MUScoop
MUScoop => The Superbar => Topic started by: Tugg Speedman on August 05, 2015, 07:50:02 AM
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Disney's stock is going to get crushed today (predicted to open down 8%) in the wake of its earnings report last night. While the overall report was good, the trouble was they came up light on revenues.
But what was really troubling, and was the focal point of the investor conference call last night, was subscriber losses at ESPN. They are losing subscribers and this has investors greatly concerned. Bob Iger did his best to dissuade investors but they are not buying it.
The fear is linear TV watching (what we do now) is becoming a thing of the past. Streaming and paying for what you want, and not for a bundle of channels you do not want, is a thing of the past.
If so, ESPN is in deep trouble. They bought the rights to sports properties at top dollar on the assumption this would NOT happen.
Keep this in mind the next time someone bashes Fox Sports. They are all offering yellow taxis (cable bundles) in an Uber world (pick and choose streaming).
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The Wall Street Journal
Disney Defends ESPN in an Age of Cable Cord-Cutting
Media company’s bottom line was helped by latest ‘Avengers’ movie, ‘Frozen’ merchandise
By Ben Fritz Updated Aug. 4, 2015 7:10 p.m. ET
http://www.wsj.com/articles/disney-profits-boosted-by-avengers-frozen-1438720227
A conference call to discuss Walt Disney Co. ’s financial results Tuesday became a forceful defense of ESPN in an age of cable cord-cutting, reflecting Wall Street’s concerns about the future of one of the media world’s most lucrative brands.
While granting that sports powerhouse ESPN has experienced “some subscriber losses” that he declined to specify, Disney Chief Executive Robert Iger repeatedly said the channel will remain in a healthy position thanks to its long-term rights to the NBA, college football playoffs and other programming, as well as the value to advertisers of its programming that is largely watched live.
The combination, Mr. Iger said in his opening remarks, “adds up to a very strong hand and gives us enormous confidence in ESPN’s future no matter how technology transforms the media business.”
Still, as consumers shift to less costly “skinny packages” or abandon cable altogether, Disney is feeling the impact. The company previously said its cable business, primarily driven by ESPN, would achieve “high single digit” operating income growth on a compound basis between fiscal 2013 and 2016.
But partly because of lower subscriber levels, that figure will end up in the “mid-single digits,” said Chief Financial Officer Christine McCarthy. The strong U.S. dollar also had an impact, Ms. McCarthy added.
Mr. Iger said he doesn’t foresee “dramatic declines” in basic cable subscriptions over the next five years that would necessitate launching an “over-the-top” product that allows consumers to purchase ESPN through the Internet without a package of other channels.
However, he did say that new deals with cable and satellite companies give Disney the option to make such a move “should we conclude that becomes the more attractive opportunity for us.”
Disney shares closed up 1% at $121.69 before results were released Tuesday, but fell nearly 6% in after-hours trading.
Wall Street’s concerns about ESPN’s future come as the cable network has been dropping big name talent like Bill Simmons and Keith Olbermann in an effort to trim costs as it loses subscribers. Advertising revenue at the sports network was down 3% in the quarter ended June 27, which Disney attributed to a difficult comparison with last year, when the men’s FIFA World Cup aired.
Cable has accounted for 46% of Disney’s operating income so far this fiscal year, making the stakes in ESPN’s evolution quite high. The company combines ESPN’s results with those of other, smaller networks such as Disney Channel and ABC Family.
Overall cable-networks revenue increased 5% to $4.14 billion in the three months ended June 27, Disney’s third financial quarter; operating income was up 7% to $2.1 billion. Contractual rate increases at Disney Channel and ABC Family, as well as sales of their programs to subscription video on-demand services, helped.
Total revenue for Disney rose 5% in the quarter to $13.1 billion and net income was up 11% to $2.5 billion.
The company’s movie studio remained a particularly strong performer, with revenue up 13% to $2 billion and operating income up 15% to $472 million. Impressive box office returns for “Avengers: Age of Ultron,” “Inside Out” and “Cinderella” more than made up for the fizzle of “Tomorrowland” and the studio continued to benefit from its share of “Frozen” merchandise sales.
The only weak spot came from Disney’s interactive group, where revenue was down 22% to $208 million and operating income fell from $29 million a year ago to break-even.
Sales of the company’s flagship “Infinity” videogame and interactive toys are down, Disney said. New “Star Wars”-inspired Infinity products will launch this fall, though the results may be obscured as the company will combine its interactive and consumer products units in the new fiscal year starting in late September.
Though Disney doesn't provide specific guidance, Ms. McCarthy did provide a warning to investors about fiscal 2016. Because the company wasn't able to purchase currency hedges at rates as attractive as it did a year ago, the strong U.S. dollar will lower operating income next fiscal year by about $500 million, she said.
Next fiscal year will be a critical one for the company, as it launches its first “Star Wars” movie in December and opens its theme park in Shanghai next spring.
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Old news. Been discussed frequently here. All of that cost-cutting (Cowherd, Simmons, Olbermann) took place for a reason.
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Old news. Been discussed frequently here. All of that cost-cutting (Cowherd, Simmons, Olbermann) took place for a reason.
Since you knew this before yesterday's announcement, congrats on the money you made on your Disney short.
Yes the concept is old news ... what is new news is the trend away from bundles appears to be accelerating faster than anyone thought.
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Old news. Been discussed frequently here. All of that cost-cutting (Cowherd, Simmons, Olbermann) took place for a reason.
Cowherd was not a cost cutting move, he was offered $5M per year, more than he was currently being paid at ESPN.
Simmons was on his way out for the last 3 years. I'd add that Simmons needs a big brand to make his schtick go from a platform perspective. He landed at HBO, where he will have even less to worry about because they don't care about ratings per se, and all their other content will keep his stuff going.
Olbermann is a jackhole that has been fired EVERYWHERE.
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As a Disney stockholder and former Disney employee (Mouseschwitz is what we used to call it), I'm not worried one iota.
They beat earnings, they were short on revenue. Sure the stock will get hit, but just wait until Star Wars next quarter and some of the pipeline content.
Put another way, I'm buying Disney today.
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Disney was down more than 9% today to $110.53 ... it's worst day since the height of the financial crisis in 2008. Today was more than just a jiggle.
And it was more than Disney, CBS, Time Warner, Comcast and Fox were all hammered today.
And on the other side, Netflix had another huge upside day to another all-time high. Its market cap is now $52 billion
Analyst are saying the ESPN results show the cord cutting is accelerating faster than anyone thought. One analyst called it a "Netflix world."
Chicos will write 5 to 10 paragraphs about why this is not the case. And he will be 100.00% correct.
The problem is the "market makes its own reality." If investors decided it is a netflix world, and destroy the stocks of traditional TV companies and send Netflix's stock to the moon, guess what, it will be a Netflix world!!!
Why put this here? Because the biggest loser is live sports. ESPN, Fox Sports and the rest stunningly overpaid for their rights (including Fox for the BE). They are going to lose tons and tons of money. Sports franchise are going to feel it when their current deals are over.
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I bought some today when it was down about $10.00. May buy some more tomorrow.
I love Bob Iger, but thought he was a bit disingenious with his statement that they could go OTT today if they wanted to. From a technical perspective, he's correct. From a contractual perspective, not so fast. More importantly, he knows that if he did the amount of money he stands to lose is huge. That's why they are sticking with the bundle despite a lot of people screaming they shouldn't, because of those people simply don't understand the mechanics or the risk involved.
Some day, yes, but not for awhile.
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I bought some today when it was down about $10.00. May buy some more tomorrow.
I love Bob Iger, but thought he was a bit disingenious with his statement that they could go OTT today if they wanted to. From a technical perspective, he's correct. From a contractual perspective, not so fast. More importantly, he knows that if he did the amount of money he stands to lose is huge. That's why they are sticking with the bundle despite a lot of people screaming they shouldn't, because of those people simply don't understand the mechanics or the risk involved.
Some day, yes, but not for awhile.
100% correct
But isn't the market saying that "someday" is actually a lot sooner than you think?
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100% correct
But isn't the market saying that "someday" is actually a lot sooner than you think?
They are taking that bet. Investors are paying 277x earnings at $123.71. Some forecasts calling for $160+ (355x). Either the E rises sharply, or the P plunges in the other direction.
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100% correct
But isn't the market saying that "someday" is actually a lot sooner than you think?
The market is often irrational, too. There was a great article about the over panic on Disney stock last night....I'll try to find it. I think the key line was Iger saying not only is the bundle NOT going away, it will grow.
I think he's right. People just haven't figured out what that means. In my view, it means things like AT&T DIRECTV where ESPN mobile bundles will be created. Dish is trying to buy T-Mobile, you'll see wireless video bundles there. etc, etc
I've used a phrase here for many years about trading dollars for dimes. I've noticed it is starting to be used a lot in these articles with a twist, trading analog dollars for digital dimes. It's not entirely accurate since everything on satellite, cable, telco has been digital for some time (for satellite since day 1), but that's the situation. For so many of these channels that is the problem they have. A premium like HBO can do it because they are already an a la carte channel. For ESPN or Discovery or fill in the blank "basic" channel, the decision is enormously more complex because they make their because of the bundle, not despite it.
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Huge buying opportunity
http://www.cnbc.com/2015/08/05/disney-earnings-dip-is-huge-buying-opportunity-cio.html
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Star Wars Land...
this is why I bought more Disney stock last week. With Marvel, Lucas, etc....Disney will be doing just fine.
http://mashable.com/2015/08/15/star-wars-the-force-awakens-disney-d23/?utm_cid=mash-com-fb-main-link
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Star Wars Land...
this is why I bought more Disney stock last week. With Marvel, Lucas, etc....Disney will be doing just fine.
http://mashable.com/2015/08/15/star-wars-the-force-awakens-disney-d23/?utm_cid=mash-com-fb-main-link
The stock has not recovered from its ESPN cord-cutting dive.
As noted above, on August 5 Disney closed down 9% at $110.53, its worst day since the financial crisis. On Friday (Aug 14) it closed at $107.
Yes Disney may recover for non cord-cutting reasons, one of which you note. But, make no mistake, the market has decided that cord-cutting is accerlating faster than anyone imagined. The single biggest loser due to cord-cutting will be ESPN (and its owner Disney), quickly followed by sports properties (NFL, NBA, ACC etc.) that depend in sports networks to grotesquely overpay for their product.
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The stock has not recovered from its ESPN cord-cutting dive.
As noted above, on August 5 Disney closed down 9% at $110.53, its worst day since the financial crisis. On Friday (Aug 14) it closed at $107.
Yes Disney may recover for non cord-cutting reasons, one of which you note. But, make no mistake, the market has decided that cord-cutting is accerlating faster than anyone imagined. The single biggest loser due to cord-cutting will be ESPN (and its owner Disney), quickly followed by sports properties (NFL, NBA, ACC etc.) that depend in sports networks to grotesquely overpay for their product.
We shall see. The Horowitz study that was released on Thursday was interesting and clearly many people aren't paying attention to it, and instead going through irrational behavior again.
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Disney's stockis getting smashed again today. Down 6% to $100 Recall on August 4 it was trading $122, then the next day Disney said cord-cutting is much faster than anyone ever thought, which devastates ESPN. In three weeks the company has lost 20% of its value.
Remember, the market makes it's own reality. You can give me tons of reasons why this is wrong, and you will be 100% correct. But the market has decided that bundles and the current business model is done. We are just waiting for industry execs to sign the death certificate. In the meantime the market is taking money away from "bundle sellers" (Disney, Time Warner, Fox, Comcast, etc) them and giving it to streaming serves (like HBO, Netflix and Google because it owns YouTube.)
Again the biggest loser is ESPN which means the live sports will be killed. No more way overpaying for their broadcast rights. It will take a few years as the current contracts have to expire, but this could be the busting of the live sports bubble.
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Bernstein: Investors Need to Completely Rethink the Way They Value Media Companies
In a new valuation, Disney and Time Warner were the biggest losers, while Viacom had been downgraded earlier
http://www.bloomberg.com/news/articles/2015-08-20/bernstein-investors-need-to-completely-rethink-the-way-they-value-media-companies
Media stocks have been slammed since the start of the month, triggered by comments out of Disney suggesting an accelerated decline in pay-TV subscribers. Since those comments, Disney is down more than 15 percent, dragging others with it.
Now Sanford C. Bernstein analyst Todd Juenger and his team have a big message for the media industry: Everything has changed. In a note sent out this morning, Juenger not only downgrades Disney and Time Warner; he also says analysts need to change the way they think about valuing this industry all together, as both of the industry's major revenue streams—pay subscribers and advertisers—are in jeopardy.
Where the stocks/sector have traded historically is irrelevant. The world has changed too much. Where the stocks are currently trading may or may not be appropriate – but why?… We have come to believe the affiliate fee revenue stream deserves a higher risk premium than it did before. The question of whether pay-tv sub declines are accelerating is only a question of 'over what time frame?'
It gets worse.
We believe the U.S. television industry is entering a period of prolonged structural decline, caused by a migration of viewers from ad-supported platforms to non-ad-supported, or less-ad-supported platforms. We favor companies that have the least exposure to U.S. advertising, the most exposure to sports, and advantaged positions internationally. But we fear the entire sector will struggle to work until the content owners take concerted action to reclaim on-demand viewing from the SVOD services and use it to protect affiliate fees.
In this new valuation, Disney and Time Warner were the biggest losers, although Viacom had already been downgraded. Until recently, Disney had been one of the top performers in the Dow Jones Industrial Average. Fox was one of Bernstein's reluctant bright spots, as it has doubts the stock will continue to perform well in quarters to come but "cannot force out model or 12-month target price any lower." Time Warner was noted as a close call, but the analysts believe the company's guidance for 2018 is at risk. Disney was also downgraded despite positive projects in the pipeline, such as the college football championship and an expansion of the Star Wars franchise. Lastly, they called Viacom a "clear structural short." Ouch.
Media stocks are getting slammed today: Disney is off over 4.5 percent. Viacom is off over 5 percent. Time Warner is down over 3.5 percent.
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Disney's stockis getting smashed again today. Down 6% to $100 Recall on August 4 it was trading $122, then the next day Disney said cord-cutting is much faster than anyone ever thought, which devastates ESPN. In three weeks the company has lost 20% of its value.
Remember, the market makes it's own reality. You can give me tons of reasons why this is wrong, and you will be 100% correct. But the market has decided that bundles and the current business model is done. We are just waiting for industry execs to sign the death certificate. In the meantime the market is taking money away from "bundle sellers" (Disney, Time Warner, Fox, Comcast, etc) them and giving it to streaming serves (like HBO, Netflix and Google because it owns YouTube.)
Again the biggest loser is ESPN which means the live sports will be killed. No more way overpaying for their broadcast rights. It will take a few years as the current contracts have to expire, but this could be the busting of the live sports bubble.
I agree that the paradigm is changing...but don't think ESPN will be the biggest loser. Even though it has traditionally made its money as part of a bundled package, ESPN has a big enough name that it should be able to get subscribers if/when all viewing becomes a la carte. I think the real losers will be the smaller networks (Hallmark, Oxygen, Comedy Central, FoxSportsOne), which seem to do OK as "add-on" channels as part of a bundle, but which may not have a large enough following to compete independently.
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I agree that the paradigm is changing...but don't think ESPN will be the biggest loser. Even though it has traditionally made its money as part of a bundled package, ESPN has a big enough name that it should be able to get subscribers if/when all viewing becomes a la carte. I think the real losers will be the smaller networks (Hallmark, Oxygen, Comedy Central, FoxSportsOne), which seem to do OK as "add-on" channels as part of a bundle, but which may not have a large enough following to compete independently.
It's about what ESPN charges. Every cable bill in the US (which includes you and me) pays $7/month for ESPN/ESPN2 (more if you get U, news, classic, etc). Most other stations charge less than $1/month (like Fox Sports).
Maybe 20% of all TVs actually watch ESPN yet 100% pay for it.
So yes millions will sign up for ESPN if they go streaming. But unless they are willing to pay $40/$50 month, ESPN will never make up the lost revenue it makes now with the bundle, as it gets hundreds of millions a month from cable subscribers that do not use the product. Wall Street fears that only 20% to 30% of current bundles subscribers will pay ESPN $7 to $10 month (what they pay now as part of the bundle). That means ESPN loses 80% of its revenue base! This flows-through to sports franchises as they will get many billions LESS in broadcasting rights once their current deals expire. So yes their will always be a ESPN. But it's going to have to drastically cut its costs.
The bull story is Wall Street has it wrong and the bundle is sticking around a lot longer. That only works if most subscribers think their $100/month cable bill is a good deal. They don't.
This is why Disney's stock is getting destroyed (down 20% in three weeks since the announcement of subscriber losses at ESPN). Wall Street gets it, the old model is dead (see the post above) and ESPN is way too high a cost producer to survive in its current form in the new streaming world. They paid too much to the NFL, MLB, NBA, ACC etc. When these contracts expire in the new streaming world, they are all getting billions less and the high cost of running a sports league (player salaries) will crush sports franchises.
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I think FS1 could do well in small bundles as a low cost alternative to ESPN. You can still get your daily sports highlight/news show and a variety of live events at a fraction of what you'd have to pay for ESPN. That might be good enough for a lot of people.
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Do people really watch sports highlight shows anymore? If I want highlights I get it streamed from some website. Oftentimes straight from the league (MLB is pretty good about providing highlights).
Isn't FS1 competing with ESPN for Sportscenter viewers two starving castaways fighting for the last coconut?
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Do people really watch sports highlight shows anymore? If I want highlights I get it streamed from some website. Oftentimes straight from the league (MLB is pretty good about providing highlights).
Isn't FS1 competing with ESPN for Sportscenter viewers two starving castaways fighting for the last coconut?
That's what I was thinking. I haven't watched Sportscenter in years, and I have no idea what the FS1 alternative is even called. I always hated having to wait through highlights of sports or teams I didn't care about just to see the things I wanted to see.
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Buy buy buy
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Buy buy buy
You lost $10 bucks a share when you bought Disney a week ago. Meanwhile, AT&T going sideways down. Sell, sell, sell. I will listen to Heise since he built The Al.
http://www.marketwatch.com/investing/stock/t
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You lost $10 bucks a share when you bought Disney a week ago. Meanwhile, AT&T going sideways down. Sell, sell, sell. I will listen to Heise since he built The Al.
http://www.marketwatch.com/investing/stock/t
You're not factoring in the 6% yield on AT&T stock for the dividend. I'll take it.
Disney, I'll keep buying on the way down. I own plenty from when it was below $30 and no problem buying it at $100. I'm more worried about the bigger picture with the market overall, but a company like Disney I'm in for the long run.
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DIS is overvalued. Motley Fool has been selling its "four secret stocks to buy" report - which includes DIS - for a couple years now. A lot of people buying the dream... but it's no more rational than people who buy lottery tickets to get rich.
The problem is, no one can come out and say it because Disney is still a corporate juggernaut and has the revenues to show for it. The real issue is that they have too many eggs in the media/entertainment sector, which is going through a major evolution in consumer demand right now... if the cord-cutting fad becomes fashion, the mouse is in serious trouble.
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DIS is overvalued. Motley Fool has been selling its "four secret stocks to buy" report - which includes DIS - for a couple years now. A lot of people buying the dream... but it's no more rational than people who buy lottery tickets to get rich.
The problem is, no one can come out and say it because Disney is still a corporate juggernaut and has the revenues to show for it. The real issue is that they have too many eggs in the media/entertainment sector, which is going through a major evolution in consumer demand right now... if the cord-cutting fad becomes fashion, the mouse is in serious trouble.
I just looked at my Disney stuff. All time, I'm up 212.67% on what I paid for it. I'm feeling pretty good about it. I have a few stinkers, a few winners.
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DIS is overvalued. Motley Fool has been selling its "four secret stocks to buy" report - which includes DIS - for a couple years now. A lot of people buying the dream... but it's no more rational than people who buy lottery tickets to get rich.
The problem is, no one can come out and say it because Disney is still a corporate juggernaut and has the revenues to show for it. The real issue is that they have too many eggs in the media/entertainment sector, which is going through a major evolution in consumer demand right now... if the cord-cutting fad becomes fashion, the mouse is in serious trouble.
ESPN is just one (of many) revenue streams for DIS. I don't own any, but would consider opening a position for the right price because Disney has a demonstrated ability to cultivate billion dollar brands and keeps on adding to them (Marvel, Star Wars). If cord cutting is inevitable, ESPN will adapt or die. DIS will reallocate its capital to other more profitable ventures. The mouse is going nowhere long term.
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ESPN is just one (of many) revenue streams for DIS. I don't own any, but would consider opening a position for the right price because Disney has a demonstrated ability to cultivate billion dollar brands and keeps on adding to them (Marvel, Star Wars). If cord cutting is inevitable, ESPN will adapt or die. DIS will reallocate its capital to other more profitable ventures. The mouse is going nowhere long term.
Let's be honest.... First off, ESPN is the mouse's revenue stream. Disney paid a lot of money for those other properties so while it might be a few years before they see any ROI there, they really don't have the luxury of time right now.
Second, ESPN is already on the front lines when it comes to adapting; that's why ESPN3 and WatchESPN were invented. The problem there is that we've seen the numbers from Chicos and the pundits (not a band) saying that monthly ESPN fees would have to be $30-80 PER MONTH to make up for lost revenue in most simulations; those models consider the supply/demand at the price, but they don't contemplate the socio-economics of the consumer demand. $30/month doesn't seem like it's going to go over very well with the NASCAR demographic who makes up the wide majority of cable TV's - and ESPN's - constituency unless their $150/month cable bills go away.... in which case, Bubba's still going to be pretty pissed when he and his kin have to pay $30 for ESPN & $20 for the SEC Network, when his package of CMT, TruTV, A&E, CMT-2, NASCAR Network, Animal Planet, TLC, CMT-Ocho, and Lifetime (cause momma's gotta watch her stories) is only $15.
Third, Disney is already reallocating capital to profitable ventures like Disney Interactive. Whoopsie daisy. You see, corporate behemoths like Disney are slow to adapt to evolution in consumer demand... they make their money on driving consumer demand, i.e. telling people what they want, so when their customers don't respond the way they expect (or tell) them to, they get flustered. So either they try to adapt, which seems like it works for a while, but ultimately end up screwing the pooch (like DI) or they end up buying companies that are several steps ahead of them already (see: Pixar) in order to get some semblance of momentum back... which is fine when you have a huge revenue stream to fall back upon (whoopsie daisy, again) and/or there's no other viable competition, which brings me to point four:
In fifteen years, try to explain to your kids how Google got its start. "Search engine? Is that how our driverless cars find each other, daddy?" It's no secret that Google and Apple are not only making inroads into media/entertainment -- they already have -- but have their eyes set on something much larger. They're already a decade or two ahead of Disney on this front... another mouse business unit supposedly adapting to change, Disney Movies Everywhere, isn't even being powered by Disney. Because Disney already failed on their own in that attempt. DME is basically a licensee of iTunes (though some may argue iTunes is licensing Disney, Apple had the upper-hand in those negotiations). They're partnering with a competitor, just like they did with the aforementioned Pixar, but the difference this time around is that Disney isn't the 800 lb. gorilla in that relationship... Disney couldn't acquire Apple if it tried, and Apple doesn't need to acquire Disney. The sad thing is that some Disney execs have compared their relationship with Apple on DME to dating Charlie Sheen... sure, it's great for publicity and you're raking in the dough right now, but even if you can say you're in love, everyone knows where this is going long term. If Walt made it to heaven, he probably only got there a few years ago because Steve Jobs requested a butler (rumor is the iPad has made processing new arrivals a hell of a lot easier for St. Peter, so he was happy to oblige). In short, Disney has competition now, which is nothing new to them, generally speaking; however, those competitors are no longer the mom & pop shops and startups, that when they become too threatening, you can simply go in and exploit them.
Lastly... as with any investment, if your basis is low, then you're fine. If you bought DIS for $15 back in early 2003, you're dancing. If you bought them at $120 a couple weeks ago, you're screwed. But the real winners are going to be those who ponied up the likes of $20 for Amazon or the price of a standard Duke brothers wager for Apple instead.
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I just looked at my Disney stuff. All time, I'm up 212.67% on what I paid for it. I'm feeling pretty good about it. I have a few stinkers, a few winners.
Even more reason to start selling off. If you are up in Blackjack, do you walk away as you start losing or do you wait until all your winnings are gone? Start selling off to profit take and buy your land in Montana.
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Even more reason to start selling off. If you are up in Blackjack, do you walk away as you start losing or do you wait until all your winnings are gone? Start selling off to profit take and buy your land in Montana.
+1
How far does Disney have to go down before you think the market is telling you something you should listen too?
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DIS at under $92, which is about 18x 2015 earnings estimates, would be an extremely attractive entry point IMHO. That's where my limit order is -- 91 and change.
DIS is a classic "want to" stock for me. I don't "need" to own it to realize my financial goals. But it is a fantastic company with a future of limitless potential and I would be happy to own it for decades to come if I can get it at what I consider a bargain price.
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DIS at under $92, which is about 18x 2015 earnings estimates, would be an extremely attractive entry point IMHO. That's where my limit order is -- 91 and change.
DIS is a classic "want to" stock for me. I don't "need" to own it to realize my financial goals. But it is a fantastic company with a future of limitless potential and I would be happy to own it for decades to come if I can get it at what I consider a bargain price.
Take a look at 2016 earnings estimates. They were $5.72 on August 4th. Today they are $5.58 and the latest earnings estimates are coming in closer to $5.50. That is a big move in that short period of time and it is due to the reassessment of cable subscriptions at ESPN (FYI, ESPN is about a third of Disney earnings).
The crown jewel that drives Disney earnings is ESPN. Iger had near monopoly pricing. With that potentially gone, everything changes. As explained a few posts above
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Now Sanford C. Bernstein analyst Todd Juenger and his team have a big message for the media industry: Everything has changed. In a note sent out this morning, Juenger not only downgrades Disney and Time Warner; he also says analysts need to change the way they think about valuing this industry all together, as both of the industry's major revenue streams—pay subscribers and advertisers—are in jeopardy.
Where the stocks/sector have traded historically is irrelevant. The world has changed too much. Where the stocks are currently trading may or may not be appropriate – but why?… We have come to believe the affiliate fee revenue stream deserves a higher risk premium than it did before. The question of whether pay-tv sub declines are accelerating is only a question of 'over what time frame?'
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An 18 PE was the old world that ended on August 4. Today's new (cord--cutting) world might be an under 15 forward PE ... on a lower earnings estimate.
Change your buy order to $75 to $80.
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They are going to print money for this thing. Brilliant move. Sell all the tickets now before anyone hears if it is good, bad, or indifferent. Book it in advance.
Next trailer out tomorrow night with Monday Night Football...also a Disney property.
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Buy buy buy
Back over $115. Only need to go to Target...or your grocery store...or the pet store to see which division's earnings projections were terribly understated.
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Back over $115. Only need to go to Target...or your grocery store...or the pet store to see which division's earnings projections were terribly understated.
Yup, like taking candy from a baby.
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Yup, like taking candy from a baby.
Page 1 you said bought on August 5. Price was $112 on August 5. August 24 it was $90. Today it is $114.
This is what you defined as taking candy from a baby? Suffering through a $22 loss only to make $2 and then brag about it?
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Grantland is no more. I was a faithful reader but it seemed like more of a vanity / cocktail party play...never to be a huge revenue driver.
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Grantland is no more. I was a faithful reader but it seemed like more of a vanity / cocktail party play...never to be a huge revenue driver.
For all of ESPN's good business practices, this was a failure for ESPN to properly monetize their product.
First off, there was the personality conflict (jealousy) with Simmons. At one point, he was the highest paid ESPN employee. With changes in some top management offices, that caused problems.
Second, Grantland wasn't a money maker because of eSPN mismanagement. Annual ad revenue for Grantland was about $6 mil a year, including the Web site and a Simmons podcast; since his departure from ESPN, Simmons has rolled out his own (and his owned) podcast, which, is probably worth north of $5 million in yearly revenue alone. So, Simmons is now making for himself roughly the same as Grantland’s entire annual ad-sales revenue.
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Page 1 you said bought on August 5. Price was $112 on August 5. August 24 it was $90. Today it is $114.
This is what you defined as taking candy from a baby? Suffering through a $22 loss only to make $2 and then brag about it?
I bought three times in three weeks and I believe stated I was buying again and again, all the way down. It worked out and was easy money. Just like GM and C during the bailout.
As a former Walt Disney employee I have a lot of faith in how they operate their businesses for the most part. ESPN is the area of concern, but not for the reasons you cited. It isn't cord cutting doing the real damage, it is cord shaving which I described here on several occasions over the years.
That's what has them in a tight spot right now. Two friends of mine were let go last week, so it is a tough situation.
So yes, knowing the company and what they do, I was confident and why I said multiple times to buy buy buy. If I said it at $110, I certainly kept saying it as it got cheaper. Easy money when you consider their broader portfolio and especially with Star Wars about to come out.
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I bought three times in three weeks and I believe stated I was buying again and again, all the way down. It worked out and was easy money. Just like GM and C during the bailout.
As a former Walt Disney employee I have a lot of faith in how they operate their businesses for the most part. ESPN is the area of concern, but not for the reasons you cited. It isn't cord cutting doing the real damage, it is cord shaving which I described here on several occasions over the years.
That's what has them in a tight spot right now. Two friends of mine were let go last week, so it is a tough situation.
So yes, knowing the company and what they do, I was confident and why I said multiple times to buy buy buy. If I said it at $110, I certainly kept saying it as it got cheaper. Easy money when you consider their broader portfolio and especially with Star Wars about to come out.
C lost 96% of its value all the way down into 2009. Yet you managed to buy the low, but not 70% before the low, but the absolute low after a three-year relentless decline, and make money????
Like GM they were both going out of business and only survive because of government bailouts. You make money because of socialism.
Since you're that good at market timing, when will we see the announcement for the Chico Bail Bonds school of Business at Marquette University?
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You lost $10 bucks a share when you bought Disney a week ago. Meanwhile, AT&T going sideways down. Sell, sell, sell. I will listen to Heise since he built The Al.
http://www.marketwatch.com/investing/stock/t
Nope, I made out quite well, all three times I bought. :D
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C lost 96% of its value all the way down into 2009. Yet you managed to buy the low, but not 70% before the low, but the absolute low after a three-year relentless decline, and make money????
Like GM they were both going out of business and only survive because of government bailouts. You make money because of socialism.
Since you're that good at market timing, when will we see the announcement for the Chico Bail Bonds school of Business at Marquette University?
I make money based on common sense and market realities. I abhor the bailouts that Bush started and Obama completed, but that doesn't make me stupid not to pounce on them. No way the gov't was going to let GM or C fail. That's the opportunity.
This is why a few weeks ago I told you August 5th to buy, August 16th to buy, August 20th to buy, etc.
;)
You have to look at the bigger picture, not the micro story in my opinion. When all the Sony stuff was hitting the fan, I bought Sony. If you think it is a blip and the company over the longhaul is likely to overcome, go for it. Now, if they have a fundamental massive problem that has no shot, then stay the hell away for obvious reasons. I don't believe in legalizing pot, but I know its going to happen. Thinking about buying some marijuana stocks now to get ahead of the 10 year run up when it is legalized. Healthcare, very much staying in that for the longhaul....so on and so forth.
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I make money based on common sense and market realities. I abhor the bailouts that Bush started and Obama completed, but that doesn't make me stupid not to pounce on them. No way the gov't was going to let GM or C fail. That's the opportunity.
This is why a few weeks ago I told you August 5th to buy, August 16th to buy, August 20th to buy, etc.
;)
You have to look at the bigger picture, not the micro story in my opinion. When all the Sony stuff was hitting the fan, I bought Sony. If you think it is a blip and the company over the longhaul is likely to overcome, go for it. Now, if they have a fundamental massive problem that has no shot, then stay the hell away for obvious reasons. I don't believe in legalizing pot, but I know its going to happen. Thinking about buying some marijuana stocks now to get ahead of the 10 year run up when it is legalized. Healthcare, very much staying in that for the longhaul....so on and so forth.
Citibank (C) ....
It peaked on December 29, 2006 at $570 (no typo!)
