Disney down again, -5% amid broad media sell-off
Aug 6 2015, 13:01 ET | By: Jason Aycock, SA News Editor
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Disney (NYSE
IS) is down another 5.2% today (down 13.7% in two days) amid a deepening media stock sell-off that it seems to have spurred with its Tuesday earnings report, where it took a fair chunk of time on an analyst call acknowledging subscriber losses at ESPN.
Also off broadly at midday: CBS -3.1%; CMCSA -4%; FOXA -9.8%; VIAB -15.6%; TWX -5%; AMCX -9.6%; LGF -6.7%.
The sell-off is affecting several companies with a cable or pay-TV component, as sub losses at ESPN -- the most valuable part of any cable bundle -- point to the effect of cord-cutting.
Analysts are agreeing that the trend of unbundling (or skinny bundling) might threaten the long-term health of the pay TV ecosystem, which has profited from the promise of rising subscription fees from providers. That's dependent on subscriber counts that don't significantly drop off.
A growing pile of reports this week is indicating warning signs for subscriber counts. Dish Network (DISH -2.2%) had "almost certainly the worst quarter" for satellite subscriber losses, analyst Craig Moffett noted, as it merged Sling TV subscriber growth into its overall count, masking the core number. Moffett estimates Dish lost 151K satellite TV customers in Q2.
Subscriber losses mean lower affiliate fees. Disney said in its call "we now expect domestic cable affiliate revenue [growth] to fall short of previous expectation, but still in high single digits."