Why I'm Shorting Charter And Buying Comcast
Ranjit Thomas, CFA
Ranjit Thomas, CFA
You Probably Hate Comcast
Chris DeMuth Jr. • 28 Comments
Chris DeMuth Jr. • 28 Comments
Why I'm Shorting Charter And Buying Comcast
Ranjit Thomas, CFA
Ranjit Thomas, CFA
Oct. 28, 2015, 7:55 PM
- With IBM taking on the digital and data assets of The Weather Company, what happens to The Weather Channel that it's leaving behind?
- It's struggling, but it will pursue storm coverage as a "hyper-local streaming service," according to channel CEO Dave Shull. "We are continuing to invest in our strategic partnerships with our distributors, advertisers, and emerging technology start-ups."
- The network will continue as its own company -- still owned in part by NBCUniversal (CMCSA +0.7%) along with Bain Capital and Blackstone (BX +1.2%) -- and has a long-term deal to use the services it sold to IBM. It's also still one of the most distributed channels on pay TV; Shull says more than half of America tunes in at least once a week.
- Comcast's recent earnings filing shows its investment in the channel has been marked down to $81M after a $252M impairment charge.
- Previously: IBM confirms Weather Co. deal, touts cloud/analytics synergies; shares rise (updated) (Oct. 28 2015)
- Previously: WSJ: IBM near $2B-plus deal for The Weather Company assets (Oct. 27 2015)
Oct. 27, 2015, 8:28 PM
- IBM is nearing a deal in excess of $2B to acquire the digital and data assets of The Weather Co., owner of the Weather Channel, The Wall Street Journal is reporting.
- The company -- owned in part by NBCUniversal (NASDAQ:CMCSA) along with Bain Capital and Blackstone (NYSE:BX) -- started hiring banks to seek a buyer in August for a deal it hoped would hit $3B. The company's digital bits were widely considered to be the most valuable.
- IBM has a particular interest in the company's forecasting group, WSI, the WSJ says -- a unit that's chock full of tech and weather data that the Weather Co. licenses to various businesses.
- The deal would reportedly come with Weather Co. CEO David Kenny, who would join IBM.
- A $2B deal would be a discount over the company's 2008 sale price, valued at $3.5B. IBM shares fell 4.1% today.
- Previously: IBM eyes digital assets of The Weather Company (Oct. 19 2015)
- Previously: Weather Channel hires banks to explore sale for up to $3B (Aug. 20 2015)
Oct. 27, 2015, 7:17 PM
- Following its in-line Q3 earnings report, Comcast (CMCSA -1%) confirmed its intention to test wireless services as part of a spectrum deal it entered with Verizon years ago.
- Commercial launch isn't close, though, and the company isn't showing interest in making an acquisition in the wireless space: "We've always felt (wireless is) part of a product set," says CEO Brian Roberts. "I don't think we feel that we have to necessarily in any way seek owner's economics."
- But it is evaluating whether to enter the bidding in the FCC's broadcast incentive spectrum auction.
- "It takes about six months to activate the MVNO," CEO Brian Roberts said. "We're going to trial some things and test some things after we activate. We'll update people as that progresses."
- Comcast last week triggered part of a 2012 deal where a cable consortium sold airwaves to Verizon with a right to resell Verizon service later. The company is said to be planning a hybrid cellular/Wi-Fi service along the lines of Google's Project Fi.
- Related: Comcast's (NASDAQ:CMCSA) CEO Brian Roberts on Q3 2015 Results - Earnings Call Transcript (Oct. 27 2015)
Oct. 27, 2015, 9:43 AM
- Comcast (NASDAQ:CMCSA) is off slightly, -0.6%, along with the broader market after Q3 results where yet again profits were in line and the company beat on revenue that grew 11%.
- Profits fell 19.2% Y/Y overall. Revenues were boosted by strong results on the content side, with Universal films contributing and theme parks, cable networks and NBC TV all adding strong gains.
- Cable Communications revenue of $11.74B (up 6.3%) by segment: Video, $5.35B (up 3.3%); High-speed Internet, $3.13B (up 10.2%); Voice, $900M (down 1.4%); Business Services, $1.2B (up 19.5%); Advertising, $593M (down 0.2%); Other, $562M (up 11.8%).
- At NBCUniversal, revenues of $7.15B (up 20.8%) by segment: Cable networks, $2.4B (up 7%); broadcast television, $1.97B (up 11.3%); filmed entertainment, $1.95B (up 64%); theme parks, $896M (up 14.1%).
- Net video subs fell by 48,000 (that is the company's best Q3 result in that area for nine years) and high-speed Internet customers gained by 320,000 (best Q3 there in six years). Voice customers grew by 17,000.
