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Chris DeMuth Jr. is the founder of Rangeley Capital LLC. Rangeley is an investment firm that focuses on event driven, value-oriented investment opportunities. Rangeley Capital and his value investing forum, Sifting the World (StW), search the world for misplaced bets. Rangeley exploits them for... More
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  • HBO, Cheap 7 comments
    Aug 14, 2014 3:10 PM | about stocks: TWX, FOXA, T, DISH

    How Do I Get A Good Deal on HBO?

    Anti-TV snobs are among the most boring of snobs and I am among their greatest bores. So today's post will dispense with the usual, "(I'm better than you because) I read books" and stay 100% pro-TV. Sometimes TV is great and much of the greatest is on HBO. So, how does one get HBO for a bargain price?

    First off, one might consider the prospect of Time Warner Inc (NYSE:TWX). TWX is a recently broken pre-arbitrage opportunity left in the floorboards after the arb guys exited and before the value guys have shown up. But TWX is extraordinarily valuable. It is unclear whether you pay much of anything at all for the entirety of the company besides HBO. To reveal that value, TWX may look at a tracking stock or other such device. However they proceed, their stock is worth today at least the $85 offered by FOXA.

    As for the content, I would not compare an evening of watching Game of Thrones by myself to that of an evening in the company of even the most occasional reader of this blog. However, it compares quite favorably to anyone else. HBO also has an awesome library of completed series such as John Adams and Rome.

    But what about getting HBO as a customer? For the sake of this exercise, I consider 2-year commitments from either DTV or DISH. What is the best price for HBO? Other premium channels would be nice but the question is simply this: how little can we pay for HBO for two years? If you have a good deal, please let me know in the comments below.

    Meanwhile, here is my script for DTV and DISH, altered only slightly from page 7 of The Predictioneer's Game:

    Hello. I plan on buying a two-year contract including HBO today at 5 P.M. I am calling all of the services and I am telling each of them what I am telling you. I will commit to buying the service today at 5 P.M. from the service that gives me the lowest price. I need to have the all-in price, including taxes - everything - because I will pay only what you tell me this will cost.

    I would make sure to tell the salesman that I will tell the next dealer the price I've been quoted. Also, losers will not be contacted again, so anyone interested in the business should be sure to quote the lowest possible quote in the first call. Based on the work of Bruce Bueno De Mesquita, this tactic has had stellar results for car purchases; it will be interesting to see if it works for HBO.

    Disclosure: The author is long DTV.

    Additional disclosure: Chris DeMuth Jr is a portfolio manager at Rangeley Capital, a partnership that invests with a margin of safety by buying securities at deep discounts to their intrinsic value and unlocking that value through corporate events. In order to maximize total returns for our partners, we reserve the right to make investment decisions regarding any security without further notification except where such notification is required by law.

