Media Companies Search for Positives in Earnings Numbers - Broadcasting & Cable

Media Companies Search for Positives in Earnings Numbers

Media companies are reporting earnings propped up by corporate tax cuts and trying to convince investors there is still life in the television business
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With the backdrop of a plunging stock market in the background, media companies are reporting calendar fourth-quarter earnings propped up by corporate tax cuts and trying to convince investors there is still life in the television business.

The Walt Disney Co., 21st Century Fox and Viacom all are looking at transformative transactions, with Disney waiting for government approval to acquire cable network and studio assets from Fox and Viacom’s board looking at a combination with CBS.

In the meantime, top executives pointed to the opportunities presented by going direct to consumer while insisting pay TV erosion is slowing.

Disney CEO Bob Iger provided additional details of its ESPN Plus streaming service, now due to launch in the spring through a redesigned app. Subscribers who pay $4.99 a month will get access to thousands of games, plus other content including the 30 for 30 library.

The company said it has also detected slowdown in subscriber losses. Instead of rounding down to get a 3% rate of erosion, it was now rounding up to 3%.

Iger also said the emergence of digital multichannel video programming distributors like YouTube TV and Hulu’s live service were bringing cord-nevers into the pay-TV world.

At 21st Century Fox, executive chairman Lachlan Murdoch and CEO James Murdoch spent a fair amount of time defending their costly deal to acquire the NFL’s Thursday Night Football. They say it will give “New Fox,” the company live sports and news oriented company that will be left behind after the Disney deal, leverage in retransmission and advertising negotiations.

“It seems fair based on the evidence from the quarter that neither sports nor primetime nor stations are very profitable anymore (at least in a non-political year),” Sanford C. Bernstein analyst Todd Juenger said. “And now they just added an unprofitable NFL deal, and may be looking to acquire more stations.”

Viacom’s numbers weren’t very good either, with affiliate fees dropping 8% and domestic advertising down 5%. But Viacom CEO Bob Bakish seems to have convinced analysts that things will get better faster than anticipated.

“The improved outlook on affiliate growth as well as the reiteration of ad guidance were both better than we expected, suggesting the turnaround is on track,” Jefferies analyst John Janedis said.

With the backdrop of a plunging stock market in the background, media companies are reporting calendar fourth-quarter earnings propped up by corporate tax cuts and trying to convince investors there is still life in the television business.

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