March 6, 2009 it bottomed at $9.70 (no typo!)
Today it is at $53 (No typo)
So you bought when it was going down. You did not buy at $500 or $400 or $300 or $200 or $100 or even $50. No, you knew it was going all the way from $570 to $9.70 and bought that low and made money.
When C got its first bailout (Sep 2008) it was $250, you did not buy. When C received its second bailout in Nov 2008 it was $150 but you did not buy. You knew that even after the second bailout the stock was still going down another 70% to $9.70 before it bottomed. Then you bought.
I know Michael Lewis who wrote the Blind Side, Liars Poker, the Big Short and Flash Boys. He is looking for another topic. Maye I can put him in touch with you ... "Chicos Bail Bonds, The Greatest Market Timer The World Has Ever Seen"
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I make money based on common sense and market realities. I abhor the bailouts that Bush started and Obama completed, but that doesn't make me stupid not to pounce on them. No way the gov't was going to let GM or C fail. That's the opportunity.
This is why a few weeks ago I told you August 5th to buy, August 16th to buy, August 20th to buy, etc.
You do realize that GM filed for bankruptcy in 2009. That means that the stock went to ZERO(!) and the Government took them over (nationalized them). So anyone that said the Government was going to bail them out lost 100% of their investment. Not 99% but 100%. The company you claimed to have bought and made money does not exist anymore.
The current stock called GM is a complete new company with no ties to the previous company and was IPO'ed (Initial Public Offering) on November 17, 2010 at $33. Yesterday it closed at $34. No one has made money on it in the five years it has existed ... except for the world's greatest market timers.
To be clear, you concluded in 2008 it was a buy but you waited until the stock went to zero first, then wait two more years for the IPO, then waited another 18 months after the IPO when it slumped to $20 in 2011 and 2012, and then you finally bought. So today at $34 you're sitting with a nice profit. (Incidentally the Government took the company at an average price of $44 and sold it at $33 and lower so it lost a ton of money on it.)
Why are your wasting you time in the Cable/Sat TV industry. You should be on Wall Street making billions.
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You do realize that GM filed for bankruptcy in 2009. That means that the stock went to ZERO(!) and the Government took them over (nationalized them). So anyone that said the Government was going to bail them out lost 100% of their investment. Not 99% but 100%. The company you claimed to have bought and made money does not exist anymore.
The current stock called GM is a complete new company with no ties to the previous company and was IPO'ed (Initial Public Offering) on November 17, 2010 at $33. Yesterday it closed at $34. No one has made money on it in the five years it has existed ... except for the world's greatest market timers.
To be clear, you concluded in 2008 it was a buy but you waited until the stock went to zero first, then wait two more years for the IPO, then waited another 18 months after the IPO when it slumped to $20 in 2011 and 2012, and then you finally bought. So today at $34 you're sitting with a nice profit. (Incidentally the Government took the company at an average price of $44 and sold it at $33 and lower so it lost a ton of money on it.)
Why are your wasting you time in the Cable/Sat TV industry. You should be on Wall Street making billions.
I think you may want to go back and read what I said....you are jumping to a few conclusions, probably because I didn't articulate it well.
First off, I'm in the digital entertainment industry...with specialties in Sports, satellite, digital over the top, television, digital entertainment (music, video, etc.) To make billions, you need huge amounts of money to make those bets, you should know this. You won't win a lot of money at the $5 black jack table, even if you are winning most hands.
Now, back to what I said. I knew the gov't wasn't going to allow GM, C and others fail. You'll have to show me where I said I invested in GM pre bankruptcy? I didn't say that. My point was that once they reorganized, they were going to prop up the company which of course they did. Incidentally, you are mostly right about GM shares pre bankruptcy, but not entirely. They did go to Motor Liquidation for a time, but certainly an investment prior to that would have been full hardy. I just wish I had gotten into Ford at the time. My first job out of college was three years in the automotive industry working with Ford, GM, Cummins, etc, on engine oil testing platforms. Ford came out of great recession without taking federal money and did it right. I would have liked to have jumped on that, but didn't.
As for C, now there I did jump on but not until 2009. I just looked it up. On March 13, 2009 at $1.799904 per share is when I jumped in. I did not think the gov't was going to let another major financial institution "fail". Even though personally I think way more of these firms and others should have gone into bankruptcy.
Some of my choices are lucky (Facebook at $18.75, SNE at $16.88, DIS at $24.23 :D), some not so lucky. I have my share of stinkers, but I've been more pleased than not over the years.
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ESPN reported today that it has lost 7 million subscribers in the last two years. It now has 92 million subscribers, a 10 year low.
http://www.marketwatch.com/story/disney-is-losing-espn-subscribers-by-the-millions-2015-11-26
This is a far steeper rate than most thought (shocking rate according to some) and not close to ending. Most analyst think is ESPN is "done" and will struggle with a bloated cost structure, continuing loss of subscribers and turmoil for many more years.
These same analysts like Disney stock because Bob Iger (Disney CEO) is a brilliant manager and he knows ESPN is "done" and repositioning himself away from ESPN and toward other Disney Properties (Star Wars and theme parks).
Disney's stock is down 4% today to $113.
Could the Big East have made a brilliant move getting away from ESPN and it's insanely high cost structure that will lead to massive changes and cost structure in the future? In a few years Fox Sports might look like a better option compared to the explosion about to happen in Bristol.
And was the Big East brilliant in signing a 12 year deal at the high? It has an overvalued cash flow stream for another 10 years. Good luck to the ACC and the NFL when their deals are up and they find out they are not worth what they thought.
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ESPN reported today that it has lost 7 million subscribers in the last two years. It now has 92 million subscribers, a 10 year low.
http://www.marketwatch.com/story/disney-is-losing-espn-subscribers-by-the-millions-2015-11-26
This is a far steeper rate than most thought (shocking rate according to some) and not close to ending. Most analyst think is ESPN is "done" and will struggle with a bloated cost structure, continuing loss of subscribers and turmoil for many more years.
These same analysts like Disney stock because Bob Iger (Disney CEO) is a brilliant manager and he knows ESPN is "done" and repositioning himself away from ESPN and toward other Disney Properties (Star Wars and theme parks).
Disney's stock is down 4% today to $113.
Could the Big East have made a brilliant move getting away from ESPN and it's insanely high cost structure that will lead to massive changes and cost structure in the future? In a few years Fox Sports might look like a better option compared to the explosion about to happen in Bristol.
And was the Big East brilliant in signing a 12 year deal at the high? It has an overvalued cash flow stream for another 10 years. Good luck to the ACC and the NFL when their deals are up and they find out they are not worth what they thought.
LOL
How it is shocking to some when little old me told you this 2 and 3 years ago? If any analyst said this, they should be fired for incompetence. When we instituted skinny packages at DIRECTV it was with the SOLE PURPOSE of taking out sports content because it was so expensive. We created SELECT package to do that for that purpose. Disney knew exactly what it meant. To get the higher rate they wanted, they had to give on the penetration numbers.
THAT, is what people are missing here. There was always 50 to 60% of people that don't give two squirts about sports and never wanted ESPN to begin with, but DISNEY forced all the MVPDS (cable, telco, satellite) to penetrate Disney in all of their packages. When they did that, it kept raising the costs of programming so much that distributors had to raise prices every year to customers to keep pace. This is not just a Disney thing, but they are the biggest influencer on the cost side. As a result, skinny packages were introduced by DIRECTV and Comcast, and others followed suit soon thereafter. As a result, Disney loses subscribers, easily forecast BUT they were made whole by the dollar rate per sub they have.
As for your ACC and NFL comments.....I'll bet a year of my salary that the next NFL deal will be gangbusters in the early 2020's and will far exceed what the current ones do. ACC will also make out very well. Right now, ESPN overspent, but they are still making a ton of money which most people apparently want to ignore. They downsized because they want to maintain their profit margins for overspending on the NFL and other properties. That's their mistake on the spend, but this is hardly an organization hurting in the pocketbook. I have a ton of friends at ESPN at the executive level, and they are doing just fine and will be for many many many years to come. They will do special rates, if I had to guess, in the mobile space and monetize in the skinny packages as well.
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LOL
How it is shocking to some when little old me told you this 2 and 3 years ago? If any analyst said this, they should be fired for incompetence. When we instituted skinny packages at DIRECTV it was with the SOLE PURPOSE of taking out sports content because it was so expensive. We created SELECT package to do that for that purpose. Disney knew exactly what it meant. To get the higher rate they wanted, they had to give on the penetration numbers.
THAT, is what people are missing here. There was always 50 to 60% of people that don't give two squirts about sports and never wanted ESPN to begin with, but DISNEY forced all the MVPDS (cable, telco, satellite) to penetrate Disney in all of their packages. When they did that, it kept raising the costs of programming so much that distributors had to raise prices every year to customers to keep pace. This is not just a Disney thing, but they are the biggest influencer on the cost side. As a result, skinny packages were introduced by DIRECTV and Comcast, and others followed suit soon thereafter. As a result, Disney loses subscribers, easily forecast BUT they were made whole by the dollar rate per sub they have.
As for your ACC and NFL comments.....I'll bet a year of my salary that the next NFL deal will be gangbusters in the early 2020's and will far exceed what the current ones do. ACC will also make out very well. Right now, ESPN overspent, but they are still making a ton of money which most people apparently want to ignore. They downsized because they want to maintain their profit margins for overspending on the NFL and other properties. That's their mistake on the spend, but this is hardly an organization hurting in the pocketbook. I have a ton of friends at ESPN at the executive level, and they are doing just fine and will be for many many many years to come. They will do special rates, if I had to guess, in the mobile space and monetize in the skinny packages as well.
Here is what I read ....
ESPN is losing revenue
ESPN overspent of TV rights
ESPN will over spend even more on TV rights
ESPN has too high a cost structure
Everyone at ESPN will be fine.
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Here is what I read ....
ESPN is losing revenue
ESPN overspent of TV rights
ESPN will over spend even more on TV rights
ESPN has too high a cost structure
Everyone at ESPN will be fine.
I agree, Heisenberg, for the near future.
When I want scores, I don't type in Fox1Sports, Yahoo Sports, CBSsports into my web browser. I type in four letters: E-S-P-N.
And I use their app as well.
However, I would rather follow on Twitter, even if that means I have to sift through the trash, because it's more current. Reading an article on ESPN or getting late "updates" (with no commentary) is becoming passe.
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Here is what I read ....
ESPN is losing revenue
ESPN overspent of TV rights
ESPN will over spend even more on TV rights
ESPN has too high a cost structure
Everyone at ESPN will be fine.
What you didn't read
ESPN is losing subscribers but OFFSET by higher per rate sub gains. These articles you are reading DO NOT call out ESPN revenues, instead these analysts are extrapolating how much money they think have shrunk do to subscriber declines. They are purely guessing and based on the per sub rate they are using, they are off the mark.
No one said everyone at ESPN will be fine, there have been obvious cutbacks.
They absolutely did overspend for rights, which by the way they have tied up until the early 2020's. With Fox and others clamoring for more rights, that will continue into the next decade as well. Guess how they'll monetize it? They'll charge even more for their content
ESPN is profitable and will remain profitable.
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Passe or not, here's why you will continue to go to ESPN for the next decade
College football regular season (ACC 2027, Big 12 2025, Pac-12 2023, SEC 2023, etc)
College football bowl games 2024
College football playoff 2026
College basketball (ACC 2027, Big Ten 2017, Big 12 2025, Pac-12 2023, SEC 2023)
NFL until 2021
MLB 2021
NBA 2025
Masters Golf
US Men's Soccer National Team 2022
On and on
I wholeheartedly agree that ESPN overpaid, just as FOX totally overpaid for Big East. That's the nature of sports broadcasting. They will find a way to monetize it and ESPN will remain where one comes to see live sports for the next decade plus.
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What you didn't read
ESPN is losing subscribers but OFFSET by higher per rate sub gains. These articles you are reading DO NOT call out ESPN revenues, instead these analysts are extrapolating how much money they think have shrunk do to subscriber declines. They are purely guessing and based on the per sub rate they are using, they are off the mark.
No one said everyone at ESPN will be fine, there have been obvious cutbacks.
They absolutely did overspend for rights, which by the way they have tied up until the early 2020's. With Fox and others clamoring for more rights, that will continue into the next decade as well. Guess how they'll monetize it? They'll charge even more for their content
ESPN is profitable and will remain profitable.
This is not the way it is being reported ....
http://learnbonds.com/125254/walt-disney-co-dis-espn-suffers-life-threatening-subscriber-bleed/
The average ESPN subscriber pays around $6 a channel per month. So the erosion of 7 million subscribers would have resulted in a loss of over $500 million in revenue per year since 2013. And that’s not even taking into account the advertising dollar lost. Moreover, the last two year’s decline in subscribers has also been hurting its sister networks. ESPN2 lost 7 million subscribers, ESPNNews and ESPN Classic 6 million, while ESPNU shed 4 million subscribers.
The Implications for Cable Industry are Dire
Fox Sports’ Clay Travis reckons that if we put together all those subscriber losses, the revenue picture looks grim. “ESPN is bringing in somewhere around $700 million less in subscriber revenue from these channels than it did in 2013,” he wrote earlier today.
He goes on to add that these revenue losses may be “partially offset by the SEC Network, which ESPN reports is in 63 million homes,” but the broad trend is still alarming for the cable industry. “ESPN is making hundreds of millions of dollars less off its core business in 2015 than it was making in 2013.”
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Wall Street's take (warning, do not little children or the weak read this as it is not pretty)....
http://us11.campaign-archive1.com/?u=886b833e7ee9981fff7354cd9&id=b60494b216
The Eric Jackson Tech & Media Email
#27: November 22, 2015
If ESPN Has Dropped From 99M To 92M Subs in 2 Years, Where Does It Bottom?
For the last several months, I’ve argued that Bill Simmons’ departure was less about his comments on Roger Goodell or office politics and more about money.
Although I’m sure there were concerns about Simmons’ rogue comments about the NFL, this should pale in comparison to ESPN’s main concern throughout 2015: cord-cutting.
ESPN topped out with 99 million US subscribers (“subs”) 2 years ago, according to their filings with the Securities and Exchange Commission. Since then, its sub count has been shrinking. It’s currently at around 92 million. That drop in subs has meant a big drop in profitability for ESPN which has been at the heart of its parent company’s profitability.
If you look at the Disney 10-K from 2013 to 2014, you can see the drop in subs:
ESPN dropped from 99 million to 95 million (-4%)
ESPN2 declined from 99 million to 95 million (-4%)
ESPNEWS went from 76 million to 73 million (-3.9%)
ESPNU went from 76 million to 74 million (-2.6%)
ESPN Classic dropped from 31 million to 26 million (-16.1%)
Fortunately for ESPN, they rolled out a new network to collect affiliate revenues in 2014 called the SEC Network for which they had 63 million subs (which has helped mask the bigger drop in affiliate revenues from their main networks).
For each of these subs, ESPN - like every cable network - gets affiliate revenue per sub from cable and satellite providers. Per SNL Kagan, the revenues per sub last year were as follows:
ESPN $6.61
ESPN2 $0.83
SEC $0.63
ESPNU $0.22
It is believed that ESPN now has 92 million subs.
That difference in 7 million subs from 2013 to 2015 means ESPN has about $650 million less in affiliate revenues. The drop in viewers also affects their ad revenues in a negative fashion (probably a drop of $250-300 million). Most of these revenues are sheer profits.
To compensate this drop, all cable networks have been trying to raise their per sub affiliate revenue fees each year with the cable and satellite providers. This gets more difficult as viewers and ratings keep dropping. ESPN has also combatted these revenue declines by rolling out the SEC Network to 63 million households (which is pretty staggering to think that much of the country wants to see SEC football). The SEC Network has been a secret weapon for ESPN in the last year and it has helped bring in more than $200+ in annual affiliate revenue to Bristol.
Before 2014, ESPN sub number kept going up. Perhaps that explains why ESPN reportedly spent $125 million in mid-2013 on revamping the SportsCenter set. In the face of recent ESPN cost-cutting, spending such a sum on a show that is now somewhat passe seems hard to fathom.
Last week on his new podcast, with guest Chuck Klosterman, Bill Simmons addressed these financial issues facing ESPN (at the 27 minute mark).
Simmons agrees that cord-cutting is a real issue having major ramifications on ESPN (and all cable nets of course). He states that he didn’t hear ESPN execs really worrying about it until later in 2014. He points to the new SportsCenter set as proof that none of the executives saw this sub drop from cord-cutting coming.
Yet, Simmons also claims that none of the departure of top talent relates to these cost demands. He states that his departure had nothing to do with money. But what if ESPN didn’t want to pay him $6 million a year and that’s why they stopped negotiating with him?
Simmons said that Colin Cowherd left because he got a better offer from Fox. But why didn’t ESPN counter the offer?
Simmons said that Jason Whitlock self-destructed, but ESPN can’t have been oblivious to the benefits of not going through with a new Grantland-like third party site The Undefeated (even though at present they say it’s still going to happen – something I doubt).
Simmons said Olberman was cancelled because of bad ratings. But, again, there would have been a lot of cost savings from not using the expensive Times Square studio any longer.
Simmons also discusses the demise of Grantland, without connecting the dots of its closure to the cord cutting phenomenon. They’re still honoring the staff’s contracts (what choice did they have) but they will no longer support some outpost operation and bring it back into Bristol.
I don’t quite understand how Simmons is so easily able to hold these two realities of financial pressures and personal vendettas so separately in his mind.
(Simmons also has a little soliloquy about how Grantland failed in part because it didn’t have an app because it was conceived of in 2010. Someone explain Buzzfeed to him.)
My point isn’t to bash Simmons here. I love his podcasts. It’s to point out that of course his departure and the closure of Grantland was about money. Let’s not pretend otherwise. Maybe they kept Grantland going for 6 months to try to stick it to Simmons that they could go on without him. But after Iger’s August earnings presentation, that kind of fanciful thinking gave way to hard-nosed economics.
More importantly, it’s fascinating how ESPN top brass was totally caught off guard by cord cutting. To see your subscribers go from growth to a 7% decline in 2 years must be hugely alarming. Media Networks (the formal name of Disney’s cable nets group) did $7.3 billion in operating income last year for Disney and most of that was from ESPN. Media Networks accounted for 56% of Disney’s operating income last year.
ESPN is a big deal to Disney and its shareholders.
To watch $1 billion of annual affiliate and ad revenue go away in a couple of years is a shock to the system.
But where’s it going? That’s the real question any of us has yet to tackle.
We’ve now seen the first wave of cord-cutting lead to a 7% drop in 2 years. Have we bottomed? Unlikely.
I think it was Rich Greenfield of BTIG who said a couple of weeks ago: “the real question is do subs bottom out at 90, 70, or 50?”
That’s exactly right. And those are three very different realities for Burbank – not just Bristol.
If the answer is 50 million subs for ESPN in 5 years (or less – imagine that!), Disney likely sees cable and satellite companies beating them down on per sub affiliate fees.
And in such a world, Disney’s Media Networks might do $4 – 5 billion in annual revenue instead of $11 billion and $4 billion in ad revenue vs. $8 billion today.
That’s a total shrinkage of possibly $10 billion in revenues in the next few years. Disney had $13 billion in operating income in 2014 across the whole company.
When is Bob Iger’s retirement party so he can focus on LA NFL football? Let the next CEO take on this one.
Some will argue that Disney (and other cable networks) can simply figure out a way of charging more more money to the cord-cutters or never-signed-up-for the-cable-bundle people for their new and exciting digital products?
After all, this is America. We need our sports. And we’ll pay any price for it.
Won’t we?
Some certainly will. But how much will they pay?
What if most of the die hards are the ones who stick with the bundle?
What if the cutter, nervers and never-had-its don’t need sports?
And what if half of those 50 million households are gone forever to Netflix and chill, check Facebook, and watch sports highlights on Twitter Moments and Vine?
A $10 billion hole in any ship is going to take on a lot of water.
If $10 billion in Disney operating income just evaporates in the next few years out of a total of $13 billion, does a Disney investor pay 12x Enterprise Value to EBITDA? Or 9x? Or 7x?
Those are very different realities.
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Those SNL Kagan per rate fees are wrong....that's for starters. Thus, the math is wrong right from the get go.
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Those SNL Kagan per rate fees are wrong....that's for starters. Thus, the math is wrong right from the get go.
What are the right numbers?
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What are the right numbers?
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This is not the way it is being reported ....
http://learnbonds.com/125254/walt-disney-co-dis-espn-suffers-life-threatening-subscriber-bleed/
The average ESPN subscriber pays around $6 a channel per month. So the erosion of 7 million subscribers would have resulted in a loss of over $500 million in revenue per year since 2013. And that’s not even taking into account the advertising dollar lost. Moreover, the last two year’s decline in subscribers has also been hurting its sister networks. ESPN2 lost 7 million subscribers, ESPNNews and ESPN Classic 6 million, while ESPNU shed 4 million subscribers.
The Implications for Cable Industry are Dire
Fox Sports’ Clay Travis reckons that if we put together all those subscriber losses, the revenue picture looks grim. “ESPN is bringing in somewhere around $700 million less in subscriber revenue from these channels than it did in 2013,” he wrote earlier today.
He goes on to add that these revenue losses may be “partially offset by the SEC Network, which ESPN reports is in 63 million homes,” but the broad trend is still alarming for the cable industry. “ESPN is making hundreds of millions of dollars less off its core business in 2015 than it was making in 2013.”
What the Chicos of the world refuse to acknowledge is that this trend is going to continue. It's not just about losses in the last couple years - it is the compounded losses in the years ahead.
And I don't really care - but the sports rights bubble has stretched just about as far as it can. When it bursts, the broadcast rights won't mean a lot. Re-negotiation is always on the table despite what anyone from either side says.
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I PM'd you Berg
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Just to put somethings in perspective, ESPN delivered $6.8billion in operating profit this last fiscal year. It is wildly profitable.
ESPN by itself is valued at over $50 billion, about 40% of Disney's total valuation.
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Just to put somethings in perspective, ESPN delivered $6.8billion in operating profit this last fiscal year. It is wildly profitable.
ESPN by itself is valued at over $50 billion, about 40% of Disney's total valuation.
This.
It's like McDonald's. Had a few quarters without the earnings growth it had been enjoying, and many panicked with cries of, "Nobody eats that unhealthy crap anymore!"
But millions and millions and MILLIONS do eat that unhealthy crap. Despite its "struggles," MCD still made more money than the next 10 restaurant chains combined.
The death of Mickey D's was greatly exaggerated. As is the death of ESPN -- and certainly of Disney.
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This.
It's like McDonald's. Had a few quarters without the earnings growth it had been enjoying, and many panicked with cries of, "Nobody eats that unhealthy crap anymore!"
But millions and millions and MILLIONS do eat that unhealthy crap. Despite its "struggles," MCD still made more money than the next 10 restaurant chains combined.
The death of Mickey D's was greatly exaggerated. As is the death of ESPN -- and certainly of Disney.
Interesting analogy using Mickey D's
This is a company that has fired multiple CEOs, revamped its menu over and over and has lagged all its competitors making it one of the worst restaurant stocks of the last decade. I'm sure Chicos bought it 14 cents off its low but throw a dart at any other restaurant stock and you would have done much better.
Oh yes, and the suits and Mickey D's will also tell you they knew all this was coming and they are really smart. In fact, to prove they are so smart they will point to Chipolte and Smash Burger ... they were both started by frustrated execs at Mickey D's because the brilliant suits would not listen to them so they left and made other wildly rich.
So if you're saying that ESPN is a bloated bureaucracy that cannot change and will watch its talent go make others rich as it shrinks to half its size as the industry remakes itself without them, I agree.
Oh, and reports of Western Unions demise were also greatly exaggerated. They exist too ... which is why Mickey and ESPN will do.
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Just to put somethings in perspective, ESPN delivered $6.8billion in operating profit this last fiscal year. It is wildly profitable.
ESPN by itself is valued at over $50 billion, about 40% of Disney's total valuation.
The question is not what they are worth now, the question is what they will be worth in five years. Their operating profits have a negative growth rate. Two years ago they had 100m subscribers. Now they have 92m. What will they have in 5 years? Above they say 50m.
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I PM'd you Berg
Got it. I'll just say SNL Kagan and Jackson (post above) are pretty big hitters on Wall Street. Their stats are always known to help good. So they get the benefit of the doubt.
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Interesting analogy using Mickey D's
This is a company that has fired multiple CEOs, revamped its menu over and over and has lagged all its competitors making it one of the worst restaurant stocks of the last decade. I'm sure Chicos bought it 14 cents off its low but throw a dart at any other restaurant stock and you would have done much better.
Oh yes, and the suits and Mickey D's will also tell you they knew all this was coming and they are really smart. In fact, to prove they are so smart they will point to Chipolte and Smash Burger ... they were both started by frustrated execs at Mickey D's because the brilliant suits would not listen to them so they left and made other wildly rich.
So if you're saying that ESPN is a bloated bureaucracy that cannot change and will watch its talent go make others rich as it shrinks to half its size as the industry remakes itself without them, I agree.
Oh, and reports of Western Unions demise were also greatly exaggerated. They exist too ... which is why Mickey and ESPN will do.
OK. I'll take my chances with MCD as part of a diversified portfolio filled mostly with long-time dividend growers. They will help me meet my goals.
You are free to choose other companies, and I sincerely hope they help you meet your goals.
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I have no dog in this fight, but Jim Skinner ran McD very well. I caddied for him and his wife back in my high school/MU summer's...good people too.
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Skinner was a big part of the problem. He is the reason Chiplote a Smash burger exist, he did listen to those guys and they left. He should have stayed at Walgreens.
His hand picked successor Don Thompson was worse.
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Doug Kass is one of the best short sellers on Wall Street. He is Warren Buffett's "resident Bear" at his annual meetings.
Wall Street thinks ESPN has a big big problem. That means ESPN has a big big problem until Bob Iger convinces Wall Street it does not. What Wall Street thinks becomes reality.
Iger is not even trying right now.
Kass Katch of the Week: Short Disney
NOV 30, 2015 | 9:06 AM EST
Stock quotes in this article: DIS
"When you lost 'some' subscribers it can be overlooked. But when your subscribers go to 92 million from 99 million in two years, as have ESPN's for Disney (DIS), then you've got a front and center problem.
That's a nasty trajectory.
I have long held that Disney's one of the greatest companies and therefore one of the greatest stocks of all time. But I don't know how I would reverse that ESPN trend. We have so many different ways of getting sports, including my Watch ESPN app, and we have so many other ways of getting scores and we have so little time to watch all of that admittedly spectacular programming, it's hard to see a reverse.
Within that last sentence, I think, is the most damning part of the situation.
The programming is SPECTACULAR. I don't know how you would make it more relevant, more exciting, more beautifully produced and more intelligent. It is nothing short of fantastic.
But we aren't watching as much TV as before, so we don't watch as much ESPN.
We watch our cell phones. They aren't just the enemy of the mall or the desktop, but the television itself."
-- Jim Cramer, Disney Has a Hard Truth to Face with ESPN (Nov. 27, 2015)
As Jim "El Capitan" Cramer noted the other day, Disney -- which is on my "Best Short Ideas" list -- last week revealed a 7-million-subscriber loss over the past two years at the company's ESPN unit.
ESPN and Disney's other media networks are the company's largest sales and profit contributor, accounting for 44% of revenues and 54% of income. And within the segment, cable networks account for 72% of sales and 87% operating income. (Click here to check out Disney's recent fiscal fourth-quarter and full-year report.)
But like ESPN's unfortunate decision over the years to revise its theme song, the times they are a changin' -- but not for the better.
The current trend of declining subscribers is likely to continue, reflecting (as Jim describes), TV's reduced role in our daily lives. As a result, I find it difficult not to see profitability at Disney's largest business segment remain under siege. The company might not cut costs quickly enough to absorb the erosion of subs and sustain income growth.
And from my perspective, "cord-cutting" and higher ESPN production and programming costs are but a few of the intermediate-term business threats that Disney faces.
For example, I'm increasingly concerned with the company's parks-and-resorts business, which accounts for 31% of total sales and 21% of total operating income. This unit has flourished in the past, but could face challenges ahead.
A quantum increase in admission ticket prices over the last two decades could result in profitability pressures from greater consumer-demand elasticity. There's also the headwind of a strong U.S. dollar (affecting overseas parks), coupled with competitive alternatives from a pricing standpoint. Average guest spending and attendance trends seem destined to come under pressure.
Of course, the biggest pushback to shorting Disney could be the company's upcomingStar Wars: The Force Awakens movie and the multi-billion-dollar product licensing that will stem from the film. But who doesn't expect an extraordinary success from a Star Warsmovie? Moreover, a grand success for The Force Awakens will only produce difficult year-over-year comparisons for DIS in the future.
The Bottom Line
Disney has enjoyed 20.2% average annual earnings-per-share growth over the last five years, including a 19% gain in the fiscal year ended Oct. 3. Consensus estimates also call for 13% to 14% annual EPS growth over the next five years.
But personally, I expect 2016-2020 EPS growth to come in at less than 10% a year. I also note that Disney's enterprise value of $210 billion (equity capitalization plus net debt) is approximately 4x reported 2015 annual revenues of $52.5 billion.
Lastly, shares currently trade at about 22.5x trailing 12-month earnings and 20.2x fiscal 2016 EPS consensus. That will be a relatively lofty valuation if EPS growth over the next five year comes in at around half of what it was over the past five.
That's why I've put Disney on my "Best Short Ideas" list.
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Heisy, please don't use Jim Cramer as an "expert". One of my favorite all time clips is of John Stewart taking him down after the crash in '08. (Sorry I mentioned that - Everything really was Obama's fault.)
Otherwise I agree with you here. ESPN is not going out of business - but - they also cannot continue to sustain the loss of subscribers like the last two years. At what point would someone as blind as Chicos acknowledge the problem? Does it have to go to 10 million subscribers before he does?
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Heisy, please don't use Jim Cramer as an "expert". One of my favorite all time clips is of John Stewart taking him down after the crash in '08. (Sorry I mentioned that - Everything really was Obama's fault.)
Otherwise I agree with you here. ESPN is not going out of business - but - they also cannot continue to sustain the loss of subscribers like the last two years. At what point would someone as blind as Chicos acknowledge the problem? Does it have to go to 10 million subscribers before he does?
Fair enough point about Cramer. Kass likes him (as Kass writes for his website thestreet.com)
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Fair enough point about Cramer. Kass likes him (as Kass writes for his website thestreet.com)
He is entertaining and fun to watch - but he had no clue about the Wall Street crash until after it happened.
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He is entertaining and fun to watch - but he had no clue about the Wall Street crash until after it happened.
True dat. He was saying "buy buy buy" Bear Stearns practically until the day of the crash. Stewart absolutely killed him and it was hilarious.
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Heisy, please don't use Jim Cramer as an "expert". One of my favorite all time clips is of John Stewart taking him down after the crash in '08. (Sorry I mentioned that - Everything really was Obama's fault.)
Otherwise I agree with you here. ESPN is not going out of business - but - they also cannot continue to sustain the loss of subscribers like the last two years. At what point would someone as blind as Chicos acknowledge the problem? Does it have to go to 10 million subscribers before he does?
Since you started it.......anyone that blames Obama for 2008 are as clueless as those that blame Bush for 9/11.
I have always thought Chicos is too close to the story. It happens, same as tech execs were in 2001. We all saw the changes happening but the crash was deeper than anyone anticipated. Same may happen to ESPN. If they make the right moves they can pull it out.
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if espn is falling, my bet is it's because people turned them on for their sports, not their politics. whenever you take sides, you are going to lose some people.
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if ESPN is falling, my bet is it's because people turned them on for their sports, not their politics. whenever you take sides, you are going to lose some people.
Or this (which is what the ESPN suits "don't get," will never get, and are getting run over by it) ....
Nielsen: Smartphones and the Internet are eating our TV time
By RYAN NAKASHIMA
AP Business Writer
Dec 3, 1:47 PM EST
http://hosted.ap.org/dynamic/stories/U/US_MOBILE_VS_TV_TIME?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-12-03-13-47-23
The use of Internet-ready devices like smartphones appears to have seriously cut into the time Americans spend watching traditional TV, new Nielsen data show, potentially undercutting the notion that mobile devices merely serve as "second screens" while people are plopped in front of the set.