    Stocks: TWX, FOXA, T, DISH
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Comments (7)
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  • Mike Serebrennik
    , contributor
    Comments (1235) | Send Message
    I can attest to similar tactics working very well for car purchases. Of note is a nifty service offered by, which I personally used with ease and success.
    14 Aug 2014, 03:49 PM Reply Like
  • bazooooka
    , contributor
    Comments (3686) | Send Message
    I have acquaintances who get basic Dish packages for around $20/mo and then they add HBO for $10 based on current deals. Often they sell/share their HBO ToGo passwords as well. I assume in the near future HBO will allow an ala carte price for their ToGo service.
    14 Aug 2014, 04:51 PM Reply Like
  • Spidron
    , contributor
    Comments (27) | Send Message
    Great write-up, as usual. I hadn't heard of The Predictioneer's Game - I'll add it to my reading list.
    14 Aug 2014, 09:14 PM Reply Like
  • galicianova
    , contributor
    Comments (3700) | Send Message
    well, to make the intellectual game more interesting, let us think about salesman's defense tactics. You tell him quate a price and he retorts: give me your best quote and i will tell you whether i can beat it or not. no numbers provided. well, what then?
    15 Aug 2014, 03:39 AM Reply Like
  • galicianova
    , contributor
    Comments (3700) | Send Message
    PS: in chess that would be known as Sicilian Defense, or perhaps Nimtzowitz Defense...Now one needs an alternatice line of attack. One trick pony can work only in a traveling Circus that changes is audience.
    15 Aug 2014, 03:43 AM Reply Like
  • mjflack
    , contributor
    Comments (11) | Send Message
    Not sure if The Predictioneer's Game will make my reading list. On the page the author states " I conclude that if the U.S. fully withdraws, then Iran and Iraq will form a strategic partnership and Iran might even intervene militarily on behalf of Iraq’s Shia government to put down a rising political threat from the pro-Baathist, anti-American, Sunni Vice President of Iraq, Tariq al-Hashimi. Hashimi’s power is predicted to increase markedly while Prime Minister Maliki’s declines if President Obama decides not to maintain 50,000 American troops in Iraq. If, however, he chooses to keep 50,000 or more troops in Iraq after August 2010, then Iran and Iraq will not forge a strategic alliance, Hashimi’s growing power will be contained, and Maliki will remain in charge. And in Iran, Ayatollah Khamenei’s power will continue to decline while the military, the moneyed interests and the Qum clerics will become the backbone of a more moderate, more pragmatic Iranian regime." It appears Mr. Bueno de Mesquita did not predict that Syrian anti-basthist jihadists would invade Iraq. Maybe predicting the future is not that easy?


    15 Aug 2014, 09:45 AM Reply Like
  • TimeOnTarget
    , contributor
    Comments (3638) | Send Message
    What a great negotiation tactic. I'm definitely going to try that when I buy my next truck.


    I used to watch very little TV, except for stuff the like Science Channel, History Channel, etc., but I have to admit that I have genuinely enjoyed a bunch of the shows that FX, AMC (wish they had kept Rubicon" going), Showtime, etc. have developed. I thought "The Killing" was excellent. Gotta admit, I didn't figure it out. They were fair about the info you got, very fair. I just didn't figure it out. It was impressive.


    I was always a huge "Night of the Living Dead" and "Dawn of the Dead" fan-- (I liked the "survive in style" aspect of Dawn of the Dead). I found "The Walking Dead" to be a very pleasant surprise.


    I wouldn't call it literature, but I find "Justified" very entertaining. It is about a U.S. Marshall who winds up killing people by the truckload, usually without planning it that way. But, the killings are always "justified." It somehow pulls off a similar trick to what "Miller's Crossing" did.


    In "Miller's Crossing" the characters and plot line are elevated to just below the point of hyperbole/spoof, and held right below that line for the entire movie. But it is so well done, you can't ever not take them seriously. They never cross the line. It makes for a very unique viewing experience. One of the best movies ever done in my opinion.


    Justified isn't quite at that level, but it definitely has some of it going. There are several actors that I think are just totally excellent. Like 5 or 6. Not being the most patient of souls, I like buying these kind of series on DVD so I can watch lots of episodes without commercials. But, I'm afraid I have now watched all the Justified ones on DVD--I'll have to actually watch TV this next season, and I will.


    "The Bridge" is another one I have enjoyed. It has this kind of weird surreal feel to it, but kind of works. I used to live in El Paso and it is kind of a funky place. I actually think it is a pretty cool city.


    A number of people have recommended Game of Thrones to me. If you like it too, I'm going to give it a shot.


    Now one thing I never will watch, not ever, no how, no reason, NO, is other people play video games. Watching other people play video games has got to be the lowest form of human endeavor.



    I sent that link to a friend of mine and his comment was that Amazon has finally jumped the shark. I agree. I used to think they were smart; now I think they are really not very smart at all.


    30 Aug 2014, 12:58 PM Reply Like
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