The owners of several of the country’s biggest media networks are scheduled to report quarterly results over the next two weeks, with CBS and Showtime owner CBS Corp. (CBS) reporting after the close on November 2 and Fox owner 21st Century Fox (FOXA) set to report after the close on November 8. Both follow NBC owner Comcast (CMCSA) and HBO and Turner parent Time Warner (TWX), which report on October 26. What to watch for: 1. CONSOLIDATION: During the company’s last earnings call, Time Warner CEO Jeff Bewkes said he believes the proposed merger with AT&T (T) “remains on track to close before year end, pending regulatory review and consents.” Back on August 3, Jefferies analyst John Janedis downgraded Time Warner to Hold saying the AT&T takeover appeared on track to close in Q4. Meanwhile, AT&T was said to be planning to drop the Time Warner name after the proposed $85B takeover deal closes, according to The New York Post. Later that month, The Wall Street Journal reported that the government review of AT&T’s proposed $85B takeover of Time Warner had reached an advanced stage in which AT&T lawyers and the Justice Department were holding talks over merger conditions. Meanwhile, on September 13, 21st Century Fox Executive Chairman Lachlan Murdoch said he is “very disappointed” the U.K. regulator has asked to further study Sky (SKYAY) deal, but is still confident the deal will be completed by mid-2018. 2. OUTLOOK: During Time Warner’s last earnings call, the company reaffirmed its full-year 2017 business outlook, saying it still sees FY17 adjusted operating income up in high single digits. Additionally, the company noted it expects Turner’s subscription revenue growth in the second half of 2017 to increase at a similar rate as in the first half of the year, and total expense growth in the second half of 2017 to moderate compared to the first half. Time Warner also anticipates Home Box Office’s subscription revenue growth rate will increase in 2H17 relative to the Q2, and expects Warner Bros.’ Operating Income growth in the second half of 2017 to be weighted to Q4. Meanwhile, Turner’s total advertising revenues should decline in the low single-digits in Q3 compared to the prior year quarter, due to lower audience delivery at its domestic entertainment networks. Meanwhile, Comcast said it expects to lose 100K-150K video subscribers in Q3 due to competition and storms. Earlier this month, Fox agreed to pay $400M to secure English-broadcast rights to the 2018 and 2022 World Cup and outbid Disney’s (DIS) ESPN, but the broadcasts are expected to be less valuable after the U.S. Men’s National Team lost to Trinidad & Tobago, eliminating them from the 2018 competition, according to Business Insider. Fox Sports expects to lose $10M-$20M in advertising sales without the U.S. team, Bloomberg reported. 3. NEW DEALS: On August 17, Turner and UEFA announced a three-year multi-platform rights agreement for the exclusive presentation of the UEFA Champions League and UEFA Europa League beginning with the 2018-19 season. Timed to this multi-year rights agreement, Turner also announced plans to launch a new standalone premium sports streaming video service. Last month, Comcast and Google (GOOG, GOOGL) announced the nationwide launch of YouTube on Xfinity X1. On September 11, CBS and Sinclair Broadcast Group (SBGI) also announced a multi-year deal that renews three station affiliation agreements that were set to expire at the end of 2018. On October 17, Comcast’s NBCUniversal and Snap (SNAP) said they are partnering to produce content for Snapchat as the messaging app looks to shift to a full-fledged content provider, according to The Wall Street Journal.
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