2017-04-26 14:01:36 | On The Fly: What to watch in media networks earnings reportsThe owners of several of the country's biggest media networks are scheduled to report quarterly results over the next two weeks, with NBC owner Comcast (CMCSA, CMCSK) reporting on April 27, HBO and Turner parent Time Warner (TWX) set to report on May 3, CBS and Showtime owner CBS Corp. (CBS) reporting on May 4, and Fox owner 21st Century Fox (FOXA, FOX) reporting on May 10. What to watch for: 1. CONSOLIDATION: During the company's last earnings call back, Time Warner chairman and CEO Jeff Bewkes said it was on track to close AT&T (T) transaction later this year. A month later, the European Commission announced that it approved AT&T's pending acquisition of Time Warner. Meanwhile, Verizon (VZ) CEO Lowell McAdam said in an interview with Bloomberg that he would consider a deal with Comcast, Disney (DIS) or CBS if it helped the company adapt to the quickly changing industry landscape. Last week, BTIG analyst Rich Greenfield made the case that Comcast's "window for M&A is simply to enticing too ignore" and laid out six potential targets that would "truly be transformative," with his top pick among the group being Charter (CHTR). The other five possible deals that Greenfield makes the case for are Disney (DIS), Verizon (VZ), Netflix (NFLX), T-Mobile (TMUS) and Snap Inc.'s (SNAP) Snapchat. On Monday, Oppenheimer analyst Timothy Horan noted that wireless companies will be allowed to discuss M&A this week, and said he believes the most likely outcome is for consolidation around the four major wireless providers, something along the lines of Charter/Sprint, T-Mobile/Comcast, Verizon/DISH (DISH), with AT&T's position "fairly solidified" with DirectTV/Time Warner. 2. HULU STAKE: On Wednesday, Credit Suisse analyst Omar Sheikh noted that Comcast will be free to sell its 30% stake in Hulu from the end of 2017. Given his belief that there is a $100B domestic revenue opportunity for targeted TV advertising long-term, which vertically integrated networks/distributors will be in a strong position to exploit, Sheikh argued that it would make sense for 21st Century Fox to acquire Comcast's stake in Hulu. 3. NEW PRODUCTS, PARTNERSHIPS: Back in March, Verizon and CBS announced a new multiyear content carriage agreement that includes continued retransmission consent of CBS-owned television stations in multiple markets across the country. Verizon will also provide access to live streaming on CBS.com, the CBS App and Verizon's authenticated platform. Three weeks ago, Comcast introduced Xfinity Mobile, a new wireless service that uses the 4G LTE network along with Comcast's 16 million Wi-Fi hotspots to provide consumers with a better wireless experience, for less money. A few days later, Bloomberg said Comcast intends to introduce an online video service offering shows from its NBCUniversal networks in the next year to year-and-a-half. 4. HARASSMENT SCANDAL: Earlier this month, The New York Times said that reports of sexual harassment allegations against 21st Century Fox news host Bill O'Reilly led multiple advertisers to pull commitments from his show, such as BMW (BAMXY), Hyundai (HYMLF), Daimler's (DDAIF) Mercedes-Benz, and Endurance's (EIGI) Constant Contact. Last week, 21st Century Fox confirmed that Bill O'Reilly was not returning to the Fox News Channel. This comes months after Roger Ailes resigned following allegations that he sexually harassed female colleagues. | |
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