Data provided to The Associated Press show an increase in the number of 18-to-34-year-olds who used a smartphone, tablet or TV-connected device like a streaming box or game console. That grew 26 percent in May compared with a year earlier, to an average of 8.5 million people per minute.
Those devices, which all showed gains in usage, more than offset declines in TV, radio and computers. In the same age group, the demographic most highly coveted by advertisers, use of those devices fell 8 percent over the same period to a combined 16.6 million people per minute.
Nielsen's inaugural "Comparable Metrics" report for the first time presents data on average use per minute, making it possible to directly compare various devices.
It's not a one-to-one tradeoff, however. Sometimes people are using smartphones while watching TV, or using them outside the home where it wouldn't cut into TV time. Some mobile device use is also, well, to watch TV shows. The study counts all apps, Web surfing and game play but not texts or calling.
Still, the trends are strong enough to confirm a trend in other Nielsen data that found viewing of traditional TV - through a cable or satellite connection or an antenna - peaked in the 2009-10 season.
"It's pretty clear the increased use of mobile devices is having some effect on the system as a whole," said Glenn Enoch, Nielsen's senior vice president of audience insights.
The audience for TV viewing alone fell by 10 percent, to 8.4 million people a minute, in the 18-to-34-year-old category.
The new Nielsen data doesn't break out time spent specifically on streaming TV, mainly because it doesn't distinguish video streaming on TV-connected devices from other activities like playing games.
Since Nielsen inaugurated its tracking service in 1949, average daily TV viewing has grown steadily, from 4 hours and 35 minutes a day to a peak of 8 hours and 55 minutes in 2009-10. That increase coincided with growing numbers of TV sets sold and the proliferation of programming on cable channels.
But viewership has been declining ever since. From late September until mid-November this year, daily TV watching accounted for only 8 hours and 13 minutes, Nielsen said.
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Subs may be dropping and admittedly I don't know much about business but don't most of ESPNs money come from sponsorships? I can't imagine a world where ESPN would be hurting so long as they have multi millions dollar sponsor contracts.
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Oh yes, and the suits and Mickey D's will also tell you they knew all this was coming and they are really smart. In fact, to prove they are so smart they will point to Chipolte and Smash Burger ... they were both started by frustrated execs at Mickey D's because the brilliant suits would not listen to them so they left and made other wildly rich.
Who are the former McDonald's execs that started Chipotle and Smashburger?
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Who are the former McDonald's execs that started Chipotle and Smashburger?
Smashburger founder (one of them) is Tom Ryan, in 2007. He was he was Executive Officer, Worldwide Chief Concept Officer for McDonald's Corporation. Read he handed MCD the idea for Smashburger and they did not think it would fly. Bad call, really bad call!
Steve Ells founded Chiptole in 1993. In 1998 MCD began as an investor in it. MCD sold its ownership in 2006 thinking the concept had peaked. Split adjusted CMG was $22 when MCD sold out. Today it is $565. CMG is up 1,120% since 2006. MCD is up 226% over the same period. Bad call, really bad call!
The MCD suits are too entrenched, too uncreative and too bureaucratic to get out of their own way. They have loads of brilliant people they employ ... that they do not listen too. These brilliant people leave and Chipolte and Smashburger are created without MCD.
ESPN is the same in their industry.
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Who are the former McDonald's execs that started Chipotle and Smashburger?
I thought Smashburger was founded by the Mohegan Sun Casino here in Connecticut as a source of non-gambling revenue?
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I thought Smashburger was founded by the Mohegan Sun Casino here in Connecticut as a source of non-gambling revenue?
I thought they were going to buy the Turnpike and turn it back into a toll road... if they did, I wonder if they'd refund the toll at Exit 79A 9.
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Since you started it.......anyone that blames Obama for 2008 are as clueless as those that blame Bush for 9/11.
I have always thought Chicos is too close to the story. It happens, same as tech execs were in 2001. We all saw the changes happening but the crash was deeper than anyone anticipated. Same may happen to ESPN. If they make the right moves they can pull it out.
I've been on both sides of the table of this the last three years. On the distributors side as a MVPD, as an OTT player (think HBO Now, Netflix), etc. Look, I think eventually things go there, but the problem I continue to have with these gloom and doom scenarios is the timelines are insanely wrong.
It's all about inflection points. For HBO, it made sense because they were an a la carte anyway on all MVPDs. In other words, you bought the service not part of the basic package. For ESPN, they get enormous revenue from people buying a package that could care less about ESPN. For them to equal that revenue, they would have to charge a pretty penny to go a la carte and plus they have MFN deals working against them that doesn't allow them to do it right now.
Eventually? Sure....but that inflection point is some time away.
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Since you started it.......anyone that blames Obama for 2008 are as clueless as those that blame Bush for 9/11.
I have always thought Chicos is too close to the story. It happens, same as tech execs were in 2001. We all saw the changes happening but the crash was deeper than anyone anticipated. Same may happen to ESPN. If they make the right moves they can pull it out.
Excuse me... but get a clue?
Bush was president in 2008. How could Obama be blamed for the crash when he wasn't even elected before he was even elected?
Bush was also president during 9/11.
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Excuse me... but get a clue?
Bush was president in 2008. How could Obama be blamed for the crash when he wasn't even elected before he was even elected?
You miss read the semantics brand.
Bush was also president during 9/11.
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No - my point was that Obama was not president when either of those things happened. So why would anyone other than the "re-writing history" crowd blame Obama for happenings on Bush's watch.
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As a Disney stockholder and former Disney employee (Mouseschwitz is what we used to call it), I'm not worried one iota.
They beat earnings, they were short on revenue. Sure the stock will get hit, but just wait until Star Wars next quarter and some of the pipeline content.
Put another way, I'm buying Disney today.
If it grosses less than $2 billion, Disney is in trouble. More than $2.5 billion and Disney does well. In between is a mixed bag.
Star Wars opens Friday (Dec 18). Yes the lines will be around the block, everyone knows this. Grossing at least $2 billion or bust.
Disney paid $4 billion for the franchise and $250 million to make the movie. So it has to gross north of $2 billion (making it one of the top five movies ever, highest ever was Avatar at $2.7b)
Good luck to Disney
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If it grosses less than $2 billion, Disney is in trouble. More than $2.5 billion and Disney does well. In between is a mixed bag.
Star Wars opens Friday (Dec 18). Yes the lines will be around the block, everyone knows this. Grossing at least $2 billion or bust.
Disney paid $4 billion for the franchise and $250 million to make the movie. So it has to gross north of $2 billion (making it one of the top five movies ever, highest ever was Avatar at $2.7b)
Good luck to Disney
Respectfully disagree. The franchise can be milked for decades. The gift that keeps on giving. This is not a one movie situation. They are already in production on the next one and will continue to make them into the future. Star Wars land is being built right now at Disneyland, so on and so forth. The merchandising dollars they are going to make on this thing are insane. With Target, Chevy, etc.
But just for giggles, some are expecting them to make close to $5 billion.....on merchandise alone...for just this movie.
http://theconversation.com/how-disney-will-make-us-5-billion-from-star-wars-7-merchandise-47506
http://www.hollywoodreporter.com/news/star-wars-merchandise-sales-could-819004
http://www.theatlantic.com/business/archive/2015/11/the-force-awakens-sales/417642/
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A bargain. Printing money
http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-star-wars-disney-empire-20151213-story.html
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I agree with Chicos. DIS is a great long-term, buy-and-hold company. Star Wars will be huge for them for decades.
I am hoping that the Fed will raise rates this week and give me one more shot at DIS under 100. I got greedy a few months ago and tried to wait for a chance at 90, but got burned.
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Signaling the end of linear TV?
ESPN's Dilemma in Mobile Age Where Fans See Clips All Day
December 16, 2015 — 10:38 AM CST
http://www.bloomberg.com/news/articles/2015-12-16/espn-s-dilemma-in-mobile-age-where-fans-can-watch-clips-all-day
* SportsCenter' retools to target fans on the move, night owls
* Competition erodes audience at most-watched cable TV network
When Holly Holm delivered her vicious knockout against UFC champion Ronda Rousey last month, the highlight seemed perfect for ESPN’s “SportsCenter.”
Yet by the time the sports network’s flagship news program showed images of the fight, many had already seen the clip on Reddit and commented on Twitter.
That’s the dilemma for ESPN and “SportsCenter,” the news and highlights show the network introduced to pay-TV audiences 35 years ago. While ESPN remains the dominant sports outlet on TV and the Web, and the single biggest profit contributor at Walt Disney Co., competition is eating into its audience. To adapt, the company is reinventing “SportsCenter” for mobile viewing and online sharing, adding new late and early morning editions.
“Our producers have spent a lot of time working with our talent to really think about which audience we’re seeing through the course of the day,” Rob King, ESPN’s senior vice president for news, said in an interview. The show “is still relevant and meaningful to people. It’s a matter of where they are and how they consume it.”
One big change is set for February, when ESPN introduces a 7 a.m. edition of “SportsCenter.” The network will try to attract viewers on their way to school or work by encouraging them to watch on mobile devices, King said.
In September, Scott Van Pelt took over as anchor of a new late edition of “SportsCenter.” Van Pelt can compete with talk-show hosts like Jimmy Fallon and Jimmy Kimmel, King said, and his show is experimenting with new segments, including one that shows highlights of plays that would be of keen interest to bettors. A recent ad urging fans to “end your day on a highlight” included a spot with a college student watching late at night on his tablet from the roof of a frat house.
Media Meltdown
Disney itself cast a light on the troubles at ESPN in August when the company cut its profit outlook, citing a drop in the homes that get the sports network. The announcement renewed investor concerns that consumers are dropping or cutting back on pay-TV services and sent media stocks tumbling.
ESPN’s ratings are another sign of the changes rattling the TV industry.
(http://assets.bwbx.io/images/iunTBloMgVVA/v2/-1x-1.png)
Live editions of “SportsCenter” are down 10 percent this year in total viewers, according to ESPN, while the Sunday pregame show “NFL Countdown” is down 13 percent. Overall, viewership has fallen 10 percent in 2015, though network executives say that’s really 4 percent excluding World Cup and NASCAR events that didn’t air this year.
Same Pressures
“ESPN is so valuable because they have the most valuable live sports content,” said Liam Boluk, a media strategist at Jason Hirschhorn’s REDEF. “But the rest of their programming is under the same pressures as the rest of the industry.”
Meanwhile, audiences are growing at the Fox Sports 1 and NBCSN, which are up 14 percent and 25 percent in prime-time, respectively, though both networks draw only a fraction of ESPN’s viewers, according to Nielsen data. For NFL games this season, ESPN’s ratings are down 3 percent while two broadcast networks, NBC and CBS, have gained, according to data supplied by the programmers. ESPN says that’s largely because it has aired one fewer Monday Night Football matchup.
Bristol, Connecticut-based ESPN has been in a belt-tightening mode. In October, the network eliminated about 300 positions worldwide. Over the past year, it has parted with several prominent personalities, including Keith Olbermann and Bill Simmons, who says the number of people canceling pay-TV service caught ESPN by surprise.
“I don’t think they ever saw it coming. I really don’t,” Simmons said on his podcast last month. “They didn’t have a plan for this whole next generation of stuff.”
An ESPN spokeswoman said Simmons wasn’t privy to internal conversations about the company’s future.
Live Sports
ESPN’s abundance of live sports has helped it stay on top of the cable TV landscape. It’s the No. 1 cable network and its “Monday Night Football” telecasts outdraw all other networks on that night. The network also commands the highest monthly rate from pay-TV services, at $6.64, according to SNL Kagan. And not all of its talk shows are down. “Mike & Mike,” a radio show simulcast on ESPN2, is up 16 percent in viewers, the company said.
In prime time, which is dominated by live sports, ESPN’s audience is up slightly over the past two years, “which is great in today’s TV world,” according to Artie Bulgrin, the network’s senior vice president of global research.
“Our relative advantage in the marketplace is stronger than it has been in a long, long time,” Bulgrin said in an interview. “When everything can be time-shifted, live sports is going to win.”
ESPN executives say they are prepared for the changing TV landscape and are faring better than some entertainment-oriented channels. The network’s digital audience, which isn’t counted in the ratings, is growing, with the WatchESPN app adding 1.5 percent to ESPN’s “Monday Night Football” audience.
Earlier this month, the network unveiled live streaming on its main app, making it easier to alert mobile viewers “when something great is happening on ‘SportsCenter,’” King said.
Advertisers are following ESPN’s audience online as well. Amplifi, a division of the ad agency Dentsu Aegis Network that handles media buying for Microsoft Corp., General Motors Co. and Home Depot Inc., has shifted some spending to ESPN’s digital channels, according to Andy Donchin, chief U.S. investment officer.
“If you want to reach men, it’s kind of hard not to buy ESPN,” Donchin said. “They dominate the sports marketplace. They used to be the 800-pound gorilla. Now they’re the 795-pound gorilla.”
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Signaling the end of linear TV?
I wrote about this happening over a year ago
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Part of the answer is them finally getting serious about piracy, sharing, etc. The fun is just getting started in that area. Oh the bitching from the millenials when they are hammered with fines. Reminds of the days back when Napster and others got hit, individuals having to pay massive fines and all the complaining "it's just songs". No different than going into a story and stealing a sweater.
Going to be fun to watch.
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Part of the answer is them finally getting serious about piracy, sharing, etc. The fun is just getting started in that area. Oh the bitching from the millenials when they are hammered with fines. Reminds of the days back when Napster and others got hit, individuals having to pay massive fines and all the complaining "it's just songs". No different than going into a story and stealing a sweater.
Going to be fun to watch.
True. But won't the piracy technology most likely always be a step ahead of the law?
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True. But won't the piracy technology most likely always be a step ahead of the law?
You impose harsh enough fines you can curb all kinds of behavior. All of our cars are capable of going 100mph, but how many of us actually go that fast? The technology is there. Just a matter of the will to do it.
They need to cut simultaneous streams to one, match logins to devices paired. They have pixel tracking capabilities to know exactly who is stealing what, they just haven't decided to go after these folks.
Oh the fun that will ensue.
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You impose harsh enough fines you can curb all kinds of behavior. All of our cars are capable of going 100mph, but how many of us actually go that fast? The technology is there. Just a matter of the will to do it.
They need to cut simultaneous streams to one, match logins to devices paired. They have pixel tracking capabilities to know exactly who is stealing what, they just haven't decided to go after these folks.
Oh the fun that will ensue.
I wish we'd take that same kind of attitude towards wall street, fraud, corruption, etc.
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This morning Rich Greenfield of the brokerage firm BTIG downgraded Disney to a Sell with a target of $90. Dis down 3% to $108
@RichBTIG 37m
#FadeTheForce -- Even The Force Cannot Protect ESPN -- Downgrading Disney to SELL, $90 PT
http://www.btigresearch.com/2015/12/18/even-the-force-cannot-protect-espn-downgrading-disney-to-sell-with-90-price-target/ …
He think Star Wars does $2.6 billion in box office (higher than the Wall Street expectation) so he arguing that ESPN is going to be a huge drag on Disney.
ESPN is the death star of Disney (his words).
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I wish we'd take that same kind of attitude towards wall street, fraud, corruption, etc.
Me too....Obama promised.....
Same for gov'ts, unions, etc.
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Star Wars shatters opening preview night beating Harry Potter.....printing money
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The deal of the century
http://www.wired.com/2015/12/disney-star-wars-return-on-investment/
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Yes Fandango has broken all sales records BEFORE the movie even opened!
‘Star Wars: The Force Awakens’ Breaks Fandango’s All-Time Ticketing Record; MovieTickets Sales Still Soaring
http://deadline.com/2015/12/star-wars-the-force-awakens-ticket-record-fandango-1201668739/
But Disney's stock is down 3% today to $108 (down on the downgrade noted above). Star Wars is no longer a story for Disney's stock. Everyone knows it going to sell billions of tickets and the stock is still stuck at $108. Wall Street looks forward and see a mega record movie and it is not moving the stock higher.
Why? ESPN is a big big problem. They are 45% of Disney's earnings and Wall Street thinks ESPN is "done"
It seems everyone gets this except people that live in Bristol CT.
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Disney's stock getting smashed again today, under $106
The market knows that Star Wars is going to blow away every movie record ever. But it's not good enough. The "death star" of ESPN and its massive over-payment for sports right is too much for even the highest grossing film in human history to overcome.
The sports bubble is popping. Thank god the Big East has nine more years on its FS1 contract.
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ESPN and Disney's other media networks are the company's largest sales and profit contributor, accounting for 44% of revenues and 54% of income. And within the segment, cable networks account for 72% of sales and 87% operating income.
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The sports bubble is popping. Thank god the Big East has nine more years on its FS1 contract.
If the bubble bursts, the contracts aren't worth the paper they are printed on.
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Disney's stock getting smashed again today, under $106
The market knows that Star Wars is going to blow away every movie record ever. But it's not good enough. The "death star" of ESPN and its massive over-payment for sports right is too much for even the highest grossing film in human history to overcome.
The sports bubble is popping. Thank god the Big East has nine more years on its FS1 contract.
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ESPN and Disney's other media networks are the company's largest sales and profit contributor, accounting for 44% of revenues and 54% of income. And within the segment, cable networks account for 72% of sales and 87% operating income.
I caution you against making long-term proclamations based upon short-term market movements.
If you truly think Disney is doomed, you should be mortgaging your house and selling everything you own to short the stock big-time. Then you'll be rich, rich, rich and you can laugh at the millions of pitiful Disney shareholders.
BTW, I do not own DIS. But I will be a buyer if it drifts under 100 again, and maybe even before that.
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I caution you against making long-term proclamations based upon short-term market movements.
If you truly think Disney is doomed, you should be mortgaging your house and selling everything you own to short the stock big-time. Then you'll be rich, rich, rich and you can laugh at the millions of pitiful Disney shareholders.
BTW, I do not own DIS. But I will be a buyer if it drifts under 100 again, and maybe even before that.
ESPN and Disney's other media networks are the company's largest sales and profit contributor, accounting for 44% of revenues and 54% of income.
Stop calling it Disney and start calling it ESPN and things will make a lot more sense.
And Disney is not a short, it is dead money. ESPN growth is going to suck and drag the entire companies growth prospects down. You'll get a chance to buy it under $100 many times over the next many years. I don't bother with investments that will return 0% to -10%. I look for things that are going up.
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ESPN and Disney's other media networks are the company's largest sales and profit contributor, accounting for 44% of revenues and 54% of income.
Stop calling it Disney and start calling it ESPN and things will make a lot more sense.
And Disney is not a short, it is dead money. ESPN growth is going to suck and drag the entire companies growth prospects down. You'll get a chance to buy it under $100 many times over the next many years. I don't bother with investments that will return 0% to -10%. I look for things that are going up.
OK.
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ESPN and Disney's other media networks are the company's largest sales and profit contributor, accounting for 44% of revenues and 54% of income.
Stop calling it Disney and start calling it ESPN and things will make a lot more sense.
And Disney is not a short, it is dead money. ESPN growth is going to suck and drag the entire companies growth prospects down. You'll get a chance to buy it under $100 many times over the next many years. I don't bother with investments that will return 0% to -10%. I look for things that are going up.
I notice that on this subject, just as with every other subject that is brought up, that you ONLY deal with absolutes. If something is happening today, that means it will always be that way.
That is why you say that a lock for the Dem nomination has no chance - because you read an article that Bernie gained ground one week. Which, to your way of thinking, means he will continue to gain every week until he crushes HRC.
There is only one absolute. Things change! That is something you should have been taught at a very young age.
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I notice that on this subject, just as with every other subject that is brought up, that you ONLY deal with absolutes. If something is happening today, that means it will always be that way.
That is why you say that a lock for the Dem nomination has no chance - because you read an article that Bernie gained ground one week. Which, to your way of thinking, means he will continue to gain every week until he crushes HRC.
There is only one absolute. Things change! That is something you should have been taught at a very young age.
(http://media.tumblr.com/2b214d90cee69777c2ff8fc9d0f90866/tumblr_inline_mnvxyz5vv51qz4rgp.jpg)
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I notice that on this subject, just as with every other subject that is brought up, that you ONLY deal with absolutes. If something is happening today, that means it will always be that way.
That is why you say that a lock for the Dem nomination has no chance - because you read an article that Bernie gained ground one week. Which, to your way of thinking, means he will continue to gain every week until he crushes HRC.
There is only one absolute. Things change! That is something you should have been taught at a very young age.
Plus, Heisy is fortunate to be an expert on so very many things: Basketball, politics, crime, racial issues, the stock market, whatever. Hence my last response to him: "OK." It's impossible to converse when somebody is highly opinionated and totally unyielding.
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Gee and I thought I was watering down my opinions to make them sounds more nuanced here.
I gets I should stop kittenfooting around and tell you what I really think.
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At least a few of the analysts today properly said they can't go OTT for quite awhile, which is what I've been saying for years. They would lose their ass. They are stuck between a rock and a hard place on that.
Iger was on Bloomberg today, and also correctly stated that ESPN is still immensely profitable and will be just fine for many years to come.
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At least a few of the analysts today properly said they can't go OTT for quite awhile, which is what I've been saying for years. They would lose their ass. They are stuck between a rock and a hard place on that.
Iger was on Bloomberg today, and also correctly stated that ESPN is still immensely profitable and will be just fine for many years to come.
I thought Iger said all the right things.
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At least a few of the analysts today properly said they can't go OTT for quite awhile, which is what I've been saying for years. They would lose their ass. They are stuck between a rock and a hard place on that.
Iger was on Bloomberg today, and also correctly stated that ESPN is still immensely profitable and will be just fine for many years to come.
The issue is not profitability, it's growth. DIS stock gets a hefty premium because on the belief that it will continue to produce big growth rates (trailing P/E is 21, 12 month forward P/E is 19). That is now in question (because of subscriber reductions at ESPN).
That's why I said it was dead money and not a short. It trades $90 to $100 for years (versus $106 now) because it is profitable with much lower growth.
Meanwhile ESPN dominance in the sector starts to erode.
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Dougie Kass is a hedge fund manager and short seller. I posted him above. Here is his latest musing (just post a little while ago.)
All of this gets me to my analysis of Walt Disney Co. (DIS). I outlined my bearish case for Disney back on Nov. 27, shorting the stock at $116.25 a share at the time.
Well, Disney closed $10 a share below that yesterday. I remain short on the stock, and have even added to this position over the last several weeks.
Lo and behold, well-respected BTIG analyst Richard Greenfield dropped the hammer on Disney last week. He cited a point I previously made -- that the publicity surrounding the new Star Wars movie is distracting investors from the drain of subscribers at ESPN.
Disney CEO Robert Iger slammed Greenfield's report yesterday when he appeared on Bloomberg TV for a lengthy interview. Those with Bloomberg terminals can watch the entire talk, while others can check out these excerpts:
• Iger attacking BTIG position and ESPN's risk from fixed sports-rights deals. http://bit.ly/bbiger12-21-15
• The CEO talking about ESPN and cable TV's maturity, and on direct-to-consumer opportunities. http://bit.ly/ESPNMature
• Other clips from Iger's appearance. http://www.bloomberg.com/search?query=iger&startTime=-1d
As for Greenfield, he defended his ESPN views yesterday on CNBC. His comments contrast with Iger's about ESPN's readiness to go direct to consumer, which the BTIG analyst sees as challenging. http://bit.ly/CNBCDisney12-21-15
Greenfield also expanded on his thoughts in a missive (http://www.btigresearch.com/2015/12/21/watch-iger-vs-greenfield-is-espn-direct-to-consumer-viable/) on BTIG's Web site entitled Iger vs. Greenfield (free registration required). And Andrew Ross Sorkin wrote about Greenfield's views and Disney's challenges in a well-documented New York Times column this morning. http://www.nytimes.com/2015/12/22/business/dealbook/at-disney-a-dark-force-looms-large-unbundling.html?ref=business&_r=0%20-
Of course, shorting Disney or any other stock isn't for everyone. The point of my analysis wasn't just to recommend a DIS short, but to provide reasons why those who are long on the stock might consider paring back or even eliminating their stakes.
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Dougie Kass is a hedge fund manager and short seller. I posted him above. Here is his latest musing (just post a little while ago.)
All of this gets me to my analysis of Walt Disney Co. (DIS). I outlined my bearish case for Disney back on Nov. 27, shorting the stock at $116.25 a share at the time.
Well, Disney closed $10 a share below that yesterday. I remain short on the stock, and have even added to this position over the last several weeks.
Lo and behold, well-respected BTIG analyst Richard Greenfield dropped the hammer on Disney last week. He cited a point I previously made -- that the publicity surrounding the new Star Wars movie is distracting investors from the drain of subscribers at ESPN.
Disney CEO Robert Iger slammed Greenfield's report yesterday when he appeared on Bloomberg TV for a lengthy interview. Those with Bloomberg terminals can watch the entire talk, while others can check out these excerpts:
• Iger attacking BTIG position and ESPN's risk from fixed sports-rights deals. http://bit.ly/bbiger12-21-15
• The CEO talking about ESPN and cable TV's maturity, and on direct-to-consumer opportunities. http://bit.ly/ESPNMature
• Other clips from Iger's appearance. http://www.bloomberg.com/search?query=iger&startTime=-1d
As for Greenfield, he defended his ESPN views yesterday on CNBC. His comments contrast with Iger's about ESPN's readiness to go direct to consumer, which the BTIG analyst sees as challenging. http://bit.ly/CNBCDisney12-21-15
Greenfield also expanded on his thoughts in a missive (http://www.btigresearch.com/2015/12/21/watch-iger-vs-greenfield-is-espn-direct-to-consumer-viable/) on BTIG's Web site entitled Iger vs. Greenfield (free registration required). And Andrew Ross Sorkin wrote about Greenfield's views and Disney's challenges in a well-documented New York Times column this morning. http://www.nytimes.com/2015/12/22/business/dealbook/at-disney-a-dark-force-looms-large-unbundling.html?ref=business&_r=0%20-
Of course, shorting Disney or any other stock isn't for everyone. The point of my analysis wasn't just to recommend a DIS short, but to provide reasons why those who are long on the stock might consider paring back or even eliminating their stakes.
Thanks for providing this interesting information.
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Disney's Iger Says ESPN Paid High Rights Fees To "Perpetuate A Competitive Advantage"
Published December 22, 2015 Font Size
Iger says he has no second thoughts about long-term rights fees for ESPN
Disney Chair & CEO Bob Iger yesterday said the company, despite recent stock downgrades from analysts, "will continue to derive growth from ESPN," but it will "just not be at the rate we have seen before.” Iger appeared on Bloomberg TV and said of ESPN's long-term rights fees, "We haven’t second-guessed that at all. Our cable fees are going up per subscriber, but as I’ve said, ... we have lost some subscribers." Iger: "We made a decision to license ... the NFL and Major League Baseball, the NBA, and the College Football Championships to name a few, for one main reason. That is to serve the ESPN fan well and really to essentially perpetuate a competitive advantage that ESPN has and to continue to support the strength of its brand and the consumer proposition that it makes." Iger said of the current TV model, "It is a business that is relatively mature, the multichannel television business, so you’re not going to see growth in households that’s anything close to what the business experience over the last decade or two decades. There’s some pricing leverage, there’s still some price increases that can and will be taken, certainly by the best channels in my opinion. By the way, we believe we will continue to see some growth in that business, but it won’t grow at the rate that we saw in the past." Iger: "If you’re in a market that is being disrupted, you obviously want the best products that are out there in a disrupted market, and we believe we have that at the company, including obviously ESPN. If you’re in a market that is changing, you’d rather have a very strong hand, so I’ve said what’s better than ESPN in that regard?"
OVER THE TOP: Bloomberg TV’s David Westin asked, "How important is direct-to-consumer for ESPN’s future?” Iger said, “We believe in the multichannel model, and we believe that it’s not only not going away, but the predictions about its demise were, we think, overstated. That said, we talked about growth being limited in many respects, or more limited than before. We think at some point, if that business model were to fall apart, there are opportunities to go direct-to-consumer.” Iger: "Long-term, ESPN will be just fine, but we refuse to have our head in the sand or be Pollyannaish about what we’re seeing in the marketplace and others may be seeing things differently. We believe there’s disruption going on and there’s more disruption ahead and we’re spending a fair amount of time making sure we’re well positioned in that market. Obviously ESPN is we believe something of great value even in this disrupted world.”
SHOTS FIRED? Iger said of BTIG analyst Rich Greenfield, who yesterday questioned Iger's claim that an ESPN OTT net could launch immediately if the company wanted, "The analyst that came out with that report has been wrong about us on a number of occasions, and so one would have to question, if he’s been wrong so often before how valid were his comments this time around? He’s entitled to his opinions and the other thing I would say, I don’t know where the accountability is. When he’s wrong, I don’t know who he’s accountable for" ("Bloomberg West," Bloomberg TV, 12/21).
CRYSTAL BALLERS: In N.Y., Andrew Ross Sorkin notes Greenfield on Friday "became the only analyst to have a 'sell' rating" on Disney. Most analysts "wave off concerns about ESPN, arguing that this won’t be a problem for some time and that live sports will remain the most desirable programming for viewers who still want a bundle of channels." Rosenblatt Securities Senior Research Analyst Martin Pyykkonen said, "The turmoil and disruption will most be felt by the distributors and some of the weaker programming content companies. For Disney, we think it’s a reasonable bet that they will be a necessary part of almost any skinnier programming package going forward." Sorkin notes it is also possible that shifts in TV-viewing habits will "change more slowly than some of the most dire predictions." Disney "may have seen all of this coming," as it has "spent the past decade diversifying its business by adding big franchises like Star Wars, Marvel and Pixar while expanding its theme park business." So while the entire TV industry "may be challenged, perhaps Disney will be able to weather the storm better than many others" (N.Y. TIMES, 12/22). The WALL STREET JOURNAL's Ben Fritz writes despite a record-breaking opening for "Star Wars: The Force Awakens," some Wall Street analysts "remain concerned about cord-cutting pressures" on ESPN and are "taking the current hoopla as an opportunity to sell." Jefferies analyst John Janedis yesterday said that the success of the film "doesn’t change his core thesis that slowing media-industry growth and rising sports-rights costs at ESPN will limit further upward earnings revisions." ESPN is Disney’s "biggest single business and Wall Street has been sensitive to any signs that its growth rate is slowing as fewer customers pay for cable-television bundles" (WALL STREET JOURNAL, 12/22).
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Star Wars came out December 18 (sneak peek December 17). It is now the fastest movie to $1 billion in revenues (9 days).
December 16 (day before sneak peek) to now Disney stocks crushed for a loss of 6% (was 8% until yesterday's bounce back).
Their is information is the stock price action. And the fact that Disney's stock is going straight down while lines are around the block for Star Wars speaks volumes.
Cutting to the chase, all the comments here about the Star Wars property are proving correct. We now have hard numbers to confirm it. But that still cannot offset the worry about Disney's death star - ESPN. The worry is ESPN is seeing massive cord cutting is so palpable that not even the greatest movie release in human history can save Disney's stock.
This is a long thread so here is the Cliff Notes version ...
First ESPN accounts for 44% of revenues and 54% of earnings at Disney. Disney might as well change its ticker symbol from DIS to ESPN.
Two years ago ESPN had 99 million subscribers. Last update this fall from Disney was ESPN was down to 92 million. This is a collapse.
When ESPN pays billions and billions for broadcast rights for everything from Monday Night Football to ACC basketball, this kind of cord cutting is so worrisome for Wall Street that even Star Wars cannot save Disney's stock.
Anticipating Chicos response ... Disney CEO Bob Iger will correctly say ESPN is still profitable. Like the window washer that fell from the 10th floor and said "so far so good" as he crossed the third floor, Wall Street's concern is Disney's 92 million subscribers are 85 million in a year and 73 million in two years and ESPN's fixed costs (broadcast rights) cannot be cut to fall with its declining subscribers (revenues) so the fear is losses are coming.
Want Disney's stock to go back to $125 to $130? Convince Wall Street cord-cutting will end at 91 million, or ESPN can just jack it fees 15% to 20% and cover the cord-cutters. That argument cannot be made so the stock suffers.
