Author Topic: GTN - Gray Television  (Read 6177 times)

LC

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Re: GTN - Gray Television
« Reply #10 on: February 22, 2013, 05:45:59 AM »

But I don't think that the profitability of online advertising companies may matter.  Traditional media will still have to compete against online alternatives.

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I think the market thinks radio and TV are declining industries.
I don't like traditional radio and OTA TV stocks because I'm not sure where the future is headed.


Couple of things: Digital advertising isn;t the be-all-and-end-all. Advertising doesn't work in a vacuum. It's not TV vs. Radio vs. Billboards vs. Digital. They all combine to drive sales or brand awareness. Advertisers know this. Attribution is the forefront of the advertising industry right now.

So when you say traditional radio and TV station stocks are "hated by the market" and "you don't know where their future is headed"....isn't that exactly the type of investment opportunity you want? One that the market is heavily discounting and that most people don't understand?

Just food for thought.
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ItsAValueTrap

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Re: GTN - Gray Television
« Reply #11 on: February 22, 2013, 06:13:42 AM »
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One that the market is heavily discounting and that most people don't understand?

I think that it's best to stick to things within your circle of competence, and avoid the things in the "too hard" pile.  Predicting the future of most technology companies goes into the too hard pile for me.  Even media is really, really hard.  John Malone has made plenty of mistakes in media.  When his net worth was tied up in AT&T stock, it was a nightmare for him.  He didn't realize that the CEO would destroy a lot of shareholder value through dumb acquisitions.  He was a little wrong on how the combination of assets would play out.
He was kind of wrong about the smart TV being the future (along with Bill Gates) and kind of wrong about @Home.  People used to think that Internet portals would be the way to monetize things.

Even Malone isn't certain how the Internet will affect the media industry.  The big problem is getting people to pay for content delivered over the Internet.
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ItsAValueTrap

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Re: GTN - Gray Television
« Reply #12 on: February 22, 2013, 06:30:16 AM »
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Attribution is the forefront of the advertising industry right now.
Part of me thinks that it may be BS.  Certainly the idea of "attribution" is favorable for the advertising industry as it would justify higher advertising spending.

Just because something is "hot" doesn't necessarily mean that it has value and is here to stay.  A lot of things happened in the Dot-Com Bubble that did not create value and faded away (e.g. online portals).

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Advertising doesn't work in a vacuum.
There is no rule in capitalism that says that you have to spend money on advertising.  And you don't have to engage in (what I call) spray and pray advertising where you buy some TV, print, billboards, social media, etc.


Anyways... this is getting off topic.
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Packer16

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Re: GTN - Gray Television
« Reply #13 on: February 22, 2013, 06:33:52 AM »
The reason I think TV and radio is interesting is I think historcially it has not been in the two hard pile (like hardwarte technology has been), WB has invested in many of these in the past, and if the co-opt model is what is happening (based upon revenue and margin trends I think this is what is happening) then this is even more interesting.  With valuations of 3 to 8x FCF the market is saying theses firms are in terminal decline like directories and even if they hold steady there is a nice margin of safety.

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ItsAValueTrap

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Re: GTN - Gray Television
« Reply #14 on: February 22, 2013, 04:37:40 PM »
I guess the world is constantly changing.

People used to think that railroads were really safe.  Railroad companies leveraged themselves to the hilt and were able to sell 100-year bonds.  Then the airplane came along and practically every railroad went bankrupt.

I think the Warren Buffett approach to media would be to invest in the companies which will sustain growth over the long run.  Liberty Capital / SiriusXM / DTV is probably the way to go.  I haven't checked but those may be Berkshire's biggest positions in media.

2- Everybody's "too hard" pile is different.
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lessthaniv

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Re: GTN - Gray Television
« Reply #15 on: February 29, 2020, 09:55:17 AM »
Great call Packer16.
 :)

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