With all the attention on DIS’s DTCI segment the last several mos., we thought it time to switch gears to the Parks – esp. after spending nearly 12 consecutive hours with DIS mgmt. and ~50 of our closest buy-side and sell-side friends as we toured Star Wars: Galaxy’s Edge at the Disneyland Resort in Anaheim, May 21-22. By the way, this Land doesn’t officially open to the public until 5/31.
Search Coverage List, Models & Reports
Search Results1-10 out of 89
While the bulk of what we heard during the FOXA Investor Day (5/9, NYC) was positive - i.e. the partnership with TSG, the cadence of retrans/reverse, comments from Roger Goodell & Rob Manfred, the 2.5-3.0x gross leverage target, & no random M&A – we were not quite sure how to interpret the “$200-250MM of investment spend” for F’20. Our sense is that ~75% is incremental, specifically in TV. Separately, we had time to review our Cable ests. and note the $100MM EBITDA beat in FQ3 was on a lack of UFC & UEFA rights (which we didn’t flow thru). While this is a partial positive offset, we still reduce our F’20 EBITDA by 2.5% (to $2.608B from $2.671B vs. Consensus of $2.693B) and F’20 FCF by 2% (to $1.657B from $1.689B vs. Consensus of $1.938B).
The hottest names this week were CMLS (1,093bps better than the S&P), MDP (453bps), CABO (448bps), BBGI (292bps), and CHTR (231bps).
This morning (5/14), DIS and CMCSA issued a joint release announcing an agreement on Hulu’s “Future Governance and Ownership.” DIS CEO Bob Iger spoke at an investor conference at 10am, and CMCSA CFO Mike Cavanagh followed at 10:40am. We provide some highlights below.
The hottest names this week were SBGI (3,969bps better than the S&P), CCO (829bps), OUT (691bps), TGNA (660bps), and FOXA (501bps).
First, the REVENUE GUIDE WAS REAFFIRMED, which was important after the miss in FQ2, which was due to a self-inflicted pause in content licensing and some tough FX headwinds in international (core was fine). Digging in a little bit here, mgmt. still expects full year domestic & affiliate rev. growth to be up LSD. And while full year rev. growth is still forecasted to be up LSD to MSD, we did take our revenue down (from +1% to -1%) on the currency headwinds. Importantly though, underlying is still solid & now GROWING in Networks.
Total revenue missed at $2. 958B (-6%) vs. our $2.983B (-5%) and the Street’s $3.052B (-3%). The slight miss vs. us was in Networks, but mostly in the less important Int’l ancillaries & on higher FX. Film came in better.
The message was clear – FOXA is a small but fierce media co. with a simple business model – 50% affiliate rev., 50% advertising REV., 100% domestic, 75% of costs are programming (2/3rds sports), & the focus is SPORTS & NEWS (which are NOT-NETFLIXABLE). While we didn’t get a LT guide, no one expected it (we remind you of Aug. 2013). But we DID get comments on an eventual buyback, acceleration in retrans, a 2.5-3.0x gross leverage tgt., & pretty deliberate commentary on M&A (i.e. no random acq.). While our model still needs refinement, we are raising F20 EBITDA by 1% after having raised F’19 EBITDA by 6% last night post the FQ3 print. We reiterate our Outperform and $49 YE 2019 PT.
Consolidated rev. of $2.752B came in 4% ahead of our $2.643B est. and the Street’s $2.609B forecast – the beat was in both Cable (by +1%) and TV (by +7.5%). Looking at the components, affiliate fee rev. in total was +11% – with +4% in cable (vs. our +3%) and +29% in TV (in-line with us). And advertising also came in ahead, +9% vs. our +4.5% – with cable +4% vs our +3% and TV +10% vs. our +5%.
- 1 of 9
- next →