It’s not clear how the conservative talk show host affected Dial Global — the radio programming company that merged last year with Westwood One. (Limbaugh is syndicated by Clear Channel.) But Dial says in an SEC filing that “advertisers’ response to controversial statements by a certain nationally syndicated talk radio personality in March 2012″ contributed to financial woes that raise “substantial doubt about the Company’s ability to continue as a going concern.” The March date coincides with an advertiser boycott of Limbaugh following his attacks on Georgetown University law student Sandra Fluke, who urged Congress to require employer health insurance plans to cover contraception.
But Limbaugh appears to be the least of Dial’s problems: Its stock is down nearly 77% today, to about 47 cents, after it said that it may not be able to meet its debt covenants and will voluntarily leave NASDAQ to just trade over the counter. The company reported a Q3 net loss Read More »
The benchmark Standard & Poor’s 500 was up 4.3% today after central banks in the U.S., Europe, and Japan said that they’d help supply cash to avoid a credit crunch if the European debt crisis worsens. That buoyed media stocks: The Dow Jones U.S. Media Index was up nearly 4.4%. CBS shares rose 5.8%, giving it the biggest bump among the elite group of Big Media companies. It was followed by Disney (+5.4%), News Corp (+5.4%), Time Warner (+4.3%), Viacom (+4.3%), Comcast (+4.2%), and Sony (+2.7%). Among other media companies, Westwood One and The New York Times were up more than 10%. Companies up more than 9% include Outdoor Channel, LIN TV, and Entercom. Only a few companies lost ground. The hardest hit was Netflix, down 4.5% after Wedbush Securities’ Michael Pachter downgraded the video rental firm to “underperform” from “neutral.” His rationale: “We think that the company’s pricing structure is wrong, and its business model is broken. At current prices, we expect Netflix to continue to lose more hybrid (DVD and streaming) customers than it adds, and those who remain will not be particularly profitable.”
Shoppers spent a record $52.4B over the four-day Thanksgiving weekend, up 16% from last year, the National Retail Federation says. Add that to reports that European leaders are getting serious about resolving their debt crisis, and it’s easy to see why investors are in such a good mood today. The Dow Jones U.S. Media Index is up 2.8% at mid-day, about the same as the Dow Jones Industrial Average. Among Big Media stocks, Time Warner (+4%) leads followed by Sony (+4%), Viacom (+3.7%), Comcast (+3.7%), CBS (+3.4%), News Corp (+3.2%), and Disney (+2%). In the rest of the media universe several companies that have been pummeled in 2011 are taking a breather including Crown Media (+17.7%), Real D (+11.8%), and Netflix (+10.5%). Sinclair Broadcast Group is up 9% after it announced today that it wants to raise its borrowing capacity by $530M, possibly to buy TV stations. Madison Square Garden — which owns the New York Knicks — is up 8.7% after the NBA announced that it will salvage at least part of this year’s basketball season. The short list of companies that are down at midday includes New Frontier Media (-2.8%), Cinedigm (-2.7%) and Westwood One (-1.1%).
The federal government will have to slash $1.2T in spending, mostly beginning in 2013, if the 12-member congressional Super Committee can’t strike a deficit reduction deal soon. They still appear split — even though, as a practical matter, they have to reach an agreement by midnight in order to have something ready for the official Wednesday deadline. That drove most company shares down, with a late uptick possibly softening the blow. The Dow’s U.S. Media Index was down 1.2% about 20 minutes before the end of the trading day. Disney was hardest hit among the industry’s biggest players: Its shares were -3.5%, followed by Sony (-3.4%), CBS (-2.3%), Viacom(-2%), and Time Warner (-1%). Comcast was up about 0.5%. Among other media companies, Cinedigm (-8.8%) and RealD (-7.2%) took the worst beatings. Others down at least 4% include E.W. Scripps, Entercom, Crown Media, Netflix, National CineMedia, Live Nation, LIN TV, and Dish Network. Gainers include Westwood One, Barnes & Noble, Sirius XM, Radio One, McClatchy, and McGraw Hill.
The Dow Jones U.S. Media Index was down 3.5% today while the DJ Industrial Average was off 2.4% — and Goldman Sachs may have contributed to the imbalance: It downgraded the entertainment sector today to “neutral” from “attractive” saying that ad sales will be weaker than expected as the overall economy softens. That came as the market also reacted to Greece’s report over the weekend that it will fail to hit its deficit-reduction targets for the year — increasing the possibility of a default. CBS, -7%, was the biggest loser among the major media companies. It was followed by Viacom (-5.1%), Sony (-4.7%), Disney (-3.9%), Time Warner (-3.4%), and Comcast (-2.2%). In the broader media market, broadcasters Westwood One, LIN TV, Rado One, and Entercom were down by more than 10%. Pandora, Live Nation, Crown Media and Cumulus Media lost more than 8% of their market value. A few companies were up for the day including Yahoo (+2.7%), Regal Entertainment (+2.0%), Coinstar (+1.6%) and Time Warner Cable (+0.2%).
