Author Topic: DISCA/DISCK - Discovery Communications  (Read 105849 times)

thefatbaboon

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Re: DISCA/DISCK - Discovery Communications
« Reply #20 on: May 22, 2014, 02:48:01 AM »
dwy,

I share your amazement regarding splits!  But I even notice with myself that if I own a $120 stock and it goes up or down $12 it always "feels" more significant than a $25 stock that goes up or down $2.5!  It's retarded.  Obviously I know better, and I don't make any investing decisions based on such things, but the emotional reaction is spontaneous and ingrained.

sleepy,

dwy is right, more C shares have no effect on the voting proportions within DISC as a whole.  On another note, why did you buy the As?   I've never understood the value discrepancy between the A and C shares.  Maybe 1 or 2% (like BRK) but 7% makes no sense to me.  The A shareholder doesn't control DISC, it's controlled by Malone and his B shares (which he has optioned on to Zaslav) and the Newhouse family.  Is there something I've misunderstood?


sleepydragon

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Re: DISCA/DISCK - Discovery Communications
« Reply #21 on: May 22, 2014, 06:34:24 PM »
thanks to you both for your view on this.
the reason I bought disca instead of disck is simple: I am dumb! I should have just bought the c shares. I didn't thought too much about which one to buy. I noticed Akre bought the A shares, and I like to vote on things, so I bought A shares. I didn't check the spread between the two classes of shares, and I didn't think the spread will narrow.

sleepydragon

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Re: DISCA/DISCK - Discovery Communications
« Reply #22 on: May 23, 2014, 06:52:57 PM »

thefatbaboon

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Re: DISCA/DISCK - Discovery Communications
« Reply #23 on: May 31, 2014, 06:10:30 AM »
Been doing some thinking on Discovery. 

One of the common arguments supporting a premium valuation for Discovery is that their content can be sold globally.  All you need is a little dubbing and a show about elephants can be sold to the whole world. 

I think that's true as far as it goes but I don't think Zaslav has any intention of sticking closely to a narrow interpretation of this niche.

1. "As far as it goes" because Discovery isn't driving ratings with BBC-style nature shows.  They are investing in more and more fiction-dramas (is there a name for these?).  And, while a show about elephants can obviously be leveraged across the whole world, can the same be said of "Amish Mafia" type shows?  Also,  these shows have similar finitude to dramas, hot one year and cold the next.

2. The SBS buy, the OWN partnership, the Eurosport buy...these don't seem to be the signs of someone sticking around their niche.  SBS is a well-established broadcaster in Scandinavia, OWN is Oprah's latest network and Eurosport is the sports network that currently specializes in sports of limited popularity.  They all seem to have different dynamics than the elephant documentary.  Even with the finest dubbing I don't imagine they're going to be selling Oprah to Norwegians or Ski Jumping to Brazilians.  That said, they still seem like smart, limited risk investments - with a lot of upside potential. 

Rather than sticking to the Discovery/Animal Planet niche it looks more like Zaslav is trying to aggressively build a big content company.  I know it's a stretch but does anyone else see a kind of nascent Disney Group (Disney, ABC, ESPN, A+E).  Obviously Discovery is at an early stage in some areas but I see pretty strong outlines of where they are trying to go.

Maybe I'm crazy about that Disney stuff, but I still don't think anyone should be justifying their DISC investment on the basis of the global marketability of elephant documentaries.

« Last Edit: May 31, 2014, 09:50:28 AM by thefatbaboon »

sleepydragon

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Re: DISCA/DISCK - Discovery Communications
« Reply #24 on: July 07, 2014, 05:39:16 PM »
WSJ: A New Media Landscape in Sun Valley
http://online.wsj.com/articles/changes-in-media-landscape-to-dominate-conference-in-idaho-1404675325

"Discovery Communications Inc.,  whose CEO, David Zaslav, is attending, could be a target or a buyer in a consolidation wave, analysts and investment bankers say. Discovery looked at buying Scripps last year, and recently analysts including Tony Wible of Janney Capital Markets have noted the benefits of pairing Discovery with Disney, a much bigger player that lacks Discovery's international growth."


ItsAValueTrap

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Re: DISCA/DISCK - Discovery Communications
« Reply #25 on: July 07, 2014, 07:46:14 PM »
2. The SBS buy, the OWN partnership, the Eurosport buy...these don't seem to be the signs of someone sticking around their niche.  SBS is a well-established broadcaster in Scandinavia, OWN is Oprah's latest network and Eurosport is the sports network that currently specializes in sports of limited popularity.  They all seem to have different dynamics than the elephant documentary.  Even with the finest dubbing I don't imagine they're going to be selling Oprah to Norwegians or Ski Jumping to Brazilians.  That said, they still seem like smart, limited risk investments - with a lot of upside potential. 

The book Curious Discovery talks about how Oprah's network came to be.  They needed to do something with the predecessor network to OWN since its economics weren't working out well.  So they took that channel and simply switched it over to Oprah.

Cable channels are mostly about first mover advantage.  Once somebody dominates the niche, its hard for other people to take over that niche.
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smd123

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Re: DISCA/DISCK - Discovery Communications
« Reply #26 on: December 26, 2014, 09:47:24 AM »
Changes in working capital: -95 [ Adding this back in the formula below ]

How did you arrive at -95 for the working capital change? What did you consider as working capital?

gjangal

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Re: DISCA/DISCK - Discovery Communications
« Reply #27 on: December 26, 2014, 06:29:43 PM »
2013 10-K Cash flow statements have the line items for working capital in detail. Summing them up will give you the number.  I treated content acquisition costs as maintenance capex as described in the post and excluded that from changes in WC calculation. The 10-k has more details on how they amortize content costs etc.

smd123

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Re: DISCA/DISCK - Discovery Communications
« Reply #28 on: December 26, 2014, 10:05:30 PM »
2013 10-K Cash flow statements have the line items for working capital in detail. Summing them up will give you the number.  I treated content acquisition costs as maintenance capex as described in the post and excluded that from changes in WC calculation. The 10-k has more details on how they amortize content costs etc.

Thanks a bunch!


CorpRaider

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Re: DISCA/DISCK - Discovery Communications
« Reply #29 on: March 18, 2015, 10:17:45 AM »