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Wed, Jan. 13, 4:58 PM
- Large-cap media stocks are set to surprise investors (positively) this earnings season, says Jefferies Group's John Janedis.
- Particularly considering the bear market in media, Q4 ad results were strong and Janedis expects that market will stay strong at least through Q2. “The stock market continues to dismiss the advertising demand on doubts related to sustainability, focusing more on sub trends and terminal values,” he says. M&A could be a catalyst in 2016 as well.
- His top picks for the sector include CBS (CBS -4.4%), Lions Gate (LGF -2.6%), Live Nation Entertainment (LYV -4.5%), Time Warner (TWX -0.6%), Twenty-First Century Fox (FOX -2.5%, FOXA -2.1%) and Viacom (VIA -1.9%, VIAB -2.2%).
Fri, Jan. 8, 2:12 PM
- Viacom (VIA +5.8%, VIAB +6.4%) will allow investors a (doomed) March vote on whether to extend voting rights to all its shareholders, Reuters reports.
- The measure is headed for a failure because National Amusements -- Sumner Redstone's company that controls about 80% of Viacom's class A voting rights -- is opposed. But with a rash of questions springing up around the health of Chairman Redstone since October, the vote could provide a litmus test on shareholder sentiment toward Redstone.
- The company says its dual-class structure helps it focus on long-term goals, but that it will include the proposal in its proxy statement "as required by SEC rules."
- Activist investor Seamus Finn of Missionary Oblates is pressing the issue, and he's been joined by prominent pension funds in California and Florida.
- Previously: Redstone seeks suit dismissal; ex-girlfriend looks to subpoena Dauman (Jan. 05 2016)
- Previously: Reuters: CalSTRS official says Viacom should drop dual-class structure (Dec. 03 2015)
- More on Sumner Redstone
Wed, Jan. 6, 8:01 PM
- Viacom (VIA -1.2%, VIAB -1.2%) is facing a wrongful termination suit from a former VP who said she spoke out against a tax scheme she considered illegal.
- Nataki Williams says that she was fired after opposing a plan that would have placed revenue from the Teenage Mutant Ninja Turtles franchise in the Netherlands, dodging U.S. taxes. She also says the company had similar plans for other properties, including SpongeBob SquarePants and Dora the Explorer.
- Williams was vice president for financial planning and analysis from 2007-2014, a period that included the production of Paramount's 2014 film reboot of the franchise.
- Her suit claims that while TMNT was owned by a Netherlands entity, all the business concerning its rights took place in New York, subject to its laws. And it alleges that she was instructed not to list details of the proposed scheme in e-mails.
- Viacom says the reason she was fired was because she listed her partner (the father of her child) as her spouse on company benefits paperwork.
Tue, Jan. 5, 11:12 AM
- Sumner Redstone's legal team has requested a dismissal of a new petition to evaluate his mental competence, while his ex-girlfriend Manuela Herzer is looking to subpoena Viacom (VIA, VIAB) chief Philippe Dauman, the latest moves in a back-and-forth legal drama.
- In documents submitted to the court, Redstone's primary physician said he saw the mogul in a "routine" visit Dec. 30 (last Wednesday) where Redstone "seemed his usual self, and joked with me." He also wrote that a November brain scan was "quite good for a 92-year-old."
- Herzer has sought to get a January examination of Redstone's mental competence after she was expelled from his home and removed as his healthcare agent on Oct. 16. Dauman was named as Redstone's agent to replace Herzer.
- The drama is engaging investors who are following succession issues at Viacom and at CBS (CBS -0.6%), the two companies of which Redstone is chairman (and in which he controls about 80% of voting power).
- Previously: Bloomberg: Deal would make Moonves CBS chairman after Redstone (Dec. 22 2015)
- Previously: New suit alleges forgery of Redstone's signature, calls for exam (Dec. 15 2015)
Mon, Jan. 4, 3:51 PM
- With Star Wars: The Force Awakens (DIS -2.2%) trucking toward Avatar's domestic box office record following a $90M weekend, there were still slimmer pickings for competitors who nonetheless pursued more holiday moviegoers.
