Faber Report: Future of Warner Bros. Discovery - YouTube - CNBC - 18 July 2024

with David Faber and Jim Cramer Based in New York,Warner Bros. Discovery is a multinational media and entertainment conglomerate broadcasting and streaming to more than 220 countries in 50 languages.*Warner Bros Discovery (WBD)

21st Century Fox:A New Generation of Leaders

Media and entertainment titan 21st Century Fox has reported a mixed earnings picture for Q2 2015.The company earned 0.39 a share versus the 0.37 estimate,but missed on revenue,reporting 6.21 billion dollars versus the 6.46 billion estimate on currency fluctuations.21st Century Fox owns the most-watched Fox News,Fox Broadcasting and 20th Century Fox studios.The studios' revenue was down because they sold their pay-tv businesses in Italy and Germany to British Sky Broadcasting Group.Even minus that transaction,revenue was still down by 635 million.
Fox cable operating income rose 1% to 1.22 billion on higher affiliate and ad revenue,but the film division suffered when 2015's "Spy" and "Poltergeist" didn't do as well as 2014's "X-Men:Days of Future Past" and "Rio 2."The TV business dropped by 32 million down to 113 million on lower ad revenue as "American Idol" and "The Following" lost viewers.So the company lost some battles in the content wars.*
Lachlan Murdoch,son of Fox's Australian founder Rupert Murdoch,and now executive co-chairman of the firm along with his father,summed the situation up in the earnings conference call:
My brother James and I have been immersed in 21st Century Fox in all its iterations for at least the last 25 years,Mr.Murdoch said.This background and context will serve us well as we partner to lead 21st Century Fox through a time of accelerated industry change.Every aspect of our business is being affected by increasingly rapid change from how we develop content,to delivery,to consumer engagement,and of course,to how we monetise it all.The scale and speed of this change will,to some,be overwhelming.But a key underlying trend is important to all of them:More people are now watching more quality story telling than ever.They are just consuming it differently,given the growing array of options available to them.This is a key and positive trend.
Empowered by new technologies,our customers are demanding distinct and better ways to consume our content,personalised to them in a variety of new non-linear environments.One thing is very clear to us.In this environment,it is not enough to simply adapt to change.To succeed in this environment,we must lead change.*
The company,now under Lachlan's brother,CEO James Murdoch,is going ahead with its planned five billion-dollar buyback over 12 months and will pay investors a dividend of 0.15 a share.*
21st Century Fox (FOXA)

Media Mergers on the Hotplate

In a media and entertainment mega deal,cable TV titan Charter Communications,guided and backed by billionaire investor and Liberty Media magnate John Malone,is buying Time Warner Cable for 78.7 billion dollars in cash and stock,while at the same time putting fellow provider Bright House Networks in its shopping cart for 10.4 billion.From our perspective,said Troy Gayeski of Skybridge Capital,this deal is a great vindication of the strategy.Most of these deals are still accretive,which is a good sign there will be more deals.The US had a long hiatus in deal activity,but by late 2013,we started to see the boom come back.Europe is still grappling with slow growth,but now management teams are seeing deals are being rewarded.You're going to see inter-European consolidation.Italy has relaxed bank consolidation rules.The trend will be for higher deal flow,whether inter-European or with overseas partners.*
Also in the media and entertainment sector,Europe's Altice SA,based in Luxembourg,having just acquired American cable operator Suddenlink,is believed to be shopping for still more cable assets,a potential candidate being Bethpage,New York's Cablevision Systems Corporation.Charter rival Comcast has itself recently tried yet failed to acquire Time Warner Cable,being rebuffed by antitrust regulators.Some fear the lessened number of competitors will mean higher prices for customers.*
The expanded version of Charter would reportedly be called "New Charter." It would have a combined 24 million customers,serving about 18 million of those broadband Internet customers on 25 Mbps or less,and 16 million video subscribers,or about 17% of all video subscribers.New Charter would own about 86% of Bright House Networks;Advance/Newhouse will own the rest.Charter Communications' CEO Tom Rutledge would stay in that role for the new company.
All three of the prospectively merged companies offer Digital TV,High Speed Internet and Home Phone services.Time Warner Cable additionally brings assets in the form of cable advertising,regional sports networks,plus local news channels by way of Time Warner Cable News.TWC is the fifth largest landline telephone provider as well.It serves the big markets of Los Angeles,San Diego,New York City,Dallas,Charlotte,Cleveland and Cincinatti,among others.Indeed,TWC is larger than its acquirer Charter Communications.
New Charter would be the second largest cable TV company,after Comcast,and the third largest subscription TV provider,after AT&T/Direct TV and Comcast,pending regulatory approval of the AT&T/Direct TV merger.*
Time Warner Cable Inc (TWC),Bright House Networks Inc (BHN),Charter Communications Inc (CHTR),SPDR S&P 500 ETF (SPY),Liberty Media Corp (LMCA),Cablevision Systems Corp (CVC)

