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. 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.
Oct. 19, 2015, 11:52 AM
- In the scare-off at the pre-Halloween weekend box office, youth-focused Goosebumps (SNE +0.9%) spooked a larger-than-usual number of competitors to take the top spot with grosses of $23.5M.
- The rivals included the more grown-up gothic-romance Crimson Peak (CMCSA +0.3%), from director Guillermo del Toro, which disappointed with $12.9M for a fourth-place finish.
- The Martian (FOX -0.4%, FOXA -0.5%) gave up the top spot in its third week to finish second, with $21.5M ($143.8M cumulative).
- Among the other debuts, Bridge of Spies (DIS +0.6%), the Cold War drama starring Tom Hanks and directed by Steven Spielberg, was No. 3 with $15.4M.
- Goosebumps is based on the popular youth-horror book series -- but loosely, as the story involves author R.L. Stine himself, played by Jack Black. Meanwhile, Sony's Hotel Transylvania 2 took another $12.3M to hit $136.4M total for its four weeks of release.
Oct. 19, 2015, 8:26 AM
- The Weather Company is in advanced talks with IBM about the sale of its digital assets, Re/code reports, stating that a number of different parties have been discussing the purchase of either parts or all of its assets.
- Those include: The product and technology division, the television business (with the Weather Channel) and a large meteorological team.
- The Weather Company is currently owned by the Blackstone Group (NYSE:BX), Bain Capital and NBC Universal (NASDAQ:CMCSA). The trio paid $3.5B for the firm in 2008.
Oct. 16, 2015, 7:19 PM
- Despite some initial hesitation, media companies are starting to sign on to a planned YouTube service that lets consumers watch videos ad-free.
- Firms including Turner Broadcasting (NYSE:TWX), Fox Sports (FOX, FOXA), A&E (NYSE:DIS), and NBCUniversal (NASDAQ:CMCSA) are going along, The Wall Street Journal reports. They stand to gain about 55% of overall subscription revenue for their agreement, apportioned by time spent on the videos.
- YouTube is hoping to launch the service soon at around $10/month. Google (GOOG, GOOGL) had confirmed in the spring that it was bringing an ad-free YouTube out, likely before year-end.
- Some of the companies kicked at first, arguing for disproportionate share compared to smaller YouTube creators, but YouTube is managing to keep the revenue split terms intact so far. Other companies continue to negotiate the terms of joining up.
Oct. 16, 2015, 7:02 PM
- Customer dissatisfaction with copper-based broadband is a threat for firms like AT&T (NYSE:T) and CenturyLink (NYSE:CTL), Morgan Stanley says, noting a ripe opportunity for cable companies.
- Though cable firms (CMCSA, CHTR, TWC, Cox) dominate broadband already, there's upside for them if they target providers of DSL, IPTV and even satellite broadcasters like DirecTV and Dish Network (NASDAQ:DISH) which resell DSL service.
- The conclusions are based on Morgan Stanley's August-September survey of homes on broadband and TV services.
- Cable customers got faster speeds on average -- 38 Mbps, vs. 21 Mbps for DSL -- and "U-verse and AT&T DSL had especially weak satisfaction results, and satellite pay-TV subscribers' broadband satisfaction fell materially year over year."
- Meanwhile, FiOS (NYSE:VZ) customers were happier and saw nearly 30 Mbps service on average.
Oct. 15, 2015, 7:39 PM
- In a wide-ranging interview with The Hollywood Reporter, Hulu CEO Mike Hopkins covers at least a couple of differences from VOD giant Netflix: He's not planning a move into original movies, and has no plans to take the service overseas, for now.
- In other tidbits: He thinks the (reported) $700K/episode price for Seinfeld has been worth it ("Subscribers have flocked to that show in ways that we haven't seen with any other show"); its content investments are "quite a bit higher" than the $500M it reportedly spent in 2012; the biggest surprise hit is The Mindy Project, a top-five show there.
- As for its ad-free and limited-ad plans: "The mix of subscribers taking our no-commercials plan and limited-commercials plan is exactly what we projected. We assumed that a large majority of people would choose to stick to the limited commercials plan — and that's held true for new sign-ups as well."
- And the corporate ownership that used to vex former chief Jason Kilar is an advantage, Hopkins says: "We couldn't be doing what we're doing if it wasn't for the support of Fox (FOX +2.5%, FOXA +2.5%), NBC (CMCSA +1.8%) and ABC (DIS +2.1%)." An IPO or sale aren't in the plans until they build further, he suggests.
Oct. 15, 2015, 10:43 AM
- NBCUniversal (CMCSA +0.7%) has set plans for its comedy-focused subscription video service -- to be called "SeeSo" and cost $3.99/month.
- The service will launch via private beta in December and roll out to the public in January.
- It will feature full episodes and clips that lean on company properties including The Office, Saturday Night Live (all 40 years) and The Tonight Show. It will also show original series and daily stand-up specials including live comedy. But it's not designed to compete with the big over-the-top services.
- “This is a complement, not a replacement," says executive VP Evan Shapiro.
Oct. 14, 2015, 10:47 PM
- Prime-time broadcast ratings are still in decline -- even counting delayed views from DVRs and video on demand.
- Some individual shows display strength with the delayed viewings, but overall, prime-time premiere week (counting seven days of recorded viewing and four days of on-demand) fell 9% to 9.1M viewers on average.
- The brunt of viewer declines has fallen on ABC (9.2M average, down 11% from 10.3M) and Fox (5.7M average, down 15% from 6.8M).
- NBC fell 12% (10.7M average, down from 12.1M) and CBS -- benefiting from a very strong NFL lead-in -- slipped 2% to 13.1M from 13.2M.
- Smaller network the CW, on the other hand, was up 25% on average to 1.2M viewers from 980K.
- Broadcast companies: CBS; ABC (NYSE:DIS); NBC (NASDAQ:CMCSA); Fox (FOX, FOXA); the CW (CBS/TWX)
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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