- Paramount's Daddy's Home (VIA -2.1%, VIAB -1.2%) held down the No. 2 spot for the second weekend and actually held a lot of its audience, dropping from a first-weekend $38.7M to $29.2M and adding up to $93.9M in its cumulative take.
- Tina Fey/Amy Poehler comedy Sisters (CMCSA -1.1%) showed some strength in its third week as well, holding up with $12.8M for the No. 4 spot ($62.9M total), and Alvin and the Chipmunks: The Road Chip (FOX -2.4%, FOXA -2.2%) drew $11.8M for the No. 5 position ($67.4M total). Meanwhile, Quentin Tarantino's The Hateful Eight (Weinstein Co.) went wide at the No. 3 spot with $15.7M total.
- Elsewhere, while U.S. theaters booked a record year of $11.01B, global box office hit a record $38B in 2015, Rentrak says, with China up nearly 50% Y/Y to $6.77B -- another data point setting up tough comps for 2016.
- Previously: Exhibitor stocks whacked after 2016 U.S. box forecasts taken lower (Jan. 04 2016)
Mon, Jan. 4, 3:30 PM
- Pacific Crest's Andy Hargreaves is expecting a strong year for media networks and is still bullish on a subset of network stocks as top sector picks for 2016: Twenty-First Century Fox (FOX -2.8%, FOXA -2.7%), AMC Networks (AMCX +0.1%), Netflix (NFLX -5%) and Time Warner (TWX -0.3%).
- Hargreaves has Overweight ratings on all of them. He had called out AMC, Fox and Netflix for praise in the past.
- After a tough year for media stocks, he believes fundamentals are lining up for 2016, including election-year advertising, amid lowered market expectations.
- The group's average multiple is close to historical averages and below the broader market, "which creates a slightly positive risk/reward around valuation, in our view."
- Two possible negative catalysts come if negotiations between Viacom (VIA -2.2%, VIAB -1.6%) and Dish Network (DISH -0.4%) take a bad turn, and if Thursday Night Football bidding follows a trend of skyrocketing sports rights costs.
- Previously: Pacific Crest on media: Strong on AMC Networks, Fox, Netflix (Nov. 17 2015)
Fri, Jan. 1, 4:53 AM
- Dow: NKE +29%; HD +27%; MCD +25%; GE +21%; V +16%.
- S&P 500: NFLX +135%; AMZN +119%; ATVI +90%; NVDA +61%; CVC +54%.
- Nasdaq: NFLX +135%; AMZN +119%; CTRP +104%; ATVI +90%; NVDA +61%.
- Dow: WMT -29%; CAT -28%; AXP -26%; CVX -21%; UTX -18%.
- S&P 500: CHK -77%; CNX -77%; SWN -75%; FCX -71%; FOSL -67%.
- Nasdaq: MU -59%; WDC -47%; STX -47%; VIAB -46%; BBBY -37%.
Dec. 31, 2015, 4:05 PM
- Hollywood has capped off a record year of just over $11B at the box office -- with a little help at the end from some Star Warriors -- and the spoils aren't evenly divided between studios, as Universal has pulled off a historic hit year.
- A boost from Star Wars: The Force Awakens and its record-smashing performance pushed receipts past the $10.9B previous record, from 2013, by 1.5%. The $11B-plus was up 7.3% Y/Y.
- With final numbers still coming in, admissions look flat, but higher ticket prices are providing a revenue boost.
- Universal (CMCSA -0.4%) and Walt Disney (DIS -1.1%) drove the year with dominating performances, while Paramount (VIA +1.7%, VIAB +0.9%), Fox (FOX -0.4%, FOXA -0.4%), Sony (SNE -0.4%) and Lions Gate (LGF +0.1%) all declined Y/Y.