Restated simply, the sports broadcasting bubble has popped. What follows next is the mess.
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Sigh
"Despite the mounting worries about ESPN, though, most investors see the diversity of Disney's business units as a big plus. Analysts, on average, think Disney could be worth $119 a share in 18 months, which would be 13% upside from the current price"
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OVER THE TOP: Bloomberg TV’s David Westin asked, "How important is direct-to-consumer for ESPN’s future?” Iger said, “We believe in the multichannel model, and we believe that it’s not only not going away, but the predictions about its demise were, we think, overstated. That said, we talked about growth being limited in many respects, or more limited than before. We think at some point, if that business model were to fall apart, there are opportunities to go direct-to-consumer.” Iger: "Long-term, ESPN will be just fine, but we refuse to have our head in the sand or be Pollyannaish about what we’re seeing in the marketplace and others may be seeing things differently. We believe there’s disruption going on and there’s more disruption ahead and we’re spending a fair amount of time making sure we’re well positioned in that market. Obviously ESPN is we believe something of great value even in this disrupted world.”
In other words, we will see stand-alone ESPN in the near future - under 2 years is my prediction.
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Just got a letter from DirecTV about my costs going up. I think I'll have to call Time-Warner to get an estimate. I don't want to go away from DirecTV, but my satellite/Internet is already over $200 per month and the only real extras I have are the DTV sports package, HBO, Cinemax, and Showtime. I'd much rather stick with DirecTV than go to TWC (who is generally terrible in my estimation) but man...$200/month feels really steep. Especially when my Netflix/Amazon Prime combination comes in at under $20 per month. Add Hulu and what's the point?
Honestly, the only real attraction left is live sports. That might be the next big Internet opportunity. If some company could become the Netflix of live sports, streaming ESPN, FS1, NBCSN, and all the other major sports networks, that would be a goldmine. I have to imagine most sports fans would pay $30/month for that at the least. Do that, then include an archive feature for old games and events and you'd have an easy billion-dollar business. Someone must be working on that by now.
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Star Wars came out December 18 (sneak peek December 17). It is now the fastest movie to $1 billion in revenues (9 days).
December 16 (day before sneak peek) to now Disney stocks crushed for a loss of 6% (was 8% until yesterday's bounce back).
Their is information is the stock price action. And the fact that Disney's stock is going straight down while lines are around the block for Star Wars speaks volumes.
Cutting to the chase, all the comments here about the Star Wars property are proving correct. We now have hard numbers to confirm it. But that still cannot offset the worry about Disney's death star - ESPN. The worry is ESPN is seeing massive cord cutting is so palpable that not even the greatest movie release in human history can save Disney's stock.
This is a long thread so here is the Cliff Notes version ...
First ESPN accounts for 44% of revenues and 54% of earnings at Disney. Disney might as well change its ticker symbol from DIS to ESPN.
Two years ago ESPN had 99 million subscribers. Last update this fall from Disney was ESPN was down to 92 million. This is a collapse.
When ESPN pays billions and billions for broadcast rights for everything from Monday Night Football to ACC basketball, this kind of cord cutting is so worrisome for Wall Street that even Star Wars cannot save Disney's stock.
Anticipating Chicos response ... Disney CEO Bob Iger will correctly say ESPN is still profitable. Like the window washer that fell from the 10th floor and said "so far so good" as he crossed the third floor, Wall Street's concern is Disney's 92 million subscribers are 85 million in a year and 73 million in two years and ESPN's fixed costs (broadcast rights) cannot be cut to fall with its declining subscribers (revenues) so the fear is losses are coming.
Want Disney's stock to go back to $125 to $130? Convince Wall Street cord-cutting will end at 91 million, or ESPN can just jack it fees 15% to 20% and cover the cord-cutters. That argument cannot be made so the stock suffers.
Restated simply, the sports broadcasting bubble has popped. What follows next is the mess.
I understand your viewpoint and, except for the fact that you like to beat pretty much every subject bloody, a lot of what you say makes sense. Much of it is factual, too. The film IS a huge success and the share price IS going down despite that great news.
I do have a couple of quibbles, though.
First, Disney's stock price has not gone "straight down." It traded between 95 and 105 from Aug. 20 to Oct. 8, almost for two months solid. It moved up to 120 on Nov. 20 -- which I guess could have been termed "straight up" -- and then has drifted steadily downward since. Its loss has hardly been a catastrophe; DIS hasn't even retreated to where it was 6 weeks ago. It has experienced a couple of notable single-day falls, which always accentuate the negative.
Second, going from 99 million subscribers to 92 million subscribers over a two-year span -- a reduction of 7% -- is that really a "collapse"?
Heisy, you like to be a little bombastic with your wording and you like to be a lot all-or-nothing in your declarations. And goodness knows, you're always 100% certain you are right ... even about Hillary not being the Democratic nominee for president.
Maybe you do know a lot about the disaster that is Disney's future better than, say, the people at Morningstar, who rate DIS a 4-star buy and give it a $134 fair value.
I guess we'll see soon enough, although I'm more willing to wait a few months, or even years, before I make definitive declarations. Then again, I am an investor and not a trader, so I don't mind being patient.
BTW, I do not own a single share of Disney stock. It is on my watch list, however, and I very well could initiate a position if it moves back under 100.
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Just got a letter from DirecTV about my costs going up. I think I'll have to call Time-Warner to get an estimate. I don't want to go away from DirecTV, but my satellite/Internet is already over $200 per month and the only real extras I have are the DTV sports package, HBO, Cinemax, and Showtime. I'd much rather stick with DirecTV than go to TWC (who is generally terrible in my estimation) but man...$200/month feels really steep. Especially when my Netflix/Amazon Prime combination comes in at under $20 per month. Add Hulu and what's the point?
Honestly, the only real attraction left is live sports. That might be the next big Internet opportunity. If some company could become the Netflix of live sports, streaming ESPN, FS1, NBCSN, and all the other major sports networks, that would be a goldmine. I have to imagine most sports fans would pay $30/month for that at the least. Do that, then include an archive feature for old games and events and you'd have an easy billion-dollar business. Someone must be working on that by now.
Conceptually here is the problem (don't hold me to the exact numbers but I think they are close).
ESPN has 92 million subscribers on Cable and Sat. They pay $6.65/month just for ESPN (plus ESPN2, ESPNnews and so on). The majority of cable subscribers never watch ESPN. But the minority that do are so passionate about live sports that they demand it be carried on basic cable so that means everyone pays for it (otherwise someone else will, a competing cable or Sat carrier, and they will lose all those subscribers immediately). And this is just ESPN, now think of TWC or Comcast carrying local baseball games. Maybe 10% of the subscribers want that yet 100% pay for it.
What I'm getting at is if someone made a Netflix for live sports with all the channels, it will have a small minority of very loyal subscribers (say 15 to 20 million) and to make money given the broadcaster rights, it would probably cost over $100/month.
Sports right fees are extremely bloated because the business model assumed that all of America would pay for it via their cable bill because a passionate few demand live sports channels that carriers had to offer and they could charge a mint for it (ESPN is far and away the most expense channel we all pay for). Cord-cutting is blowing up this model (the sports bubble is popping). First the TV carriers get crushed because they have the fixed cost of paying agreed upon broadcast rights. Later it will be the sports leagues (or conferences) as they find their broadcast rights will attach less money.
As I noted before the Big East is in a good place only because they have 9 years left on their deal. This is 2024 problem for them.
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First, Disney's stock price has not gone "straight down." It traded between 95 and 105 from Aug. 20 to Oct. 8, almost for two months solid. It moved up to 120 on Nov. 20 -- which I guess could have been termed "straight up" -- and then has drifted steadily downward since. Its loss has hardly been a catastrophe; DIS hasn't even retreated to where it was 6 weeks ago. It has experienced a couple of notable single-day falls, which always accentuate the negative.
The chart below is the last five years of Disney's stock. The August 2015 announcement of subscribers losses is very apparent. It change the trend. Restated, the single biggest thing to happened to Disney stock in the last five years was the ESPN announcement that it is losing subscribers. It single-handily ended the $30 to $120 uptrend.
So yes a stock that was in a relentless never look back uptrend for five years. Nothing stopped Disney. Then ESPN announces larger than expected cord-cutting and the roof fell in. So now it is stumbling 8% on the release of the highest grossing film ever. In my book, that is getting "crushed." (As I noted before, I don't think it necessarily goes down. Five years of uptrend is over. I think the stock is $110 in five years, hence my comment on a previous page that it is "dead money.")
(http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=DIS&uf=0&type=2&size=2&sid=1618&style=320&freq=2&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=12&rand=525242311&compidx=&ma=0&maval=9&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1)
Second, going from 99 million subscribers to 92 million subscribers over a two-year span -- a reduction of 7% -- is that really a "collapse"?
If it stops at 92 no it is not a big deal. The fear is this is the early innings of cord-cutting. See the chart above, that is what it says.
Maybe you do know a lot about the disaster that is Disney's future better than, say, the people at Morningstar, who rate DIS a 4-star buy and give it a $134 fair value.
I guess we'll see soon enough, although I'm more willing to wait a few months, or even years, before I make definitive declarations. Then again, I am an investor and not a trader, so I don't mind being patient.
BTW, I do not own a single share of Disney stock. It is on my watch list, however, and I very well could initiate a position if it moves back under 100.
"Despite the mounting worries about ESPN, though, most investors see the diversity of Disney's business units as a big plus. Analysts, on average, think Disney could be worth $119 a share in 18 months, which would be 13% upside from the current price"
I mentioned that I work on Wall Street (although in Chicago, not NYC). I can tell you that the largest money managers in the world pay absolutely no attention to these calls. They do not view them as credible. The reason is this is their call on every stock! Including Disney in August right before the ESPN announcement.
I don't either.
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Just got a letter from DirecTV about my costs going up. I think I'll have to call Time-Warner to get an estimate. I don't want to go away from DirecTV, but my satellite/Internet is already over $200 per month and the only real extras I have are the DTV sports package, HBO, Cinemax, and Showtime. I'd much rather stick with DirecTV than go to TWC (who is generally terrible in my estimation) but man...$200/month feels really steep. Especially when my Netflix/Amazon Prime combination comes in at under $20 per month. Add Hulu and what's the point?
Honestly, the only real attraction left is live sports. That might be the next big Internet opportunity. If some company could become the Netflix of live sports, streaming ESPN, FS1, NBCSN, and all the other major sports networks, that would be a goldmine. I have to imagine most sports fans would pay $30/month for that at the least. Do that, then include an archive feature for old games and events and you'd have an easy billion-dollar business. Someone must be working on that by now.
Time Warner...raised prices
Dish...raised prices
Comcast...raised prices
Cox...raised prices
Pretty simple. Econ 101
The cost of sales goes up every year at the first of the year because contracts start a new and Disney, Fox, CBS, etc, etc all get rate increases. Now Fox is starting to pull back from Netflix as are others. More price increases across the board.
http://www.watertowndailytimes.com/news03/time-warner-cable-directv-and-dish-network-raising-prices-in-2016-20151227
http://www.godanriver.com/work_it_sova/news/cable-bills-are-rising-again/article_f5f34c6c-aa62-11e5-a58d-af6e5a992e26.html
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Below
Conceptually here is the problem (don't hold me to the exact numbers but I think they are close).
ESPN has 92 million subscribers on Cable and Sat. They pay $6.65/month just for ESPN (plus ESPN2, ESPNnews and so on). NOPE...incorrect number and it continues to go up yearly. For obvious reasons I cannot state what the number is, but that number is wrong and low. The majority of cable subscribers never watch ESPN. But the minority that do are so passionate about live sports that they demand it be carried on basic cable so that means everyone pays for it (otherwise someone else will, a competing cable or Sat carrier, and they will lose all those subscribers immediately). Partially true, but it isn't the minority demanding it on basic cable, it is the Walt Disney company. Just as NewsCorp demands Fox be on basic cable, and AMC demands it, and Discover demands it, etc, etc. And this is just ESPN, now think of TWC or Comcast carrying local baseball games. Maybe 10% of the subscribers want that yet 100% pay for it. More like 40% of the subscribers and 85% pay for it.
What I'm getting at is if someone made a Netflix for live sports with all the channels, it will have a small minority of very loyal subscribers (say 15 to 20 million) and to make money given the broadcaster rights, it would probably cost over $100/month. Yes, some have looked at this...some on this very board have been very very very very involved in this very idea...and with lots of crazy smart people concluded in today's day and age it cannot be done. Though your $100 is too high, nevertheless it is a tidy sum. TV is a subsidized game, that's how great content is created. Much like the drug industry. You want great movies, series, etc, well most don't succeed and you need a few to hit, plus you need predictable revenue streams.
Sports right fees are extremely bloated because the business model assumed that all of America would pay for it via their cable bill because a passionate few demand live sports channels that carriers had to offer and they could charge a mint for it (ESPN is far and away the most expense channel we all pay for). Cord-cutting is blowing up this model (the sports bubble is popping). First the TV carriers get crushed because they have the fixed cost of paying agreed upon broadcast rights. Later it will be the sports leagues (or conferences) as they find their broadcast rights will attach less money. TBD. You are partly correct, but also wrong just the same. Sports rights exploded for many reasons, including RATINGS and advertising. It is DVR proof, and that means you get to charge a pretty penny. The other parts you talk about, sure there is some truth to this.
However, much like did with DVD sales, taxis, etc, you put things in the buried column years before you need to. All credible analysis show Pay TV model is here for a LONG time to come. It will erode some with subscribers, but revenues will be solid. Projections are that still 85% plus of the US will be pay TV into the 2020's. Furthermore, who do you think is getting into the cord cutting business? Verizon. Check. AT&T \ DIRECTV. Check. Dish. Check. Comcast. Check. So they're still going to get theirs, just at different margins, but also at different expenses. Let me give you an example. Dish and DIRECTV spend about $900 to acquire a customer. That is why they need two year contracts, because the SAC cost is so high for the marketing, equipment, installer, etc. They are now selling OTT products with a SAC of about $150. Now, are they getting the revenues for OTT or the two year contract? Nope, but they are also clearing money in the first few months that they weren't clearing on other subs until much later. It's a trade they can live with, to a certain point. For the customer, there is good and bad. They don't get as quality a service, have to rely on their own connections and data plans, limited to 2 concurrent streams or less, etc, etc.
As I noted before the Big East is in a good place only because they have 9 years left on their deal. This is 2024 problem for them.
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First, Disney's stock price has not gone "straight down." It traded between 95 and 105 from Aug. 20 to Oct. 8, almost for two months solid. It moved up to 120 on Nov. 20 -- which I guess could have been termed "straight up" -- and then has drifted steadily downward since. Its loss has hardly been a catastrophe; DIS hasn't even retreated to where it was 6 weeks ago. It has experienced a couple of notable single-day falls, which always accentuate the negative.
The chart below is the last five years of Disney's stock. The August 2015 announcement of subscribers losses is very apparent. It change the trend. Restated, the single biggest thing to happened to Disney stock in the last five years was the ESPN announcement that it is losing subscribers. It single-handily ended the $30 to $120 uptrend.
So yes a stock that was in a relentless never look back uptrend for five years. Nothing stopped Disney. Then ESPN announces larger than expected cord-cutting and the roof fell in. So now it is stumbling 8% on the release of the highest grossing film ever. In my book, that is getting "crushed." (As I noted before, I don't think it necessarily goes down. Five years of uptrend is over. I think the stock is $110 in five years, hence my comment on a previous page that it is "dead money.")
(http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=DIS&uf=0&type=2&size=2&sid=1618&style=320&freq=2&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=12&rand=525242311&compidx=&ma=0&maval=9&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1)
Second, going from 99 million subscribers to 92 million subscribers over a two-year span -- a reduction of 7% -- is that really a "collapse"?
If it stops at 92 no it is not a big deal. The fear is this is the early innings of cord-cutting. See the chart above, that is what it says.
I mentioned that I work on Wall Street (although in Chicago, not NYC). I can tell you that the largest money managers in the world pay absolutely no attention to these calls. They do not view them as credible. The reason is this is their call on every stock! Including Disney in August right before the ESPN announcement.
I don't either.
OK, Heisy, nicely done. You mostly -- MOSTLY -- stuck to facts here and in so doing, you basically are admitting to being over the top earlier.
For example:
The chart below is the last five years of Disney's stock. The August 2015 announcement of subscribers losses is very apparent. It change the trend. Restated, the single biggest thing to happened to Disney stock in the last five years was the ESPN announcement that it is losing subscribers. It single-handily ended the $30 to $120 uptrend.
Yep, and that is still very different -- and far more truthful -- than saying the stock has gone "straight down" as you did earlier.
Unfortunately, I own a stock that has gone straight down: KMI. (Thankfully, I sold most of it before it plummeted, but I still own a little unfortunately.) The difference between KMI going "straight down" from 44 to 15 and DIS going down and then going sideways and then going up and now trending downish is -- as your hero would say -- youge! As this chart you presented shows.
If it stops at 92 no it is not a big deal. The fear is this is the early innings of cord-cutting. See the chart above, that is what it says.
Yes, that is the fear, and it very possibly is a valid fear despite what Iger says (CEOs fib all the time in an effort to prop up their stock). Again, this statement of yours is a big difference from your earlier statement calling it a "collapse." It might indeed collapse down the line; it has not collapsed yet. Again, you seem to acknowledge that with this toned-down rhetoric.
I mentioned that I work on Wall Street (although in Chicago, not NYC). I can tell you that the largest money managers in the world pay absolutely no attention to these calls. They do not view them as credible. The reason is this is their call on every stock! Including Disney in August right before the ESPN announcement.
Wow. I hope you got rich-rich-richer-than-rich following the fortune-telling abilities of your buddies by shorting DIS right before the ESPN announcement! If so, can I borrow a million or two?
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Now Fox is starting to pull back from Netflix as are others. More price increases across the board.
They aren't going to pull back very far when Netflix pays as much as $750,000 per episode for streaming rights.
And if the networks want to stack shows for bing-watching via Video on Demand, then Netflix lowers their fees for those shows accordingly.
In the long run, though, Netflix, Hulu, and Amazon Prime will find a way to work with the networks. They will find a way for all sides to maximize profits.
Despite all of CBB's protestations that Netflix was in trouble, they are the driver here.
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The other aspect about DIS stock that few seem to take into consideration. The dividend. It is an income producing stock. Great companies can afford to pay dividends. It is not a high yield dividend like AT&T, but a dividend nonetheless in the neighborhood of an Apple and others.
This past year, two dividends were paid out for Disney stock. This year a 7.6% increase on the dividend from the previous year. For a long time DIS was doing one dividend a year, now its twice per year. That's real money.
(http://i0.wp.com/www.suredividend.com/wp-content/uploads/2014/07/Sure-Dividend-Disney-Dividend-Payout-2.png)
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The other aspect about DIS stock that few seem to take into consideration. The dividend. It is an income producing stock. Great companies can afford to pay dividends. It is not a high yield dividend like AT&T, but a dividend nonetheless in the neighborhood of an Apple and others.
This past year, two dividends were paid out for Disney stock. This year a 7.6% increase on the dividend from the previous year. For a long time DIS was doing one dividend a year, now its twice per year. That's real money.
(http://i0.wp.com/www.suredividend.com/wp-content/uploads/2014/07/Sure-Dividend-Disney-Dividend-Payout-2.png)
Wall Street is all about what the dividend growth rate will be in coming years, not the last five years.
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They aren't going to pull back very far when Netflix pays as much as $750,000 per episode for streaming rights.
And if the networks want to stack shows for bing-watching via Video on Demand, then Netflix lowers their fees for those shows accordingly.
In the long run, though, Netflix, Hulu, and Amazon Prime will find a way to work with the networks. They will find a way for all sides to maximize profits.
Despite all of CBB's protestations that Netflix was in trouble, they are the driver here.
Netflix will double its output of original shows to 31 next year
http://www.businessinsider.com/netflix-will-produce-31-original-shows-in-2016-2015-12
Netflix’s head of content, Ted Sarandos said on Monday that Netflix will basically double its output of original shows next year, according to Broadcasting & Cable. Sarandos revealed that Netflix will produce 31 scripted shows next year, up from 16 this year. Netflix also has the following in the pipeline, according to Sarandos: 10 feature films, 30 kids shows, 12 documentaries, and 10 stand-up specials.
Are they producing more stuff than Disney/ABC? What about the quality?
Streaming titans Amazon and Netflix win big at 2015 Emmys
http://www.dailydot.com/entertainment/emmys-2015-winners-amazon-netflix/
Netflix and Amazon both marked their territory at the 67th Annual Emmy Awards Sunday, with the streaming titans bringing home five combined, high-profile statues.
It was a banner year for Web-based prestige TV, with 46 nominations between them for shows like Transparent, Unbreakable Kimmy Schmidt, House of Cards, and Orange Is the New Black. Netflix's 34 nominations led the pack, and Amazon garnered the remaining 12.
How many did Disney/ABC get?
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Wall Street is all about what the dividend growth rate will be in coming years, not the last five years.
And the dividend growth rate in the coming years looks very good, including two payments a year, not an annualized dividend like years in the past.
Incidentally, ONE analyst is saying sell. Everyone else, buy, outperform or hold.
http://markets.ft.com/research/Markets/Tearsheets/Forecasts?s=DIS:NYQ
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And the dividend growth rate in the coming years looks very good, including two payments a year, not an annualized dividend like years in the past.
Incidentally, ONE analyst is saying sell. Everyone else, buy, outperform or hold.
http://markets.ft.com/research/Markets/Tearsheets/Forecasts?s=DIS:NYQ
And they all said that when the stock was $120 in August, two week later it was $90.
90% of all analyst always have buys on stocks, even in the market panic of 2008 they were all saying buy too.
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Netflix will double its output of original shows to 31 next year
And most are high quality shows - as the Emmy noms indicate. Prime is also upping the ante in that direction as well. The standup comedy shows and dcumentaries are also outstanding.
The original movies thus far? I'll pass on any Adam Sandler schlock.
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And they all said that when the stock was $120 in August, two week later it was $90.
90% of all analyst always have buys on stocks, even in the market panic of 2008 they were all saying buy too.
But you knew differently in 2008, and you know differently today! That's why they call you The Sage of Wall Street.
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Netflix will double its output of original shows to 31 next year
http://www.businessinsider.com/netflix-will-produce-31-original-shows-in-2016-2015-12
Netflix’s head of content, Ted Sarandos said on Monday that Netflix will basically double its output of original shows next year, according to Broadcasting & Cable. Sarandos revealed that Netflix will produce 31 scripted shows next year, up from 16 this year. Netflix also has the following in the pipeline, according to Sarandos: 10 feature films, 30 kids shows, 12 documentaries, and 10 stand-up specials.
Are they producing more stuff than Disney/ABC? What about the quality?
Streaming titans Amazon and Netflix win big at 2015 Emmys
http://www.dailydot.com/entertainment/emmys-2015-winners-amazon-netflix/
Netflix and Amazon both marked their territory at the 67th Annual Emmy Awards Sunday, with the streaming titans bringing home five combined, high-profile statues.
It was a banner year for Web-based prestige TV, with 46 nominations between them for shows like Transparent, Unbreakable Kimmy Schmidt, House of Cards, and Orange Is the New Black. Netflix's 34 nominations led the pack, and Amazon garnered the remaining 12.
How many did Disney/ABC get?
A few things.
I have two former Netflix employees on my staff, one former Hulu employee. The dirty little secret is no one watches their originals...well no one is not correct, but not many.
Netflix barely makes a profit, they spend a ton of money, and that's why they barely make a profit. Hulu has YET to be profitable...EVER. Amazon Prime...if it were its own P&L...has NEVER made a profit.
People just don't get it, but I don't blame them because they aren't in the industry and they don't understand the industry. Is Netflix a player? Of course, because they throw money around and studios are trying to monetize. However, what some of the studios are finally realizing (and I and others said this would happen at least 4 years ago), they have traded digital dollars for digital dimes. It's hurting their bottom numbers. So they are pulling back, because they have no choice.
I'm still a Netflix stockholder, though it is irrational. They have a market cap of $55 billion on only $6 billion in revenue and $300 million in profit. Tiny laughable. Let me give a comparison, Time Warner has the same market cap of around $50 billion, but on $24 billion in revenue. Fox, very similar, on $27 billion in revenue. Netflix is so crazy over valued, but as long as the market is irrational then I'll hang on to it. I have my sell puts in place. Not one for the long haul for me as pricing pressures continue to hit them, growth is slowing, their SAC costs have exploded in the last 12 months.
Everyone is getting into the game they used to be mostly alone in and barely made any money to begin with, but the difference now is you have huge companies getting in to preserve ecosystem revenues.
http://investorplace.com/2015/11/netflix-stock-gearing-another-epic-collapse-nflx/#.VoNehxUrIdV
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A few things.
I have two former Netflix employees on my staff, one former Hulu employee. The dirty little secret is no one watches their originals...well no one is not correct, but not many.
Netflix barely makes a profit, they spend a ton of money, and that's why they barely make a profit. Hulu has YET to be profitable...EVER. Amazon Prime...if it were its own P&L...has NEVER made a profit.
ESPN finally made a profit in its 9th year.
Amazon finally made a profit in its 10 year.
For tesla, it was its 11th year.
For Turner Broadcasting, it took 21 years.
Some would have only seen deficiencies in these companies.
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I have two former Netflix employees on my staff, one former Hulu employee. The dirty little secret is no one watches their originals...well no one is not correct, but not many.
How many people watched Arliss? How many watched Sex and the City or The Sopranos in the late 1990s? In those days, most people viewed HBO series as novelty shows. The bulk of their programming was movies 24/7. Slowly, the word got around. By the end of its run, Sopranos was near must-watch television (and probably still had far lower ratings than Game of Thrones or True Detective). The same went for Weeds and Dexter when Showtime first started to seriously venture into original programming.
Netflix has really only been doing original programming about 2-3 years. House of Cards and Lilyhammer were the first ones I heard about as being worth watching (still haven't seen Lilyhammer), but it amazes me how many people are talking about Orange is the New Black, Daredevil, Jessica Jones, Making a Murderer, and Bloodline. For Netflix, this is what original programming was on HBO about 15 years ago. Of course no one was watching, but that doesn't mean viewers weren't coming.
If Netflix and Prime continue winning awards and getting the water cooler talk, people will watch. Maybe Making a Murderer is an exception here in Wisconsin because of the local nature of the story, but it's truly amazing how many people are talking about it. I haven't had a day in the past week where someone didn't talk about it unsolicited, and most people I talk to have already binge watched the entire thing.
Maybe not many are watching, but the broadcast model for shows has changed radically since HBO transitioned from movies to original programming as their primary draw, and I've no doubt in 10 years, Netflix will still be going strong with continued quality and vastly more viewers. Wouldn't surprise me to see some of their shows make it to syndication as well.
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How many people watched Arliss? How many watched Sex and the City or The Sopranos in the late 1990s? In those days, most people viewed HBO series as novelty shows. The bulk of their programming was movies 24/7. Slowly, the word got around. By the end of its run, Sopranos was near must-watch television (and probably still had far lower ratings than Game of Thrones or True Detective). The same went for Weeds and Dexter when Showtime first started to seriously venture into original programming.
Netflix has really only been doing original programming about 2-3 years. House of Cards and Lilyhammer were the first ones I heard about as being worth watching (still haven't seen Lilyhammer), but it amazes me how many people are talking about Orange is the New Black, Daredevil, Jessica Jones, Making a Murderer, and Bloodline. For Netflix, this is what original programming was on HBO about 15 years ago. Of course no one was watching, but that doesn't mean viewers weren't coming.
If Netflix and Prime continue winning awards and getting the water cooler talk, people will watch. Maybe Making a Murderer is an exception here in Wisconsin because of the local nature of the story, but it's truly amazing how many people are talking about it. I haven't had a day in the past week where someone didn't talk about it unsolicited, and most people I talk to have already binge watched the entire thing.
Maybe not many are watching, but the broadcast model for shows has changed radically since HBO transitioned from movies to original programming as their primary draw, and I've no doubt in 10 years, Netflix will still be going strong with continued quality and vastly more viewers. Wouldn't surprise me to see some of their shows make it to syndication as well.
Absolutely correct on HBO. I ran their business for DIRECTV for 6 years, and the viewership of their originals was often low, nowhere close to the movies product. My point is, people talk about the originals, but few people watch them. And yes, that is why they are doing it.
The big difference, however, is HBO is massively profitable, while Netflix is barely profitable. That is a MASSIVE difference.
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Absolutely correct on HBO. I ran their business for DIRECTV for 6 years, and the viewership of their originals was often low, nowhere close to the movies product. My point is, people talk about the originals, but few people watch them. And yes, that is why they are doing it.
The big difference, however, is HBO is massively profitable, while Netflix is barely profitable. That is a MASSIVE difference.
HBO has been running original programming for over 20 years. Netflix for less than 5 years.
There is a MASSIVE difference in how long the companies have been around.
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HBO has been running original programming for over 20 years. Netflix for less than 5 years.
There is a MASSIVE difference in how long the companies have been around.
Exactly. Beyond that, HBO has been available as a premium service for 43 years with 20 years of original content. Netflix started out as a DVD delivery service 18 years ago and did that almost exclusively for the better part of a decade. They have been offering streaming for less than 10 years and original programming for less than 5.
Comparing the two is somewhat silly because for the most part, HBO has been offering the same type of service for over 40 years, while Netflix almost completely shifted their business model and has been offering this same type of service for 8 years.
Netflix may not be profitable now, but if they keep winning awards and earning viewers by word of mouth, then eventually, just like HBO they'll have the audience that follows. It's blatantly obvious that streaming is going to be the future of media delivery. I have to imagine anyone inside or outside the industry can see that. They are at the forefront of the streaming market with the best original content. That will certainly pay off in the long run.
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Exactly. Beyond that, HBO has been available as a premium service for 43 years with 20 years of original content. Netflix started out as a DVD delivery service 18 years ago and did that almost exclusively for the better part of a decade. They have been offering streaming for less than 10 years and original programming for less than 5.
Comparing the two is somewhat silly because for the most part, HBO has been offering the same type of service for over 40 years, while Netflix almost completely shifted their business model and has been offering this same type of service for 8 years.
Netflix may not be profitable now, but if they keep winning awards and earning viewers by word of mouth, then eventually, just like HBO they'll have the audience that follows. It's blatantly obvious that streaming is going to be the future of media delivery. I have to imagine anyone inside or outside the industry can see that. They are at the forefront of the streaming market with the best original content. That will certainly pay off in the long run.
5 years of Netflix stock below (black bars). The stock has gone from $5 to $120. How can this be? They are losing money or barely profitable!
Wall Street looks forward, current profitability is looking backwards. Investors care about the future, not the past.
Wall Street believes in their business model and that is why they have gone up 20 fold in the last five years.
(http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=nflx&uf=0&type=2&size=2&sid=1142344&style=320&freq=2&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=12&rand=318383123&compidx=&ma=0&maval=9&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1)
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Going back and reading some of the comments in this thread and similar ones.
It's amazing that a "broken model" brings in more money than 99.99% of businesses in the United States. Industries would be killing for this broken model. LOL.
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Going back and reading some of the comments in this thread and similar ones.
It's amazing that a "broken model" brings in more money than 99.99% of businesses in the United States. Industries would be killing for this broken model. LOL.
Timing is everything.
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5 years of Netflix stock below (black bars). The stock has gone from $5 to $120. How can this be? They are losing money or barely profitable!
Wall Street looks forward, current profitability is looking backwards. Investors care about the future, not the past.
Wall Street believes in their business model and that is why they have gone up 20 fold in the last five years.
(http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=nflx&uf=0&type=2&size=2&sid=1142344&style=320&freq=2&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=12&rand=318383123&compidx=&ma=0&maval=9&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1)
No one here said it couldn't happen, of course it can. They're betting on a dream, we'll see it comes through. Amazon has only had one profitable quarter in years. Now, having said that, it means if the dream takes a few hits, you're in serious trouble because there is no real dollars to prop you up.
