Corner of Berkshire & Fairfax Message Board

General Category => Investment Ideas => Topic started by: dabuff on February 23, 2015, 03:23:03 PM

Title: FOXA - Twenty-First Century Fox Inc
Post by: dabuff on February 23, 2015, 03:23:03 PM
Berkshire disclosed a new holding, albeit relatively small. Does anyone think this is a Weschler holding?
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: gfp on February 23, 2015, 03:55:07 PM
Certainly either a Weschler holding or a Combs holding.  Much too small to be a disclosed Buffett idea.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: boilermaker75 on May 20, 2015, 08:08:25 AM
For the trailing twelve months FOXA has "other income" of $5,048 million, which appears to be non-cash. Does anyone know what this is or how I can go about finding out?

TIA,

Boiler
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Tim Eriksen on May 20, 2015, 08:26:28 AM
For the trailing twelve months FOXA has "other income" of $5,048 million, which appears to be non-cash. Does anyone know what this is or how I can go about finding out?

TIA,

Boiler

It is clearly detailed in the 10-Q that it is from the sale of Sky Italia and Sky Deutschland. 
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Phaceliacapital on May 20, 2015, 08:50:55 AM
It's from selling Sky It & Ge to Sky.

They still own 40% of Sky itself.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Schwab711 on May 20, 2015, 09:34:53 AM
I like the Fox Sports package for its potential. They have some premium niche programming with Fox Sports, Fox News, 20th Century Fox (maybe it's 21st now judging by name), Simpsons, and what seems like a near-monopoly on Australian-based programming. I definitely think earnings power could be much higher than current earnings in a few years as the streaming/bundling mess plays out. This is probably not the case for nearly all over content producers other than DIS.

With the presidential election near you could see some serious revenue growth over the next year. Anyone playing broadcasters for election reasons? You could probably find some with heavy concentration in swing-states to take further advantage of the boost.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: boilermaker75 on May 20, 2015, 09:43:17 AM
For the trailing twelve months FOXA has "other income" of $5,048 million, which appears to be non-cash. Does anyone know what this is or how I can go about finding out?

TIA,

Boiler

It is clearly detailed in the 10-Q that it is from the sale of Sky Italia and Sky Deutschland.

Thanks, I have been looking at the 10-ks, but I didn't think about looking at the 10-Q for something that has occurred since the last 10-k. It should have been an obvious thing to do. Thanks again.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: silverhawk on May 21, 2015, 07:54:39 AM
I like the Fox Sports package for its potential. They have some premium niche programming with Fox Sports, Fox News, 20th Century Fox (maybe it's 21st now judging by name), Simpsons, and what seems like a near-monopoly on Australian-based programming. I definitely think earnings power could be much higher than current earnings in a few years as the streaming/bundling mess plays out. This is probably not the case for nearly all over content producers other than DIS.

With the presidential election near you could see some serious revenue growth over the next year. Anyone playing broadcasters for election reasons? You could probably find some with heavy concentration in swing-states to take further advantage of the boost.

A lot of things to unpack in Fox.  In terms of the Simpsons, did a related party transaction a year ago to launch an extension of the FX brand - FXX for $750mm that was just a transfer of value between divisions.  Fox and News Corp split in 2013 and News Corp got most of the australian assets - foxtel / fox sports australia.  Advertising as a percentage of revenue should decrease over time as the company grows its affiliate and retransmission revenue.  The majority of political spend is on local television networks which Fox owns a nice portfolio but lift likely to be a delta of 2% for advertising.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: loganc on June 11, 2015, 09:52:25 AM
Thoughts on this investment with Chase Carey presumably leaving along with Rupert Murdoch?  I have been eyeing FOX for a while and really like the assets, but I had considered Carey to be de facto CEO and assumed he would be staying at the company for quite some time. 

It is also interesting to consider the potential for ValueAct to have more of an impact at the company, given the capital they have raised from paring their VRX position.  Would they be pushing to keep Carey?  I can't imagine finding a much better person to have running the company.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: thefatbaboon on June 11, 2015, 10:27:03 AM
Thoughts on this investment with Chase Carey presumably leaving along with Rupert Murdoch?  I have been eyeing FOX for a while and really like the assets, but I had considered Carey to be de facto CEO and assumed he would be staying at the company for quite some time. 

It is also interesting to consider the potential for ValueAct to have more of an impact at the company, given the capital they have raised from paring their VRX position.  Would they be pushing to keep Carey?  I can't imagine finding a much better person to have running the company.

Best mustache around
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Phaceliacapital on June 11, 2015, 01:02:14 PM
It's at least interesting that there is an executive shuffle only weeks after ValueAct considerably increased its position. I think it's their number 5 position (by heart so not completely sure).

I like Fox as a company, they are really an international content company with significant franchise power. They were going international way before anyone else (their India numbers are impressive and I expect them to remain that way for the coming years). As a "content" company they are less dependent on advertising revenues than their peers (Viacom, CBS, TW, ...) + they have the best content for advertising stickiness (sports, news, ..). My guess is earnings will be up considerably in coming years as affiliate fees get renegotiated (they negotiated lower fees for FXX as it was in the startup phase) and the investments in those channels temper off (gross investment was 2015 and prior years). Movie business is hit & miss but they have the highest EBITDA margin in the business from a long term perspective. There is much to like at Fox but it doesn't screen well on people's estimates (which I think are too low but what do I know).

