×

Media stox strut on Street

Media investors remained confident

Even as worries about the economy grew, media investors remained confident in the first half of this year: Returns on media stocks were almost three times greater than those for the larger market.

Giving media stocks a boost: continuing gains in advertising, new digital deals, perceptions of a looser regulatory climate and diminished fears over cord-cutting in the first two quarters of 2011.

Media stocks returned 11% to shareholders, according to the Bloomberg Media Index, vs. 4% for the Standard & Poor’s Index. The Bloomberg Index measures 36 stocks across all sectors of the biz.

The big winner was CBS, with a 42% return. Topper Leslie Moonves’ loud championing of the Eye’s new revenue stream through retransmission fees appears to have been heard loud and clear on Wall Street. Moonves has said those fees could top $2.5 billion in the next several years. In addition, CBS saw the largest dollar commitment from advertisers during the spring’s upfront sales, north of $2.5 billion.

Netflix matched CBS with a 42% return, as the streaming service announced it had more than 23 million subscribers, putting it on par with Comcast, the nation’s largest cable company. CEO Reed Hastings continued to preach that he is an ally of Hollywood, not a competitor, even as Netflix moves into its own original programming.

Not surprisingly, Sony Corp. posted the worst performance, with its shares falling 29% in the first half, largely on the hit it took from the devastation of the Japanese tsunami and earthquake in March. The company was forced to close several plants. Sony shares were not helped by a scandal that involved hackers stealing personal information from its PlayStation Network in April.

DreamWorks Animation continued to see its stock plummet, dropping 27% in the first half. Tepid sales of “Megamind” (not to mention a disappointing box office) and the fourth “Shrek” installment on DVD soured investors on the company. Still, DWA is counting on “Kung Fu Panda 2” and “Puss in Boots” to trigger a rally in shares in the second half.

But Sony and DreamWorks were the rare laggards among media giants. “What you are seeing is companies harvesting gains from the steps they have taken in the past several years coming out of the recession,” said Tuna Amobi, an analyst with Standard & Poor’s. “That’s everything from restructurings to striking new digital deals.” He did point out that in the last several weeks, as more ominous macro-economic data was released, media stocks were a bit more “choppy,” but he believes they will continue to outperform the broader market in the second half. “You will see some speed bumps,” he said.

One of the companies that could be in for a rougher second half is Disney, as rising oil prices deter travelers from heading off to theme parks. Disney’s shares were up 2.5% in the first half.

In terms of big deals making investors nervous, Comcast put that notion to rest, as it won regulatory approval that some thought it might not gain under a Democrat-dominated FCC. Its shares were up 11% in the first half, after closing its joint venture with NBCUniversal in January and despite spending big to retain the rights for hockey and the Olympics.

The prize for the best comeback in the first half of the year goes to Discovery Communications, whose shares ended up essentially flat after a 5% decline in the first quarter on worries that its joint venture with Oprah Winfrey, cable net OWN, is not living up to expectations. Investors are obviously anxious for Oprah herself to debut on her own network later this year and to see if viewership spikes.

The big test for many media outfits in the second half will be convincing advertisers to keep spending as talk of a double-dip recession grows louder — sending jitters through Madison Avenue and up the spines of more than few moguls.

More Film

  • (from left) Tom (Henry Golding) and

    Emilia Clarke's 'Last Christmas' Crosses $100 Million at Global Box Office

    Universal’s “Last Christmas,” a romantic comedy starring Emilia Clarke and Henry Golding, surpassed $100 million in global ticket sales. The milestone is a win for original fare, one that is especially impressive considering the movie was skewered by critics for its wacky twist ending. After six weeks in theaters, “Last Christmas” has earned $34.4 million [...]

  • DSCF0855.RAF

    'Jumanji 2' Rules Overseas Box Office With $85 Million

    Sony’s “Jumanji: The Next Level” powered international box office charts, collecting $85 million from 34 markets over the weekend. The action-packed sequel kicked off in North America with $60 million for a global start of $145 million. “Jumanji: The Next Level” debuted in a handful of foreign territories last weekend, bringing box office receipts to [...]

  • Rey (Daisy Ridley) in STAR WARS:

    Disney Plus Signs Exclusive Distribution Deal With Canal Plus in France

    Ahead of its launch in France on March 31, 2020, Disney Plus has signed an exclusive distribution agreement with Canal Plus Group, the country’s leading pay-TV company. The deal, which was first reported in the French newspaper Les Echos and confirmed by Canal Plus Group CEO Maxime Saada on his Twitter account, marks a new [...]

  • French movie actress Anna Karina smiles

    Anna Karina, French New Wave Star and Jean-Luc Godard Collaborator, Dies at 79

    French New Wave star Anna Karina, who served as a muse for Jean-Luc Godard and appeared in eight of his films, has died. She was 79. France’s culture minister, Franck Reister, announced her death in a tweet, as did her agent, Laurent Balandras, who attributed the cause as cancer. “Her gaze was the gaze of [...]

  • Frozen 2

    'Frozen 2' Sets Record as Disney's Sixth Movie to Hit $1 Billion in 2019

    “Frozen 2” is the sixth Disney movie this year to hit $1 billion globally, strengthening the studio’s sheer dominance over the box office. Those ticket sales extend the benchmark Disney set over summer, with five other films — “Avengers: Endgame,” “Aladdin,” “Toy Story 4,” “The Lion King” and “Captain Marvel” — joining the billion-dollar club [...]

  • Kevin Hart, Dwayne Johnson, Jack Black

    Box Office: 'Jumanji 2' Levels Up With $60 Million Debut, 'Richard Jewell' Stumbles

    It’s shaping up to be a merry holiday season for “Jumanji: The Next Level.” Sony’s adventure sequel debuted in first place to $60.1 million, dethroning “Frozen” after three consecutive weeks as box office champ. Those ticket sales, arriving at the higher end of industry projections, represent a healthy jump on the $36 million start of [...]

  • My Zoe

    'My Zoe': Film Review

    There are two films in Julie Delpy’s ambitious, sharply-made but unbalanced “My Zoe.” There’s the scabrous relationship melodrama, about bitter exes sharing custody of a beloved child, which contains the story’s most potent emotions. And there’s the sci-fi-inflected ethical-dilemma grief movie, which houses its most provocative ideas. Both have much to recommend them, not least [...]

More From Our Brands

Access exclusive content