That’s the assessment from Barton Crockett, a senior analyst at FBR Capital Markets & Co. In an appearance Friday (10/13) on CNBC’s Power Lunch, Crockett pointed his attention at the Mouse House — suggesting its the company that can put a brighter spotlight on broadcast media.
He also believes M&A activity could help the sector, and believes there is one company that looks great for an internet giant’s acquisition. It’s the company that is spinning off its radio stations to Entercom Communications.
“Disney, like the rest of the sector, needs to show a little more life. That would help,” Crockett said in a three-minute segment from CNBC’s Washington, D.C., bureau.
He continued, “I think M&A, and consolidation, would help, and I think all of these things are potentially in the offing.”
That’s a thumbs-up for the proposed merger between Sinclair Broadcast Group and Tribune Media, which has come under intense scrutiny as the deal could only be done thanks to the restoration by the FCC of its “UHF discount.”
With focus on TV networks thanks to Tweets from President Trump in recent days attacking NBC, Crockett turned to the sector of the media industry by noting “the pressure on the TV network stocks.”
For companies such as Viacom, which on Thursday closed at a five-year low, or for some of the broadcast TV owners, “things have gotten to silly.”
He questioned those who treat some of these media companies “as if there is zero equity value in four or five years, which is clearly not the case.”
Crockett wishes there to be a little bit of change in the narrative, and perhaps a better ad trend in Q4.
He also wants better measurement — specifically “C+7” data from Nielsen.
And, Crockett adds, “maybe we’ll see the AT&T-Time Warner deal work.”
Crockett has a “Neutral” rating on The Walt Disney Co. and 21st Century Fox.
A TIFFANY-FUELED WEDDING?
Who’s best-positioned for growth, in his view? CBS Corp. He likes how they have “pivoted” with CBS AllAccess, and how its core TV business continues to drive revenue for the company.
But, could they be a great buy for a telecom company looking to grow, should AT&T’s wedding with Time Warner occur? Yes, he says.
“It would be a great buy for an internet company,” Crockett says of CBS. “Nobody is going to buy FOX from the Murdochs. Disney is huge, and hard to afford. Netflix doesn’t really help you support your dividend and cap-EX. But, CBS has impactful content and could be bought.