I have Netflix stock and have owned it since Feb of 2013, but I have puts when to sell it because they are totally dependent on subscriber growth. They're largely at that ceiling in the US, which means massive expenditures globally to continue to drive subscriber growth to fuel and pay for their $6.8 billion content costs. Thus, paltry profits. Hopefully they keep it going, works fine by me for my portfolio. If they don't, then I'll have made my money and done just fine.
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Timing is everything.
It can be, so can very good business plans, sharp people, some luck, and tremendous amount of hard work.
Of course, none of these are guarantees of anything either.
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Called DTV yesterday and was able to save $25 on my bill, so my costs will go down instead of going up, mainly because I called Time-Warner first and they offered me the same thing for about $44 per month less. If my wife wasn't so adamantly against TWC, I'd probably be switching.
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I found this article interesting .. written from the "future" of 2026 about how TV is delivered.
http://consumerist.com/2016/01/04/a-message-from-the-year-2026-about-the-future-of-your-tv/
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I found this article interesting .. written from the "future" of 2026 about how TV is delivered.
http://consumerist.com/2016/01/04/a-message-from-the-year-2026-about-the-future-of-your-tv/
Good read, good find
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Sigh
"Despite the mounting worries about ESPN, though, most investors see the diversity of Disney's business units as a big plus. Analysts, on average, think Disney could be worth $119 a share in 18 months, which would be 13% upside from the current price"
Disney briefly traded under $100 today. Down 15% since Star Wars was released.
The movie release is turning out to be a great sell signal.
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Called DTV yesterday and was able to save $25 on my bill, so my costs will go down instead of going up, mainly because I called Time-Warner first and they offered me the same thing for about $44 per month less. If my wife wasn't so adamantly against TWC, I'd probably be switching.
Why would you let her have a say in a man's decision
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Why would you let her have a say in a man's decision
Exactly. Her job is to cheer for whatever he decides.
I'm sure Chick does that with Glow 8-)
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Interesting article ..
https://www.techdirt.com/articles/20160114/06532833339/56-would-drop-espn-heartbeat-if-it-meant-saving-8-month-cable.shtml
Wish we'd pass a law .. no quoting of anything in monthly periods.
$8 a month is squat. If they phrased it $96/year, that 56% would be 86%.
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Interesting article ..
https://www.techdirt.com/articles/20160114/06532833339/56-would-drop-espn-heartbeat-if-it-meant-saving-8-month-cable.shtml
Wish we'd pass a law .. no quoting of anything in monthly periods.
$8 a month is squat. If they phrased it $96/year, that 56% would be 86%.
What law would you like passed?
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Somewhat halfhearted here, but .. I think we can all agree that average America's financial acumen isn't high.
Imagine the cable or phone industry, if they had to quote prices in annual numbers. Your cable bill isn't $135, it's $1,620. That's real money.
Your kid wants a cell phone? You gripe about a $60/month fee but you say hell no to $720 a year.
Everything is affordable if you boil it down to a daily figure, eh.
For just $25 a day, you too can drive a Jaguar! That's pennies a minute! You can find that in your couch.
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Somewhat halfhearted here, but .. I think we can all agree that average America's financial acumen isn't high.
Imagine the cable or phone industry, if they had to quote prices in annual numbers. Your cable bill isn't $135, it's $1,620. That's real money.
Your kid wants a cell phone? You gripe about a $60/month fee but you say hell no to $720 a year.
Everything is affordable if you boil it down to a daily figure, eh.
For just $25 a day, you too can drive a Jaguar! That's pennies a minute! You can find that in your couch.
Sure, including your house. How much will you actually pay for your house when all is said and done? $750K? $1M?
But doesn't the inverse work as well? Perhaps your monthly check is $7K....but annually it is $84K. Don't get me wrong, there are plenty of people out there that can't handle their finances. For that reason, there are credit checks for houses, cars, and yes....satellite TV and even by some of the phone companies.
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Interesting article ..
https://www.techdirt.com/articles/20160114/06532833339/56-would-drop-espn-heartbeat-if-it-meant-saving-8-month-cable.shtml
Wish we'd pass a law .. no quoting of anything in monthly periods.
$8 a month is squat. If they phrased it $96/year, that 56% would be 86%.
What it says is 56% of the cable subscribers don't watch ESPN and are fine with ditching it.
This is what is killing Disney, ESPN cost $8/month (far and away the most expensive channel on your cable bill) and Wall Street fears they are going to lose half their subscribers. The issue is not if but how/when. And what does ESPN do when they lose half their subs? They pay $6 billion a year in broadcasting rights. How do they pay this when half go away? What happens to sports leagues (college conferences) when they get half?
Do they charge us hard core watchers $16 month? Then does ESPN2, FS1, FS2, NBSsi, CBSsp all double their fees as well (because they are suffering from the same thing)? What about the local and regional stations (like FSN Wisconsin) do they also lose half their subs (or more) and have to double or triple their fees so we can watch baseball? Are you ready to pay $300 to $400/year for sports?
The entire sports model was built of getting the majority of their revenue from people that do not watch their product. This model is blowing up and going forward people are only going to pay for what they watch, and nothing else. In the parlance of the industry, "linear TV" is dead, we are just arguing what date to write on the death certificate.
Disney's stock lost one-quarter of its value in the last six months on the mere talk this will happen. And this stock dive happened when they were making $2 billion from Star Wars. So not even the highest grossing film in human history could save Disney's stock from the death star known as ESPN.
I understand my next statement is like desecrating a religion ... Disney's stock is done. It's going down for years. What did a long-term investors in Disney get until this summer? Answer, profits. What will a long-term investor get going forward ... losses? Or see what IBM did until 5 years ago, and in the last five years. You're looking at Disney's stock 5 years into the future.
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Disney briefly traded under $100 today. Down 15% since Star Wars was released.
The movie release is turning out to be a great sell signal.
The whole market is down considerably, how you can ignore this is silly.
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The whole market is down considerably, how you can ignore this is silly.
As I noted above Disney is down 3x the market's decline. Rationalizing Disney losses because the overall market is done is to miss the larger issues with Disney.
Restated, Disney would be at $110 is it was merely following the market lower. It closed under $97 yesterday.
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Disney reported record earnings and profits largely because of the monster money made off Star Wars. Disney profits topped $1 billion in Q4 2015 for the first time ever. Disney profits blew away analyst forecasts.
So what is the stock doing? It is getting crushed! Down 6% or $5 and under $87 for the first time since late 2014. It is down more than 25% since November 20th. Why? The death star pull of ESPN is so great that not even a billion dollar quarter can stop it from crushing Disney.
Wall Street is so worried that the "game is over" for ESPN that not even a billion dollars from Star Wars can save Disney.
More evidence the "Sports Bubble" has popped. If so, it will not be pretty.
Disney Sinks as Lower ESPN Profit Overshadows `Star Wars'
Programming costs, subscriber losses, dollar hit sports network
Studio, consumer units post gains from latest film release
http://www.bloomberg.com/news/articles/2016-02-09/disney-profit-tops-estimates-as-star-wars-boosts-film-division
Walt Disney Co. shareholders overlooked a record quarter for sales and earnings and focused on flagging profits at ESPN sports network, a sign of how uneasy investors have become about the splintering of the cable-TV industry’s traditional business model.
(http://assets.bwbx.io/images/i6BZYjJuqi9Y/v3/-1x-1.png)
Investors are watching to see if ESPN, Disney’s biggest profit contributor, can stem subscriber losses, which continued in the first quarter. Bob Iger, chairman and chief executive officer, tried to address those concerns on a call, saying the company saw an uptick after the quarter. Earnings at the unit that includes ESPN and ABC slid 6 percent, the result of higher program costs and fewer viewers, along with currency fluctuations.
“It is clear that the market is still nervous about cord-cutting and its impact on the cable television business,” Paul Sweeney, a Bloomberg Intelligence analyst, said in an e-mail.
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ESPN subs grew as I said they would last month. Earnings way over expectations.
Market over reacting, but nothing they can do about that. Buying more DIS today.
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Plus you get the dividend, which as I get a little older, I'm investing more and more into great companies that provide a dividend.
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ESPN subs grew as I said they would last month. Earnings way over expectations.
Market over reacting, but nothing they can do about that. Buying more DIS today.
Subs grew at DISH, since January 1st, because of the skinny bundle, a very narrow subset. Further Iger refused to say whether those skinny bundles were getting the $6 to $7 per month or if they cut rates? Wall Street fears if ESPN did cut rates on skinny bundles it means they ESPN is readying to compete on price, all of Disney's revenue growth assumptions are in trouble.
To understand Disney they need to change their ticker symbol from DIS to ESPN, everything about Disney's earnings report was good, they had Star Was too! Yet none of that really matters as all Wall Street cares about is ESPN and they think it is a death star.
Dead money for years.
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Disney Chair & CEO Bob Iger yesterday tried to "counter the arguments that ESPN’s business is in decline" following Disney's Q1 earnings report, claiming the cable net has "experienced an uptick in subscriber numbers in the past couple of months," according to Ben Fritz of the WALL STREET JOURNAL. Iger said, "The notion that the bundle is experiencing its demise or that ESPN is cratering in any way from a sub(scriber) perspective is just ridiculous." Fritz notes despite the recent growth, ESPN "lost subscribers in the quarter ended Jan. 2 at the same time that programming costs rose, due to costly deals for the rights to sports such as professional and college football." ESPN's costs also "rose thanks to the timing" of the CFP, which "occurred in the company's fiscal first quarter, ended Jan. 2 this year, but were in the fiscal second quarter a year earlier." Operating income for Disney's TV business "fell 6% in the quarter" to $1.41B, while revenue rose 8% to $6.33B. ESPN ad revenue "grew a robust 25% in the quarter." Disney CFO Christine McCarthy said that the growth rate "would have been 14%, excluding the timing" of the CFP and the absence this year of NASCAR. Iger said that much of the recent "modest uptick in ESPN subscribers came from so-called skinny packages that have fewer channels and are aimed at cost-conscious young consumers." He said that the company is "pushing aggressively to include ESPN and its other channels in similar offerings." However, Iger said that he "wasn't ready to predict that the recent positive trend in subscriber numbers would continue." Meanwhile, the earnings report came out the same day that ESPN and DraftKings announced they have ended their "exclusive advertising relationship" at DraftKings' behest (WALL STREET JOURNAL, 2/10).
INTEREST IN ESPN IS CLEAR: Iger said about 200 million Americans "consume ESPN on one platform or another" in any given month. He added that of the 95% of Americans who "watch sports in a given month, over 80% watch ESPN." Iger: "There's clearly an interest in ESPN, and that interest propelled some growth." He added the addition of some "light cable packages that had ESPN in those packages also probably helped." He said, "What we're seeing with Dish and the Sling package that they launched is they’re bringing some folks back who had cut the cord. They’re also bringing young people into the bundle, and ESPN is part of that. One of the reasons they’re seeing success with their light bundle is because ESPN is part of that." Iger noted the "prediction that there would be a rapid demise of the bundle is way too exaggerated" ("Closing Bell," CNBC, 2/9). He added, "We fully expect our media networks, including ESPN to continue to deliver bottom-line growth, which means ad revenue growth will continue to outpace spending" (REUTERS, 2/9). Edward Jones analyst Robin Diedrich, who has a "buy" rating on Disney stock, said that Iger's ESPN comments "helped stanch the bleeding." The AP's Ryan Nakashima noted that is in part "because its other segments from movies to theme parks are booming." Diedrich said, "Even considering some of the risk and slowdown we are seeing in media, we look at this as a really good buying opportunity" (AP, 2/9).
THE FORCE WAS WITH THEM: In N.Y., Richard Morgan wrote the ESPN news "ruined" Disney's party for its successful "Star Wars: The Force Awakens" in December that helped it "beat Wall Street profit and revenue expectations." Total revenue and operating income for the company increased 14% and 20% -- to $15.2B and $4.3B, respectively -- as the film propelled the company to record quarterly profits (N.Y. POST, 2/10).
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The Mouse No Longer Roars, But It Might Purr Soon
FEB 10, 2016 | 2:54 PM EST
Stock quotes in this article: DIS
I placed Disney (DIS) on my Best Ideas List as a short last Nov. 27 at $116.25.
I remain short Disney despite its recent fall to $89 a share, but I am down to tag ends.
Pricing and margin challenges in its theme parks, continued cord-cutting and peak sports viewership represent the principle threats I see, which are likely to reduce the company's secular earnings-per-share growth rate from more than 20% annually over the last five years to less than 10% over the next five years.
My price target remains at about $80, which would be 13x forward EPS. Given the slowdown in projected growth, a price/earnings to growth (PEG) ratio of 1.3x seems reasonable.
Here are some of my thoughts on DIS:
• The Bear Case for Disney
• The Bear Case (Redux) -- Taking a Look at Theme Parks
• Peak Sports VIewership
• Apple, DIsney and "The Big Short"
• BTIG's Greenfield Chimes In
The positive at Disney was, not surprisingly, the "Star Wars" contribution, which was an important factor in the addition of almost $1 billion in cash flow during the quarter.
Debt to cash flow is now below 1x, which represents, in theory, an ability to retire stock through more leverage. I wouldn't be surprised to see a more aggressive buyback program as CEO Bob Iger studied this strategy at CCB under Tom Murphy.
Share count is already down by nearly 20% from peak levels; DIS has spent about $3.7 billion in buying stock over the last four to five months, even though stock was used as currency in a number of acquisitions, including Pixar.
Interestingly, there was a large (22%) rise in accounts receivables (are theatres slow payers?). This represents a gain of almost $2.2 billion, which will be finding its way onto the balance sheet in the year ahead. The company also benefited from a $332 million gain from an investment in "Vice," which was taken below the line and not included in operating income.
In other words, the quarter was conservatively stated.
Bottom line:
DIsney has been a terrific short. Though I have covered most of this short, I would not yet buy the shares.
DIS currently is trading at about 9.5x trailing 12-month EBITD, so the shares are starting to get cheaper given its core brand franchise, free cash flow and high level of overall profitability.
I am close to covering the balance of my short in Disney. It seems like $75 to $80 is a good buy entry point.
Position: Short DIS small
Douglas A. Kass
Seabreeze Partners Management Inc.
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http://awfulannouncing.com/2016/disney-stock-takes-hit-despite-greatest-single-quarter-in-history-thanks-to-espn.html?utm_source=dlvr.it&utm_medium=twitter&utm_campaign=disney-stock-takes-hit-despite-greatest-single-quarter-in-history-thanks-to-espn (http://awfulannouncing.com/2016/disney-stock-takes-hit-despite-greatest-single-quarter-in-history-thanks-to-espn.html?utm_source=dlvr.it&utm_medium=twitter&utm_campaign=disney-stock-takes-hit-despite-greatest-single-quarter-in-history-thanks-to-espn)
I think it's an industry bubble not just ESPN. Note that CBS has been down as well.
Costs can't keep going up while revenues flatten or decrease
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http://awfulannouncing.com/2016/disney-stock-takes-hit-despite-greatest-single-quarter-in-history-thanks-to-espn.html?utm_source=dlvr.it&utm_medium=twitter&utm_campaign=disney-stock-takes-hit-despite-greatest-single-quarter-in-history-thanks-to-espn (http://awfulannouncing.com/2016/disney-stock-takes-hit-despite-greatest-single-quarter-in-history-thanks-to-espn.html?utm_source=dlvr.it&utm_medium=twitter&utm_campaign=disney-stock-takes-hit-despite-greatest-single-quarter-in-history-thanks-to-espn)
I think it's an industry bubble not just ESPN. Note that CBS has been down as well.
Costs can't keep going up while revenues flatten or decrease
Revenues are actually up. That's why the irrational stuff going on is funny to watch. The whole market is on pace to lose double digits this year.
Barrons just listed Disney as a BUY, as did a number of other analysts. Great company, great assets, strong earnings, revenue up, dividend paying stock, etc.
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Revenues are actually up. That's why the irrational stuff going on is funny to watch. The whole market is on pace to lose double digits this year.
Barrons just listed Disney as a BUY, as did a number of other analysts. Great company, great assets, strong earnings, revenue up, dividend paying stock, etc.
Disney's revenues are up, ESPNs are not. I'm not fighting you on Disney at all.
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Disney's revenues are up, ESPNs are not. I'm not fighting you on Disney at all.
Unless the internal summary I got was wrong, ESPN revenues were up also...both on the Ad Sales side and subscription revenue because subs were up AND they go their jump in new payment terms. ABC was the only network of their multiple networks that took a revenue decline.
Now, what is down is operating profit for ESPN, and that is due to their programming costs (they overpaid), but my summary shows their revenues are up for ESPN.
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Recently from WSJ:
http://blogs.wsj.com/moneybeat/2016/02/25/media-stocks-just-how-bad-is-cord-cutting/?mod=yahoo_hs
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Recently from WSJ:
http://blogs.wsj.com/moneybeat/2016/02/25/media-stocks-just-how-bad-is-cord-cutting/?mod=yahoo_hs
Yup
It's happening, but very very slowly and the reason is that it costs $$$$$$$ to create good content. The money the studios, broadcasters get from cord cutting entities is really small. Dimes compared to dollars. And the dirty secret, none of the OTT services make any money from a profitability perspective, except for Netflix and they barely make any money.
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Disney just reported earnings. For the first time in 5 years they "missed" earnings reporting $1.36 where Wall Street was expecting $1.40. They missed on Revenues too reporting $12.97B v a Wall Street expectation of $13.19B.
Stock getting crushed under $100, down 6%
Quick take away. ESPN numbers sucked again, media revenue"miss" was most of the overall miss. ESPN dragged down good movies and theme parks results.
Initial take is this is bad because they missed. Disney is not the annuity that always beats as they "missed" even with Star Wars and other good movie releases. ESPN is like a drowning man grabbing anything it can and will pull everyone down with them.
Dead money. Yes you can buy under $100. Buy why do it now. Do it in three to five years when it is still under $100.
The game ended on August 5, 2015 when they reported 7 million cord cutters. It has not been able to recover from this.
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Good call, Heisenberg
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3 to 5 years you know what is going to happen to a stock? Lol
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3 to 5 years you know what is going to happen to a stock? Lol
No I do not, that is my opinion. August 5, 2015 was the end of the ESPN era. The stock has been in a down trend since (lower highs and lower lows), the company's Q4 2015 results crushed the stock in February (see about 10 posts above) and the Q1 2016 results crushed the stock today.
Old saying on Wall Street "never sh!t where you eat." Chicos you are too close to the industry and this company. You have an emotional involvement so you will not be able to see the problems that the stock price and consecutive reports are signalling.
Again, it is not getting killed from here. I called it "dead money." That means it not doing anything.
How does one get $10,000 of Disney's stock? Buy $10,000 of Disney's stock today and wait three to five years.
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Once markets opened this morning, DIS didn't even go down to 100 and it fairly quickly rebounded to 102.
So despite an earnings report seen as catastrophic by some, the price of DIS still sits about 15% higher than it was when Heisy's hedge fund guru suggested it was time to go short.
Again, I don't even own DIS. Not a single share. But I am leery of both outsized optimism and pessimism when it comes to any stock.
Mr. Market is a funny dude. A company like DIS posts some impressive profits but misses analysts' sky-high expectations by 4 cents a share, so it gets punished by traders. Another company can lose money big-time but because its loss is a penny less than analysts expected, its stock price soars.
Is DIS "dead money," as Heisy claims? Maybe. We won't know for years. Based on the moolah it is still raking in hand over fist, however, Disney looks like anything but a dead company to this objective observer.
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Once markets opened this morning, DIS didn't even go down to 100 and it fairly quickly rebounded to 102.
So despite an earnings report seen as catastrophic by some, the price of DIS still sits about 15% higher than it was when Heisy's hedge fund guru suggested it was time to go short.
Again, I don't even own DIS. Not a single share. But I am leery of both outsized optimism and pessimism when it comes to any stock.
Mr. Market is a funny dude. A company like DIS posts some impressive profits but misses analysts' sky-high expectations by 4 cents a share, so it gets punished by traders. Another company can lose money big-time but because its loss is a penny less than analysts expected, its stock price soars.
Is DIS "dead money," as Heisy claims? Maybe. We won't know for years. Based on the moolah it is still raking in hand over fist, however, Disney looks like anything but a dead company to this objective observer.
He sold it at $116
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He sold it at $116
Hmmm ... he wrote in February that he was short at $89 but somehow mysteriously he ended up long and eventually sold for a profit. Interesting.
Either you felt compelled to report his short to us here at Scoop to support your thesis but then did not feel equally compelled to report him abandoning his short position and then going long ... or something is rotten in Hedge Land.
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Hmmm ... he wrote in February that he was short at $89 but somehow mysteriously he ended up long and eventually sold for a profit. Interesting.
Either you felt compelled to report his short to us here at Scoop to support your thesis but then did not feel equally compelled to report him abandoning his short position and then going long ... or something is rotten in Hedge Land.
see the first sentence
http://www.muscoop.com/index.php?topic=48239.msg803218#msg803218
I placed Disney (DIS) on my Best Ideas List as a short last Nov. 27 at $116.25.
and then see the next sentence
I remain short Disney despite its recent fall to $89 a share, but I am down to tag ends.
That means he cover most of his short at a big profit but still had a little left.
and his conclusion
Disney has been a terrific short. Though I have covered most of this short, I would not yet buy the shares.
DIS currently is trading at about 9.5x trailing 12-month EBITD, so the shares are starting to get cheaper given its core brand franchise, free cash flow and high level of overall profitability.
I am close to covering the balance of my short in Disney. It seems like $75 to $80 is a good buy entry point.
Here is his update today ....
The Mouse No Longer Roars
Doug Kass
MAY 11, 2016 | 10:15 AM EDT
Stock quotes in this article: DIS
I placed Walt Disney Co. (DIS) on my "Best Short Ideas" list back on Nov. 27 at $116.25 a share -- which turns out to have been a good move, as the stock is tanking today and down to about $102 at last check.
Disney seemed almost universally endorsed by both the sell side and buy side not so long ago. The expression often used was "a long runway of growth."
But falling subscriptions at Disney's key ESPN subsidiary have been underscoring "cord-cutting" concerns, and the stock moved steadily lower in recent months until it made a roughly $86-a-share intraday bottom in February.
I covered most of my short position into that decline, but Disney seemed to recover over the past several weeks as part of the broad market's rebound. So, I built my DIS short up again -- particularly increasing my position over the past two weeks ahead of last night's earnings report (which was a miss).
The principal threats that I see Disney facing include:
• Margin challenges in its theme parks.
• Continued cord-cutting (and secular headwinds at cable networks).
• Peak sports viewership.
These seem likely to reduce the company's secular earnings-per-share growth from more than 20% annually over the past five years to less than 10% over the next five years. To me, analysts' consensus projections of 13% annual EPS growth are far too generous.
I expect fiscal 2017 to be particularly challenging for Disney, with year-over-year EPS growth only coming in at about 5% -- well below consensus estimates.
My downside price target for the stock is about $75 to $80, which would represent 13.5x forward EPS. Given the slowdown that I expect in Disney's growth, a 1.3x to 1.4x price-to-earnings-to-growth ratio (or "P/E/G") seems reasonable to me.
Here are some previous columns that outlined my bear case for the stock:
• Kass Katch of the Week: Short Disney (Nov. 30, 2015)
• Apple, Disney and 'The Big Short' (Dec. 22, 2015)
• More on My Disney Short (Jan. 5, 2016)
• Peak Sports Viewership (Jan. 19, 2016)
• Short Disney (Redux) (Feb. 1, 2016)
Walt Disney Co. (DIS) is tumbling today, and I reiterated my longstanding bear case for the stock.
Disney shares were down some 4% at last check, as the company yesterday reportedearnings per share after the bell that failed for the first time in five years to meet analysts' consensus expectations.
DIS fell by as much as about $5.50 a share in after-hours trading, taking about $8 billion out of the company's enterprise value. (I used the decline to add to my short position.)
Here's my take on last night's earnings report:
• Revenues rose about 4%, but net income only grew by 2%.
• Cable-network sales were lower, while EBITD increased just 3% -- a big disappointment given the flow-through from Star Wars: the Force Awakens profits.
• Consumer-product profits were also lower year over year, suggesting continued significant problems in the interactive area. That's a business that Disney has never gotten right and that's now hidden from view, as DIS has discontinued its video-console unit.
• Media-network results grew modestly in the quarter. This segment represents nearly half of the company's sales and more than 60% of the last quarter's net income.
• Theme-park revenue disappointed, which is bad because it represents 30% of sales and 15% of net income. As I noted in my previous missive, problems with this business represent one of my major secular concerns for the company.
• Disney has a strong backlog of film releases, but this is well-known and the company's sales-and-profits headwinds lie elsewhere. After all, studio entertainment and the consumer-products/interactive-media segments only represent about a fifth of Disney's sales and roughly 25% of profits.
Jim "El Capitan" Cramer addressed this last point in his opening missive today, writing:
"Nothing's more stark than the way that CEO Bob Iger ended his conference call: 'I want to add one thing, I am actually kind of surprised that after 45 minutes of questioning we didn't get one question about our studio. But I just want to reiterate that the studio's results were up tremendously for the quarter and up over 60% for the first two quarters of the year.'
Bob's right. The studios are on fire. However, if you judge things from the stock market prism, the way to play it isn't Disney; it's EA and Hasbro.
To me, it's more than just an oddity; it's a statement that Wall Street totally undervalues the studios and overvalues everything else. However, the judgment's been made: Hasbro (HAS) and Electronic Arts (EA) are the investible Disney stories ... at least for now."
-- Jim Cramer, Get Exposed to Disney Without Owning the Stock (May 11, 2016)
The Bottom Line
Disney repurchased about 25 million of its shares during the latest quarter, which helped generate a better EPS gain than the meager 2% increase in net income would have otherwise created.
However, these buybacks took Disney's share count down about 20% from its peak levels even though the firm has used stock as currency in a number of past acquisitions (including Pixar).
And after deducting minority interest in ESPN's cash flow, Disney now trades at about 11x twelve-month-trailing EBITD.
All told, I believe that last night's results fit into and complement my thesis of lower-than-expected EPS growth at Disney over the next five years.
Position: Short DIS
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http://www.marketwatch.com/story/disney-earnings-let-wall-street-down-but-analysts-wont-let-go-2016-05-11?siteid=yhoof2
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see the first sentence
http://www.muscoop.com/index.php?topic=48239.msg803218#msg803218
I placed Disney (DIS) on my Best Ideas List as a short last Nov. 27 at $116.25.
and then see the next sentence
I remain short Disney despite its recent fall to $89 a share, but I am down to tag ends.
That means he cover most of his short at a big profit but still had a little left.
and his conclusion
Disney has been a terrific short. Though I have covered most of this short, I would not yet buy the shares.
DIS currently is trading at about 9.5x trailing 12-month EBITD, so the shares are starting to get cheaper given its core brand franchise, free cash flow and high level of overall profitability.
I am close to covering the balance of my short in Disney. It seems like $75 to $80 is a good buy entry point.
Here is his update today ....
The Mouse No Longer Roars
Doug Kass
MAY 11, 2016 | 10:15 AM EDT
Stock quotes in this article: DIS
I placed Walt Disney Co. (DIS) on my "Best Short Ideas" list back on Nov. 27 at $116.25 a share -- which turns out to have been a good move, as the stock is tanking today and down to about $102 at last check.
Disney seemed almost universally endorsed by both the sell side and buy side not so long ago. The expression often used was "a long runway of growth."
But falling subscriptions at Disney's key ESPN subsidiary have been underscoring "cord-cutting" concerns, and the stock moved steadily lower in recent months until it made a roughly $86-a-share intraday bottom in February.
I covered most of my short position into that decline, but Disney seemed to recover over the past several weeks as part of the broad market's rebound. So, I built my DIS short up again -- particularly increasing my position over the past two weeks ahead of last night's earnings report (which was a miss).
The principal threats that I see Disney facing include:
• Margin challenges in its theme parks.
• Continued cord-cutting (and secular headwinds at cable networks).
• Peak sports viewership.
These seem likely to reduce the company's secular earnings-per-share growth from more than 20% annually over the past five years to less than 10% over the next five years. To me, analysts' consensus projections of 13% annual EPS growth are far too generous.
I expect fiscal 2017 to be particularly challenging for Disney, with year-over-year EPS growth only coming in at about 5% -- well below consensus estimates.
My downside price target for the stock is about $75 to $80, which would represent 13.5x forward EPS. Given the slowdown that I expect in Disney's growth, a 1.3x to 1.4x price-to-earnings-to-growth ratio (or "P/E/G") seems reasonable to me.
Here are some previous columns that outlined my bear case for the stock:
• Kass Katch of the Week: Short Disney (Nov. 30, 2015)
• Apple, Disney and 'The Big Short' (Dec. 22, 2015)
• More on My Disney Short (Jan. 5, 2016)
• Peak Sports Viewership (Jan. 19, 2016)
• Short Disney (Redux) (Feb. 1, 2016)
Walt Disney Co. (DIS) is tumbling today, and I reiterated my longstanding bear case for the stock.
Disney shares were down some 4% at last check, as the company yesterday reportedearnings per share after the bell that failed for the first time in five years to meet analysts' consensus expectations.
DIS fell by as much as about $5.50 a share in after-hours trading, taking about $8 billion out of the company's enterprise value. (I used the decline to add to my short position.)
Here's my take on last night's earnings report:
• Revenues rose about 4%, but net income only grew by 2%.
• Cable-network sales were lower, while EBITD increased just 3% -- a big disappointment given the flow-through from Star Wars: the Force Awakens profits.
• Consumer-product profits were also lower year over year, suggesting continued significant problems in the interactive area. That's a business that Disney has never gotten right and that's now hidden from view, as DIS has discontinued its video-console unit.
• Media-network results grew modestly in the quarter. This segment represents nearly half of the company's sales and more than 60% of the last quarter's net income.
• Theme-park revenue disappointed, which is bad because it represents 30% of sales and 15% of net income. As I noted in my previous missive, problems with this business represent one of my major secular concerns for the company.
• Disney has a strong backlog of film releases, but this is well-known and the company's sales-and-profits headwinds lie elsewhere. After all, studio entertainment and the consumer-products/interactive-media segments only represent about a fifth of Disney's sales and roughly 25% of profits.
Jim "El Capitan" Cramer addressed this last point in his opening missive today, writing:
"Nothing's more stark than the way that CEO Bob Iger ended his conference call: 'I want to add one thing, I am actually kind of surprised that after 45 minutes of questioning we didn't get one question about our studio. But I just want to reiterate that the studio's results were up tremendously for the quarter and up over 60% for the first two quarters of the year.'
Bob's right. The studios are on fire. However, if you judge things from the stock market prism, the way to play it isn't Disney; it's EA and Hasbro.
To me, it's more than just an oddity; it's a statement that Wall Street totally undervalues the studios and overvalues everything else. However, the judgment's been made: Hasbro (HAS) and Electronic Arts (EA) are the investible Disney stories ... at least for now."
-- Jim Cramer, Get Exposed to Disney Without Owning the Stock (May 11, 2016)
The Bottom Line
Disney repurchased about 25 million of its shares during the latest quarter, which helped generate a better EPS gain than the meager 2% increase in net income would have otherwise created.
However, these buybacks took Disney's share count down about 20% from its peak levels even though the firm has used stock as currency in a number of past acquisitions (including Pixar).
And after deducting minority interest in ESPN's cash flow, Disney now trades at about 11x twelve-month-trailing EBITD.
All told, I believe that last night's results fit into and complement my thesis of lower-than-expected EPS growth at Disney over the next five years.
Position: Short DIS
Hmmm.
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Buy Buy Buy
http://seekingalpha.com/article/3974003-buy-disney-sell
http://washingtonnewswire.com/2016-05-11-traders-buy-walt-disney-co-dis-on-weakness-after-earnings-miss/
http://www.risersandfallers.com/2016/05/11/shares-of-the-walt-disney-company-nysedis-rated-as-buy-by-analysts-at-topeka-capital-markets/
http://www.thestreet.com/story/13568430/1/disney-is-a-buy-here-s-why.html
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You guys are all missing Heisenberg's point. Disney is not dead, it will likely even continue to grow. But at a P/E of ~18, that's already priced in. What's the upside catalyst? How can it realistically outperform? You might clip a dividend + some modest price appreciation and not technically lose money, but there's an opportunity cost to parking your $ there. You could achieve virtually the same thing by buying a 10-year DIS bond, yield ~2.5% per year, and know with near certainty you'll get your principal back if you hold to maturity. But if it's an equity risk/return profile you want, you're likely better off throwing it in an index fund and waiting 10 years.
