Media stocks popped Monday on news from the FCC but ended the day off their highs as TV and radio broadcasters pined for more sweeping changes.
With faint praise, Viacom and GE’s NBC called the commission’s new ownership regime “a first step.” News Corp. dubbed it “an important step” in recognizing a diverse and competitive media landscape. “We have much further to go before there is a level playing field between free and pay TV,” cautioned NBC.
Both News Corp. and Viacom already cover about 40% of the U.S. TV market, which means that a new boost in the ownership cap to 45% gives them only minimal leeway. And Viacom chief operating officer Mel Karmazin told a group of investors at a conference Monday that he’s no fan of tighter parameters the FCC established to measure radio ownership. The agency also left in place its ownership cap on radio to eight stations in major markets.
Shares of Viacom and News Corp. rose 1.4% to close at $46.30 and $31.21, respectively. NBC parent GE nosed up 1.05% to $29.
Media stocks mirrored the overall market, which was buoyed early in the day by May manufacturing stats indicating that the economy is reviving. Shares of ad-based companies are highly sensitive to economic news.
Walt Disney, which has more room to expand in both TV and radio, said it “strongly supports the FCC’s decision,” adding, “Because we have been disciplined buyers, Disney/ABC had substantial room under the old limits to buy more stations, both nationally and locally.”
Mouse shares jumped 2.14% to $20.07 Monday — also a day after Disney-Pixar’s “Finding Nemo” stormed the weekend box office.
Local b’casters frown
Local broadcasters, in particular, were dismayed by the new 45% cap and chagrined by limits on TV duopolies in small or mid-sized markets where they operate.
Besides the big congloms, stocks were rather mixed depending on each company’s stable of assets — and on how much its shares had run up in past months as investors anticipated a relaxation of the rules and subsequent consolidation.
Gannett firmed 0.68% to $79.54. Belo gained 1.45% to $23.74, and Emmis jumped 2.93% to $21.80. Tribune, a rare loser, eased 0.36% to $49.70.