×
You will be redirected back to your article in seconds

Media Stocks Plunge on Fears About Health of TV Business

Media companies still bruised from the great stock selloff earlier this month got beat up again on Thursday.

It was a generally rough day for markets, with the Nasdaq, the New York Stock Exchange and the Dow Industrial Average each dropping, but media companies appeared to be hardest hit.

The likes of 21st Century Fox, Time Warner, Disney and Viacom all took a shellacking amid investor anxiety about the long-term health of the television business. These concerns were inflamed this week after Sanford C. Bernstein analyst Todd Juenger wrote a blistering note that implied the cable and broadcast industries were in shambles. Cord-cutting will accelerate, ratings will erode and advertising is in a state of decline, he argued, all while downgrading Disney and Time Warner. Moreover, the fees that affiliates pay to air shows could also be at risk.

“When an industry is undergoing a massive structural upheaval, one major revenue stream is already impaired — and now there are signs the second one may be as well — investors won’t wait for final conclusive evidence to re-evaluate how much they are willing to pay for the existing status quo cash flow streams,” Juenger wrote.

Investors shared his pessimism, resulting in widespread carnage. Disney stock was down 5.97% in afternoon trading, Time Warner plunged 4.14%, Viacom dropped 5.22%, CBS Corp. slid 3.74%, Lionsgate fell 4.78%, DreamWorks Animation declined by 6.51% and Fox fell back 3.56%.

The bloodletting wasn’t consigned to old media — it was also a bad day for Netflix. The company behind “House of Cards” and “Orange Is the New Black” saw its stock fall as much as 8.8% in Thursday trading.

While Netflix shares have been notoriously volatile, the selloff is somewhat ironic: The streamer is at least partly responsible for the pummeling Disney, Time Warner and other media and entertainment stocks have taken, as Netflix’s rise has contributed to concerns over the health of the pay-TV sector by potentially siphoning off customers.

Netflix’s drop Thursday appeared to be “guilt by association with high-multiple stocks that have harder to fall when the market is in a downturn,” said Rosenblatt Securities equity research analyst Martin Pyykkonen, adding that there was no notable news that triggered the decline.

Forgive media players if they’re suffering from a sense of déjà vu. Two weeks ago, Disney’s acknowledgement that its popular ESPN sports channel had lost some subscribers spurred a downward spiral among media stocks that triggered widespread fears the pay-TV business was contracting at a more rapid rate than analysts had anticipated.

Todd Spangler contributed to this report.

Popular on Variety

More Film

  • Constance Wu and Jennifer Lopez star

    Box Office: 'Hustlers' Racks Up Solid $33 Million Debut, 'Goldfinch' Bombs

    “Hustlers” rolled in the Benjamins this weekend, collecting $33.2 million when it debuted in 3,250 North American theaters. Boosted by rave reviews and stellar word of mouth, “Hustlers” beat expectations and now ranks as the best start for an STX film, along with the biggest live-action opening weekend for stars Jennifer Lopez and Constance Wu. [...]

  • German Cinema Is Diverse, But Is

    German Cinema Is Varied, But Is It Too Risk Averse?

    One of the strengths of German cinema is its diversity, says Simone Baumann, managing director of the national film promotion agency German Films. As well as the three films at Toronto directed by female German helmers, there was also German filmmaker Thomas Heise’s documentary film essay “Heimat Is a Space in Time.” Then there were [...]

  • Female Filmmakers in Germany Make Progress

    Female Filmmakers Surge Forward in Germany, But Still Face Obstacles

    Four feature films by German filmmakers screened at the Toronto Film Festival, and three of them were directed by women – Angela Schanelec’s “I Was at Home, But…,” winner of the Berlinale’s best director prize, Ina Weisse’s “The Audition,” and Katrin Gebbe’s “Pelican Blood,” the latter two both starring Nina Hoss. Germany’s Oscar entry this [...]

  • Bull

    Annie Silverstein's 'Bull' Takes Top Awards, Robert Pattinson Starrer 'The Lighthouse' Wins Jury Prize at Deauville

    Annie Silverstein’s feature debut “Bull” swept three awards at the 45th Deauville American Film Festival, including the Grand Prize, the Revelation Prize for best first film and the Critics’ Prize. “Bull,” a portrait of a rebellious teenage girl from South Texas, world premiered at Cannes’s Un Certain Regard and marks Silverstein’s follow up to her [...]

  • Constance Wu and Jennifer Lopez star

    Jennifer Lopez's 'Criminal' Striptease: How 'Hustlers' Landed the Fiona Apple Hit

    Contrary to what you might be expecting, the number of songs by Jennifer Lopez, Lizzo and Cardi B in “Hustlers,” their newly released acting vehicle, adds up to … zero. Meanwhile, the standout music sync in a movie that’s full of them belongs to no less likely a choice than Fiona Apple. The scene in [...]

  • Game of Thrones Season 8

    'Game of Thrones,' 'Avengers' Win Big at 45th Annual Saturn Awards

    As Jamie Lee Curtis picked up her first trophy ever at the 45th Annual Saturn Awards Friday night, she had a good luck charm on her arm: former manager Chuck Binder, whom she said was the reason she became an actor. “I was in college and had no thought of being an actor,” Curtis told [...]

More From Our Brands

Access exclusive content