As a cable operator it's impossible to not offer Fox networks. Some people argue that distribution will take the most of the value created but it seems to me that once you are done competing for your customer in terms of capabilities (4G, 6G, Wifi, triple play, whatever, ...) you have to compete with something else, and that something else can only be content. I think Fox will do well in coming years and would have loved them buying Warner, HBO is one of the most undervalued assets in the market as Warner's valuation significantly depresses its true value.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: InsecurityAnalysis on June 12, 2015, 01:48:02 AM
I couldn't imagine cable providers not offering Fox most notably for the sports content, something that competitors like VIAB don't have.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Phaceliacapital on June 16, 2015, 01:53:25 AM
There is a write up available at VIC for us "normal" users. It basically says what I wrote above but with significantly more words, so for those wishing a little bit more background it's a quick and interesting read.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: ZenaidaMacroura on August 06, 2015, 06:11:03 AM
down premarket -looks to be going for another 7% hit.  The broadside didn't seem so bad, time to go through the transcript
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: bigbluffzinc on September 02, 2015, 03:31:46 PM
Anyone know why Fox is up 8.5% today after hours?
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Nnejad on September 02, 2015, 03:41:44 PM
Probably just someone using a market order after hours to buy 508 shares.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Schwab711 on September 03, 2015, 09:26:24 AM
Why would FOXA be any different from EA with their reliance on pro sports contracts? If you really believe there is long-term value in these deals then EA would be a higher leverage play.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: merkhet on September 03, 2015, 10:07:05 AM
I don't know that live sports and video games are comparable...
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Schwab711 on September 03, 2015, 10:51:52 AM
I don't know that live sports and video games are comparable...

You could be right, but they both just sports entertainment. One niche happens to be [much] larger. Both have their "moat" due to their status as the highest [qualified] bidder for licensing. I'd actually argue that video games is equally [non-]competitive market, in this specific instance (TTWO the only other possible bidder for sports rights). Both have business models with a significant amount of operating leverage built in. You could argue that broadcasting is less prone to volatile demand, but sports video games have now been with us since 1989 and new video game business models work really well with sports games in particular. I'm not sure video game and live sports markets will look all that different once bundling ends.

By the way, Hulu set the market price for new content without ads at $11.99/mth. Sling TV (ESPN and a few other channels) is a lite bundle that hasn't really gain traction with just 250k subscribers.

http://time.com/4020168/hulu-no-commercials-plan/
http://www.cnbc.com/2015/06/05/sling-tvs-web-tv-subscriber-numbers-keep-growing-now-around-250000.html

Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: undervalued on December 09, 2016, 09:38:42 AM
It's buying SKY https://www.bloomberg.com/news/articles/2016-12-09/fox-in-preliminary-deal-to-acquire-sky-for-10-75-pounds-a-share (https://www.bloomberg.com/news/articles/2016-12-09/fox-in-preliminary-deal-to-acquire-sky-for-10-75-pounds-a-share)
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: dbuch on January 03, 2017, 12:37:50 PM
You can currently buy FOX voting shares at a 2.5% discount to non-voting FOXA shares.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: ABM on January 11, 2017, 08:02:29 PM
It looks like FOX and LBTYK are going to face off in Europe along with everyone else. Who do you think will be most aggressive and do you like the FOX/Sky deal?

There are a lot of players to learn about but the main ones to me are Fox/Sky, LBTYK, and BT.   

Fox's Sky acquisition will make it the incumbent UK paytv provider that already reaches the entire country's population and has >50% market share.  As an aside, Sky is one of the largest media buyers in the world spending $6B USD in 2016 on mostly sporting rights.  This is about what NFLX spends and it is just below DIS's spend so Sky is no pushover. 

LBTYK is laying a lot of pipe in the UK (only reaches 60% of population) to improve broadband & paytv services.It is also investing in a "thick" MVNO network to boost mobile service offering (i.e. better quad play option) by partnering with BT/EE in a renewed agreement.

 BT is the #1 UK broadband provider and seems focused on growing its Paytv service as a new entrant.  Lastly, it is fresh off its mobile acquisition of EE that instantly made it the largest mobile provider in the country. 

LBTYK's CEO Fries was at Citi's conference last week and spoke openly about all the acquisition opps in Europe naming O2 specifically with Vodafone's assets remaining on investor minds. Combine that with Malone's comments from yesterday's LGF investor day and it sounds like we are in the early innings for communications M&A. UK contributes about 40% of LBTYK's EBITDA and pro-forma will contribute ~30% of FOX's EBITDA. 

I am wondering how can anyone be successful with so much intense competition brewing in a fairly mature industry.  It just seems bad for business. 

Malone, of course, argues the answer is, well, scale....
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: bizaro86 on January 01, 2019, 07:55:32 AM
Bumping this as I think this is a nice risk-reward situation right now. I'm long FOX, which votes but is otherwise the same as FOXA (and a tad cheaper).

Both share classes are getting taken out by DID for $38 in cash and stock plus a stub. The $38 is half cash half shares, but there is a collar on the shares so you get the full $38 at any DIS price between $93.53 and $114.32. With DIS over $109 you're a lot closer to getting upside over the $38 than facing any downside. And if DIS goes below $93 that would be a back-up-the-truck opportunity, imo.

Anyway, I also think new fox is cheap here. It will be leveraged (they are paying a big dividend to Disney as part of the spin to cover taxes) but will get to write up and depreciate their assets, so have a good tax shield. Fox news is must-carry, and doesn't have the variable cost of sports contracts, their costs are pretty fixed as they've proven they can swap out talking heads. The network and stations business is also probably an ok business. Finally, they own the Fox lot in LA. Disney is leasing it for awhile, but after that I expect it to get sold for a nice one-time gain that will suprise the market.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Spekulatius on June 03, 2019, 10:36:53 AM
Bumping this again, as It gets cheaper. This is a good business and the owners may sell out at the right price. It still trades at premium to other TV stocks like CBS but perhaps deservedly so. I am putting this on my watchlist. It may be the best  TV property money can buy right now.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Foreign Tuffett on June 03, 2019, 06:53:46 PM
Am I the only one concerned about Lachlan Murdoch as CEO? He has a track record of failure. Rupert is 88 and had some health problems last year....what happens when the "adult supervision" is gone?