- Overall customer relationships were up 156K to 27.4M, driven by two-product bundlers (single-product customers up 24,000; double-product up 130,000; triple-play up 1,000).
Oct. 27, 2015, 7:14 AM
- Comcast (NASDAQ:CMCSA) declares $0.25/share quarterly dividend, in line with previous.
- Forward yield 1.61%
- Payable Jan. 27; for shareholders of record Jan. 6; ex-div Jan. 4.
Oct. 27, 2015, 7:05 AM
- Comcast (NASDAQ:CMCSA): Q3 EPS of $0.80 in-line.
- Revenue of $18.67B (+11.2% Y/Y) beats by $650M.
Oct. 26, 2015, 5:30 PM
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Oct. 26, 2015, 1:20 PM
- Maybe everybody stayed at home trying to buy Star Wars tickets online.
- In a dismal weekend at the box office, five new wide releases tanked and surrendered leadership to three returning films, led by The Martian (FOX -0.2%, FOXA -0.1%), which reclaimed the top spot with $15.9M.
- Goosebumps (SNE +0.6%) and Bridge of Spies (DIS +0.2%) were second and third, with $15.5M and $11.4M respectively.
- Of the newcomers, The Last Witch Hunter (LGF +1.2%) did best -- which isn't saying much. The Vin Diesel film drew just $10.8M in more than 3,000 theaters for the No. 4 spot. The latest in a series, Paranormal Activity: The Ghost Dimension (VIA -0.7%, VIAB -1%) was sixth with $8.2M, showing on just 1,656 screens as some exhibitors skipped showing it over Paramount's home-entertainment plans.
- And biopic Steve Jobs (CMCSA +0.3%) went from one of the best per-screen averages in limited release to just $7.3M now that it's gone wide. Despite some critical acclaim for the film, that's barely better than the panned Ashton Kutcher film Jobs did in opening its take on the Apple chief.
Oct. 26, 2015, 10:32 AM
- The board at Comcast (CMCSA +0.4%) has approved a proposal to reclassify its shares, such that its special common stock (NASDAQ:CMCSK) would be reclassified into its A-share common stock.
- The company says the move to leave only the one class will end some confusion, as well as increase the trading liquidity of the A shares.
- The plan is to reclassify each share of CMCSK into a share of CMCSA.
- A preliminary proxy has been filed and the company will hold a special meeting to vote on the issue. Shareholders of record at the close on Oct. 20 are entitled to vote.
- CMCSK is up 0.1%.
Oct. 23, 2015, 7:31 PM
- Broadcast networks giveth, and taketh away, on some freshman series after several weeks of numbers in the books.
- NBC (NASDAQ:CMCSA) has cut its order on The Player, starring Wesley Snipes, to nine episodes from its 13 -- meaning it will shuffle off the schedule in November after weakening to 4M total viewers on Thursday. The Player, from the producers of The Blacklist, followed that show in time slots and drew a 1.2 rating in adults 18-49.
- Earlier this month, NBC had given a full-season order to more successful Blindspot.
- Meanwhile, Fox (FOX, FOXA) gave Rosewood a full-season order while cutting its order for Minority Report.
Oct. 22, 2015, 3:36 PM
- NBC (CMCSA +0.8%) has reportedly told employees that the Universal Sports TV channel is shutting down next month and the signal will be taken down Nov. 16.
- For its part, NBC will pick up that channel's portfolio of Olympic rights and try to find a channel home for them.
- Universal Sports has been live for 10 years. “We are thrilled to be finalizing an agreement with Universal Sports that will provide NBCUniversal and NBC Sports with an impressive collection of media rights to some of the world’s most prestigious sporting events," said NBC Sports Group in a statement.
Oct. 21, 2015, 4:18 PM
- Comcast (CMCSA -0.7%) is inching toward introducing its own wireless service, triggering part of a 2012 airwaves deal that lets it resell Verizon's (NYSE:VZ) service, Bloomberg reports.
- Verizon CFO Fran Shammo said during the company's earnings call yesterday that unnamed cable companies had said they'd execute their right to resell Verizon airwaves as part of the deal where Verizon bought spectrum from a cable consortium.
- Bloomberg says that Comcast plans a hybrid cellular/Wi-Fi service, not unlike Google's Project Fi and which would draw on Comcast's network of Wi-Fi hotspots that may be 10M strong.
- With notification of Verizon, Comcast could start a market trial within six months and offer it commercially by this time next year.
