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Disney & Altice USA Avert Channel Blackout, Nears Agreement
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Ushering in good news for pay-TV subscribers across New York metropolitan area, The Walt Disney Company (DIS - Free Report) and cable operator Altice USA have reached a preliminary programming agreement that will avoid blackout of ABC, ESPN and the Disney Channel.
Per media report, both the companies have extended the deadline to finalize the terms and conditions of the deal. Earlier, Disney had warned that the company might withdraw its channels from Altice’s Optimum cable-TV service if the negotiation fails to reach a suitable conclusion. Nearly 3.1 million subscribers in the Tri-State New York metropolitan region carry ABC, ESPN and the Disney Channel.
Despite decline in pay-TV subscribers over the past few years, Disney is trying to augment the carriage fees for both ESPN and ABC. However, Altice is reluctant to pay higher carriage charges as the viewership for ESPN has witnessed a sharp decline.
Both media companies and cable operators are failing to cope with "cord cutting" as consumers are unwilling to pay for large bundles of channels. In the last few quarters, Disney’s ESPN has been closely monitored by investors because of its performance. Identical to performances in the past few quarters, ESPN has disappointed investors in the third quarter of fiscal 2017 again. Falling subscriber base and higher programming costs at ESPN were the major concerns this quarter too. Fresh NBA agreement and increase in contractual rate for NFL programming drove the overall programming cost higher for ESPN.
Disney is striving to bring back ESPN’s golden days. In an effort to attract online viewers, the company has inked a deal with video streaming, data analytics and commerce management company – BAMTech. The company also has the option to acquire the majority stake in BAMTech in the future. BAMTech is anticipated to create an ESPN-branded, over-the-top video streaming service that will cover a variety of sports.
Where is the Stock Heading?
Despite the fabulous run of its movies, the company’s shares have declined 8.3% in the past three months, in comparison with the industry’s fall of 5.5%. Meanwhile, shares of AMC Networks Inc. (AMCX - Free Report) , Time Warner Inc. and Lions Gate Entertainment Corp. (LGF.A - Free Report) have gained 7.7%, 1.1% and 18.9%, respectively.
The success of movie business is crucial for Disney as the loss of subscribers at ESPN and decline in rating at the company’s youth-focused Disney Channel has been a major concern for investors. Disney currently carries a Zacks Rank #3 (Hold). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Disney & Altice USA Avert Channel Blackout, Nears Agreement
Ushering in good news for pay-TV subscribers across New York metropolitan area, The Walt Disney Company (DIS - Free Report) and cable operator Altice USA have reached a preliminary programming agreement that will avoid blackout of ABC, ESPN and the Disney Channel.
Per media report, both the companies have extended the deadline to finalize the terms and conditions of the deal. Earlier, Disney had warned that the company might withdraw its channels from Altice’s Optimum cable-TV service if the negotiation fails to reach a suitable conclusion. Nearly 3.1 million subscribers in the Tri-State New York metropolitan region carry ABC, ESPN and the Disney Channel.
Despite decline in pay-TV subscribers over the past few years, Disney is trying to augment the carriage fees for both ESPN and ABC. However, Altice is reluctant to pay higher carriage charges as the viewership for ESPN has witnessed a sharp decline.
Both media companies and cable operators are failing to cope with "cord cutting" as consumers are unwilling to pay for large bundles of channels. In the last few quarters, Disney’s ESPN has been closely monitored by investors because of its performance. Identical to performances in the past few quarters, ESPN has disappointed investors in the third quarter of fiscal 2017 again. Falling subscriber base and higher programming costs at ESPN were the major concerns this quarter too. Fresh NBA agreement and increase in contractual rate for NFL programming drove the overall programming cost higher for ESPN.
Disney is striving to bring back ESPN’s golden days. In an effort to attract online viewers, the company has inked a deal with video streaming, data analytics and commerce management company – BAMTech. The company also has the option to acquire the majority stake in BAMTech in the future. BAMTech is anticipated to create an ESPN-branded, over-the-top video streaming service that will cover a variety of sports.
Where is the Stock Heading?
Despite the fabulous run of its movies, the company’s shares have declined 8.3% in the past three months, in comparison with the industry’s fall of 5.5%. Meanwhile, shares of AMC Networks Inc. (AMCX - Free Report) , Time Warner Inc. and Lions Gate Entertainment Corp. (LGF.A - Free Report) have gained 7.7%, 1.1% and 18.9%, respectively.
The success of movie business is crucial for Disney as the loss of subscribers at ESPN and decline in rating at the company’s youth-focused Disney Channel has been a major concern for investors. Disney currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>