- Universal's performance came from several of the year's biggest hits, notably Jurassic World, Furious 7, Minions, Pitch Perfect 2 and Fifty Shades of Grey. For its part, aside from an in-progress record push by Star Wars (about to surpass Jurassic World's domestic gross), Disney also put Avengers: Age of Ultron and Inside Out into the year's top five. Both of those drew more than $350M at home.
- Moviegoers who crave more original screenplays may end up disappointed, if studios learn any lesson from this record year: Seven of the top 10 films were sequels and remakes, and the top two (Jurassic World and Star Wars) are from franchises dating to 1993 and 1977 respectively.
Dec. 24, 2015, 4:17 AM
- With schools on holiday break and families looking for entertainment, Hollywood is about to kick into overdrive.
- Seven major movies will arrive in theaters in the coming days or expand into wide release, including Concussion, Daddy's Home (VIA, VIAB), Joy (FOX, FOXA), Point Break (NYSE:TWX), The Hateful Eight, The Revenant (FOX, FOXA) and The Big Short (VIA, VIAB).
- What about The Force Awakens? As of Tuesday, the film made an estimated $325.4M domestically in just five days, making it the fastest movie in history to hit $300M.
Dec. 22, 2015, 10:07 AM
- CBS CEO Les Moonves is set to become the broadcaster's chairman upon the death of Sumner Redstone, following a deal with daughter (and current vice chairman) Shari Redstone, Bloomberg is reporting.
- The move is a major step toward settling one of two major succession dramas swirling around Sumner Redstone amid reports about his ill health as legal battles about his competence heat up. Redstone is also executive chairman at Viacom (VIA, VIAB), though Shari Redstone doesn't have a similar arrangement with Viacom chief Philippe Dauman.
- Dauman has a contractual provision allowing him to take millions of dollars in severance if he's not made Viacom chairman after Sumner Redstone. He was put in charge of Redstone's health care in October, kicking off a legal battle with Redstone's ex-girlfriend Manuela Herzer.
- In that dispute, Herzer was denied her request yesterday to interview Redstone, but will get a right to question his doctors and possibly Dauman.
- Shari Redstone is entitled under the family trust to become chairman of CBS and Viacom, and she rejected an offer from her father for $1B for her 20% stake in National Amusements, the family company that holds the CBS and Viacom stakes, The Wall Street Journal reported.
- Today: CBS +0.8%; VIA +1.7%; VIAB +2.3%.
Dec. 18, 2015, 4:18 PM
- U.S. studios will head to Europe for a January hearing over antitrust concerns that were initially raised with formal charges in July, Reuters reports.
- A charge sheet from the European Commission named Disney (DIS -3.8%), NBCUniversal (CMCSA -1.8%), Paramount (VIA -0.6%, VIAB -1.9%), Sony (SNE -2.8%), Twentieth Century Fox (FOX -1.4%, FOXA -1.4%), Warner Bros. (TWX -2.1%) -- and Sky (OTCQX:SKYAY -2.2%).
- The EC accused the firms of creating improper movie licensing deals blocking users outside the UK and Ireland (thus, most of Europe) from getting to paid Sky programming. Related clauses in the deals block other broadcasters from making pay TV available in the UK and Ireland. Meanwhile, the EC is pursuing a market less fragmented by border restrictions.
- Heavy fines could await all involved; the EU could fine companies up to 10% of global annual revenue. Disney pledged in the summer to fight vigorously.
- A closed-door hearing is set for Jan. 18-19.
- Previously: EU antitrust charges against Hollywood: What's at stake (Jul. 23 2015)
Dec. 15, 2015, 1:39 PM
- Another new lawsuit filed by the ex-girlfriend of Sumner Redstone alleges that his signature was forged on a key document with the suggestion that he is being manipulated in business and personal affairs.
- Manuela Herzer has been pursuing legal action after her removal as Redstone's healthcare agent on Oct. 16. A document signed in November allowing her to remove belongings from his home had Redstone's signature forged, Herzer alleges.
- She's renewing her call for a medical examination before a January court hearing, and the judge has agreed to hold a new hearing on the issue next Monday.