- Good for T-Mobile (TMUS -1.2%) either way? The carrier comes up in rumors about a Comcast merger -- though Comcast denied them earlier this year -- but in any cast, a Comcast entry would press the big two of AT&T (NYSE:T) and Verizon more. “This will be bad for the carriers, with the possible exception of T-Mobile, and good for cable,” says New Street Research's Jonathan Chaplin.
- And T-Mobile chief John Legere has been not-too-subtly dropping lines about a merger with his company: "You really believe that the Comcast future in wireless is to be an MVNO with Verizon? I mean, give me a break."
- Previously: Legere: T-Mobile will bid in auction; Verizon video a 'debacle' (Sep. 18 2015)
- Previously: Comcast source denies interest in T-Mobile purchase (Jun. 17 2015)
Oct. 20, 2015, 11:27 PM
- Richard Plepler, CEO of HBO (NYSE:TWX), had talked nicely in the spring about whether the launch of stand-alone service HBO Now would antagonize the network's longtime cable partners: "We see this as an expansion of the pie, not cannibalistic at all of our current business."
- Now he's speaking a little more directly: “If you’re Brian [Roberts, CEO of Comcast (NASDAQ:CMCSA)] and you have 6M broadband subs, why would you not bundle HBO and share that revenue with us? Why would you give up that real estate and not be paid for it? I don’t understand it," Plepler said tonight in a keynote in Laguna Beach, Calif.
- Comcast, along with to-be-merged Charter (NASDAQ:CHTR) and Time Warner Cable (NYSE:TWC), don't offer HBO Now. Cablevision (NYSE:CVC) and Verizon (NYSE:VZ) do.
- In comments reported by Variety, Plepler went after distributors who were leaving money on the table: “Some of our partners are not as skilled at that, and I think that’s myopic on their part,” he said.
- Previously: HBO CEO: Direct streaming a play for millennials (Mar. 31 2015)
- Previously: HBO-Apple deal a year in the making; cable partners still a challenge (Mar. 09 2015)
Oct. 20, 2015, 8:04 PM
- After a lot of talk about the evolution of TV upfronts, a swath of hyped premieres and political debates and the return of football, TV ad spending for Q3 was flat Y/Y.
- Cable spending rose 1% for the quarter, but broadcast ads fell 3%, according to Standard Media Index. Local-focused spot spending was up 2%.
- Syndication spending fell 6%; local cable, MSO and satellite TV slipped 1%.
- There were few positive signs, but the scatter market rose 6% for the quarter, and Scripps Networks (NYSE:SNI) and AMC (NASDAQ:AMCX) showed ad spending growth, as did broadcasters Telemundo and ABC (NYSE:DIS).
- Local broadcast stocks: SBGI, MEG, SNI, GTN, MDP, TGNA, NXST
- Other network stocks: AMCX, DIS, CMCSA, CBS, FOX, FOXA, VIA, VIAB, STRZA, DISCA
Oct. 20, 2015, 4:35 PM
- NBC (NASDAQ:CMCSA) today launched its smart-TV app on Xbox One and existing Apple TVs, and is now working to bring it to Amazon Fire TV and Chromecast.
- That's in addition to its existing base on Roku and iOS/Android devices. It's got full access to many popular NBC shows as well as some exclusives (this season of The Blacklist) and clips. The numbers: More than 1,000 episodes of more than 40 shows.
- While some shows have a "TV Everywhere" focus, requiring sign-in with existing pay-TV account info, "the overwhelming majority" of the content is available to all, NBC says.
- Today, CBS also said it was going to launch its live/on-demand app on the next-generation Apple TV when it comes out.
Oct. 20, 2015, 3:21 PM
- Comcast (NASDAQ:CMCSA) is starting to take steps to capitalize on an asset it's been grooming for a while: the mountain of data on what its millions of TV subscribers are watching, paired with more detailed information about them that could goose advertising results.
- The carrier is in talks with TV networks and audience-measurement firms, including ESPN, Turner, Discovery Communications and others about licensing data from its set-top boxes and streaming apps.
- It had already rejected an exclusive offer from Nielsen (NYSE:NLSN), said to be $100M.
- “We do believe it’s an unprecedented set of information,” says Comcast's Sam Schwartz. Unlike Nielsen's extrapolated sample, Comcast's data reflects actual viewing from a much larger base.
- For now, Comcast is only licensing subsets of the data to any one firm, and won't give compromising information about its clients to competitors.
Comcast Corp. is a media, entertainment and communications company. The company provides video, high-speed Internet and phone services to residential and business customers in the United States. The company operates its business through five reportable segments: Cable Communications, Cable... More
Industry: CATV Systems
Country: United States
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