Media stocks suffered along with just about everyone else today after the Federal Reserve stirred recession fears by reporting “significant downside risks to the economic outlook” — and World Bank President Robert Zoellick warned that global economies are in a “danger zone.” The Dow Jones U.S. Media Index fell 3.9%, slightly more than the 3.5% drop in the DJ Industrial Average. Companies most exposed to advertising were hard hit. CBS led the pack among the industry’s Big Guns with shares down 7.2%. It was followed by Viacom (-6.6%), Disney (-5.5%), Comcast (-3.8%), Time Warner (-3.6%), News Corp (-3.3%), and Sony (-2.7%). Others falling at least 7% include Nielsen and Sirius XM. Those dropping at least 6% include Martha Stewart Living Omnimedia, The New York Times, Coinstar, IMAX, and Cumulus Media. Even in the battered market, a few media companies were up on the day including Live Nation (+2.1%), Barnes & Noble (+3.1%), Scholastic (+6.8%) and Westwood One (+20.8%).
UPDATE 4:10 PM: The markets couldn’t sustain an early afternoon rally amid concerns that France might lose its AAA debt rating and that Spain or Italy might default on payments. The Dow Jones Industrial Average fell 4.6% while the S&P 500 dropped 4.4% and NASDAQ was down 4.1%. But media companies were mixed, with some showing big improvements from mid-day. Disney remained the hardest hit of the Big Guns with shares falling 9.1%. It was followed by Sony (-5.7%), CBS (-5.4%), News Corp (-4.7%), Time Warner (-4.6%), Comcast (-4.5%), and Viacom (-0.3%). Among other media companies, Crown Media, Westwood One, and E.W. Scripps fell at least 10%. Entercom, The New York Times, and Gannett were off at least 9%. And Martha Stewart Living Omnimedia, AOL, and LIN TV were down at least 8%. Some companies were up including Cinedigm (+8.7%), National CineMedia (+4.3%), New Frontier Media (+2.7%), DreamWorks Animation (+2%), Lionsgate (+1.8%), Pandora Media (+0.6%), and Coinstar (+0.1%).
PREVIOUS, 9:00 AM: Here we go again. Stock markets at mid-day have given up just about all of yesterday’s gains following the Fed’s pledge to keep interest rates low — and media companies are being hammered. The Dow Jones U.S. media index is -4.7% while the Dow Jones Industrial Average is -4.1%. Similarly the S&P media index is off 5.5% while the S&P 500 is -3.8% and NASDAQ’s media shares are -4.8 vs. the overall exchange which is -3.3%. Here’s how industry giants are faring at mid-day: Disney (-10.7%), CBS … Read More »
UPDATE, 2 PM: The market deteriorated as the day wore on, continuing the worst market slump since 2008. The Dow Jones U.S. Broadcasting and Entertainment Index closed down 7.3% — exceeding the 5.6% decline in the Dow Jones Industrial Average, 6.7% drop in the Standard & Poor’s 500, and 6.9% fall at NASDAQ. CBS’ -10.3% slide made it the leading loser among media’s Big Guns. It was followed by News Corp (-7.7%), Viacom (-7.1%), Comcast (-6.6%), Sony (-6.4%), Disney (-6.1%), and Time Warner (-5.8%).
Double-digit losers include AMC Networks (-12.8%), LIN TV (-12.7%), Sirius XM (-12.7%), RealD (-12.6%), Cumulus Media (-11.9%), TiVo (-11.4%), Entercom (-10.9%), Westwood One (-10.8%), and E.W. Scripps (-10.3%). Those losing at least 9% include National CineMedia, Dish Network, Arbitron, Sinclair Broadcasting, Rovi, Outdoor Channel, Crown Media, Electronic Arts, Cablevision, and Coinstar. Read More »
UPDATE, 1:30 PM: Fear that the economy may be headed back into recession seemed to grow in the last hour of trading. The Dow ended the day -4.3% at 11,383.68. It was the biggest single-day drop since Oct. 22, 2008 and took the Dow below where it was at the beginning of 2011. Similarly, the S&P 500 was -4.8% and NASDAQ was -5.1%.
Although most media companies remain well ahead of where they were a year ago, today’s losses still look ugly. CBS, down 9.3%, was the hardest-hit infotainment giant. Here’s how the other Big Guns fared: News Corp -6.7%, Sony -6.5%, Disney -5.6%, Time Warner -4.6%, Comcast -4.3%, and Viacom -3.4%.
Among other media companies, Comscore finished -38.3% and Westwood One was -13.2%. Sinclair Broadcasting and McClatchy each lost more than 9%. Cinedigm, Live Nation, TiVo, and Liberty Media fell at least 8%. And Yahoo, Best Buy, Barnes & Noble, The New York Times Company, Coinstar, and Dish Network lost at least 7%. Even World Wrestling Entertainment, which had been up earlier in the day, closed -1.4%.
The only company in the sector that gained ground today was Pandora Media. It ended +1.6% after Bank of America Merrill Lynch initiated coverage with a “buy” recommendation. Read More »