×
You will be redirected back to your article in seconds

Disney, Cable Stocks Take Hit as Investors Worry About Long-Term Media Trends

Disney and the largest cable operators saw their share prices take a hit on Thursday as investors seemed to renew concerns about long-term trends in the traditional media sector.

Disney shares were down as much as 5% after CEO Bob Iger announced during the Bank of America Merrill Lynch investor conference in Beverly Hills, Calif., that the studio has decided to include its Marvel and “Star Wars” movie titles in the subscription entertainment service that it is planning to launch in the U.S. by the end of 2019. The new service will take the place of the traditional pay TV window for Disney film titles.

Disney ended the day down 4.4%, or $4.46, to close at $97.04.

Meanwhile, cable shares were also hammered by news of the past 24 hours. Comcast executive Matthew Strauss, also speaking at the Bank of America conference, acknowledged that video subscribers would be down for the quarter by 100,000-150,000. That sent Comcast shares down 6.2%, to close at $38.60, marking the biggest one-day drop in six years, per CNBC.

Shares in Comcast rivals Charter Communications and Altice USA also took a hit. The cable drop was also likely exacerbated by a report issued Wednesday evening by Moody’s Investor Service casting doubt on the plausibility of Charter being acquired by a telco or tech giant because of the debt load that would accompany any transaction. Charter, the second-largest cable operator behind Comcast, has been the subject of takeover talk on Wall Street in recent months amid chatter that Verizon was eyeing the company.

Charter shares were down 1.7% at closing to $395.64. Altice fell 3.4% to $29.26.

Wells Fargo analyst Marci Ryvicker said the surprise news from Comcast had a ripple effect across the sector, even as Comcast executives reaffirmed their financial targets for the quarter and 2017 overall. Concerns about subscriber losses from storm-battered areas in Texas and Florida only adds to the uncertainty, she said in a research note.

“We think (Comcast’s) comments on Q3 subs are moving the stocks more than anything else,” Ryvicker wrote. “Unfortunately we don’t know how much is competition and how much is weather. And no one seems to care about the financials at the moment.”

Disney’s volatility proved a drag on other media stocks, although not to the same degree. Fox was off 2.2% ($25.38), Viacom fell 3.6% ($27.20), and CBS dipped 2.1% ($60.50). Time Warner weathered the turbulence with a less than 1% drop but AT&T, which is in the process of acquiring TW, slid 2.7% ($35.60).

The reaction to Disney’s decision to revamp its pay TV theatrical window strategy largely reflected skepticism that even the biggest media companies can go it alone with direct-to-consumer services.

The ability to license theatrical releases for a pay TV window on a premium cabler has historically been a big component of film profits for all but the biggest blockbusters. Netflix has been paying Disney an estimated $300 million a year for those rights. Disney and other media companies have to balance the loss of that considerable licensing revenue against the costs of building a proprietary service that also has to be stocked with some original programming.

Netflix, the streamer that will lose Disney’s Marvel and “Stars Wars” movies as of 2019, was essentially flat for the day with a 25 cent drop to close at $179.

More Biz

  • WGA Agency Packaging Fight Placeholder Writer

    Writers Guild Agrees to Resume Meetings With Talent Agencies

    The Writers Guild of America has agreed to resume negotiations with Hollywood’s talent agents, six weeks after talks between the two sides cratered. WGA West President David A. Goodman announced Wednesday night that the WGA had approved a proposal by UTA co-president Jay Sures to get back to the bargaining table. Sures had made the [...]

  • Contract Placeholder Business WGA ATA Agent

    Agencies Offer to Restart Talks With WGA to End Packaging Fee Standoff

    Hollywood’s largest talent agencies have offered to restart negotiations with the WGA to end the standoff over the guild’s effort to impose new rules on talent agents. In a letter to WGA West president David Goodman sent Wednesday, UTA co-president Jay Sures extended an olive branch and suggested resuming talks next week. UTA later sent [...]

  • Woodstock 50 Files Appeal Seeking Return

    Woodstock 50 Files Appeal Seeking Return of $18 Million From Former Financial Partner

    In the latest round of the ongoing legal battle between the organizers of Woodstock 50 and their erstwhile partners Dentsu Aegis, attorney Marc Kasowitz announced that the festival has filed an appeal for Dentsu to return some $18.5 million the financial giant withdrew from the organizers’ bank account. That money has been a point of [...]

  • Spider-Man Homecoming

    Film and TV Productions Are Using Drones for Scouting Locations, Lighting and More

    Since a ruling by the Federal Aviation Administration in 2014 that cleared the use of drones in film and TV production, the acquisition of footage by these unmanned flying machines has become de rigueur for aerial shooting in cases when cranes or aircraft are impractical or unsafe.  As such, drones have been greeted enthusiastically not [...]

  • White House Communications Director Hope Hicks,

    House Judiciary Committee Issues Subpoena for Fox Spokeswoman Hope Hicks

    The House Judiciary Committee has issued a subpoena for Hope Hicks, the Fox Corporation communications chief who previously worked as the communications director in President Donald Trump’s White House. The call for Hicks to appear before the committee was issued Tuesday. Hicks could not be reached for immediate comment on the matter. Hicks was in [...]

  • Stephanie Dalton City National Bank

    Why City National Handles Financing for Half the Shows on Broadway

    Seen a Broadway show lately? If the answer is yes, then there’s a pretty good chance that Stephanie Dalton and her team at City National Bank have played a role in the financial life of the production. That can mean anything from managing the cash that a show takes in at the box office to [...]

  • Broadway Theater Placeholder

    The Great Green Way: Inside Broadway's Economic Boom

    Here’s an old Broadway story, probably apocryphal, but with the ring of truth: A worried producer checks in on his ticket sales to see how his show is doing. “We had a terrible night, boss,” the treasurer tells him. “We did one penny.” The producer sulks through Shubert Alley and runs into a rival. “How’s [...]

More From Our Brands

Access exclusive content