Seeking Alpha
Long only, medium-term horizon, tech, solar
Profile| Send Message|
( followers)  

For years News Corp. (NWS) has been driven by a single corporate vision of integration.

By owning both the content and the means by which that content is delivered, the company could double its profits. When you're buying from yourself it's a guaranteed profit.

The phone hacking scandal has, at minimum, delayed this vision from becoming reality. News Corp. hopes that by dividing itself into two companies, one focused on video and one on publishing, it can make another run to acquire the rest of BskyB and use that direct broadcasting pipe to guarantee its product a profitable market.

But while News Corp. has been huffing-and-puffing, Comcast (CMCSA) has been achieving the vision. That becomes clear today as MSNBC.com, and its cable channel, become NBC News.

Comcast is the nation's largest cable operator, and it followed the News Corp. formula to the letter in the last decade by getting heavily involved in sports. But the big breakthrough came last year, when it acquired the bigger half of NBC Universal.

The deal transformed Comcast at a stroke from a mere pipe operator to a vertically-integrated giant. Comcast is NBC, just as News Corp. is Fox. But Comcast has no problem owning its pipes, while News Corp. has major difficulty in it.

Since the deal closed Comcast has been slapping the NBC name on everything it can find, much as News Corp. used the Fox name. Its former Vs. sports channel is now NBC Sports. And now MSNBC is NBC News.

Since closing the deal Comcast is up about 30%, and investors are getting a 2.06% yield on top of that. It's revenues and earnings are now fairly flat, but the profits are practically baked-in. You still have to look at the balance sheet as you would a carrier, with a debt-to-assets ratio of 25%, but since the NBC deal closed that has been on the decline.

If you ever thought Rupert Murdoch's business vision meant anything, in short, buy CMCSA.

Source: Comcast Becomes What News Corp. Wanted To Be