DISNEY PUSHING ALTICE TO PICK UP ACC/SEC NETWORKS IN NYC MARKET; SUBSCRIBERS WILL LOSE ESPN IF NO DEAL REACHED BY MONTH END

Disney’s (DIS) contract with cable operator Altice USA (ATUS) expires at the end of the month and the ESPN parent company is asking ATUS to carry the ACC Network, the SEC Network and expand distribution of the ESPN flagship channel (i.e. less skinny bundles w/o it) within the NYC market, as conditions for a renewal. Should talks fail, subscribers would lose access to ESPN. Verizon Communications (VZ), ATUS’ main competitor in the market would likely be the beneficiary should disenchanted subscribers opt to make a change. It is the first of several TV distribution contracts that DIS will work to renew over the next 2 years. If successful, the approach will help DIS stem the loss of subscribers cutting cable or subscribing to skinny bundles that exclude live sports.

Howie Long-Short: Altice became a player in the NYC market when it purchased Cablevision and acquired their 2.4 million subscribers. The company recently announced a one-year, $1.2 billion share buyback plan, that reflects the company’s confidence in hitting near-term financial targets and boost shareholder returns.

Fan Marino: More than 90% of NYC isn’t going to be pleased with the incremental cost increase associated with the addition of the ACC & SEC Networks; but NYC CFB fans are about to get high quality football, heavily subsidized by their irreverent neighbors. Now, if they would only add the Pac-12 Network…

ESPN Pushes College Channels on Altice in New Fee Talks

DISNEY FINDING WAYS TO OFFSET ESPN STRUGGLES

2017 hasn’t been kind to ESPN. In April, the company laid off 200+ employees and then in June reported their lowest rated second quarter in 4 years. ESPN’s struggles don’t seem to be hurting parent company Disney (DIS) as much as some may think. In April of 2017, DIS neared an all-time high of $120 (the stock is at $109 at the close on Aug. 2). Helping them soar are increased revenues from their theme parks, as well as the success of their Star Wars & Marvel franchises. Rumors of a possible acquisition by Verizon (VZ) are likely not hurting the stock either.

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Disney: 30% Less Dependent On ESPN

Howie Long-Short: No doubt, ESPN is facing a tough task as it is overpriced and overdistributed. But Disney is still the premier media company out there. They will be fine.

David Price/Earnings: Disney continues to un-web their core business from ESPN. Definitely a wise decision based on recent stock performance.

Fan Marino: ESPN fired top notch reporters like Marc Stein and Jayson Stark, while keeping high priced carnival barkers like Steven A. Smith. Certainly seems like a Mickey Mouse organization to me.