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You guys are all missing Heisenberg's point. Disney is not dead, it will likely even continue to grow. But at a P/E of ~18, that's already priced in. What's the upside catalyst? How can it realistically outperform? You might clip a dividend + some modest price appreciation and not technically lose money, but there's an opportunity cost to parking your $ there. You could achieve virtually the same thing by buying a 10-year DIS bond, yield ~2.5% per year, and know with near certainty you'll get your principal back if you hold to maturity. But if it's an equity risk/return profile you want, you're likely better off throwing it in an index fund and waiting 10 years.
I don't own DIS, so I guess I do get it.
It's just Heisy's way of expressing his opinion that always cracks me up.
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The Mouse No Longer Roars, But It Might Purr Soon
FEB 10, 2016 | 2:54 PM EST
Stock quotes in this article: DIS
I placed Disney (DIS) on my Best Ideas List as a short last Nov. 27 at $116.25.
I remain short Disney despite its recent fall to $89 a share, but I am down to tag ends.
Pricing and margin challenges in its theme parks, continued cord-cutting and peak sports viewership represent the principle threats I see, which are likely to reduce the company's secular earnings-per-share growth rate from more than 20% annually over the last five years to less than 10% over the next five years.
My price target remains at about $80, which would be 13x forward EPS. Given the slowdown in projected growth, a price/earnings to growth (PEG) ratio of 1.3x seems reasonable.
Here are some of my thoughts on DIS:
• The Bear Case for Disney
• The Bear Case (Redux) -- Taking a Look at Theme Parks
• Peak Sports VIewership
• Apple, DIsney and "The Big Short"
• BTIG's Greenfield Chimes In
The positive at Disney was, not surprisingly, the "Star Wars" contribution, which was an important factor in the addition of almost $1 billion in cash flow during the quarter.
Debt to cash flow is now below 1x, which represents, in theory, an ability to retire stock through more leverage. I wouldn't be surprised to see a more aggressive buyback program as CEO Bob Iger studied this strategy at CCB under Tom Murphy.
Share count is already down by nearly 20% from peak levels; DIS has spent about $3.7 billion in buying stock over the last four to five months, even though stock was used as currency in a number of acquisitions, including Pixar.
Interestingly, there was a large (22%) rise in accounts receivables (are theatres slow payers?). This represents a gain of almost $2.2 billion, which will be finding its way onto the balance sheet in the year ahead. The company also benefited from a $332 million gain from an investment in "Vice," which was taken below the line and not included in operating income.
In other words, the quarter was conservatively stated.
Bottom line:
DIsney has been a terrific short. Though I have covered most of this short, I would not yet buy the shares.
DIS currently is trading at about 9.5x trailing 12-month EBITD, so the shares are starting to get cheaper given its core brand franchise, free cash flow and high level of overall profitability.
I am close to covering the balance of my short in Disney. It seems like $75 to $80 is a good buy entry point.
Position: Short DIS small
Douglas A. Kass
Seabreeze Partners Management Inc.
I know Doug well . He will eventually " ring the register" on the short and keep a close eye on it with the intention of going back in on the long side. At some point the market will severely discount the value of the studio and it will be a reentry point.
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You guys are all missing Heisenberg's point. Disney is not dead, it will likely even continue to grow. But at a P/E of ~18, that's already priced in. What's the upside catalyst? How can it realistically outperform? You might clip a dividend + some modest price appreciation and not technically lose money, but there's an opportunity cost to parking your $ there. You could achieve virtually the same thing by buying a 10-year DIS bond, yield ~2.5% per year, and know with near certainty you'll get your principal back if you hold to maturity. But if it's an equity risk/return profile you want, you're likely better off throwing it in an index fund and waiting 10 years.
Most of my DIS is at $28 to $32, so I'm not complaining. The point I have trouble with is the claim it won't be above $100....no one knows. It might be, it might not be. I enjoy owning great companies, call me old fashioned. Doesn't mean all my money is in companies like that, but no doubt some of my anchor investments are in companies that should be alive and well long after I'm gone.
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Most of my DIS is at $28 to $32, so I'm not complaining. The point I have trouble with is the claim it won't be above $100....no one knows. It might be, it might not be. I enjoy owning great companies, call me old fashioned. Doesn't mean all my money is in companies like that, but no doubt some of my anchor investments are in companies that should be alive and well long after I'm gone.
Excellent investing attitude, Chicos. And you're so right about "no one knows."
I laugh when people state definitively that company XYZ "will be at $300 next year" or "will be stuck under $100 for years."
If I was such an expert that I knew this kind of stuff for sure, I'd be living on my personal desert island somewhere. I sure as hell wouldn't be wasting my time bragging about my investing acumen on a fan Web site!
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It's getting worse
ESPN Still Bleeding Subs As 1.2mm People Ditch Service In Past 2 Months Alone
http://www.zerohedge.com/news/2016-11-30/espn-still-bleeding-subs-12mm-people-ditch-service-past-2-months-alone
Last month we noted that ESPN lost 621,000 subscribers in the month of the October (see "ESPN Loses A Record 621,000 Subscribers In One Month"). Unfortunately, the sports media powerhouse can't seem to make the bleeding stop as evidenced by another 555,000 subscriber losses this month as reported by Nielsen. For those keeping track, that's roughly 1.2mm in sub losses in just two months, which, at $7 of revenue per sub, represents about $100mm of lost annual revenue for ESPN's parent company, Disney.
Obviously this is not welcome news for a company that is locked in to $7.3 billion in sports content deals or roughly 70% more than the second highest network, NBC.
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It's getting worse
ESPN Still Bleeding Subs As 1.2mm People Ditch Service In Past 2 Months Alone
http://www.zerohedge.com/news/2016-11-30/espn-still-bleeding-subs-12mm-people-ditch-service-past-2-months-alone
Last month we noted that ESPN lost 621,000 subscribers in the month of the October (see "ESPN Loses A Record 621,000 Subscribers In One Month"). Unfortunately, the sports media powerhouse can't seem to make the bleeding stop as evidenced by another 555,000 subscriber losses this month as reported by Nielsen. For those keeping track, that's roughly 1.2mm in sub losses in just two months, which, at $7 of revenue per sub, represents about $100mm of lost annual revenue for ESPN's parent company, Disney.
Obviously this is not welcome news for a company that is locked in to $7.3 billion in sports content deals or roughly 70% more than the second highest network, NBC.
My issue with your posts is that you are making this an ESPN "issue". People are not ditching cable because of ESPN. They are doing it because cable is doing a continually worsening job of meeting people's needs. Time Warner, for one, only gives a deal or discounts when you include their phone service - whether you want it or not.
Plus, there are too many options for people like me who basically watch only Sports and News on live TV. There are millions of us and the cable industry's only reply is "too bad".
Yes - ESPN is losing subscribers. But the people they are losing are people who are sick of cable - not people sick of ESPN.
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My issue with your posts is that you are making this an ESPN "issue". People are not ditching cable because of ESPN. They are doing it because cable is doing a continually worsening job of meeting people's needs. Time Warner, for one, only gives a deal or discounts when you include their phone service - whether you want it or not.
Plus, there are too many options for people like me who basically watch only Sports and News on live TV. There are millions of us and the cable industry's only reply is "too bad".
Yes - ESPN is losing subscribers. But the people they are losing are people who are sick of cable - not people sick of ESPN.
The cable/Satellite companies thought they had everyone by the short-hairs because live sports would keep everyone buying the product. And far and away leading the live sports argument was ESPN.
Now that the sports bubble has popped, leading the rush away from cable/Satellite is the loss of ESPN subscribers. So I would argue you have it backwards. The popping of the sports bubble is accelerating the rush away from cable/Satellite. Not the rush away from cable/Satellite is causing ESPN to lose subscribers.
And ESPN is going to be the biggest loser of the sports bubble popping, led be their $7.3 billion broadcasting rights they have committed too. If this loss rate continues they are going to be in a world of hurt.
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My issue with your posts is that you are making this an ESPN "issue". People are not ditching cable because of ESPN. They are doing it because cable is doing a continually worsening job of meeting people's needs. Time Warner, for one, only gives a deal or discounts when you include their phone service - whether you want it or not.
Plus, there are too many options for people like me who basically watch only Sports and News on live TV. There are millions of us and the cable industry's only reply is "too bad".
Yes - ESPN is losing subscribers. But the people they are losing are people who are sick of cable - not people sick of ESPN.
no disrespect here jesse as i usually agree with your stuff, but brands has an excellent point here from a consumer point of view. cable companies are, and i don't know how, quietly(or not) becoming little monopolies. they have become the bullies of tv. they think they have a take it or leave it attitude because they think they have the best. i have noticed the huge improvement in customer service at time warner/spectrum, but they ain't cheap. they try to lump chit together to make it appear that you are getting a great deal. then you go to look over your bill and say, i don't need this, this and...but tw/spectrum will tell you that if you eliminate that, your $$ will actually go up. then they try to sell you a faster internet and you walk away feeling like you just got poked in the exit only region. yes, some of the political crap espn tries to integrate into their product bothers me, but overall, i still love their SPORTS and their 30 for 30's.
as for losing subscribers, how do the ratings people take in to account all the sports bars, the buffalo wild wings, casinos, et. al that carry the espn product? the numbers being revealed may show some drops, but i doubt they are as drastic as they are reported to be. direct tv is having some pretty dramatic success with their sunday NFL ticket.
http://www.usatoday.com/story/tech/columnist/2016/11/29/nfl-sunday-ticket-tv-expands-its-game/94166930/
bottom line, people want options. i have tw/spectrum in wisconsin and direct tv in Az. so far, direct seems to be LESS annoying and more malleable
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what about IPTV protocols-not being accounted for in their ratings analysis does not allow for an accurate representation. i'm not trying wave a big espn banner here, but there are "things" that need to be acknowledged. does nielson have a $$ bias? follow the money...are people shorting this thing while this news is coming out and then when they have what they want, the news changes, they've bought back in before many others who aren't privy to the "inside" story and it's "show me the money". the "little people" are once again left with their trousers down
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Now that the sports bubble has popped, leading the rush away from cable/Satellite is the loss of ESPN subscribers. So I would argue you have it backwards. The popping of the sports bubble is accelerating the rush away from cable/Satellite. Not the rush away from cable/Satellite is causing ESPN to lose subscribers.
And ESPN is going to be the biggest loser of the sports bubble popping, led be their $7.3 billion broadcasting rights they have committed too. If this loss rate continues they are going to be in a world of hurt.
People are not ditching $150 - $200 cable bills over a few dollars that ESPN commands. They are ditching it because of the $150 - $200 that appears on their bill each month. Add in the fact that people under 35 do not watch TV in the traditional way.
Just as technology forced changes on the way we consumed music, technology is forcing changes in the way we consume sports.
The sports bubble has not popped. It is just in the process of transforming into a new shape.
Now, ESPN could very well be the victim of these economics, but they aren't the reason for the change.
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The cable/Satellite companies thought they had everyone by the short-hairs because live sports would keep everyone buying the product. And far and away leading the live sports argument was ESPN.
Now that the sports bubble has popped, leading the rush away from cable/Satellite is the loss of ESPN subscribers. So I would argue you have it backwards. The popping of the sports bubble is accelerating the rush away from cable/Satellite. Not the rush away from cable/Satellite is causing ESPN to lose subscribers.
And ESPN is going to be the biggest loser of the sports bubble popping, led be their $7.3 billion broadcasting rights they have committed too. If this loss rate continues they are going to be in a world of hurt.
I think Brand is mostly correct, but it's statistically difficult to prove. Fox Sports is also losing subscribers, but so are all the providers. I'm willing to bet if you could assess the subscriber loss rate for the TV provider industry that it would be the same or greater than that of E$PN specifically and sports content generally.
For your statement to be correct, E$PN would have to be losing viewers at a faster rate than the providers, which would mean that some significant amount of TV viewers were ditching their sports programming but staying with cable generally. That doesn't pass the sniff test for me.
Now where I think Brand doesn't quite have it correct is that there is also a shift in viewing habits for sports watchers that is also directly impacting E$PN. With the proliferation of methodologies to consume highlights, reviews, etc people just aren't tuning in for things like SportsCenter anymore. People are consuming things in quick chunks and on demand like never before so E$PN is being impacted on the ad revenue side as well that has nothing to do with anger at the cable company.
E$PN's problem really is they made a big bet that the paradigm wasn't changing as rapid as it actually is. They made content acquisitions at pricing that was easily sustainable if subscribers stayed flat or increased slight, but that isn't happening. I really do think in the next two years someone in the sports content market is going to make a drastic break from the norm to try and deliver content outside the monopoly of the cable providers. The only reason that hasn't happened yet is that almost all of the cable providers are also the data providers which any non-cable delivery mechanism would have to depend on.
Not making it political, but it'll be interesting if a Trump presidency strengthens the trend toward cable and internet monopoly or weakens it. If you broke the infrastructure providers from the content providers, you'd see a very rapid change in the industry....creative destruction at it's finest.
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I think Brand is mostly correct, but it's statistically difficult to prove. Fox Sports is also losing subscribers, but so are all the providers. I'm willing to bet if you could assess the subscriber loss rate for the TV provider industry that it would be the same or greater than that of E$PN specifically and sports content generally.
For your statement to be correct, E$PN would have to be losing viewers at a faster rate than the providers, which would mean that some significant amount of TV viewers were ditching their sports programming but staying with cable generally. That doesn't pass the sniff test for me.
Now where I think Brand doesn't quite have it correct is that there is also a shift in viewing habits for sports watchers that is also directly impacting E$PN. With the proliferation of methodologies to consume highlights, reviews, etc people just aren't tuning in for things like SportsCenter anymore. People are consuming things in quick chunks and on demand like never before so E$PN is being impacted on the ad revenue side as well that has nothing to do with anger at the cable company.
E$PN's problem really is they made a big bet that the paradigm wasn't changing as rapid as it actually is. They made content acquisitions at pricing that was easily sustrightble if subscribers stayed flat or increased slight, but that isn't happening. I really do think in the next two years someone in the sports content market is going to make a drastic break from the norm to try and deliver content outside the monopoly of the cable providers. The only reason that hasn't happened yet is that almost all of the cable providers are also the data providers which any non-cable delivery mechanism would have to depend on.
Not making it political, but it'll be interesting if a Trump presidency strengthens the trend toward cable and internet monopoly or weakens it. If you broke the infrastructure providers from the content providers, you'd see a very rapid change in the industry....creative destruction at it's finest.
This is such a unnatural carnal knowledgeing joke.
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People are not ditching $150 - $200 cable bills over a few dollars that ESPN commands. They are ditching it because of the $150 - $200 that appears on their bill each month. Add in the fact that people under 35 do not watch TV in the traditional way.
Just as technology forced changes on the way we consumed music, technology is forcing changes in the way we consume sports.
The sports bubble has not popped. It is just in the process of transforming into a new shape.
Now, ESPN could very well be the victim of these economics, but they aren't the reason for the change.
I posted this recently. My Frontier U-Verse deal expired and went up to $210/month for TV, phone & internet. They would not reduce or cut me a deal, so I switched to Optimum Cable for $150/month for all 3 services. $150/mo still does feel like way too much.
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This is such a unnatural carnal knowledgeing joke.
That is correct. Not sure what the answer is, short of turning the internet into a utility but my reaction to that is:
(https://67.media.tumblr.com/d216994f4d94be374485e741bf6c5cf7/tumblr_nllfkjAF9y1slj24go1_400.gif)
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That is correct. Not sure what the answer is, short of turning the internet into a utility but my reaction to that is:
(https://67.media.tumblr.com/d216994f4d94be374485e741bf6c5cf7/tumblr_nllfkjAF9y1slj24go1_400.gif)
I understand your feeling. But I'm not so sure. My water works fine. So does my electricity. Would it really be awful to have city centers/utility companies lay cable/fiber for data and then run them as a utility?
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Chattanooga, TN offers free public wifi to anyone. My guess is that as this technology becomes cheaper, and the services is as dependable as as fast as in-home wifi, that is the direction you could see municipalities head. Or maybe that's just a pipe dream.
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I understand your feeling. But I'm not so sure. My water works fine. So does my electricity. Would it really be awful to have city centers/utility companies lay cable/fiber for data and then run them as a utility?
Not being glib, but do you understand your electrical bill, what the revenue actually goes to and how horrifically out of date the electrical grid is? Yes you get energy and it's not super expensive but that's because they are living off old technology that is already paid for.
I could see some sort of public-private consortium but dear lord please not a full public internet utility. Innovation would die
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Not being glib, but do you understand your electrical bill, what the revenue actually goes to and how horrifically out of date the electrical grid is? Yes you get energy and it's not super expensive but that's because they are living off old technology that is already paid for.
I could see some sort of public-private consortium but dear lord please not a full public internet utility. Innovation would die
Then what are all these "smart grid" commercials I'm seeing on the ol' Philco?
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It's getting worse
ESPN Still Bleeding Subs As 1.2mm People Ditch Service In Past 2 Months Alone
http://www.zerohedge.com/news/2016-11-30/espn-still-bleeding-subs-12mm-people-ditch-service-past-2-months-alone
Last month we noted that ESPN lost 621,000 subscribers in the month of the October (see "ESPN Loses A Record 621,000 Subscribers In One Month"). Unfortunately, the sports media powerhouse can't seem to make the bleeding stop as evidenced by another 555,000 subscriber losses this month as reported by Nielsen.
Besides my other disagreements with your points here, this is my biggest disagreement.
You are listing how many subscribers ESPN has lost. In fact, we don't really know. However, we do know it is significantly less than the numbers given in your article.
Nielsen does not yet have a decent method to measure the entire universe of video viewing, including time-shifting, mobile video audiences, and streaming services. They are not taking into account new services that provide ESPN like Sling and vue.
They are trying to figure out how to get accurate readings on this, but they are not there yet.
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The breakup of the old Big East, which was purely driven by money, was the exact top of the sports bubble.
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The breakup of the old Big East, which was purely driven by money, was the exact top of the sports bubble.
Not sure it was the "exact top", but it was surely an indicator.
It was the moment college sports ceased being about sports at all and became all about dollars. ADs realized that with unpaid employees driving their businesses, they needed a helmet if they were gonna stand under the money tree.
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Not sure it was the "exact top", but it was surely an indicator.
It was the moment college sports ceased being about sports at all and became all about dollars. ADs realized that with unpaid employees driving their businesses, they needed a helmet if they were gonna stand under the money tree.
Major college sports has been mostly about money for decades now.
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Then what are all these "smart grid" commercials I'm seeing on the ol' Philco?
Buzz words and marketing spin.....smart grid isn't going to be an actual thing for at least another 5 years. And it's not being driven because it's good for the users, it's being driven because it makes it easier/cheaper for the utilities to continue using the existing infrastructure without replacing or building more.
If Elon Musk gets his way....the grid will go poof, smart grid or not.
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Major college sports has been mostly about money for decades now.
Correct, it was the only reason the Eastern Football conference never happened in the 80s. If that idea had germinated now it would have been gold Jerry, GOLD!
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Buzz words and marketing spin.....smart grid isn't going to be an actual thing for at least another 5 years. And it's not being driven because it's good for the users, it's being driven because it makes it easier/cheaper for the utilities to continue using the existing infrastructure without replacing or building more.
If Elon Musk gets his way....the grid will go poof, smart grid or not.
OK, not on this topic, but since when do we treat Elon Musk as some sort of future visionary who is all-knowing in these types of areas?
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OK, not on this topic, but since when do we treat Elon Musk as some sort of future visionary who is all-knowing in these types of areas?
Marketing and spin. He's Howard Hughes without the OCD. America loves smart people that spin a tale of greatness regardless of the truth or actual knowledge in that area.
Basically we bow and scrape to those people we think are visionaries.
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OK, not on this topic, but since when do we treat Elon Musk as some sort of future visionary who is all-knowing in these types of areas?
There's a big difference between vision, knowledge and execution. Groundbreaking innovation doesn't happen without all three... but we can't name the dozens of people in the second category and the hundreds and thousands of people in the third, so we name the one person that sits in the first column.
In other words, Elon knows where he wants to go, and it's someplace most of us have never imagined; that doesn't mean he has the slightest clue as to how to get there... so he employs dozens of people to figure out where the path should go and hundreds and thousands more to build the path.
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This is such a unnatural carnal knowledgeing joke.
Isn't video just data? Those that build the pipes and control the pipes will deliver the data. Disney stock above $110 again. Great company.
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Isn't video just data? Those that build the pipes and control the pipes will deliver the data. Disney stock above $110 again. Great company.
Hi Chicos
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Isn't video just data? Those that build the pipes and control the pipes will deliver the data. Disney stock above $110 again. Great company.
(same chart as I used in the Apple post)
The chart below is the ratio of Disney's stock price to the S&P 500 Index. It is a total return chart so dividends are included. Highlighted on the chart are important milestones and peaks and troughs of the ratio.
To be clear, when the ratio is rising Disney is beating the overall market. When it is falling it is lagging the overall market.
Disney's relative ratio peaked with it announcement on August 4, 2015 that it was losing ESPN subscribers. According to the market, this was the single most important event of the last six years.
Let me sum it up. Iger is an outstanding manager. Everything he does it correct. But if he cannot stop ESPN sub losses, and he cannot, he is nothing more than King Canute trying to stop the tide from coming out.
By not heeding the market's warning in August 2015, one lost years of relative performance in Disney.
Remember every stock has an alternative, buy the overall market index (S&P 500). You only own a stock because it will perform better than the index (or you think it will). As of the August 4, 2015 Disney stopped being an out performer and it seems that only stopping subscriber losses at ESPN will change this. Stopping subscriber losses to streaming is simply not possible.
Still in trouble.
(https://www.biancoresearch.com/bianco/wp-content/uploads/2017/02/DashDisneySPX.png)
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Yukon, is there a chart that shows performance independent of how the market performed as a whole?
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Yukon, is there a chart that shows performance independent of how the market performed as a whole?
(http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=DIS&uf=0&type=2&size=2&sid=1618&style=311&freq=2&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=12&rand=1696477561&compidx=&ma=0&maval=9&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1)
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So in other words, Disney is performing pretty well despite the cord cutting?
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So in other words, Disney is performing pretty well despite the cord cutting?
If you think the alternative is nothing (cash in the bank) then it is performing pretty well. I would argue this is the wrong alternative, the correct alternative is the overall market, like the ETF SPY (S&P 500). That is why I use the ratio charts and they show Disney is not performing pretty well.
If you invest, you should start by "owning the market" (SPY). After that make choices that will "beat the market." I believe Disney will not beat the market so it should be sold and "the market" bought in its place.
Investing is not absolute, it is about competing alternatives.
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Then maybe I am misunderstanding your chart. I thought you were showing me how Disney was performing versus the market as a whole.
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If you think the alternative is nothing (cash in the bank) then it is performing pretty well. I would argue this is the wrong alternative, the correct alternative is the overall market, like the ETF SPY (S&P 500). That is why I use the ratio charts and they show Disney is not performing pretty well.
If you invest, you should start by "owning the market" (SPY). After that make choices that will "beat the market." I believe Disney will not beat the market so it should be sold and "the market" bought in its place.
Investing is not absolute, it is about competing alternatives.
So, in other words, kind of the way AAPL has beaten SPY the last 1, 3, 5, 10 and 15 years. Thanks!
(Couldn't resist.)
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Disney Q1 Revenue Weighed Down By ESPN Struggles
Media networks reported a dip in revenue and profit
February 7, 2017 @ 1:09 PM
http://www.thewrap.com/disney-q1-revenue-weighed-espn-struggles/
Cable networks, particularly ESPN, have been an albatross on Disney’s stock price even as the company’s two other major prongs, movies and theme parks, continue to perform well. As cheaper TV alternatives began to proliferate, ESPN hemorrhaged subscribers during the course of 2016 and is now at less than 88 million, compared with a peak of 100.1 million in 2011. At an estimated $7 per subscriber, that dip has been a substantial hit to Disney, especially considering media networks made up 49 percent of Disney’s profits during fiscal 2016.
At the same time, rights fees for the live sports ESPN specializes in broadcasting continue to go up, as there’s plenty of competition for one of the few pieces of programmed television that still delivers monster ratings. ESPN will pay $7.3 billion for content this year – the biggest price tag among all media companies. Operating income at Disney’s cable networks division — primarily ESPN — plunged 11 percent compared with the same time the previous year. Disney attributed that drop entirely to lower ESPN revenue.
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Disney Q1 Revenue Weighed Down By ESPN Struggles
Media networks reported a dip in revenue and profit
February 7, 2017 @ 1:09 PM
http://www.thewrap.com/disney-q1-revenue-weighed-espn-struggles/
Cable networks, particularly ESPN, have been an albatross on Disney’s stock price even as the company’s two other major prongs, movies and theme parks, continue to perform well. As cheaper TV alternatives began to proliferate, ESPN hemorrhaged subscribers during the course of 2016 and is now at less than 88 million, compared with a peak of 100.1 million in 2011. At an estimated $7 per subscriber, that dip has been a substantial hit to Disney, especially considering media networks made up 49 percent of Disney’s profits during fiscal 2016.
At the same time, rights fees for the live sports ESPN specializes in broadcasting continue to go up, as there’s plenty of competition for one of the few pieces of programmed television that still delivers monster ratings. ESPN will pay $7.3 billion for content this year – the biggest price tag among all media companies. Operating income at Disney’s cable networks division — primarily ESPN — plunged 11 percent compared with the same time the previous year. Disney attributed that drop entirely to lower ESPN revenue.
One thing that needs to be repeated because it is always said wrong.
Report after report talk about ESPN hemorrhaging subscribers. It is actually cable in general that is the problem. There is no standalone ESPN that people are cancelling. They are cancelling their cable contract and dragging ESPN (along with all other channels) with them.
It is just more dramatic to go after eSPN. But FX, AMC, Comedy Channel, etc. are losing the same number of subscribers - it is just that they are never mentioned. NBO made the decision to offer its channel ala carte, so they are somewhat immune to the losses.
I expect the same from ESPN before too long. Contracts will be re-negotiated where need be and it will get done.
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One thing that needs to be repeated because it is always said wrong.
Report after report talk about ESPN hemorrhaging subscribers. It is actually cable in general that is the problem. There is no standalone ESPN that people are cancelling. They are cancelling their cable contract and dragging ESPN (along with all other channels) with them.
It is just more dramatic to go after eSPN. But FX, AMC, Comedy Channel, etc. are losing the same number of subscribers - it is just that they are never mentioned. NBO made the decision to offer its channel ala carte, so they are somewhat immune to the losses.
I expect the same from ESPN before too long. Contracts will be re-negotiated where need be and it will get done.
100% correct on all of this.
But remember that ESPN is the most expensive cable channel at $7/month. So ESPN (Disney) has the most to lose by cord cutting. And it is worth reminding everyone that every single person of those 88 million subscribers they have left, down from 100 million in 2011 (see a few post above) pay $7/month because ESPN is a "must have" on basic cable. The problem is the vast majority never watch it even thought they are paying for it. This is why cable bills are through the roof and everyone is cord cutting.
Just today on Bloomberg TV an analyst said that if ESPN went totally streaming (via WatchESPN) it would have to charge $80/month to keep revenues the same (meaning about 10% of cable viewers value ESPN enough to pay a premium for it while the other 90% don't care). He said no one will pay $80/month of ESPN so they should expect revenues to continue to fall. ESPN is almost half Disney's revenues and this is why the stock is suffering. Half its revenues base is declining and Bob Iger (DIS CEO) cannot stop that.
And yes, I also said on previous pages that this will filter through to sports leagues and college conferences getting less in broadcasting rights. But sports leagues and conferences have costs too high and this will impact them at every level, including the product on the field.
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100% correct on all of this.
But remember that ESPN is the most expensive cable channel at $7/month. So ESPN (Disney) has the most to lose by cord cutting. And it is worth reminding everyone that every single person of those 88 million subscribers they have left, down from 100 million in 2011 (see a few post above) pay $7/month because ESPN is a "must have" on basic cable. The problem is the vast majority never watch it even thought they are paying for it. This is why cable bills are through the roof and everyone is cord cutting.
Just today on Bloomberg TV an analyst said that if ESPN went totally streaming (via WatchESPN) it would have to charge $80/month to keep revenues the same (meaning about 10% of cable viewers value ESPN enough to pay a premium for it while the other 90% don't care). He said no one will pay $80/month of ESPN so they should expect revenues to continue to fall. ESPN is almost half Disney's revenues and this is why the stock is suffering. Half its revenues base is declining and Bob Iger (DIS CEO) cannot stop that.
It is a ridiculous hypothetical from Bloomberg TV as that would NEVER happen, so the $80 is meaningless. Then they make the even dumber comment that revenues will continue to fall cuz no one will pay the $80 number that they just pulled out of their a$$.
Yes, we all know people are sick of cable and their thieving ways. ESPN is smart enough to know this and so are the leagues that are under contract. The money owed to them by ESPN becomes less valuable as fewer eyes see their games. Hence, contracts will be re-negotiated in the future. All of the sports leagues need a strong ESPN as well as other sports networks. This is how they market their teams. They are not going to let it go away.
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Again, the ESPN business model works because it gets most cable subscribers pay for something they don't use. This has bloated ESPN revenues and both Disney and sports leagues (and conferences) have structured their costs based on these bloated revenues.
Now that streaming is here, cable has to get efficient. That means people that do not use the product (ESPN) will are no longer playing it via cord-cutting.
So for those that care about ESPN (like everyone here) Wall Street estimates the $7/month we pay now (along with everyone else) has to rise to as much as $80/month given the universe of those that want it. Some think it might be $40 to $50.
The point is no one is going to pay this much for ESPN so revenues are going down. Yes, the leagues will have to adjust. That is a nice way of saying Scott Boros and the rest of the agents will have to agree their clients will get less money in the future.
Before that happens, their will be upheaval. Probably strikes and canceled post seasons and or entire seasons (hockey almost had that happened about 10 years ago). So getting to that point will be messy.
The sports bubble high was the moment Syracuse and Pitt jumped to the ACC. A pure greed move that happened at the high.
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So for those that care about ESPN (like everyone here) Wall Street estimates the $7/month we pay now (along with everyone else) has to rise to as much as $80/month given the universe of those that want it. Some think it might be $40 to $50.
Again, that is wrong.
It only has to rise to $40 or $50 or $80 if EVERYBODY gets rid of cable. That is NOT going to happen.
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Again, that is wrong.
It only has to rise to $40 or $50 or $80 if EVERYBODY gets rid of cable. That is NOT going to happen.
Why?
With gigabit and smart TVs, why keep cable?
With Netflix, Hulu and Amazon producing original context, the "good stuff" isn't even on cable anymore.
Old people (sweater vests) will because they are resistant to change. But they will die off soon.
Besides young people don't even watch TV on some big screen on the wall. They watch it on their devices.
Cable is going away. We are arguing about the time of death.
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Why?
With gigabit and smart TVs, why keep cable?
With Netflix, Hulu and Amazon producing original context, the "good stuff" isn't even on cable anymore.
Old people (sweater vests) will because they are resistant to change. But they will die off soon.
Besides young people don't even watch TV on some big screen on the wall. They watch it on their devices.
Cable is going away. We are arguing about the time of death.
Quite simply, you are wrong.
"Besides young people don't even watch TV on some big screen on the wall. They watch it on their devices."
What a silly statement. Yes, a minority of young people watch things on their phone. But, you made a blanket statement that was ludicrous.
And, there are a myriad of reason why the vast majority of people have cable. Whether you or I disagree with their reason for keeping cable is meaningless.
Yes, some will continue to ditch cable. 20 years from now, the majority will still have it.
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I am a parent of a 30-year-old and a 29-year-old. They do sometimes watch crud on their phones and tablets. But both have TVs, and both pay for cable (or DirecTV, I'm not certain). As do just about all of their friends.
Like most of us, they don't want to watch a sporting event on a 5x2 inch cellphone screen; they want to watch it in HD on a 50- or 60-inch screen with surround sound.
