google (NASDAQ:GOOG) and its YouTube unit for more than $1 billion, citing unauthorized use of copyrighted material.

In addition to more than $1 billion in damages, the suit, filed with the U.S. District Court for the Southern District of New York, seeks an injunction against further violations. VIA alleges that almost 160,000 unauthorized clips of company-owned programming has been uploaded onto YouTube and viewed more than 1.5 billion times.

GOOG representatives have so far failed to comment. The stock has dropped nearly one percent in trading so far today; VIA shares have gained nearly one percent.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.