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I bot some last week. It's down only 2%, but Hmmm... Sorry about the bolding. Couldn't get rid of it.
The company faces a slowdown at ESPN as viewers cancel their cable subscriptions or decide against having cable at all. "Investors must remember that at its core, Disney is a cable network company that has the highest level of fixed costs (sports rights) in the industry," he wrote.
HBO and CBS have started offering à la carte programming for less than the bundled cable bill and Mr. Greenfield says he believes that ESPN will have to follow suit, but that it will not be able to offset the loss in cable subscribers.
These fees cover the enormous cost of licensing live sports programming.
Mr. Greenfield said he believed that expectations were too high and that the stock would fall in the next year. "It puts incredible pressure on the films. They all have to be massive successes," he said. Currently 44 percent of Disney's profits come from cable television.
Most analysts have waved off these concerns, saying that the cord-cutting will happen slowly. Disney has also diversified its business with franchises like Marvel and Pixar, as well as its theme park business. Even Mr. Greenfield conceded, "It would be more fun to be them than anyone else." So the force is still with them for now.
THE DARK SIDE OF CORD-CUTTING
Wall Street may be giddy about "Star Wars" and what it has done for Disney's prospects, but Richard Greenfield, a longtime media analyst at BTIG Research, still urged his clients to sell their Disney stock. Mr. Greenfield does not have an issue with Darth Vader, but he says the company has deeper problems, Andrew Ross Sorkin writes in the DealBook column.The company faces a slowdown at ESPN as viewers cancel their cable subscriptions or decide against having cable at all. "Investors must remember that at its core, Disney is a cable network company that has the highest level of fixed costs (sports rights) in the industry," he wrote.
HBO and CBS have started offering à la carte programming for less than the bundled cable bill and Mr. Greenfield says he believes that ESPN will have to follow suit, but that it will not be able to offset the loss in cable subscribers.
These fees cover the enormous cost of licensing live sports programming.
Mr. Greenfield said he believed that expectations were too high and that the stock would fall in the next year. "It puts incredible pressure on the films. They all have to be massive successes," he said. Currently 44 percent of Disney's profits come from cable television.
Most analysts have waved off these concerns, saying that the cord-cutting will happen slowly. Disney has also diversified its business with franchises like Marvel and Pixar, as well as its theme park business. Even Mr. Greenfield conceded, "It would be more fun to be them than anyone else." So the force is still with them for now.
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