https://www.reuters.com/article/us-twentyfirstcenturyfox-appointment-lac/prodigal-son-returns-lachlan-murdoch-back-in-news-corp-idUSBREA2Q08P20140327 (https://www.reuters.com/article/us-twentyfirstcenturyfox-appointment-lac/prodigal-son-returns-lachlan-murdoch-back-in-news-corp-idUSBREA2Q08P20140327)
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Spekulatius on June 05, 2019, 09:26:09 AM
Am I the only one concerned about Lachlan Murdoch as CEO? He has a track record of failure. Rupert is 88 and had some health problems last year....what happens when the "adult supervision" is gone?

https://www.reuters.com/article/us-twentyfirstcenturyfox-appointment-lac/prodigal-son-returns-lachlan-murdoch-back-in-news-corp-idUSBREA2Q08P20140327 (https://www.reuters.com/article/us-twentyfirstcenturyfox-appointment-lac/prodigal-son-returns-lachlan-murdoch-back-in-news-corp-idUSBREA2Q08P20140327)
Yes Rupert passing on the baton could be an issue. There is currently a good writup in VIC available, which also compares this to CBS. I looked at CBS and passed on it, because of the issues with the owner and Viacom as well as capitalizing programming, leading to FCF being smaller than earnings. FOX does not have either issue. I think FCF is 9-10% ( back if the napkin calc, so I could be off a bit) and this business is growing. Next year is election year, so it should be good for TV, especially Fox News.

Small starter position as I want to learn more and get a better feel. I dumped some more cyclical stocks yesterday and rather recycle this into Stock/business like FOX.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: KJP on June 05, 2019, 10:26:42 AM

FCF is 9-10% ( back if the napkin calc, so I could be off a bit) and this business is growing. Next year is election year, so it should be good for TV, especially Fox News.

That depends on how you define "growing."  I believe their "volume" defined as subs to MVPDs that pay Fox to rebroadcast their channels is declining, but they believe they can more than make up for that through increased or alternative pricing, e.g., high per-sub retrans fees (or fixed fees from certain Fox affiliates), higher reverse retrans, etc.  Tobacco companies have shown you can have great shareholder returns despite declining volume, but it's not easy. 

They're also quite open about building the Fox broadcast channel on live sports.  That has worked for them for decades, but will it continue to work if other players start to bid up those same rights?  Put another way, if the internet continues to erode the Fox network's historical competitive advantage in distribution, will Fox be able to extract any value from sports, or will a larger and larger share of their value accrue to the leagues?  Or is this all overblown, because the vast majority of the value in Fox is in the cable channels, in which Fox is a content producer, rather than a distributor/aggregator like the Fox broadcast channel?

Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: ander on June 05, 2019, 12:47:40 PM
Am I the only one concerned about Lachlan Murdoch as CEO? He has a track record of failure. Rupert is 88 and had some health problems last year....what happens when the "adult supervision" is gone?

https://www.reuters.com/article/us-twentyfirstcenturyfox-appointment-lac/prodigal-son-returns-lachlan-murdoch-back-in-news-corp-idUSBREA2Q08P20140327 (https://www.reuters.com/article/us-twentyfirstcenturyfox-appointment-lac/prodigal-son-returns-lachlan-murdoch-back-in-news-corp-idUSBREA2Q08P20140327)
Yes Rupert passing on the baton could be an issue. There is currently a good writup in VIC available, which also compares this to CBS. I looked at CBS and passed on it, because of the issues with the owner and Viacom as well as capitalizing programming, leading to FCF being smaller than earnings. FOX does not have either issue. I think FCF is 9-10% ( back if the napkin calc, so I could be off a bit) and this business is growing. Next year is election year, so it should be good for TV, especially Fox News.

Small starter position as I want to learn more and get a better feel. I dumped some more cyclical stocks yesterday and rather recycle this into Stock/business like FOX.

Spek - I would just be mindful that if FOX decides to ramp up their OTT (DTC) offerings that they will likely have an increase in capitalized programming spend affecting FCF. That doesn't bother me much on CBS and won't affect my view on FOXA either but just something to be mindful of.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Spekulatius on June 05, 2019, 04:28:03 PM

FCF is 9-10% ( back if the napkin calc, so I could be off a bit) and this business is growing. Next year is election year, so it should be good for TV, especially Fox News.

That depends on how you define "growing."  I believe their "volume" defined as subs to MVPDs that pay Fox to rebroadcast their channels is declining, but they believe they can more than make up for that through increased or alternative pricing, e.g., high per-sub retrans fees (or fixed fees from certain Fox affiliates), higher reverse retrans, etc.  Tobacco companies have shown you can have great shareholder returns despite declining volume, but it's not easy. 

They're also quite open about building the Fox broadcast channel on live sports.  That has worked for them for decades, but will it continue to work if other players start to bid up those same rights?  Put another way, if the internet continues to erode the Fox network's historical competitive advantage in distribution, will Fox be able to extract any value from sports, or will a larger and larger share of their value accrue to the leagues?  Or is this all overblown, because the vast majority of the value in Fox is in the cable channels, in which Fox is a content producer, rather than a distributor/aggregator like the Fox broadcast channel?