- Philippe Dauman, CEO of Viacom (VIA +1%, VIAB +1.3%) had replaced Herzer on Redstone's healthcare directive, and has defended Redstone's mental competence. The cases have raises a swirl of succession questions, however, among investors at Viacom and at CBS (CBS +1.5%) -- companies at which Redstone is executive chairman.
- Previously: Viacom chief: Redstone plans in place; retain 'decency' in speculation (Dec. 07 2015)
- Previously: Viacom statement: Redstone physicians say he's 'mentally capable' (Dec. 02 2015)
- Previous Redstone coverage
Dec. 15, 2015, 10:54 AM
- Hasbro (HAS +1.7%) signs a new picture deal with Paramount Pictures (VIA, VIAB) to cover five of the company's properties.
- The agreement will allow the movie studio to create films off the G.I. Joe, Micronauts, Visionaries, M.A.S.K. (Mobile Armored Strike Kommand), and ROM character sets.
- Hasbro and Paramount have worked well together in the past, creating a successful franchise off of Transformers after some initial skepticism in Hollywood.
Dec. 8, 2015, 3:18 PM
- It's been a rough run for value stocks over the past few years, but the metric used to determine value - price/book - may not be the right one, says Citi's Robert Buckland. Free-cash-flow yield is better, he argues. noting this metric tracked traditional value in the 1990s and 2000s, but has easily outperformed over the past decade.
- It's a sign of the times, he says, as FCF is a "capex-suspicious metric," and investors are concerned about the economic outlook, and cynical about capital allocation decisions of managements.
- The list of 28 U.S. value (as defined by FCF yield) plays: BHI, VIAB, WFM, ANTM, HPQ, ABC, LBTYA, M, AAPL, CTL, XRX, LYB, CMI, ETN, MRK, VLO, CSCO, WRK, IBM, LVS, ESRX, IP, CAH, ADM, INTC, CAT, ABBV, EMN
Dec. 7, 2015, 12:50 PM
- Despite increasing media "hyperventilation" about succession plans at Viacom (VIA +0.9%, VIAB +0.7%) and CBS for Sumner Redstone, estate plans have been set for decades, Viacom chief Philippe Dauman says.
- Speaking at a UBS investor conference, Dauman says that while he is the backup on Redstone's medical directives, he speaks to him several times a week and Redstone is making his own medical decisions.
- He's calling for those covering Redstone to look in the mirror and "retain a sense of decency" in their reporting.
- Viacom will be run the same way in the event of any incapacitation on Redstone's part, Dauman says, and success will hinge on its ability to create great content.
Dec. 3, 2015, 4:43 PM
- Governance and strategic recommendations for Viacom (VIA -1.7%, VIAB -1.9%) are piling up: An investment officer for the California State Teachers' Retirement System is calling on the company to drop its dual-class share structure, and eliminate the non-voting class.
- "Ideally we think there should be a one-share, one-vote capital structure," Aeisha Mastagni told Reuters.
- At $184B, CalSTRS is the second-largest U.S. public pension system, and it holds 1.1M nonvoting shares. Mike McCauley, in a similar pension oversight role for Florida state, also supports a one-share one-vote structure.
- Outside advice for Viacom is gathering strength amid a succession debate around the company's ailing executive chairman, Sumner Redstone. Mario Gabelli, the company's No. 2 shareholder, has called for more information about Redstone's health and has urged the company to sell a stake in Paramount Pictures to Alibaba.
- "This is an example, putting Mr. Redstone aside, where the minority shareholders have no way to hold the board accountable," Mastagni said. "Our view is that if you’re tapping into the public markets, you should have a one-share, one-vote capital structure."
- CalSTRS also supports dropping dual-class structures at Facebook and Comcast.
- Previously: Viacom statement: Redstone physicians say he's 'mentally capable' (Dec. 02 2015)
Viacom Inc is an entertainment content company. It connects with audiences in 165 countries and territories and creates television programs, motion pictures, applications, games, consumer products, social media & other entertainment content.
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