Worth It or Not:Inside the Verizon-AOL Deal

Telecom titan Verizon Communications is buying media platform company AOL for 4.4 billion dollars in an all-cash deal expected to close this summer,pending regulatory approval.
AOL has once again become a digital trailblazer,and we are excited at the prospect of charting a new course together in the digitally connected world,said Verizon Chairman and CEO Lowell McAdams.AOL's advertising mode aligns with this approach and the advertisng platform provide a key tool for us o develop future revenue streams.*
AOL CEO Tim Armstrong and other leadership will stay on the job when AOL becomes a Verizon subsidiary.Mr.Armstrong described the combined company as deeply growth oriented and aimed directly at the platform shift that video and mobile are offering the world-today and 20 years from now.*
Verizon will get:
1.AOL's 2.2 million subscriber dial-up Internet business;
2.publications The Huffington Post;Engadget;and TechCrunch;
3.One,the automated cross-media ad-buying platform;
4.the video ad platform Adap.tv;and
5.the HuffPost Live streaming video network.
Verizon is acquiring AOL with the strategy of building the biggest media platform in the world,Armstrong said.Verizon will propel AOL and comes to the table with over 100 million mobile consumers,content deals with the likes of the NFL,and a meaningful strategy in mobile video.AOL will oversee AOL,s current assets plus additional assets from Verizon that are targeted at the mobile and video media space.The deal will give our content businesses more distribution and it will give our advertisers more distribution and mobile-first features.The deal will add scale and it will add a mobile lens to everything we do inside our content,ads and video strategy.*
AOL has over 30,000 business partners;while Verizon,born of the 2002 merger of telecom heavyweights Bell Atlantic and GTE,is the largest US wireless communications service provider.The name "Verizon" is derived from "veritas," the Latin word for "truth," and "horizon." Verizon had 125.3 million wireless service customers as of September 2014,along with residential and small business services customers that are provided with phone service,Internet access and TV via copper wire or fiber optic cable.It is in the process of transitioning wireline customers to its more economical FiOS fiber optic cable.*
Verizon stock has a 4.43% dividend yield.*
Verizon Communications Inc (VZ),AOL Inc (AOL)

Should This Market Be Trusted?

Leading investor and musician Roger McNamee,co-founder of venture capital firm Elevation Partners,doesn't think so,he told CNBC's "Squawk Alley" programme today.A plethora of worries from the Ebola outbreak,to gridlock in Washington D.C. and geopolitical crises have affected Mr.McNamee.The rate of chaos is increasing a lot,and to me,that just makes me incredibly nervous,McNamee said.It changes how much exposure to the market I want to have.I don't understand how you can have so much chaos in the world and still have prices going up every day.I think this is a really important time for people to ask themselves how confident are they in the fundamentals of things they own,and how confident are they that there's a happy ending this year for the economy and the stock market.
For his part,Mr.McNamee has moved about a third of his portfolio from stocks to US Treasury bonds.*
Roger McNamee managed the top-rated Science and Technology Fund and co-managed the New Horizons Fund at T.Rowe Price Associates before co-founding Elevation Partners,a firm that concentrates on the interesction of Media and Entertainment with consumer technology.He also plays guitar and bass with the band Moonalice.*
T.Rowe Price Group,Inc(TROW)