I believe the vast majority of FOX value is with the news channel. They basically own the right wing angle  on this. The NFL ticket is up in 2022, I believe, so they is something to watch out for.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Okonomen on June 10, 2019, 04:54:04 AM
Seems like the Murdochs (both founder and son/CEO) are also directors (chair and co chair) with substantial investments in News Corp, the old Fox home. Doesnt this create some sort of conflict of interest with fox shareholders? I assume News Corp must be at least a distant competitor? Also think its not in the interest of fox shareholders that the company ceo is co chair in another big news company not just due to conflicts of interest but also just thinking time/ressources
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Foreign Tuffett on June 14, 2019, 06:20:55 AM
So Rupert Murdoch buys 600,000 shares between June 5th and June 7th. He then immediately sells them with the following comment: "The subject shares have been purchased in error, which purchase has been deemed inadvertent and the subject shares were promptly sold. Any short swing profit resulting from the erroneous purchase and subsequent sale will be returned to the Issuer."

https://www.sec.gov/Archives/edgar/data/1024835/000120919119036013/xslF345X03/doc4.xml (https://www.sec.gov/Archives/edgar/data/1024835/000120919119036013/xslF345X03/doc4.xml)

Yesterday, this was filed:

https://www.sec.gov/Archives/edgar/data/1754301/000119312519172488/d764331d8k.htm (https://www.sec.gov/Archives/edgar/data/1754301/000119312519172488/d764331d8k.htm)

Someone correct me if I'm misinterpreting this, but it looks like Rupert, feeling bullish, inadvertently violated an arcane provision of a "Rights Agreement" when he bought more Class A shares. Now it's been amended to allow him to do so. It's going to be interesting to see if he buys more shares in the open market in the near future.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: walkie518 on August 01, 2019, 12:04:17 PM
looks like he bought them back?

buying FOX rather than FOXA should give investors of non-voting some pause? 

I have no idea why FOX does not trades for a premium to FOXA? Aren't votes worth something?

tax assets are pretty material ... does anyone have a sense as to why the market is so negative on this stock?  OTT attrition reported from cablecos?
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Spekulatius on August 08, 2019, 02:58:24 PM
FOX selling off 5% today after an earnings report that looks decent. I added a few shares, what is the reason for the selloff? I like their business focus on live entertainment (Fox news, Fox sports) and the valuation seems undemanding:
https://investor.foxcorporation.com/static-files/fe618a7b-29e3-4ac7-8048-4cad987d7b45 (https://investor.foxcorporation.com/static-files/fe618a7b-29e3-4ac7-8048-4cad987d7b45)
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: walkie518 on August 09, 2019, 05:42:37 PM
FOX selling off 5% today after an earnings report that looks decent. I added a few shares, what is the reason for the selloff? I like their business focus on live entertainment (Fox news, Fox sports) and the valuation seems undemanding:
https://investor.foxcorporation.com/static-files/fe618a7b-29e3-4ac7-8048-4cad987d7b45 (https://investor.foxcorporation.com/static-files/fe618a7b-29e3-4ac7-8048-4cad987d7b45)
perhaps the market doesn't like the consumer credit deal? maybe this is m&a drift despite supposed synergies?

Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Spekulatius on August 09, 2019, 05:53:27 PM
FOX selling off 5% today after an earnings report that looks decent. I added a few shares, what is the reason for the selloff? I like their business focus on live entertainment (Fox news, Fox sports) and the valuation seems undemanding:
https://investor.foxcorporation.com/static-files/fe618a7b-29e3-4ac7-8048-4cad987d7b45 (https://investor.foxcorporation.com/static-files/fe618a7b-29e3-4ac7-8048-4cad987d7b45)
perhaps the market doesn't like the consumer credit deal? maybe this is m&a drift despite supposed synergies?

Itís possible, although the deal quite small. They also seem like they want to rebuild their content production (after they sold of their film Studio to Disney) even though before they have claimed they are happy to be just part owner of the content that it created specifically for their channel. I think the Market sense style drift.

The downdraft in the stock occurred after the earnings release, not after the news release of the acquisition (which was a bit before). I sense a negative brokerage report or something like this.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Okonomen on August 10, 2019, 02:09:28 AM
I have been a shareholder for some months now. Really like the moaty nature of the brand, the resilience against cord cutting and the attractive price. I remember reading from the transcript at the investor day that mgmt. was very keen on staying within their circle of competence. Lachlan specifically mentioned the "circle of competence". Therefore it baffles me that they suddenly buy Credible Labs, albeit small still completely non-core. That worries me as Lachlan has a lot to prove and doesn't have the best reputation

I think the 5% decline has more to do with an analyst at Rosenblatt Securities releasing a somewhat bearish thesis focusing on cord cutting, increasing SG&A cost after spinoff and the looming NFL renewal

Anyone who knows 1) how probable is an NFL renewal for Fox and 2) what will the P/L effect be if no renewal?

I guess a renewal could also be at a much higher cost which would also hurt
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Spekulatius on August 10, 2019, 05:00:41 AM
I have been a shareholder for some months now. Really like the moaty nature of the brand, the resilience against cord cutting and the attractive price. I remember reading from the transcript at the investor day that mgmt. was very keen on staying within their circle of competence. Lachlan specifically mentioned the "circle of competence". Therefore it baffles me that they suddenly buy Credible Labs, albeit small still completely non-core. That worries me as Lachlan has a lot to prove and doesn't have the best reputation

I think the 5% decline has more to do with an analyst at Rosenblatt Securities releasing a somewhat bearish thesis focusing on cord cutting, increasing SG&A cost after spinoff and the looming NFL renewal

Anyone who knows 1) how probable is an NFL renewal for Fox and 2) what will the P/L effect be if no renewal?

I guess a renewal could also be at a much higher cost which would also hurt

I believe that 75% of the EBITDA comes from Fox News (Morningstar?, forgot the source), so that gives us an idea how much an NFL deal could impact earnings, as it only would impact Fox sports. I am sure they would find mitigating factors. Fox is less affected by cord cutting, they lost 1% of their subscribers YoY (I think this was mentioned in the CC), which less than peers (3% loss average).