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I am a parent of a 30-year-old and a 29-year-old. They do sometimes watch crud on their phones and tablets. But both have TVs, and both pay for cable (or DirecTV, I'm not certain). As do just about all of their friends.
Like most of us, they don't want to watch a sporting event on a 5x2 inch cellphone screen; they want to watch it in HD on a 50- or 60-inch screen with surround sound.
If they have a smart TV, with one swipe on your phone, you can mirror with you're watching on the 60 inch TV in surround sounds. I do it all the time.
Don't need $120/month DTV or Cable account.
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If they have a smart TV, with one swipe on your phone, you can mirror with you're watching on the 60 inch TV in surround sounds. I do it all the time.
Don't need $120/month DTV or Cable account.
Depends on your TV brand and your phone. That isn't 100% true for every smart TV/phone combination. Sometimes you also need an accessory like Amazon fire TV or Google Chromecast
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If they have a smart TV, with one swipe on your phone, you can mirror with you're watching on the 60 inch TV in surround sounds. I do it all the time.
Don't need $120/month DTV or Cable account.
Of course you need a DTV or cable account to access most good sporting events, including MU basketball.
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Depends on your TV brand and your phone. That isn't 100% true for every smart TV/phone combination. Sometimes you also need an accessory like Amazon fire TV or Google Chromecast
Or Apple TV
Chromecast is $35
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If they have a smart TV, with one swipe on your phone, you can mirror with you're watching on the 60 inch TV in surround sounds. I do it all the time.
Don't need $120/month DTV or Cable account.
Yes, but that isn't always as smooth. I've used streaming a lot, particularly with mlb.tv, but the irregularity of the signal makes me appreciate the steady/reliable picture you get from cable. Being able to quickly flip channels is also a nice bonus with cable.
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Of course you need a DTV or cable account to access most good sporting events, including MU basketball.
Remember 90% of the cable subscription don't need this.
And the rest can be streamed live. The NFL has started streaming games via twitter. This board has a "steaming option" thread almost every game.
The only reason Cable has not collapsed yet is the networks (HBO, ESPN, ABC, CBS, NBC etc.) are not ready to offer a streaming option to compete against Cable/Sat. Right now you need a cable account and have to sign in with that to use their streaming options. They are not offering their services for purchase as stand alone product priced to compete with their cable option. When NBC/CBS/ABC offer themselves as a package for $3/month ... goodbye cable (and ESPN is really screwed).
This will happen, and it will not take 20 years.
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Yes, but that isn't always as smooth. I've used streaming a lot, particularly with mlb.tv, but the irregularity of the signal makes me appreciate the steady/reliable picture you get from cable. Being able to quickly flip channels is also a nice bonus with cable.
Gigabit will take care of that. I get 400 mips downstream at home.
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Remember 90% of the cable subscription don't need this.
And the rest can be streamed live. The NFL has started streaming games via twitter. This board has a "steaming option" thread almost every game.
The only reason Cable has not collapsed yet is the networks (HBO, ESPN, ABC, CBS, NBC etc.) are not ready to offer a streaming option to compete against Cable/Sat. Right now you need a cable account and have to sign in with that to use their streaming options. They are not offering their services for purchase as stand alone product priced to compete with their cable option. When NBC/CBS/ABC offer themselves as a package for $3/month ... goodbye cable (and ESPN is really screwed).
This will happen, and it will not take 20 years.
One of the keys is exclusive content that people want. The local cable provider where I live covers the local high school sports teams. They will not sell that channel stand alone.
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One of the keys is exclusive content that people want. The local cable provider where I live covers the local high school sports teams. They will not sell that channel stand alone.
They will stream it and make money of advertising ... like they do now.
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Remember 90% of the cable subscription don't need this.
And the rest can be streamed live. The NFL has started streaming games via twitter. This board has a "steaming option" thread almost every game.
The only reason Cable has not collapsed yet is the networks (HBO, ESPN, ABC, CBS, NBC etc.) are not ready to offer a streaming option to compete against Cable/Sat. Right now you need a cable account and have to sign in with that to use their streaming options. They are not offering their services for purchase as stand alone product priced to compete with their cable option. When NBC/CBS/ABC offer themselves as a package for $3/month ... goodbye cable (and ESPN is really screwed).
This will happen, and it will not take 20 years.
1. You can't stream most NFL games without some sort of subscription, whether that is Sling, Vue, cable, DTV, etc. You infer that you can stream any NFL game for free. You are simply wrong.
2. Why would people pay $3/ month or whatever for ABC/NBC/ CBS/FOX +plus another dozen or two channels when most people can put out $40-$50 one time on an antenna and watch the networks forever for nothing?
3. HBO offers stand alone HBO.
4. CBS is also available standalone. You cannot get it for $3 a month. It won't ever be $3.00 a month.
You make many blanket statements. Very few hold up to the truth.
#alternativefacts
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1. You can't stream most NFL games without some sort of subscription, whether that is Sling, Vue, cable, DTV, etc. You infer that you can stream any NFL game for free. You are simply wrong.
2. Why would people pay $3/ month or whatever for ABC/NBC/ CBS/FOX +plus another dozen or two channels when most people can put out $40-$50 one time on an antenna and watch the networks forever for nothing?
3. HBO offers stand alone HBO.
4. CBS is also available standalone. You cannot get it for $3 a month. It won't ever be $3.00 a month.
You make many blanket statements. Very few hold up to the truth.
#alternativefacts
You're telling me what is the case now and acting these current business models are permanent and will never change. That would be quite the story because these business models are in a big state of flux.
For instance the NFL just started streaming via twitter this year. You make it sound like that is the last change they will make for the next 20 years. I say the current model for delivering NFL games will radically change in 3 to 5 years, and then radical change again in the following 3 to 5 years. Ditto all the other stuff you mention above, it is changing at 100 MPH and your freezing it in time, explaining where it today, and assuming it will be exactly the same in 20 years. This is the only way what you say makes sense.
The #alternativefacts is you belief that cable will have still 50% penetration in 20 years. See the chart below. See the slope of the decline. You say that will magically stop above 50%? Why? As streaming gets easier and cheaper the decline will accelerate. I feel like it is 1988 again and I'm arguing with my old office manager that believes the fax machine will be a viable technology for the next 20 years. Maybe that was you.
In 20 years we will no longer have drivers, no longer have cashiers, no longer have cable. Heck we will no longer have wired internet connections. Will be on something like 10g or 11g and that will be gigabit speeds streaming on every device we have, from TVs, phone appliances, cars etc. Everything will be on the cloud so we won't even have computers in 20 years, just keyboards and screens to access the cloud.
What we will have in 20 years is you and me arguing with each other when we are not changing our depends.
(http://www.digitaltvnews.net/wp-content/uploads/2015/05/Pay-TV-basic-video-subscribers-and-penetration.png)
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Quite simply, you are wrong.
"Besides young people don't even watch TV on some big screen on the wall. They watch it on their devices."
What a silly statement. Yes, a minority of young people watch things on their phone. But, you made a blanket statement that was ludicrous.
And, there are a myriad of reason why the vast majority of people have cable. Whether you or I disagree with their reason for keeping cable is meaningless.
Yes, some will continue to ditch cable. 20 years from now, the majority will still have it.
Sounds like you lost this bet a year before you made it!
For the First Time, More Than Half of Americans Will Watch Streaming TV
Digital movie streaming lags behind
February 3, 2016
https://www.emarketer.com/Article/First-Time-More-Than-Half-of-Americans-Will-Watch-Streaming-TV/1013543
This will be a benchmark year for digital video usage, particularly streaming television. According to eMarketer’s latest forecast of digital video consumption, 2016 will be the first time more than half of the US population will watch TV shows online at least once a month. In 2016, 164.5 million Americans will watch digital TV—50.8% of the US population. That's a jump from 47.8% last year.
(https://www.emarketer.com/images/chart_gifs/204001-205000/204331.gif)
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You're telling me what is the case now and acting these current business models are permanent and will never change. That would be quite the story because these business models are in a big state of flux.
Again, you are wrong. If you go back and look at any of the threads on TV, cable, netflix, etc., my point every time is that things are changing and will continue to do so at an even faster rate.
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Sounds like you lost this bet a year before you made it!
For the First Time, More Than Half of Americans Will Watch Streaming TV
Digital movie streaming lags behind
February 3, 2016
The article is misleading. The numbers are much, much, higher. About half of Americans will watch netflix this year.
That stat does not even consider Youtube. Consider that 91% of teenagers stream Youtube. Then add in Hulu, Amazon, facebook etc., and 50% doesn't even come close.
But there is still much content that users want and can only get via cable. Period.
Are you satisfied watching the NFL on Twitter? Are you satisfied with 3% of the schedule? Mostly crappy games? Yes people can stream MLB - For a price.
Americans pay for cable for the ease of watching TV. Middle-aged and older folks do not want to have 4, 5, 6 or more bills for their TV watching when cable - which everyone hates - offers the TV experience as a one-stop shop. It's not a big deal to me to set up 6 different payments (which total about 65% of what my cable bill was), but it is for some people.
Go to the grocery store and wait in line while people write checks - yes a lot of people still do. Change is coming. We know it is coming. But it is always slow because millions of people don't want to have to change.
Once someone hits on a way to bundle streaming services, where you can pick and choose networks, sports channels netflix, amazon,m HBOm MLB, NFL, etc. then the change will really roll.
20 years ago, we knew the music industry was gonna change even as the music companies denied and resisted. Napster created a new playing field.
We are not too far away from a new playing field for entertainment.
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They will stream it and make money of advertising ... like they do now.
This cable operator doesn't think that way. They operate under the model of knowing the parents and kids want to see their games on TV so they force you to by the cable package in order to stream.
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good article to get ya"ll up to speed on the "state" of tv viewing-some of this chit is a little over my head, but as with most of us 50-somethings, we have shown the ability to adapt and utilize to varying degrees of effectiveness. i usually consider myself more average to slightly above with regards to adapting and utilizing the ever evolving technology in every day life. my dad(in his 80's) for example, is more or less lost. my mom however, has utilized just enough to remain dangerous...and somewhat more efficient.
but this article, i found :D to be a pretty good barometer of where things are today and moving forward-
http://www.economist.com/news/special-report/21716459-peak-tv-its-way-slowly-traditional-tvs-surprising-staying-power
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good article to get ya"ll up to speed on the "state" of tv viewing-some of this chit is a little over my head, but as with most of us 50-somethings, we have shown the ability to adapt and utilize to varying degrees of effectiveness. i usually consider myself more average to slightly above with regards to adapting and utilizing the ever evolving technology in every day life. my dad(in his 80's) for example, is more or less lost. my mom however, has utilized just enough to remain dangerous...and somewhat more efficient.
but this article, i found :D to be a pretty good barometer of where things are today and moving forward-
http://www.economist.com/news/special-report/21716459-peak-tv-its-way-slowly-traditional-tvs-surprising-staying-power
Good article. As this chart shows, it is all about age.
(http://cdn.static-economist.com/sites/default/files/imagecache/original-size/images/print-edition/20170211_SRC562.png)
So it looks like traditional TV sticks around until the over 50 crowd dies off. Enough of them will be gone in 20 years that streaming will be the dominant form.
And don't forget "Moore Law" that computing power will double every 18 months. What does this mean? If you have an iPhone7, you have more computing power in your pocket than the entire of human history through 1960! Moore laws suggest the iPhone 23 in 20 years (at the current pace) will have more computing power and capabilities that all of Google today!
So in 20 years traditional cable will look like over-the-air TV now, horribly slow, inefficient,limiting and expensive.
When TV viewing gets that efficient so you pay for only what you want and only to the level you want to pay, sports will lose its subsidy it has now and find a drastic reduction in revenues.
http://www.investopedia.com/terms/m/mooreslaw.asp
What is 'Moore's Law'
Moore's law refers to an observation made by Intel co-founder Gordon Moore in 1965. He noticed that the number of transistors per square inch on integrated circuits had doubled every year since their invention.
Moore's law predicts that this trend will continue into the foreseeable future. Although the pace has slowed, the number of transistors per square inch has since doubled approximately every 18 months. This is used as the current definition of Moore's law.
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February 10, 2017
ESPN Reportedly Losing 10,000 Subscribers Every Day
http://www.inquisitr.com/3970090/espn-reportedly-losing-10000-subscribers-every-day/
ESPN has become a drag on the earnings of parent company Disney as cord-cutters unsubscribe in droves.
“A floundering ESPN, with rising costs and declining viewership, continued to sink Disney’s financial results during its fiscal first quarter,” MarketWatch noted.
With its movie franchises and theme parks, Disney is and should be doing fine, but the 1Q revenue was down 3 percent and profit plummeted 14 percent because of its sports media investment.
“The world-wide leader in sports lost subscribers, while average viewership and advertising rates declined and programming costs grew,” MarketWatch added.
Through the end of 2016, Bristol, Connecticut-based ESPN had lost about 12 million subscribers from a 100 million high in 2011.
“At an estimated $7 per subscriber, that dip has been a substantial hit to Disney, especially considering media networks made up 49 percent of Disney’s profits during fiscal 2016,” explained The Wrap about ESPN’s financial troubles.
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I had not thought this was the case, largely because I almost exclusively watch live sports on ESPN and almost none of the recap shows or commentary anymore.
That said, the non-political part below is interesting and goes to ESPN's problem
ESPN Profit Plummets As Network Turns Left
ESPN has become MSESPN.
By Clay Travis
Feb 8, 2017 at 1:11p ET
http://www.outkickthecoverage.com/espn-profit-plummets-as-network-turns-left-020817
Presently ESPN has the following yearly sports rights payments: $1.9 billion a year to the NFL for Monday Night Football plus an additional playoff game which costs the network an additional $100 million, $1.47 billion to the NBA, a deal I told you flat out wasn't sustrightble back in July because it meant every single cable and satellite subscriber in the country was paying an average of $30 a year for the NBA whether they watched or not, $700 million to Major League Baseball, $608 million for the College Football Playoff, $225 million to the ACC, $190 million to the Big Ten, $120 million to the Big 12, $125 million a year to the PAC 12, and hundreds of millions more to the SEC.
Add it all up and the amounts are staggering, tens of billions of dollars in yearly fees owed regardless of what revenue looks like. With most companies you can cut costs if your revenue declines. Not ESPN. It owes these tens of billions for the next decade to come and more.
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So 88 million cable subscribers that get ESPN are paying $30 year for the NBA whether they watch it or not. That means every person that reads this post and gets ESPN on cable/Sat is paying $30/year for the NBA.
This is precisely why streaming is going to kill off cable's business model. 90+% of the country could care less about the NBA and don't want to pay for it. So streaming is a way to not pay for stuff you don't want. Streaming makes you pay for what you want, not anything more.
Again, ESPN is suffering from the decline in all cable. But ESPN is the most expensive cable station and far and away has the highest cost. So it has the most to lose.
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February 10, 2017
ESPN Reportedly Losing 10,000 Subscribers Every Day
http://www.inquisitr.com/3970090/espn-reportedly-losing-10000-subscribers-every-day/
ESPN has become a drag on the earnings of parent company Disney as cord-cutters unsubscribe in droves.
“A floundering ESPN, with rising costs and declining viewership, continued to sink Disney’s financial results during its fiscal first quarter,” MarketWatch noted.
With its movie franchises and theme parks, Disney is and should be doing fine, but the 1Q revenue was down 3 percent and profit plummeted 14 percent because of its sports media investment.
“The world-wide leader in sports lost subscribers, while average viewership and advertising rates declined and programming costs grew,” MarketWatch added.
Through the end of 2016, Bristol, Connecticut-based ESPN had lost about 12 million subscribers from a 100 million high in 2011.
“At an estimated $7 per subscriber, that dip has been a substantial hit to Disney, especially considering media networks made up 49 percent of Disney’s profits during fiscal 2016,” explained The Wrap about ESPN’s financial troubles.
Again, you claim, this is an ESPN-induced problem.
It is not. It is a cable problem.
Why not have a headline saying "Comedy Channel loses 10,000 subscribers a day"? Oh, that doesn't fit your agenda.
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Again, you claim, this is an ESPN-induced problem.
It is not. It is a cable problem.
Why not have a headline saying "Comedy Channel loses 10,000 subscribers a day"? Oh, that doesn't fit your agenda.
The sentence I wrote immediately above ...
Again, ESPN is suffering from the decline in all cable. But ESPN is the most expensive cable station and far and away has the highest cost. So it has the most to lose.
ESPN/ESPN2 cost you $10/month. The Comedy channel cost you about 85 cents a month. So yes the comedy channel is losing subscribers like ESPN. But the comedy channel has no overhead when compared the huge broadcasting rights ESPN has shelled out.
And like you said the lower fees will get passed along to the sports leagues and conferences. That is a nice way to say the sports leagues/conferences are screwed and not take it lying down. I expect strikes and problems in the leagues as the realization sets in that payrolls are peaking and may head lower in the coming years. Cities like Milwaukee are going to be choking on their new basketball stadium.
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The sentence I wrote immediately above ...
Again, ESPN is suffering from the decline in all cable. But ESPN is the most expensive cable station and far and away has the highest cost. So it has the most to lose.
ESPN/ESPN2 cost you $10/month. The Comedy channel cost you about 85 cents a month. So yes the comedy channel is losing subscribers like ESPN. But the comedy channel has no overhead when compared the huge broadcasting rights ESPN has shelled out.
And like you said the lower fees will get passed along to the sports leagues and conferences. That is a nice way to say the sports leagues/conferences are screwed and not take it lying down. I expect strikes and problems in the leagues as the realization sets in that payrolls are peaking and may head lower in the coming years. Cities like Milwaukee are going to be choking on their new basketball stadium.
Yes they put out a lot of $$$$$ and the NFL and MLB negotiations in 4 years will tell us a lot about the future.
They also rake in about $7,000,000,000 - that;s 7 with a 'B' - more from carriage fees than Fox Sports. They also rake in a ton more advertising $$$$than FOX.
ESPN is down about 11 mil viewers in the last 5 years. Still, the money they make from cable carriage fees is up about $2B. Advertising $$$$ are also rising big time.
Annual rights fees now run almost $6B a year - nowhere near the $11B -$12B they bring in.
We will not totally know where ESPN's financial health is at until the MBL negotiations in 4 years and NFL in 5 years. Let's just say for now that they have no competition.
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Yes they put out a lot of $$$$$ and the NFL and MLB negotiations in 4 years will tell us a lot about the future.
They also rake in about $7,000,000,000 - that;s 7 with a 'B' - more from carriage fees than Fox Sports. They also rake in a ton more advertising $$$$than FOX.
ESPN is down about 11 mil viewers in the last 5 years. Still, the money they make from cable carriage fees is up about $2B. Advertising $$$$ are also rising big time.
Annual rights fees now run almost $6B a year - nowhere near the $11B -$12B they bring in.
We will not totally know where ESPN's financial health is at until the MBL negotiations in 4 years and NFL in 5 years. Let's just say for now that they have no competition.
Yes we know the HISTORY lesson. But the reason DIS stock is struggling is about the future. Investors are worried the number you cite are never to be seen again and they will get worse and worse as we move forward in time.
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Yes we know the HISTORY lesson. But the reason DIS stock is struggling is about the future. Investors are worried the number you cite are never to be seen again and they will get worse and worse as we move forward in time.
Sometimes investors are right; sometimes not.
There were an awful lot of people who bad-mouthed Netflix 5 years ago. One of them was our resident cable and satellite "expert" at the time - although I always thought he lied about what he did. But they were putting out a ton of money for acquisition rights without the income to back it up.
ESPN? We don't know yet. We take the opposite views and it will be five years when the big negotiations come up before we know who is right.
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As a Disney stockholder and former Disney employee (Mouseschwitz is what we used to call it), I'm not worried one iota.
They beat earnings, they were short on revenue. Sure the stock will get hit, but just wait until Star Wars next quarter and some of the pipeline content.
Put another way, I'm buying Disney today.
I bought some today when it was down about $10.00. May buy some more tomorrow.
I love Bob Iger, but thought he was a bit disingenious with his statement that they could go OTT today if they wanted to. From a technical perspective, he's correct. From a contractual perspective, not so fast. More importantly, he knows that if he did the amount of money he stands to lose is huge. That's why they are sticking with the bundle despite a lot of people screaming they shouldn't, because of those people simply don't understand the mechanics or the risk involved.
Some day, yes, but not for awhile.
This was 3 1/2 years ago. The stock is lower significantly today. So you been sitting with a loss for at least 3 1/2 years? What is the difference between being "early" and "wrong?"
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This was 3 1/2 years ago. The stock is lower significantly today. So you been sitting with a loss for at least 3 1/2 years? What is the difference between being "early" and "wrong?"
Actually, DIS is only down about $3 since then (which isn't "significantly" for a $100+ stock).
With dividends reinvested, a $10K investment on 8/5/15 would be worth about $10,230 today -- so not a loss at all, but a 2.3% gain.
Now, a 2.3% gain over nearly 3 1/2 years is nothing to really celebrate, especially since the S&P 500 (SPY) is up about 26.6% over the same span, and some blue-chip stocks are up 100% or more since then (such as Microsoft, up 128%).
But it's not a loss, let alone a "significant" one. And DIS has handily beaten SPY over the last year.
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This was 3 1/2 years ago. The stock is lower significantly today. So you been sitting with a loss for at least 3 1/2 years? What is the difference between being "early" and "wrong?"
Why didn’t you factor in the dividend Disney paid me during that time?
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Why didn’t you factor in the dividend Disney paid me during that time?
Why don't you factor in that randomly tossing a dart at the WSJ quotes would have probably produced a better investment than DIS over the 3 1/2 years.
Actually, DIS is only down about $3 since then (which isn't "significantly" for a $100+ stock).
With dividends reinvested, a $10K investment on 8/5/15 would be worth about $10,230 today -- so not a loss at all, but a 2.3% gain.
Now, a 2.3% gain over nearly 3 1/2 years is nothing to really celebrate, especially since the S&P 500 (SPY) is up about 26.6% over the same span, and some blue-chip stocks are up 100% or more since then (such as Microsoft, up 128%).
But it's not a loss, let alone a "significant" one. And DIS has handily beaten SPY over the last year.
The single biggest thing that screams "I don't get it" is measuring investments against breakeven. Making or losing money basis your cost is irrelevant. What is important is making or losing against a benchmark, or an alternative to that investment.
As you point out, but dismiss as a secondary point, DIS has been terrible against the index. The S&P is up 26,9% while DIS was up 2.3% over the same period. Or, if you like, leaving your money in the bank in 3-month T-Bills was better too, up 3.3% over the same period.
Hence my first comment, DIS has been an enormous loss of opportunity.
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Why don't you factor in that randomly tossing a dart at the WSJ quotes would have probably produced a better investment than DIS over the 3 1/2 years.
The single biggest thing that screams "I don't get it" is measuring investments against breakeven. Making or losing money basis your cost is irrelevant. What is important is making or losing against a benchmark, or an alternative to that investment.
As you point out, but dismiss as a secondary point, DIS has been terrible against the index. The S&P is up 26,9% while DIS was up 2.3% over the same period. Or, if you like, leaving your money in the bank in 3-month T-Bills was better too, up 3.3% over the same period.
Hence my first comment, DIS has been an enormous loss of opportunity.
Why are you so worried about your stance being wrong?
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Why don't you factor in that randomly tossing a dart at the WSJ quotes would have probably produced a better investment than DIS over the 3 1/2 years.
The single biggest thing that screams "I don't get it" is measuring investments against breakeven. Making or losing money basis your cost is irrelevant. What is important is making or losing against a benchmark, or an alternative to that investment.
As you point out, but dismiss as a secondary point, DIS has been terrible against the index. The S&P is up 26,9% while DIS was up 2.3% over the same period. Or, if you like, leaving your money in the bank in 3-month T-Bills was better too, up 3.3% over the same period.
Hence my first comment, DIS has been an enormous loss of opportunity.
Actually, the single biggest thing that screams, "I don't get it," is when one has to resort to lies to make his or her point.
You claimed Disney's stock price is "significantly lower" than it was in August 2015. Using facts -- remember those? -- I showed how your statement was false. Now you're shifting the goalposts in a desperate attempt to be "right." Even though you weren't.
I also just said that DIS has far outperformed SPY over the last year, which you ignored because it doesn't fit your narrative.
DIS is one of my smallest holdings. I only recently bought it in two small tranches, at 100 and 101. I plan to gradually build the position with buys when I consider it attractively valued. It doesn't matter one iota to me if you don't invest in it. Go load up on bitcoin, for all I care.
Finally, a company's stock price and its business are two vastly different things. Somebody who "gets it" would know that.
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Actually, the single biggest thing that screams, "I don't get it," is when one has to resort to lies to make his or her point.
You claimed Disney's stock price is "significantly lower" than it was in August 2015. Using facts -- remember those? -- I showed how your statement was false. Now you're shifting the goalposts in a desperate attempt to be "right." Even though you weren't.
I also just said that DIS has far outperformed SPY over the last year, which you ignored because it doesn't fit your narrative.
DIS is one of my smallest holdings. I only recently bought it in two small tranches, at 100 and 101. I plan to gradually build the position with buys when I consider it attractively valued. It doesn't matter one iota to me if you don't invest in it. Go load up on bitcoin, for all I care.
Finally, a company's stock price and its business are two vastly different things. Somebody who "gets it" would know that.
It is significantly lower than the S&P. Cost does not matter.
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Hmmmm....
Has Smuggles returned?
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Why don't you factor in that randomly tossing a dart at the WSJ quotes would have probably produced a better investment than DIS over the 3 1/2 years.
Why do you care Tugg?
Second, most of my DIS stock is from $27 to $34 when I worked for them. I like owning great American companies.
Third, the are about to own 67 % of Hulu, will make a crap ton of money due to the forced divesture of their RSN’s to whomever buys. They have major amusement park expansion opening next year. I’m fine with the investment. I don’t trade out daily or yearly for that matter. I’m buying and holding, same reason why Buffett bought so much Apple....now feel free to beat the market all day if you wish and God’s speed doing it. Don’t particularly care, that’s your call.
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Hmmmm....
Has Smuggles returned?
You just figured that out? He’s also claiming to be right about Apple because of their performance over the last few months.
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Hmmmm....
Has Smuggles returned?
So much fun to have Smuggles and chicos back, two guys who love arguing for the sake of arguing, two guys who are never wrong.
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So much fun to have Smuggles and chicos back, two guys who love arguing for the sake of arguing, two guys who are never wrong.
The irony coming from you. I’m wrong a lot, just as you are. I can admit that for both of us. Progress
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The irony coming from you. I’m wrong a lot, just as you are. I can admit that for both of us. Progress
I do not argue just to argue. And I admit when I am wrong, and apologize if necessary. If you follow that blueprint, it would be appreciated. Happy New Year.
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I do not argue just to argue. And I admit when I am wrong, and apologize if necessary. If you follow that blueprint, it would be appreciated. Happy New Year.
Countless examples I can bring up in last few months while observing before coming back, but whatever. Happy New Year
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Disney stock anyone?
;)
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Disney stock anyone?
;)
Yep.
And I'm far too lazy to look, but if memory serves this is another one that Smuggles said not to touch when it was a bargain in the high-80s or low-90s.
I have a decent amount of DIS and AAPL, but I sure wish I had really loaded up exactly when Smuggles said to do the exact opposite.
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Thread started when Disney cracked off $122 almost four years ago. Only today did it finally break above $122. Over the same period the market was up 50%.
What is interesting is the book ends of this story.
August 2015 Disney cracks as the announce “some” subscriber loss. Turned out to be a massive understatement as they lost millions of subscribers during this period.
What happens today to finally get it to break out? They finally gave up on cable and announced a streaming service. Welcome to the modern era Disney.
82 and Cheeks, got any other stocks we can have a four year 11 page thread on to make $1?
Keep that Apple thread handy 82. Some day when the DJIA is thousands of points higher again it will go one penny above you crowing you were buying more at $232. Then you can dust off that thread too.
Oh, How’s underamour doing? Funny that thread never gets mentioned, still down 60% from its peak. Remind me again how brilliant Seth Curry and Jordan Spieth were to take endorsement pay in UAA stock? They are still working for free.
————
Let’s not lose the larger story here ... why do any of you waste your time buying stocks? Just buy a broad based ETF. Much easier and more profitable. Where I’ve had my money forever.
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You forgot to mention the dividend on my Disney stock Heisy.
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You forgot to mention the dividend on my Disney stock Heisy.
And you forgot to mention my S&P 500 dividend.
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Thread started when Disney cracked off $122 almost four years ago. Only today did it finally break above $122. Over the same period the market was up 50%.
What is interesting is the book ends of this story.
August 2015 Disney cracks as the announce “some” subscriber loss. Turned out to be a massive understatement as they lost millions of subscribers during this period.
What happens today to finally get it to break out? They finally gave up on cable and announced a streaming service. Welcome to the modern era Disney.
82 and Cheeks, got any other stocks we can have a four year 11 page thread on to make $1?
Keep that Apple thread handy 82. Some day when the DJIA is thousands of points higher again it will go one penny above you crowing you were buying more at $232. Then you can dust off that thread too.
Oh, How’s underamour doing? Funny that thread never gets mentioned, still down 60% from its peak. Remind me again how brilliant Seth Curry and Jordan Spieth were to take endorsement pay in UAA stock? They are still working for free.
————
Let’s not lose the larger story here ... why do any of you waste your time buying stocks? Just buy a broad based ETF. Much easier and more profitable. Where I’ve had my money forever.
I'll start by doing something you pretty much never do, Smuggles -- apologizing. I admit that before I wrote my post yesterday, I did not go back to the top of the thread, and I certainly didn't remember what was written 4 years ago. So yes, you were right, DIS was not a good buy on Aug. 4, 2015 (the day before your post about it being ready to crash) at $121. Even the relatively small dividend chicos and others got since then did not make it a good buy; as you correctly stated, it took nearly 4 years just to get back to break even.
However ...
Just two weeks later, on Aug. 25, 2015, I made my first comment on the thread:
DIS at under $92, which is about 18x 2015 earnings estimates, would be an extremely attractive entry point IMHO. That's where my limit order is -- 91 and change.
DIS is a classic "want to" stock for me. I don't "need" to own it to realize my financial goals. But it is a fantastic company with a future of limitless potential and I would be happy to own it for decades to come if I can get it at what I consider a bargain price.
To which you promptly (and smugly) responded:
An 18 PE was the old world that ended on August 4. Today's new (cord--cutting) world might be an under 15 forward PE ... on a lower earnings estimate.
Change your buy order to $75 to $80.
Had anybody done that, he/she would have never seen the order filled. The lowest DIS got after that was when it briefly went under $87 in Feb 2016. I wish I had bought then, but I actually waited until last year (May 29, 2018 to be precise) and bought it at 100 ($99.69 to be precise) -- a purchase I reported in a public, real-time, real-money portfolio I run.
So in about 11 months, that DIS purchase, including reinvested dividends is up 32.5%. SPY, in that exact same span, is up 10%.
I since made two other DIS buys, both in the $105-108 range. Those also have crushed SPY's performance.
You spent most of the thread cut-and-pasting various articles as your way of "proving" that DIS was doomed. Okey dokey then.
At one point, I made a comparison between DIS and MCD, talking about both being out of favor companies, and you proceeded to say how much trouble MCD was in, also.
That was Nov. 28, 2015. I responded by saying:
OK. I'll take my chances with MCD as part of a diversified portfolio filled mostly with long-time dividend growers. They will help me meet my goals.
Since then, MCD (which got a good CEO and has made several outstanding changes) is up 84%. In the same span, SPY is up 48%.
You are going to die on your sword with AAPL, too, apparently. I can't speak for anybody else, but I did not buy more at $232. My last buy was in the $180s. And my AAPL position is up bigly -- way, way, way better than SPY in the time I've owned it.
But thanks for reminding everybody that you smugly said AAPL was dead money in the low-$90s and only a fool would invest in it there.
UA? I don't own it, I've never owned it, I don't follow it, and I don't know anything about it, so I'll take your word on it. I do own NKE, bought dirt-cheap, and I held it through the "Kaepernick Krisis" and I'm glad I did.
