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
Today, 2:02 PM
- The FCC split on party lines again today in adopting tough new privacy regulations on broadband Internet providers, rules that require an opt-in before sharing most customer data.
- That could present a problem growing advertising for big providers including Comcast (NASDAQ:CMCSA), Charter (NASDAQ:CHTR), AT&T (NYSE:T) and Verizon (NYSE:VZ).
- The vote passed 3-2 with strong dissents from the panel's two Republican commissioners. More public information (names, addresses) will be treated leniently, but providers will need to ask permission before sharing more sensitive data (like phone-tracked location, or sites visited and apps used).
- The new rules, while scaled back, have drawn heavy criticism from cable/telecom and advertising sectors, with companies that fret that the move will restructure the Internet's free-content approach.
- Other players: OTCPK:ATCEY, FTR, CTL, WIN, S, TMUS, CCOI
Yesterday, 3:20 PM
- With AT&T beginning a long journey to acquire Time Warner, is T-Mobile (TMUS +0.7%) the next big acquisition target in the media/telecom space? Analysts are talking up the carrier's prospects after it logged another successful quarter.
- For its part, T-Mobile has been and still is "very interested" in strategic options, COO Mike Sievert says.
- "The takeout target over the next 12 months has got to be T-Mobile," says New Street Research's Spencer Kurn, noting potential suitors in Comcast (NASDAQ:CMCSA) -- which is exercising a clause with Verizon to launch MVNO service -- as well as Dish Network (NASDAQ:DISH) and America Movil (NYSE:AMX).
- Dish has a lot of spectrum but no wireless business -- and it's lost a potential buyer in AT&T, which now has its hands full with Time Warner, notes BTIG's Walt Piecyk.
- Rival Sprint (S -1.8%) could be a takeover target as well, as CEO Marcelo Claure noted "we've had a lot of bankers placing more calls than usual over the weekend" in yesterday's earnings call.
Yesterday, 12:16 PM
- Usually in a steady state, Comcast (NASDAQ:CMCSA) shares are down 2.6% after today's Q3 earnings beat paced by an Olympic boost to revenues as well as customer gains.
- Overall revenues beat after growing 14%, and net income attributable to Comcast grew 12%. Cable Communications revenues rose 6.9% (and operating cash flow up 5.5%), while NBCUniversal revenues rose 28.3% and operating cash flow 31.5%.
- Cable revenue breakout: Video, $5.59B (up 4.5%); High-speed Internet, $3.41B (up 8.8%); Voice, $878M (down 2.4%); Business services, $1.4B (up 15.5%); Advertising, $634M (up 7.7%); Other, $650M (up 13%).
- The company reversed video subscriber losses from the year-ago quarter, adding 32,000 video subs to hit 22.258M. High-speed Internet customer adds rose 3.1%, to 330,000 (22.87M total). Net adds in single-product customers were 72,000; double product customers, 141,000; triple play, 4,000. Overall customer relationships rose 216,000 to 27.4M.
- NBCUniversal revenue breakout: Cable Networks, $2.94B (up 22%; excluding the Olympics, up 4.1% to $2.51B); Broadcast TV, $3.09B (up 56.6%; excluding Olympics and Super Bowl, down 3.6% to $1.899B); Filmed Entertainment, $1.79B (down 7.9%); Theme Parks, $1.44B (up 60.6%).
- Net cash from operations was $4.1B and free cash flow came to $1.4B for the quarter.
- Press Release
Yesterday, 7:13 AM
Yesterday, 7:01 AM
Tue, Oct. 25, 7:38 PM
- On a week where AMC's (AMCX +4.1%) The Walking Dead returned to action and nearly bested NFL football, CBS (CBS -0.6%) did what it does, and led prime-time ratings again.
- The network came in first for the week with an average of 9.9M viewers, ahead of NBC (CMCSA -0.7%) with 7.7M. ABC (DIS -0.7%) averaged 5.4M viewers and Fox (FOX, FOXA) 3.1M. NBC led the coveted 18-49 demographic.
- In cable, Fox News was the leader again, with 3.21M viewers, ahead of AMC's zombie-boosted 2.172M and CNN's (TWX +0.5%) 2.169M. ESPN fell in fourth place with 2.14M viewers, ahead of MSNBC's 1.78M.
- Among individual programs, The Walking Dead's 17M was only topped by NBC's broadcast of the Seattle Seahawks-Arizona Cardinals game (17.7M). Rounding out the next five programs, it was all CBS: 60 Minutes, with 15.99M; NCIS, with 14.77M; Chicago at Green Bay football, 14.2M; The Big Bang Theory, 14.2M; Bull, 12.3M.