I agree on Lachlan being a concern.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Nomad on August 11, 2019, 01:53:13 PM
Lachlan specifically mentioned the "circle of competence". Therefore it baffles me that they suddenly buy Credible Labs, albeit small still completely non-core. That worries me as Lachlan has a lot to prove and doesn't have the best reputation

His first major capital allocation decision has been bizarre, to say the least. What am I missing here? I've wracked my brain trying to figure out what the strategic rationale for the acquisition is but have yet to come up with any good answers. I completely agree with the others in this thread who see management as the primary risk here.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Okonomen on August 11, 2019, 02:14:23 PM
Nevertheless the Murdochs are very well aligned with us. I think the Bento acq was okay and synergetic with the broadcasting which has a lot of potential. But if they do a few more buys like Credible Iím out
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: walkie518 on August 12, 2019, 08:41:10 AM
Lachlan specifically mentioned the "circle of competence". Therefore it baffles me that they suddenly buy Credible Labs, albeit small still completely non-core. That worries me as Lachlan has a lot to prove and doesn't have the best reputation

His first major capital allocation decision has been bizarre, to say the least. What am I missing here? I've wracked my brain trying to figure out what the strategic rationale for the acquisition is but have yet to come up with any good answers. I completely agree with the others in this thread who see management as the primary risk here.

This might be a stretch, but Credbile does credit checks.  I would think that this kind of a business, provided that the data remains private, could be used to target ads better/cheaper/more effectively?  This could be an interesting angle for the upcoming elections?
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Okonomen on August 12, 2019, 11:33:17 AM
Yeah sounds like a stretch. I hope to see some non core divestment soon. Dont like when pure plays starts to go weirdo shopping. 5% of ROKU, 5% of Stars Group. Now 100% of Credible Labs. No idea why. Just sell it already and convince investors that you do what you preach. Wouldnt be surprised if I one day felt forced to sell my shares due to this Lachlan being no way near the level of his dad
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: walkie518 on August 12, 2019, 05:35:20 PM
Yeah sounds like a stretch. I hope to see some non core divestment soon. Dont like when pure plays starts to go weirdo shopping. 5% of ROKU, 5% of Stars Group. Now 100% of Credible Labs. No idea why. Just sell it already and convince investors that you do what you preach. Wouldnt be surprised if I one day felt forced to sell my shares due to this Lachlan being no way near the level of his dad

Stars will weave into the sports play.

Roku was a good investment per the chart, though I don't know much on the company or its future nor do I own the device.  Those I know who have it like it however...

Credible labs was a $400m investment.  If it doesn't half as well as Roku, we won't be so critical.

Then again, there might be reason to give FOX / Lachlan the benefit of the doubt that he is taking guidance from his father.  He doesn't need to work, ever.  Why is he doing this?  I would speculate that the scoreboard matters as does his father's approval (don't mean to sound lame?).

Stars could be an amazing investment 10 years from now, this is a similar thesis behind Perelman's investment in SGMS (though that has yet to fire). 

The buyback could be pretty material ... my initial figures indicated that despite this noise, FOXA is pretty cheap (and cheaper now)
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Nomad on August 16, 2019, 08:26:58 AM
What do you all think about the commitments and contingencies listed in the 10-K? Looks like they're on the hook for $4.9b within a year and $14.8b within two to three years.

The NFL contract expires in 2022 and MLB is set to roll off in 2028.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: walkie518 on August 16, 2019, 08:56:37 AM
What do you all think about the commitments and contingencies listed in the 10-K? Looks like they're on the hook for $4.9b within a year and $14.8b within two to three years.

The NFL contract expires in 2022 and MLB is set to roll off in 2028.

Fox news and business are not going anywhere, but Fox Sports is an important piece of the puzzle.  They need the content. 

I believe the baseball rights are until 2028 but football is 2022. 

Can Amazon, ESPN, or NBC buy programming rights away from Fox? 

Certainly this is a risk if Fox pays less, but disruption to the consumer of content means the advertising will be worth less to advertising partners, and there will be other negative effects if the content moved to Amazon for example. 

Ultimately, while painful in the visibility of the future of the business, if Fox were to lose NFL programming rights, for example, I think they find another way to deploy the capital.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Okonomen on August 16, 2019, 11:49:36 PM
Good points.

By the way, I heard someone talk about Rupert Murdoch being very conservative but that his two sons are not. Could this be a potential problem now that Lachlan is running the show? If he suddenly style drifts the channels to capture non-republicans etc I think this can destroy a lot of brand value for their core viewer
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Spekulatius on August 17, 2019, 07:48:01 AM
Good points.

By the way, I heard someone talk about Rupert Murdoch being very conservative but that his two sons are not. Could this be a potential problem now that Lachlan is running the show? If he suddenly style drifts the channels to capture non-republicans etc I think this can destroy a lot of brand value for their core viewer

Style drift in content would be easy to see. So far no dice, based on what I can tell. They basically have a lock on conservative viewers in their channels, it would be stupid to impair this. Itís a business, straight and simple. My concerns are mornin terms of conservative with respect to capital allocation.

I like the business, not the content  :o. Their focus on live events, lock on conservative viewers, tax deferr
Ende, high cash conversion ration (due to little capitalization of content) and the extra goodies in assets that may be monetizable. Also 2020 should be a monster year in terms of political advertising due to the election cycle. I think it is one of the best position cable channels out there.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: cmlber on August 18, 2019, 06:46:40 PM
lock on conservative viewers,

What odds do you put on Trump Network launching in 2021 or 2025?  And might that steal many conservative viewers? 
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Okonomen on August 19, 2019, 02:06:27 AM
lock on conservative viewers,

What odds do you put on Trump Network launching in 2021 or 2025?  And might that steal many conservative viewers?

Doesnt sound like a big threat. Sounds like very unprofessional amateurs - https://www.theguardian.com/tv-and-radio/2019/jun/15/oan-oann-fox-news-donald-trump

But would also like to hear someone elses thoughts about this
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Okonomen on August 19, 2019, 02:15:17 AM
Another point could be that the "trump network" which is also called AON afaik will probably not be as succesful after the horrible trump era. I doubt that a potential new republican president in a few years - if not the democrats win - are as crazy, abd then the AON appeal would fall I guess
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Spekulatius on August 19, 2019, 03:34:44 AM
lock on conservative viewers,

What odds do you put on Trump Network launching in 2021 or 2025?  And might that steal many conservative viewers?