For a guy who gives others advice to buy a broad-based ETF -- advice I'd second for the average investor, BTW -- you sure spend a lot of time worrying about the daily ups and downs of certain stocks. No intelligent investor I know makes long-range investing decisions based on the price gyrations of a half-dozen stocks, Smuggles, but maybe you do.
BTW, my public portfolio of well-chosen, high-quality, dividend-growing stocks has been killing SPY. That's really neither here nor there, because the primary goal is to create a reliable, growing income stream. But the secondary goal is to achieve outstanding total return, and a long-term plan of buying great companies (preferably at attractive valuation points), holding them for years, adding along the way, and reinvesting dividends will do (and has done) just fine in the total-return department.
Unlike you (apparently), I have made plenty of investing mistakes. My biggest losers have been CVS, GILD, KMI and QCOM. I also held on to KHC too long. And in my public portfolio, I paid too much for MMM.
But the nice thing about having a diversified portfolio of quality companies is that one can survive a few losers to have a winning portfolio. No investor is perfect. Not Buffett, not Lynch, not Kass. Except maybe you. Maybe Smuggles is the one perfect investor.
Anyhoo, I'm still glad I bought AAPL under $95, DIS under $100, MCD under $90 and NKE under $50. And you're still wrong about DIS being doomed and AAPL being a bad buy in the low-$90s.
Have a nice day!
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Before this thread got sidetracked into a pissing match as to who is the better investor (and yes I'm equally guilty), the original idea was is cable/sat TV ending?
Let's get back to that.
As I noted above, DIS was smashed in August 2015 when they came out and said ESPN was losing cable/Sat subscribers and made a new high this week when they finally gave up and announced a new streaming service (while undercutting NetFlix's price).
So ... and I would like to hear from Chicos here ...
For brevity, I'll make some statements, agree or disagree with them ...
Dinsey is a major player, but getting into the streaming business, cable and Sat will now accelerate out of business. Five to ten years and the business will be essentially gone (I say essentially because there will be some old people that will hold on refusing to change).
5G, which was rolled out in a very limited demonstration way this month, will accelerate this. Paying for hard-wired internet access will also go away (or the price of a cable modem with 1G speeds will drop to $5 to $10/month so you'll keep it for the same reason you still have a landline).
So, the MU season of 2029 will be streamed. Every college basketball game will be streamed. There will be apps and websites called ESPN and FS1 but they will be a low monthly payment. (yes, it is streamed now. I'm saying only streamed, no more cable or Sat. No more asking what channel is ESPN. Kids will forget what a TV channel was in due time)
Apple will jump in, like Sling and Youtube, and offer ala carte bundling to make surfing more efficient.
So Disney's announcement is the Mouse gave up and joined the 21st century, things will move fast now.
You will not recognize the TV business in 10 years.
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82/Chico - DIS is now a buy. They get it. Defending the old world is over. DIS is a tremendous producer of content and now that they got out of the business of supporting cable, they can see their value really go up.
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Before this thread got sidetracked into a pissing match as to who is the better investor (and yes I'm equally guilty), the original idea was is cable/sat TV ending?
Let's get back to that.
As I noted above, DIS was smashed in August 2015 when they came out and said ESPN was losing cable/Sat subscribers and made a new high this week when they finally gave up and announced a new streaming service (while undercutting NetFlix's price).
So ... and I would like to hear from Chicos here ...
For brevity, I'll make some statements, agree or disagree with them ...
Dinsey is a major player, but getting into the streaming business, cable and Sat will now accelerate out of business. Five to ten years and the business will be essentially gone (I say essentially because there will be some old people that will hold on refusing to change).
5G, which was rolled out in a very limited demonstration way this month, will accelerate this. Paying for hard-wired internet access will also go away (or the price of a cable modem with 1G speeds will drop to $5 to $10/month so you'll keep it for the same reason you still have a landline).
So, the MU season of 2029 will be streamed. Every college basketball game will be streamed. There will be apps and websites called ESPN and FS1 but they will be a low monthly payment. (yes, it is streamed now. I'm saying only streamed, no more cable or Sat. No more asking what channel is ESPN. Kids will forget what a TV channel was in due time)
Apple will jump in, like Sling and Youtube, and offer ala carte bundling to make surfing more efficient.
So Disney's announcement is the Mouse gave up and joined the 21st century, things will move fast now.
You will not recognize the TV business in 10 years.
-------------
82/Chico - DIS is now a buy. They get it. Defending the old world is over. DIS is a tremendous producer of content and now that they got out of the business of supporting cable, they can see their value really go up.
Nice pivot, Smuggles.
I'll let chicos take it from here.
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https://www.statista.com/chart/17724/net-subscriber-loss-of-the-largest-pay-tv-providers-in-the-united-states/
According to Leichtman Research Group, the largest pay-TV providers in the United States, accounting for 95 percent of all subscribers, lost more than 2.85 million subscribers, collectively, in 2018, with satellite services seeing the biggest drop in customers (-2.4 million) and cable companies also losing 0.9 million subs. Part of the decline was offset by a rise in internet-delivered services such as Sling TV, but overall things are looking increasingly bleak for the pay-TV industry.
As the following chart shows, cord-cutting is really picking up pace, with net subscriber losses of the largest pay-TV providers growing from 125,000 in 2014 to 2.85 million last year, with total subscriber losses amounting to more than 5.5 million over the five-year period. At the same time, household penetration of SVOD services has grown from 47 percent to 69 percent between 2014 and 2018, indicating who is likely to blame for pay-TV’s losses.
(https://infographic.statista.com/normal/chartoftheday_17724_net_subscriber_loss_of_the_largest_pay_tv_providers_in_the_united_states_n.jpg)
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With the arrival of Disney+ and all the subsequent streaming services, consumers will quickly turn back to piracy. The whole success of Netflix was not based on just cost, but also convenience. If consumers have to now subscribe to 10 different services just to be able to stream their content, they'll give up. Piracy will return again.
Cable is back. But instead of a TV box and a cord, it's a dozen logins and passwords and monthly payments.
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With the arrival of Disney+ and all the subsequent streaming services, consumers will quickly turn back to piracy. The whole success of Netflix was not based on just cost, but also convenience. If consumers have to now subscribe to 10 different services just to be able to stream their content, they'll give up. Piracy will return again.
Cable is back. But instead of a TV box and a cord, it's a dozen logins and passwords and monthly payments.
Sling, youtube red, and Prime are offering aggregation of these services.
The problem is they are seeing "bloat" as they add more and more and raise their prices. Eventually, they will have to offer a menu and let you pick and choose.
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If you bought Disney stock 10 years ago, you made a 660% return....the S&P during that time went up 240% according to CNBC.
https://www.cnbc.com/2019/04/15/what-a-1000-dollar-investment-in-disney-10-years-ago-would-be-worth-now.html
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If you bought Disney stock 10 years ago, you made a 660% return....the S&P during that time went up 240% according to CNBC.
https://www.cnbc.com/2019/04/15/what-a-1000-dollar-investment-in-disney-10-years-ago-would-be-worth-now.html
No one said to sell it 10 years ago.
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As I noted above, DIS was smashed in August 2015 when they came out and said ESPN was losing cable/Sat subscribers and made a new high this week when they finally gave up and announced a new streaming service (while undercutting NetFlix's price).
So ... and I would like to hear from Chicos here ...
For brevity, I'll make some statements, agree or disagree with them ...
Dinsey is a major player, but getting into the streaming business, cable and Sat will now accelerate out of business. Five to ten years and the business will be essentially gone (I say essentially because there will be some old people that will hold on refusing to change).
5G, which was rolled out in a very limited demonstration way this month, will accelerate this. Paying for hard-wired internet access will also go away (or the price of a cable modem with 1G speeds will drop to $5 to $10/month so you'll keep it for the same reason you still have a landline).
So, the MU season of 2029 will be streamed. Every college basketball game will be streamed. There will be apps and websites called ESPN and FS1 but they will be a low monthly payment. (yes, it is streamed now. I'm saying only streamed, no more cable or Sat. No more asking what channel is ESPN. Kids will forget what a TV channel was in due time)
Apple will jump in, like Sling and Youtube, and offer ala carte bundling to make surfing more efficient.
So Disney's announcement is the Mouse gave up and joined the 21st century, things will move fast now.
You will not recognize the TV business in 10 years.
-------------
82/Chico - DIS is now a buy. They get it. Defending the old world is over. DIS is a tremendous producer of content and now that they got out of the business of supporting cable, they can see their value really go up.
Not exactly. First off, Disney is working with all major satellite and cable companies to put Disney + ON THEIR systems. Just as Netflix is doing on Comcast, Dish and others. Why? Simple. The bundle still is the most economical benefit to them. Disney still gets paid monthly by millions of subscribers whether they watch or not their content on those platforms. So in an odd way, they are actually incentivized to keep the old world in play as you describe it.
As cord cutting increases, you also see wide distribution of their products and others on things like YouTubeTV, Hulu (which after their purchase of AT&T's 10% stake two weeks ago, they own huge majority), Sling, Vue, etc.
In addition, they are going after the DTC, or Direct to Consumer market in the same way Warner Brothers (AT&T) will later this year with their offering, or ESPN+ has with theirs. But all of those services are add-ons, not meant to be solo services. The data shows clearly that is the case. Very few people have only ESPN+ or only Netflix, they become multiples of each others. There are certainly some people that don't have any of the networks you get with CBS, ABC, NBC, FOX, but the vast majority in this country still do.
In terms of the timing, we will have to see. As I said a few years ago and this will continue, the content creators are going to get their pound of flesh one way or another. They are the most powerful piece of the value chain and more powerful now than ever. They will continue to consolidate, raise prices to maintain their revenue and margin streams.
The piracy angle is a big one for me and one I have been screaming about within the industry for some time. The last 18 months it has finally woken some people up, and really starting to hit higher gear in the last few months. We'll see if that momentum continues. The technology is there to stop it, a matter of when the will kicks in. Also a matter of when the lawmakers kick in to punish the companies allowing it (i.e. broadband providers, wireless, etc) and down to the individuals. I suspect when the money dries up to their campaign coffers from the content companies, that is when you will see it.
Finally, 5G still has a long way to go in one sense, and a short time in another. It is here now....sort of. But the build out of antennas with the density needed is long, expensive. You are going to see slivers withing DMAs that will expand over time, but it will be pocketized for some time. Apple isn't even jumping in until next year. Samsung has a phone as does Motorola. It's fun, cool, fast....but depending on where you live you could be waiting quite some time.
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No one said to sell it 10 years ago.
I'm just glad I bought it 20 years ago when I worked for them for two years. :D
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I'm just glad I bought it 20 years ago when I worked for them for two years. :D
... and you should have sold it 4 years ago.
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ESPN peaked at 110 million subscribers in 2011. Now under 85 million. 25 million gone!
The last seven months have been horrific.
https://twitter.com/SportsTVRatings/status/1112736050093408256
@SportsTVRatings
hadn't seen cable coverage estimates (how many homes each network is in) from Nielsen since August. Here's the April 2019 v August 2018 for the cable sports nets I saw:
(https://pbs.twimg.com/media/D3E7iQfWwAAUQDB.jpg)
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So what is anybody supposed to do with this info, Smuggles?
If DIS investor?
If not DIS investor?
Or is it just info you think is interesting (and there's nothing wrong with that)?
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ESPN peaked at 110 million subscribers in 2011. Now under 85 million. 25 million gone!
The last seven months have been horrific.
https://twitter.com/SportsTVRatings/status/1112736050093408256
@SportsTVRatings
hadn't seen cable coverage estimates (how many homes each network is in) from Nielsen since August. Here's the April 2019 v August 2018 for the cable sports nets I saw:
(https://pbs.twimg.com/media/D3E7iQfWwAAUQDB.jpg)
Which is exactly why they should be incentivized to keep the old bundle together. Furthermore, your little chart doesn't include their additions in the OTT space...so the net loss you are talking about is not at the same level your graphic indicates.
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Endgame might end up being the highest grossing movie ever, and Disney can just keep cranking out Marvel movie after Marvel movie and all of them will be huge at the box office. In addition to Star Wars, Pixar films, etc. In addition to theme parks and cruise ships and merchandise. Oh, and TV too.
DIS hit all-time this morning.
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So what is anybody supposed to do with this info, Smuggles?
If DIS investor?
If not DIS investor?
Or is it just info you think is interesting (and there's nothing wrong with that)?
This thread is about cord-cutting (see the name). If is not a thread about being long DIS.
Trying to get back to the original topic.
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This thread is about cord-cutting (see the name). If is not a thread about being long DIS.
Trying to get back to the original topic.
Cheek's point is that the discussion has shifted from ESPN set top household penetration to the horizontally integrated media properties that Disney is gobbling up including the Fox properties. So, while ESPN is in less homes, more people are watching Disney media properties.
So, cost synergize these properties across their verticals and increase their media impressions with acquisitions (and set top fees for each channel and on-demand subscription fees).
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This thread is about cord-cutting (see the name). If is not a thread about being long DIS.
Trying to get back to the original topic.
1. Yes, far be it from any Scooper, including you, to discuss something other than the exact title of a thread, even a related one.
2. As Dr. B said, it's all intertwined. ESPN is still important to DIS but less so than it was just a couple years ago. DIS not only will survive but thrive in the cord-cutting era.
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In kind-of-related, not-surprising news ...
https://www.sportsbusinessdaily.com/SB-Blogs/Breaking-News/2019/04/ESPN-Mag.aspx
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Cheek's point is that the discussion has shifted from ESPN set top household penetration to the horizontally integrated media properties that Disney is gobbling up including the Fox properties. So, while ESPN is in less homes, more people are watching Disney media properties.
So, cost synergize these properties across their verticals and increase their media impressions with acquisitions (and set top fees for each channel and on-demand subscription fees).
But they have to compete with Netflix, Hulu, Prime, Facebook, Google among others.
Too much competition.
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The Sports TV Bubble Shows Signs of Weakness
https://www.bloomberg.com/opinion/articles/2019-05-06/sinclair-disney-rsn-sale-sports-tv-bubble-shows-weakness?srnd=opinion
Sinclair’s deal to buy the former Fox regional sports networks values them at less than expected.
Fast forward to June 2018 when Murdoch agreed to sell most of his Fox television and movie assets to the Walt Disney Co. for $71 billion. As a condition of government approval, Disney promised to sell off Fox’s 22 regional sports networks, or RSNs. Analysts predicted that they would fetch between $20 billion and $22 billion, according to Bloomberg News.
Instead, Sinclair Broadcast Group Inc. agreed last week to buy them for $10.6 billion. True, the YES Network that broadcasts the New York Yankees — by far the most valuable of the RSNs — was not part of the deal, as the Yankees bought it back for $3.47 billion. Even so, that means that the Fox networks garnered between $6 billion and $8 billion less than Disney had hoped.
If Murdoch’s original deal with the NFL stands as an important early marker in the explosion of sports rights in the U.S. — and it does — I’m wondering if we’ll someday look back on the sale of Fox’s RSNs as the moment when the sports rights bubble began to burst. I think it might.
My thesis is based on two interrelated factors. The first is that cord-cutting is inevitably going to impinge on the ability of the TV networks to pay ever-higher prices for professional and big-time college sports. I don’t deny that sports, especially football, has become more important than ever to the legacy networks. There are many people who continue to subscribe to cable TV solely because they would otherwise miss MLB or NBA playoff games or the NCAA’s March Madness tournament. Without sports, they would likely cancel their cable subscription.
But ESPN, Disney’s all-sports network, has lost about 15 million subscribers over the past half-dozen years. That represents more than $1.2 billion in lost revenue. CBS Corp.’s revenue has been mostly flat since 2012. Disney’s chief executive Robert Iger has warned that as the company pushes aggressively into streaming services, its profits will take a short-term hit. According to Richard Greenfield, an analyst with BTIG, 1.1 million viewers cut the cord in the first quarter of 2019, the biggest quarterly decline ever. You have to wonder how the legacy networks will be able to keep paying ever higher rights fees — as they have for decades — if they keep losing viewers.
Also has this
The modern economics of sports has been built on the notion that rights packages can only go in one direction: up. That’s why Steve Ballmer was willing to pay $2 billion to buy the Los Angeles Clippers, and why the New York Yankees are worth $4 billion, according to Forbes. It’s also why the Philadelphia Phillies were able to sign Bryce Harper to a 13-year, $330 million contract, while even a middling professional basketball player like the Indiana Pacers’ Wesley Matthews makes over $16 million a year.
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Streaming Could Kill Cable In 4-5 Years: Porter Bibb
https://www.bloomberg.com/news/audio/2019-05-08/streaming-could-kill-cable-in-4-5-years-porter-bibb-podcast
Porter Bibb, Managing Partner for MediaTech Capital Partners, on Disney and an overview of the digital media sector, which is in sustained transition.
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Streaming Could Kill Cable In 4-5 Years: Porter Bibb
https://www.bloomberg.com/news/audio/2019-05-08/streaming-could-kill-cable-in-4-5-years-porter-bibb-podcast
Porter Bibb, Managing Partner for MediaTech Capital Partners, on Disney and an overview of the digital media sector, which is in sustained transition.
Most cable companies are or have launched their own streaming services....so shifting from one business unit to another.
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The Sports TV Bubble Shows Signs of Weakness
https://www.bloomberg.com/opinion/articles/2019-05-06/sinclair-disney-rsn-sale-sports-tv-bubble-shows-weakness?srnd=opinion
Sinclair’s deal to buy the former Fox regional sports networks values them at less than expected.
Fast forward to June 2018 when Murdoch agreed to sell most of his Fox television and movie assets to the Walt Disney Co. for $71 billion. As a condition of government approval, Disney promised to sell off Fox’s 22 regional sports networks, or RSNs. Analysts predicted that they would fetch between $20 billion and $22 billion, according to Bloomberg News.
Instead, Sinclair Broadcast Group Inc. agreed last week to buy them for $10.6 billion. True, the YES Network that broadcasts the New York Yankees — by far the most valuable of the RSNs — was not part of the deal, as the Yankees bought it back for $3.47 billion. Even so, that means that the Fox networks garnered between $6 billion and $8 billion less than Disney had hoped.
If Murdoch’s original deal with the NFL stands as an important early marker in the explosion of sports rights in the U.S. — and it does — I’m wondering if we’ll someday look back on the sale of Fox’s RSNs as the moment when the sports rights bubble began to burst. I think it might.
My thesis is based on two interrelated factors. The first is that cord-cutting is inevitably going to impinge on the ability of the TV networks to pay ever-higher prices for professional and big-time college sports. I don’t deny that sports, especially football, has become more important than ever to the legacy networks. There are many people who continue to subscribe to cable TV solely because they would otherwise miss MLB or NBA playoff games or the NCAA’s March Madness tournament. Without sports, they would likely cancel their cable subscription.
But ESPN, Disney’s all-sports network, has lost about 15 million subscribers over the past half-dozen years. That represents more than $1.2 billion in lost revenue. CBS Corp.’s revenue has been mostly flat since 2012. Disney’s chief executive Robert Iger has warned that as the company pushes aggressively into streaming services, its profits will take a short-term hit. According to Richard Greenfield, an analyst with BTIG, 1.1 million viewers cut the cord in the first quarter of 2019, the biggest quarterly decline ever. You have to wonder how the legacy networks will be able to keep paying ever higher rights fees — as they have for decades — if they keep losing viewers.
Also has this
The modern economics of sports has been built on the notion that rights packages can only go in one direction: up. That’s why Steve Ballmer was willing to pay $2 billion to buy the Los Angeles Clippers, and why the New York Yankees are worth $4 billion, according to Forbes. It’s also why the Philadelphia Phillies were able to sign Bryce Harper to a 13-year, $330 million contract, while even a middling professional basketball player like the Indiana Pacers’ Wesley Matthews makes over $16 million a year.
This I agree with and have been saying it for many years, the question is whether the FANG folks will keep the craziness alive.
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Most cable companies are or have launched their own streaming services....so shifting from one business unit to another.
Actually, they all are. But they make far less on a streaming subscriber than a cable subscriber. So the move to streaming means less revenues. And Porter Bibb noted that Disney is getting in late and has to really pay up for content (versus a few years ago).
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This I agree with and have been saying it for many years, the question is whether the FANG folks will keep the craziness alive.
Back to Porter Bibb ... the only reason cable has not already died is live sports. So if the FAANGS (facebook, apple, amazon, netflix and/or Google) pay up for sports rights, that is the end of traditional cable.
They all become internet providers.
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DIS had another outstanding earnings report.
https://seekingalpha.com/news/3461140-disney-plus-1_6-percent-amid-gains-parks-fox-direct-consumer
"Media Networks" segment (of which ESPN is a part) made $5.53B in revenue during fiscal Q2, about equal to Q2 of last year.
Most other segments were well up.
Good, money-making company.
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DIS had another outstanding earnings report.
https://seekingalpha.com/news/3461140-disney-plus-1_6-percent-amid-gains-parks-fox-direct-consumer
"Media Networks" segment (of which ESPN is a part) made $5.53B in revenue during fiscal Q2, about equal to Q2 of last year.
Most other segments were well up.
Good, money-making company.
So you think Nocera (thread above) is wrong in his assessment of ESPN?
https://www.bloomberg.com/opinion/articles/2019-05-06/sinclair-disney-rsn-sale-sports-tv-bubble-shows-weakness?srnd=opinion
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Back to Porter Bibb ... the only reason cable has not already died is live sports. So if the FAANGS (facebook, apple, amazon, netflix and/or Google) pay up for sports rights, that is the end of traditional cable.
They all become internet providers.
Nonsense. There are already a myriad of non-cable options for live sports that have been available for years.
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So you think Nocera (thread above) is wrong in his assessment of ESPN?
https://www.bloomberg.com/opinion/articles/2019-05-06/sinclair-disney-rsn-sale-sports-tv-bubble-shows-weakness?srnd=opinion
RSNs are a very different animal. I deal with them every day. Huge fees, low ratings. I wouldn’t judge the entire landscape on RSNs.
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So you think Nocera (thread above) is wrong in his assessment of ESPN?
https://www.bloomberg.com/opinion/articles/2019-05-06/sinclair-disney-rsn-sale-sports-tv-bubble-shows-weakness?srnd=opinion
I think that over time ESPN has to make some changes to keep making money. It already has begun to do so. As chicos said, RSNs are different from ESPN.
All that matters to me is how it relates to my DIS stock. I'm glad to be a shareholder of this diversified media and entertainment conglomerate.
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The ending of the Sixers-Raptors game shows why these networks are willing to pay so much for live sports.
It is the true "reality TV" -- pretty much the only thing a network can show that isn't contrived or scripted.
If a Hollywood screenwriter had written that ending -- the star practically falling out of bounds on a high-arching 21-footer that bounced on the rim 4 times before going through the basket, with time seemingly standing still and the crowd eerily quiet -- that screenwriter would be mocked.
Sports is the greatest theater out there.
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The ending of the Sixers-Raptors game shows why these networks are willing to pay so much for live sports.
It is the true "reality TV" -- pretty much the only thing a network can show that isn't contrived or scripted.
If a Hollywood screenwriter had written that ending -- the star practically falling out of bounds on a high-arching 21-footer that bounced on the rim 4 times before going through the basket, with time seemingly standing still and the crowd eerily quiet -- that screenwriter would be mocked.
Sports is the greatest theater out there.
All happening while the player is squatting down in the corner waiting to see if it goes in.....unbelievable.
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If a Hollywood screenwriter had written that ending -- the star practically falling out of bounds on a high-arching 21-footer that bounced on the rim 4 times before going through the basket, with time seemingly standing still and the crowd eerily quiet -- that screenwriter would be mocked.
Sports is the greatest theater out there.
It would be like "The Natural" - worst sports movie ever made.
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It would be like "The Natural" - worst sports movie ever made.
I dunno, brand. There have been some pretty bad sports movies.
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The ending of the Sixers-Raptors game shows why these networks are willing to pay so much for live sports.
It is the true "reality TV" -- pretty much the only thing a network can show that isn't contrived or scripted.
If a Hollywood screenwriter had written that ending -- the star practically falling out of bounds on a high-arching 21-footer that bounced on the rim 4 times before going through the basket, with time seemingly standing still and the crowd eerily quiet -- that screenwriter would be mocked.
Sports is the greatest theater out there.
100% agree. But this is not a case for cable.
All of this can happen as you stream it on Twitter/Facebook/Google/Netflix (when they purchase the NBA rights).
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100% agree. But this is not a case for cable.
All of this can happen as you stream it on Twitter/Facebook/Google/Netflix (when they purchase the NBA rights).
Could happen. We'll see.
Of course, Disney would still have lotsa valuable properties and, again, that's all I care about.
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I dunno, brand. There have been some pretty bad sports movies.
Die Hard was a terrible sports movie.
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I dunno, brand. There have been some pretty bad sports movies.
Maybe I used the wrong term. "Hokey" or too "Hollywood-y" might have been better.
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Maybe I used the wrong term. "Hokey" or too "Hollywood-y" might have been better.
Just about every sports movie has a really hokey ending. Calling out 'The Natural' for this is arbitrary. For the record, I could take or leave the movie.
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Yet another triumph for DIS.
https://seekingalpha.com/article/4266696-aladdins-success-shows-disney-may-netflixs-biggest-threat-yet?ifp=0
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Calling Heise
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Calling Heise
Disney had one "bad" quarter while getting going following a major acquisition. Plus, the stock price had run up too far too fast to hit its all-time high. It was a perfect storm for a little pullback. It's already moving back up today in premarket.
Although I'm still well up on my DIS investment -- much more than if I had invested in SPY -- investing is a long-term game. I'm happy to be a DIS shareholder now, and I'll probably be even happier about it years (and decades) from now.
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I received by DIS dividend a few days ago. I’m happy.
Now a few thoughts and prayers for the carnage done locally yesterday afternoon would be nice.
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Disney+ thoughts, to stay on topic ?
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Disney+ thoughts, to stay on topic ?
Agreed.
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Agreed.
https://www.theverge.com/2019/8/6/20757626/disney-plus-espn-hulu-bundle-price-date-streaming-service
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https://www.theverge.com/2019/8/6/20757626/disney-plus-espn-hulu-bundle-price-date-streaming-service
Yes, it will be interesting to see how many folks they can sign up for this service.
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Not that I believe everything analysts say, not by a long shot, I did see that after the earnings report Credit Suisse raised DIS from neutral to outperform and lifted its target price from $130 to $150.
https://www.morningstar.com/news/marketwatch/20190808177/disney-gets-an-upgrade-at-credit-suisse
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Yes, it will be interesting to see how many folks they can sign up for this service.
This is shows the future of streaming, VOD, is commercially mainstream with Disney's going live, something Cheekadamus has debated. At least he has his Disney stock as his DTV/ATT shares flatline.
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Agreed.
It was in the city next to where Disneyland is and many Disney employees live. Don’t worry if you didn’t see much about it, that’s also by design including ABC which is owned but Disney. All kinds of Disney touchpoints in our lives...as a shareholder I sometimes cringe. That’s on topic.
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It was in the city next to where Disneyland is and many Disney employees live. Don’t worry if you didn’t see much about it, that’s also by design including ABC which is owned but Disney. All kinds of Disney touchpoints in our lives...as a shareholder I sometimes cringe. That’s on topic.
I did hear of the incident. I just was ignoring you.
But if you insist: Thoughts and prayers.
Now maybe future discussions here can be about both of us being satisfied DIS investors.
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The guy who stabbed 6 people out of hate? Yup. Just no one else tried to politicize it in a thread about ESPN.
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IBTL
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chico destroys another thread. With the same crap we have heard from him a hundred times.
I was reminded of how toxic and destructive he is on Scoop as I read the discussion between Forgetful and Pakuni. Two guys who had differing opinions on a subject and treated each other with respect. A reminder of how nice Scoop can be.
No carpet bombing, no sarcastic remarks, no politics. No attempt to argue with everyone over everything. No d'baggery.
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The guy who stabbed 6 people out of hate? Yup. Just no one else tried to politicize it in a thread about ESPN.
At least it wasn't a gun. Could have easily been double, triple that number in the same amount of time
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chico destroys another thread. With the same crap we have heard from him a hundred times.
I was reminded of how toxic and destructive he is on Scoop as I read the discussion between Forgetful and Pakuni. Two guys who had differing opinions on a subject and treated each other with respect. A reminder of how nice Scoop can be.
No carpet bombing, no sarcastic remarks, no politics. No attempt to argue with everyone over everything. No d'baggery.
come on 'strap-how can you stand the smell...common denominator of the lockdowns...try again
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come on 'strap-how can you stand the smell...common denominator of the lockdowns...try again
You're a piece of work, Boo-Boo. Read the actual thread and decide objectively who the instigator was rather than leaping to Yogi's defense.
I accept your apology.
Now, how about DIS?
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You're a piece of work, Boo-Boo. Read the actual thread and decide objectively who the instigator was rather than leaping to Yogi's defense.
I accept your apology.
Now, how about DIS?
take's more than one to tango eighty-something...maintain man...maintain. but ya gotta thank 'strap for brown nosin it for ya
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take's more than one to tango eighty-something...maintain man...maintain. but ya gotta thank 'strap for brown nosin it for ya
I accept your apology.
I've been trying to keep this thread on subject.
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What do you think about ABBV here MU82? I'm seriously considering nibbling a little, despite the Humira cliff in 2023. Yield is close to 6.7%, and with their dividend growth rate the YOC should be north of 8% in three years.
Even factoring in zero capital appreciation over that time span, the dividend is tempting.
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What do you think about ABBV here MU82? I'm seriously considering nibbling a little, despite the Humira cliff in 2023. Yield is close to 6.7%, and with their dividend growth rate the YOC should be north of 8% in three years.
Even factoring in zero capital appreciation over that time span, the dividend is tempting.
Let me start with my standard caveat: Although I do write extensively about stocks, I do not pretend to be an "expert." Because of this, and because I don't want to steer my fellow investors wrong, I generally am uncomfortable at making specific recommendations.
Now, you asked a question, and I'll answer it concisely ...
I do own ABBV myself, and I also selected it last year for the public portfolio I manage. As you said, its yield is incredibly attractive, although one of the sites I trust pretty well, Simply Safe Dividends, gives it only a 50 (on a 1-100 scale) for "dividend safety."
The biggest problem with ABBV is that by far its biggest cash cow, Humira, is losing market share to similar drugs. So far, its pipeline has not produced anything close as a money-maker. Add in the unsettled political climate -- one thing politicians on both sides of the aisle seem to agree on is that drug prices need to be brought down somehow -- and one might argue that it isn't the greatest time to buy a pill company.
I bought my stake at a much lower price point, and I'm cautiously holding right now. If I get a real sense that the dividend is in danger of being cut, I will sell. As you say, it has been growing its dividend like a weed, and so far its free cash flow has covered the dividend easily, so I'm hopeful that point won't come.
Lately, it seems every bit of bad news hits ABBV harder than most, price-wise. Only you can decide if those dips represent good buying opportunities for you.
I wish you good fortune.
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The guy who stabbed 6 people out of hate? Yup. Just no one else tried to politicize it in a thread about ESPN.
No one is politicizing it....thoughts and prayers. When I worked for DIS, they put my family up in Garden Grove...it is where many employees are put up until they find lodging. DIS may need to find another location.
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No one is politicizing it....thoughts and prayers. When I worked for DIS, they put my family up in Garden Grove...it is where many employees are put up until they find lodging. DIS may need to find another location.
This stretch rivals some of Herman’s recruiting updates.
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Calling Heise
Sorry ... was too busy counting my Disney profits
82/Chico - DIS is now a buy. They get it. Defending the old world is over. DIS is a tremendous producer of content and now that they got out of the business of supporting cable, they can see their value really go up.
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Sorry ... was too busy counting my Disney profits
I hope you cashed out...
https://www.marketwatch.com/story/disney-whistleblower-told-sec-the-company-inflated-revenue-for-years-2019-08-19
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I hope you cashed out...
https://www.marketwatch.com/story/disney-whistleblower-told-sec-the-company-inflated-revenue-for-years-2019-08-19
stock rallied on the news.
Greed is good!
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Fun day for Mr. Market yesterday!
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Fun day for Mr. Market yesterday!
Political. Please stop
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Political. Please stop
Ignorance