Tue, Oct. 25, 5:30 PM
- AB, AGCO, AIT, ALLY, AOS, AVX, AVY, BA, BCO, BEN, BIIB, BOKF, BSX, CFR, CG, CMCSA, DTE, ENTG, EVR, EXAS, FDML, FLIR, GD, GNRC, GRA, GRMN, GRUB, HBAN, HES, HLT, IR, KO, LEA, LH, LRN, LUV, MDCO, MDLZ, MKTX, MMYT, NAP, NDAQ, NEO, NOC, NSC, NYCB, OC, PAG, PB, POL, RES, ROL, SAIA, SIX, SLAB, SLGN, SMED, SONS, SPG, STRA, STT, UCBI, VG, VLY, VNTV, WEC, WM, WOOF, WYN
Mon, Oct. 24, 7:24 PM
- Scary Tyler Perry outlasted Ouija-board horror at the box office as Halloween nears, as Boo! A Madea Halloween (NYSE:LGF) topped the chart with $28.5M in grosses.
- That was better than Tom Cruise in Jack Reacher: Never Go Back (VIA, VIAB) which drew a still solid $22.9M despite appearing in 67% more theaters than the Perry film.
- Jack Reacher did better in foreign markets, adding $31M outside the U.S., while Perry's film only logged domestic grosses.
- Meanwhile, a third debut, Ouija: Origin of Evil (NASDAQ:CMCSA), held down the No. 3 spot with $14.1M, just ahead of last week's leader, The Accountant (NYSE:TWX) with $13.6M.
- The weekend overall was the biggest at the box office in a few months.
- In milestones: Sully (TWX) crossed $120M in its seventh week, adding $1.49M.
Mon, Oct. 24, 6:59 PM
- After some long prep, Nielsen (NLSN +0.6%) is finally ready to measure out-of-home viewing, tapping some previously invisible ratings from viewership in public places, including restaurants, bars, airports and waiting rooms.
- The company will use its Portable People Meter to measure viewing from panelists wherever they go, and combine that with its National TV ratings panel for in-home viewing. It's a stand-along service for the moment, with plans to integrated it directly into national TV ratings in the future.
- Nielsen will offer both program and commercial ratings for live through Live+7 days. Based on more than 75,000 Portable People Meter panelists, the company will be able to project out-of-home viewing for more than half the U.S. population.
- The service should launch in April with data back to January, while data back to September 2016 should be added shortly after launch.
- News like this could be a boon for key providers of major-event sports broadcasting, which often gets significant viewership at bars and restaurants: ESPN (NYSE:DIS), Fox (FOX, FOXA), and Turner (NYSE:TWX) among others like CBS (NYSE:CBS) and NBC (NASDAQ:CMCSA).
Fri, Oct. 21, 5:23 PM
- AT&T's (T -3%) interest in Time Warner (TWX +7.8%) progressed quickly from "had talks" to "advanced talks" and now a deal could be set by Monday -- which Bloomberg says is due to a sped-up timetable caused by Bloomberg's initial report.
- That's because AT&T is said to be concerned that the publicity could allow other interested suitors like Apple (AAPL -0.4%) or Alphabet (GOOG +0.3%, GOOGL +0.3%) to jump in -- and indeed Apple is said to be monitoring the deal talks, after it made its own approach to Time Warner a few months ago, The Wall Street Journal reports.
- Those talks involved execs under Apple chief Tim Cook and didn't get beyond a preliminary stage. A source tells the WSJ that Google doesn't look interested in an offer for Time Warner.
- But the story of the deal points out just how much behind-the-scenes strategic talk is going on in the media/telecom spaces, as companies vie to be among the new leaders in an upended, converged digital media climate.
- Sumner Redstone was said to be considering not only the merger of CBS (CBS +2.1%) and Viacom (VIA +2.7%, VIAB +2.8%) that he's already pushing for, but also to combine that entity with Time Warner.
- Meanwhile, Comcast (CMCSA -0.5%) could join another company to get involved, the WSJ says, though that makes more sense if Time Warner's open to being parted out.
- Unlikely to join in this time: Twenty-First Century Fox (FOX +2.2%, FOXA +2.2%), whose own pursuit of Time Warner failed in 2014 at $85/share, and Walt Disney (DIS +1.1%).
- Previously: Time Warner at 15-year highs on merger talk; media companies rise (Oct. 21 2016)
Thu, Oct. 20, 5:48 PM
- NBCUniversal (NASDAQ:CMCSA) is doubling down on its bet on digital publisher BuzzFeed, putting another $200M in (at a valuation of around $1.7B).
- That's a slightly higher valuation than the $1.5B last year, when NBCU first put $200M into BuzzFeed (as well as a separate $200M into Vox Media). The $400M NBCU has invested amounts to one of the industry's biggest bets on digital content.
- The move follows announcements by BuzzFeed this year to pour more investment into video, and splitting its operations into a news group and an entertainment group.
Thu, Oct. 20, 3:17 PM
- TV ratings for the third (and, to the relief of many, final) presidential debate came in on par with the second showdown, though still short of the first-debate record.
- Across 11 networks measured by Nielsen, 68.76M viewers watched -- close to the 69M that viewed the second debate, but without PBS factored in yet, which could push past debate 2. This was the first presidential debate that didn't run against pro football competition.