Who knows what Trump will do. Anyways, has he had any success outside real estate so far? Then, he will be 77 in 2021. Maybe he starts another airline  ;D.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: walkie518 on September 20, 2019, 09:28:36 AM
pricing looks pretty good here for FOXA ... anyone have a sense for the recent decline or has recent price action been largely driven by market forces?
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Spekulatius on September 20, 2019, 03:19:16 PM
pricing looks pretty good here for FOXA ... anyone have a sense for the recent decline or has recent price action been largely driven by market forces?

I like it enough and rebought some of my recently sold shares. It seems like the whole content/media sector has been weak (CBS, NFLX, DISCA) and FOX didnít escape the wrath of Mr Market.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: walkie518 on September 20, 2019, 05:13:26 PM
pricing looks pretty good here for FOXA ... anyone have a sense for the recent decline or has recent price action been largely driven by market forces?

I like it enough and rebought some of my recently sold shares. It seems like the whole content/media sector has been weak (CBS, NFLX, DISCA) and FOX didnít escape the wrath of Mr Market.

somehow, FWONA dodged the bullet ... DISCA might be worth add'l consideration, though I'd want a better price before buying?

First legs down appear around the same time, but NFLX might have decoupled from CBS/VIA/FOX...

there is certainly some effect from sector/industry price correlation, but likely the CBS/Viacom deal is weighing on those stocks while FOXA is more a matter of uncertainty regarding capital allocation decisions?
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Spekulatius on September 20, 2019, 05:25:28 PM
pricing looks pretty good here for FOXA ... anyone have a sense for the recent decline or has recent price action been largely driven by market forces?

I like it enough and rebought some of my recently sold shares. It seems like the whole content/media sector has been weak (CBS, NFLX, DISCA) and FOX didnít escape the wrath of Mr Market.

Hard to tell what causes these share price oscillations. There was some concern about their purchases and then the stock bounced back, presumable because of a Murdoch insider buy. In the end, more noise than Signal and I disposition accordingly. I like FOX because  I believe their have a franchise on news for conservatives  and because their whole business around love content is Netflix resilient. their balance sheet looks way better than CBS/VIA or DISCA (which is worth consideration as well, because of the  high FCF yield).

somehow, FWONA dodged the bullet ... DISCA might be worth add'l consideration, though I'd want a better price before buying?

First legs down appear around the same time, but NFLX might have decoupled from CBS/VIA/FOX...

there is certainly some effect from sector/industry price correlation, but likely the CBS/Viacom deal is weighing on those stocks while FOXA is more a matter of uncertainty regarding capital allocation decisions?
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Foreign Tuffett on September 27, 2019, 08:21:33 AM
Some people are taking issue with Lachlan's pay:

https://www.businessinsider.com/lachlan-murdoch-ceo-pay-after-disney-fox-sale-2019-9 (https://www.businessinsider.com/lachlan-murdoch-ceo-pay-after-disney-fox-sale-2019-9)

I take issue with Lachlan's pay too. He should be paid zero, as he shouldn't be the CEO to begin with. Lachlan's only real qualifications are (1) he's Rupert's son and (2) his brother James is too politically liberal to lead a company that owns Fox News.




Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Okonomen on September 27, 2019, 03:38:33 PM
Agree that they are wel-paid. Will be interesting to see the next proxy
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: brycepeterson on September 27, 2019, 04:08:44 PM
Looks like good risk vs. reward to me here.  $31.50 share price, enterprise value about  $23.5 billion, should do around $1.6-$2.0 billion free cash flow per year.  You don't find too many FCF / EV yields in that range anymore, especially given the business quality for FOX is pretty good.  My main worry is if the CEO uses free cash flow poorly.  I don't like the latest acquisition, but I also don't fully understand it.  Seems like all FOX has to do to move the stock from low $30's to $40-$45 is generate that $1.6-$2.0 billion free cash flow and buyback a ton of stock at reasonable valuations.  I'm not sure if CEO has a brain / understands this.

Also note - Disney has come down lately from $140 to $130.  Maybe there's just general weakness in media/tv/consumer stocks?
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Spekulatius on September 27, 2019, 04:47:13 PM
Looks like good risk vs. reward to me here.  $31.50 share price, enterprise value about  $23.5 billion, should do around $1.6-$2.0 billion free cash flow per year.  You don't find too many FCF / EV yields in that range anymore, especially given the business quality for FOX is pretty good.  My main worry is if the CEO uses free cash flow poorly.  I don't like the latest acquisition, but I also don't fully understand it.  Seems like all FOX has to do to move the stock from low $30's to $40-$45 is generate that $1.6-$2.0 billion free cash flow and buyback a ton of stock at reasonable valuations.  I'm not sure if CEO has a brain / understands this.

Also note - Disney has come down lately from $140 to $130.  Maybe there's just general weakness in media/tv/consumer stocks?

Yes, the media sector has been weak, CBS/Viacom, DIS, NFLX, DISCA have all been weak lately. I like FOX focus on live programming, which means Netflix is not a competitor. They also own news for the conservative viewers (or infotainment) and Fox Sports is pretty good and way cheaper than ESPN.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Okonomen on September 28, 2019, 12:25:37 AM
The proxy came out on Sep 23

Rupert Murdoch base salary: 5 mUSD (chairman/executive)
Lachlan Murdoch base salary: 3 mUSD (CEO) - 85% of total compensation is variable/at risk

ST cash incentive based on: EBITDA (terrible metric in my opinion) 75% and 25% individual performance

LT incentive: 40% FCF, 40% EPS, 20% relative 3 year TSR

Little excessive to pay the chair more than the CEO especially when he owns so much of the company. I also would have liked to see a capital return metric be more dominant even though the LT's are not terrible metrics, but you risk mgmgt to chase bottom line without regards to reinvestment returns on capital, and FCF focus motivates macimizing cash flows but also maybe neglecting critical CapEx.