Monday Newsline:Kaymer Snares US Open as NBC Era Ends

Germany's Martin Kaymer became the first man from his country to win the prestigious 114th US Open Sunday at Pinehurst Resort,North Carolina,and Comcast NBC Universal sadly marked its final broadcast of the storied golf tournament after 20 straight years of coverage.Kaymer,29,had previously won the 2010 PGA Championship at Whistling Sraits,Wisconsin;the World Number One ranking for eight weeks in 2011;10 tournaments on the European Tour-plus the Ryder Cup as a member of Team Europe;as well as the 2014 Players Championship a few weeks ago in Florida.
Kaymer's nine under par 72 blew away the rest of the field by a margin of at least eight strokes.His closest competitors were Americans Erik Compton and Ricky Fowler,who shared second at one under par.Compton,34,a survivor of two heart transplants who is happy to just be alive,became the sentimental favourite as he notched his best PGA showing ever.*
Europeans have taken the last two US Open trophies,with Englishman Justin Rose taking America's national championship last year.Speaking of Kaymer's performance,Ricky Fowler said that Martin was in his own golf tournamnet.Seeing how in control his golf game was kind of pushes me,becuase I was not far off.*
Phil Mickelson,44,was calm as he reflected on his road ahead.The Hall of Famer had carded a poor seven over par at Pinehurst as his putting seemed to desert him,but he looked forward to the next four or five years and the exciting courses on the US Open schedule.The US Open is the only one of the four majors he has yet to win,and only five other men have accomplished this grand slam of golf.*
Meanwhile,the broadcast booth was dealing with another kind of drama.NBC analyst Johnny Miller choked up as he and colleague Dan Hicks signed off.After 20 consecutive years of televising United States Golf Association events,Comcast's NBC Universal and partner Disney's ESPN were outbid by News Corp's Fox Sports last August for the next 12 years of USGA events,which besides the US Open include the US Senior Open,US Women's Open and USGA amateur events.Fox got a 12 year multimedia deal running from 2015 through 2026.Its winning bid was reportedly around 74 million dollars a year-twice what NBC/ESPN were paying.
Fox Sports has zero experience at golf coverage,so there's a big unknown for USGA golf fans in the years ahead.The USGA is the official governing body of the sport in the USA.*
US futures and Asian markets reflected concern about the Iraq crisis and the Federal Reserve possibly raising interest rates sooner rather than later.The S&P futures were down 6.78 points,while the Dow and NASDAQ futures dropped 48.0 and 9.66 points,respectively.Oil futures climbed 0.4%,and gold rose 0.6% as Treasury rates fell.Most Asian markets were down or virtually flat on the Iraq and Fed worries.The Nikkei was down 1.04%,while the Hang Seng fell 0.6% and the KOSPI was flat in Monday trading.
Comcast(CMCST A),News Corporation(NWS)

Private Equity and Traditional Media

Jeff Marcus,partner and co-founder of Crestview Partners,a private equity firm with expertise in media,said that 92% of Americans still listen to traditional radio,and 100 million homes subscribe to cable or satellite.That's where the channels that people want to watch are.Cable has the bandwidth.
There isn't a la carte cable because programmers insist on bundling.It's a contractual matter for the cable companies.
We specialise in difficult situations;contrarian situations;complexity.Hopefully we'll always be there to take advantage of that.We like a good business model,but with too much debt.
There are dislocations caused by new media that cause value to go down,but radio's a local business.People listen to radio in the car more than to any of the others;and most people do traffic and weather,which are not on new media.We believe in traditional media,Mr.Marcus emphasised.
Crestview Partners says it is a value-added private equity firm with about four billion dollars under management.It targets investments in financial services;media;health care;and energy.Among Crestview's holdings are Charter Communications;FBR Financial Corporation;Cumulus Communications;Silver Creek Resources;and Symbion Helathcare.

Who Sings On The Sandals Resorts Commercial

The song is a vintage one.It is called "My Blue Heaven."Dating from 1927,the lyrics are by George Whiting,with the music by Walter Donaldson.The performer is our comtemporary Lizann Warner.The song was included in the Reader's Digest Treasury of Best Loved Songs.Hopefully Ms.Warner will get to record the whole number one day.
Lizann Warner is known as a vocal chameleon.An accomplished stylist who evokes everyone from Judy Garland to Barbra Streisand,she has opened for the likes of Fleetwood Mac and Pat Benatar.She also sings on video games such as Guitar Hero III by Activision.
Ms.Warner has performed in Las Vegas and has upcoming dates at Duke's Bar&Grill in Riverside,California(April 21)and State Street Winery in Redlands(April 28).You can listen to her on YouTube and ReverbNation.
Activision Blizzard,Inc.(ATVI)

Time Warner Bridges the Worlds

TV is going on the Internet on demand,says Time Warner CEO Jeff Bewkes(pronounced Byu-kiss).There's still some mid-hanging fruit for industry growth.If you think about all the people with mobile devices,the TV industry is turning to it.There's a tremendous amount of economic activity when TV goes mobile.
Basically every device is becoming a TV.It is also going on overseas.Time Warner network CNN goes all over the planet.TV profits,viewers and ratings are all growing and healthy.
All these new devices have helped the TV industry figure out how to be easier to find and easier to use.We've got now 150 channels buying shows off of network TV.We license more shows to network and cable channels than anyone else.We haven't licensed to competing subscription services.You pay a subscription,you can have it on any device that you own.
We had pricing growth in the mid-teens.The revenue growth in Time Warner's HBO,CNN,TNT is very strong.The TV business,the film business is really quite strong.The Internet is a great development,but let's not forget the strength and vitality of the TV business,Mr.Bewkes reminded.
Time Warner is a media conglomerate that owns several major brands in journalism and entertainment.From Time,Life,Fortune and People magazines to CNN,HBO and Warner Brothers Pictures Group,as well as allied online properties,it is a global leader in the publishing,film and television industries.
Time Warner Cable and Warner Music Group are now independent entities.They were spun off from their parent,Time Warner,Inc.
Time Warner,Inc.(TWX)