- Among broadcast networks (where the big four totaled 38.1M viewers), ABC (NYSE:DIS) led with 11M, followed by NBC (CMCSA -0.9%) with 10.4M, CBS (CBS +0.8%) with 10.1M, and Fox (FOX -0.7%, FOXA -0.1%) with 6.6M. Univision (Pending:UVN) and Telemundo added 2.4M and 1.5M respectively.
- In cable, Fox News was the one on top, with 11.3M, best among all networks. CNN (TWX +0.4%) drew 8.7M, and MSNBC 5.5M.
- Updated: Final numbers came in at 71.5M viewers, surpassing the second debate's 69M, but well short of the record 84.4M who viewed the first debate.
Thu, Oct. 20, 2:44 PM
- NBCUniversal (CMCSA -0.9%) is in talks with YouTube about joining the latter's burgeoning live TV streaming service set to debut next year, says The Hollywood Reporter.
- Competitors among the big four broadcast networks were already reportedly in discussion to be part of Unplugged, as the service will be called. CBS (CBS +0.7%) has a definitive deal to be part; Disney/ABC (DIS -0.1%) and Fox (FOX -0.7%, FOXA -0.1%) are close to distribution deals as well.
- NBCU would bring broadcast NBC and likely its cable channels, including USA Network, Bravo and Syfy among others.
- CBS -- which runs its own streaming live service (CBS All Access, at $5.99/month or $9.99/month) -- reportedly sought a rate between the $2/subscriber it gets from cablecos and the $5.99 for All Access.
Wed, Oct. 19, 2:51 PM
- A new TV service from Google (GOOG +0.8%, GOOGL +0.6%) is likely to come in early 2017 after the company reached a carriage deal with CBS (CBS +0.7%) and is near distribution deals with Disney (DIS +0.6%) and Fox (FOX +0.8%, FOXA +0.4%) as well, The Wall Street Journal reports.
- Reportedly called "Unplugged," the service would target cost-conscious viewers with a "skinny" bundle of live channels at $25-$40 per month, sources told the paper.
- While it would be housed on Google's YouTube infrastructure, it would be separate from the existing ad-free YouTube Red subscription offering, though a curated part of Red would be part of the Unplugged bundle.
- The bold move (with deals coming more rapidly than Apple's progress into TV) comes ahead of a planned live service from Hulu (CMCSA +0.2%, DIS, FOX, FOXA, TWX -0.1%) as well as AT&T's (T +0.2%) DirecTV Now offering arriving later this year (likely at $50/month or more), and enters a skinny space that already holds Sling TV (DISH +1.4%).
- Updated 3:48 p.m.: Viacom (VIA +0.3%, VIAB +0.8%), home of MTV, Nickelodeon, Comedy Central and BET, is also in advanced talks to join the service.
- Wall Street Journal report
Tue, Oct. 18, 7:23 PM
- DreamWorks Animation, now a part of Comcast (NASDAQ:CMCSA), has settled a suit filed by animators for the sum of $50M.
- The suit was the latest one claiming a "gentleman's agreement" between major animation studios was actually an illegal anti-poaching deal -- and the latest one to result in a settlement as the suits proceed toward trial. Sony and blue Sky offered settlement in similar suits, for a combined $19M.
- According to a court filing, the $50M is about 39.3% of the damages that a plaintiffs' expert attributed to DreamWorks Animation.
- Still unsettled: Walt Disney (NYSE:DIS), who with DreamWorks had filed for interlocutory appeal this summer but got denied in August.
Tue, Oct. 18, 7:15 PM
- There was no presidential debate in the way this time. Sunday Night Football on NBC (CMCSA -0.2%), usually a reliable ratings horse, posted its smallest audience in five years.
- NBC drew 13.6M viewers (to a not-quite-prime matchup of Indianapolis and Houston), good enough for just the fifth-highest-rated program of the week vs. a usual near-top spot. The new numbers are piling in to a debate about what's happening to football, with an across-the-board ratings decline worrying the wide number of companies and advertisers that count on heavy viewership.
- A week ago, with 66.5M viewers watching Hillary Clinton and Donald Trump go at it, Sunday Night Football drew 14.84M viewers (a 26% drop).
- The Thursday Night Football game on CBS (CBS -0.5%) slotted in a bit higher as the third-most-watched program, with 14.49M. No. 1: The O.T. on Fox (FOX +1.1%, FOXA +1.1%) with 15.38M, followed by NCIS on CBS with $14.77M, and The Big Bang Theory on CBS at No. 4 with 14.41M.
- For the week in prime-time, CBS was No. 1 with 9.1M viewers on average; NBC had 7.2M; ABC (DIS +0.4%) had 5.8M, ahead of Fox's 5.1M. In cable prime-time: Fox News led with 2.44M on average, followed by TBS (TWX +0.9%) at 2.23M and ESPN with 1.99M.
- After hours: CMCSA -1.3%.