Target payout to Rupert and Lachlan is 10,5 and 8 mUSD (21 and 16 mUSD max)

I notice the item "Personal Use of Corporate Aircraft" was 175.000 USD for Lachlan and 85.000 for Rupert...

I notice on p40 that the value of vested options for Lachlan is 44 mUSD in 2019... Sounds extreme compared to shareholder returns

Lachlan's direct ownership in common stock is around 154.000 units worth 5 mio. USD currently. Doesnt seem like a lot. The guideline for Lachlan is 5x base salary = 15 mUSD. With all the options etc he is albeit very inventivized to increase EPS, FCF and shareholder returns he just doesnt have that much downside

In general I'm a little disappointed, but didn't really expect that much due to the ownership structure. Seems like they are showering themselves with options

Any opinions on their remuneration policy 2019 ?
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: brycepeterson on September 30, 2019, 01:31:47 PM
Apologize if this has been covered lately - one observation I have of the businesses I own shares in is "in general" - they move on a daily basis with their sub-sector (close comparables, like TV/content owners for FOX), or bigger industry (like "consumer discretionary" for FOX).  My guess is indexing + sector funds buy/sell indiscriminately, thus you get daily selling or buying in TV/content owners and they all appreciate or fall together (FOX, DIS, CMCSA, etc.).  I've been wondering if this dynamic has pushed FOX down from call it $34 to $31?  The free cash flow I think it will produce doesn't justify this move down - thus I've been thinking it's sector/industry ETF/index fund selling vs. anything specific to FOX.

The big banks follow this trend. They'll move independently on unique events / news such as earnings announcements, Wells Fargo was +4% on the CEO announcement last week, etc.  But if you follow them during the routine days, I think they move fairly close together up or down.  Sometimes I think this creates buying opportunities.  (Probably FOX today.)
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Foreign Tuffett on September 30, 2019, 03:06:48 PM
Apologize if this has been covered lately - one observation I have of the businesses I own shares in is "in general" - they move on a daily basis with their sub-sector (close comparables, like TV/content owners for FOX), or bigger industry (like "consumer discretionary" for FOX).  My guess is indexing + sector funds buy/sell indiscriminately, thus you get daily selling or buying in TV/content owners and they all appreciate or fall together (FOX, DIS, CMCSA, etc.).  I've been wondering if this dynamic has pushed FOX down from call it $34 to $31?  The free cash flow I think it will produce doesn't justify this move down - thus I've been thinking it's sector/industry ETF/index fund selling vs. anything specific to FOX.

The big banks follow this trend. They'll move independently on unique events / news such as earnings announcements, Wells Fargo was +4% on the CEO announcement last week, etc.  But if you follow them during the routine days, I think they move fairly close together up or down.  Sometimes I think this creates buying opportunities.  (Probably FOX today.)

That's very interesting. I suppose CBS, at least until the Viacom transaction completes, is Fox's closest comp. Really there's no good comp though.

I agree that the company is cheap, but remain concerned about management. If anyone can explain the logic of the Credible Labs acquisition I'm all ears.

* Edited to fix typos
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Foreign Tuffett on September 30, 2019, 08:56:19 PM
Fox and Dish are battling over pricing

https://www.keepfox.com/ (https://www.keepfox.com/)


Dwayne Johnson returning to WWE Smackdown to kick off its Fox premiere this Friday. I think WWE will do well on Fox

https://www.foxnews.com/entertainment/dwayne-the-rock-johnson-wwe-return (https://www.foxnews.com/entertainment/dwayne-the-rock-johnson-wwe-return)
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Okonomen on September 30, 2019, 10:05:39 PM
Fox and Dish are battling over pricing

https://www.keepfox.com/ (https://www.keepfox.com/)


Dwayne Johnson returning to WWE Smackdown to kick off its Fox premiere this Friday. I think WWE will do well on Fox

https://www.foxnews.com/entertainment/dwayne-the-rock-johnson-wwe-return (https://www.foxnews.com/entertainment/dwayne-the-rock-johnson-wwe-return)

Cant figure out if this is a genious move by fox or too aggressive pissing dish off. However, i guess fox has the power as vustomers care about what they can watch and not about who delivers it
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Nomad on October 01, 2019, 11:35:42 AM

I agree that the company is cheap, but remain concerned about management. If anyone can explain the logic of the Credible Labs acquisition I'm all ears.


So I thought some more about this, and it's pure speculation but I'll put it out there: What if the Credible acquisition was designed to support Fox's move into sports betting? The Supreme Court has cleared the way for nationwide betting. Fox is almost certainly interested in the creditworthiness of the punters to whom the Fox Bet service is being offered. This could be an early building block as the company tries to establish the same dominance stateside that Sky enjoys in the UK.

On the other hand, it could just be a giveaway to Lachlan's Australian friends!  ;D
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: brycepeterson on October 01, 2019, 03:08:56 PM

I agree that the company is cheap, but remain concerned about management. If anyone can explain the logic of the Credible Labs acquisition I'm all ears.


So I thought some more about this, and it's pure speculation but I'll put it out there: What if the Credible acquisition was designed to support Fox's move into sports betting? The Supreme Court has cleared the way for nationwide betting. Fox is almost certainly interested in the creditworthiness of the punters to whom the Fox Bet service is being offered. This could be an early building block as the company tries to establish the same dominance stateside that Sky enjoys in the UK.

On the other hand, it could just be a giveaway to Lachlan's Australian friends!  ;D

Good thought Nomad!  Why wouldn't Fox just say that on acquisition date?  Makes the most sense of theories I've heard.  Or maybe they hinted at it and I'm not aware...

