Soon there will be $13 billion in cash burning a hole in media investors’ pockets. The question is, where will they spend it?
The money will materialize after the megamergers close: when Disney buys out CapCities/ABC shareholders ($10 billion) and Westinghouse pays off CBS shareholders ($5.4 billion). The hot money then will be trimmed back as Warren Buffett takes his ABC payoff ($1.3 billion) out of media, and ditto for the Tisch family’s CBS haul ($950 million).
This is the prophecy of Schroder Wertheim guru David J. Londoner. Most of the $13 billion, says Londoner, should worm its way back into media, particularly into the new Disney-ABC and Meredith Corp. Those are two media plays on which he’s exceptionally bullish.