Thank you.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Foreign Tuffett on October 02, 2019, 05:16:28 PM
Q3 ratings for Fox News: -1% Y/Y. #1 cable news network for 71 straight Qs.

https://deadline.com/2019/10/fox-news-cable-news-network-ratings-1202749534/ (https://deadline.com/2019/10/fox-news-cable-news-network-ratings-1202749534/)

Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Foreign Tuffett on October 04, 2019, 11:59:58 AM
Long-term renewal with Cox announced today. This suggests to me that the ongoing dispute between Fox and Dish is primarily due to Dish being obstinate and not wanting to pay up. Typical Charlie Ergen stuff.

https://www.prnewswire.com/news-releases/fox-corporation-and-cox-communications-announce-long-term-renewal-agreement-300931401.html (https://www.prnewswire.com/news-releases/fox-corporation-and-cox-communications-announce-long-term-renewal-agreement-300931401.html)

Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Spekulatius on October 04, 2019, 04:09:21 PM
Long-term renewal with Cox announced today. This suggests to me that the ongoing dispute between Fox and Dish is primarily due to Dish being obstinate and not wanting to pay up. Typical Charlie Ergen stuff.

https://www.prnewswire.com/news-releases/fox-corporation-and-cox-communications-announce-long-term-renewal-agreement-300931401.html (https://www.prnewswire.com/news-releases/fox-corporation-and-cox-communications-announce-long-term-renewal-agreement-300931401.html)

Dish had this stuff all the time going on when I was customer a couple of years ago. Itís a negotiating tactic and the content always came back.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Foreign Tuffett on October 05, 2019, 09:16:33 AM
Long-term renewal with Cox announced today. This suggests to me that the ongoing dispute between Fox and Dish is primarily due to Dish being obstinate and not wanting to pay up. Typical Charlie Ergen stuff.

https://www.prnewswire.com/news-releases/fox-corporation-and-cox-communications-announce-long-term-renewal-agreement-300931401.html (https://www.prnewswire.com/news-releases/fox-corporation-and-cox-communications-announce-long-term-renewal-agreement-300931401.html)

Dish had this stuff all the time going on when I was customer a couple of years ago. Itís a negotiating tactic and the content always came back.

Interesting, thanks.


Strong ratings for premiere of WWE Smackdown last night.

https://www.wrestlinginc.com/news/2019/10/wwe-smackdown-fox-premiere-viewership-draws-big-numbers-660399/ (https://www.wrestlinginc.com/news/2019/10/wwe-smackdown-fox-premiere-viewership-draws-big-numbers-660399/)
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Foreign Tuffett on October 07, 2019, 07:38:30 AM
Long-term renewal with Cox announced today. This suggests to me that the ongoing dispute between Fox and Dish is primarily due to Dish being obstinate and not wanting to pay up. Typical Charlie Ergen stuff.

https://www.prnewswire.com/news-releases/fox-corporation-and-cox-communications-announce-long-term-renewal-agreement-300931401.html (https://www.prnewswire.com/news-releases/fox-corporation-and-cox-communications-announce-long-term-renewal-agreement-300931401.html)

Dish had this stuff all the time going on when I was customer a couple of years ago. Itís a negotiating tactic and the content always came back.

Looks like they were able to hash out their differences in time for some of yesterday's football action.

https://www.prnewswire.com/news-releases/dish-reaches-long-term-carriage-agreement-with-fox-300932687.html (https://www.prnewswire.com/news-releases/dish-reaches-long-term-carriage-agreement-with-fox-300932687.html)

Rupert Murdoch was at the Cowboys-Packers game yesterday. I think he's friends with Jerry Jones.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Foreign Tuffett on October 08, 2019, 08:19:27 AM

I agree that the company is cheap, but remain concerned about management. If anyone can explain the logic of the Credible Labs acquisition I'm all ears.


So I thought some more about this, and it's pure speculation but I'll put it out there: What if the Credible acquisition was designed to support Fox's move into sports betting? The Supreme Court has cleared the way for nationwide betting. Fox is almost certainly interested in the creditworthiness of the punters to whom the Fox Bet service is being offered. This could be an early building block as the company tries to establish the same dominance stateside that Sky enjoys in the UK.

On the other hand, it could just be a giveaway to Lachlan's Australian friends!  ;D

Good thought Nomad!  Why wouldn't Fox just say that on acquisition date?  Makes the most sense of theories I've heard.  Or maybe they hinted at it and I'm not aware...

Thank you.

I don't think it has anything to do with sports betting.

During the Q4 call an analyst asked about the acquisition's rationale. Lachlan's response was that due to the overlap between Fox's news (Fox News, Fox Business, local news) audiences and Credible's target market, Fox can funnel lots of good prospects to Credible. Credible ultimately is just a tool to compare loan offers side-by-side.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: rogermunibond on October 08, 2019, 09:58:44 AM
It's reverse mortgages for their aging demographic.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Okonomen on October 15, 2019, 12:45:02 PM
https://seekingalpha.com/news/3505900-redstone-counters-report-exploring-fox-news-rival

Hope this will not become reality
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Okonomen on October 18, 2019, 12:26:20 PM
https://dataroma.com/m/stock.php?sym=FOX

Both Tweedy & Browne and Baupost are now shareholders. Maybe Baupost got in thru the spin
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: walkie518 on October 24, 2019, 09:14:51 AM
down 3.5% today on Kacie McDonnell? 

That doesn't make sense... anyone have any insight here?
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Spekulatius on October 24, 2019, 09:28:25 AM
down 3.5% today on Kacie McDonnell? 

That doesn't make sense... anyone have any insight here?

Itís not Kacieís fault, the whole media sector went to 💩
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Foreign Tuffett on November 06, 2019, 04:23:09 PM
Results looks fine to me. Below are my notes from the call:

"Fox has established itself as the #1 broadcast network." NFL ratings are high. Friday night WWE Smackdown is off to a strong start. Expect a robust political ad market next year. Sub declines in the traditional MVPD universe have accelerated in recent months, but mostly this is just one distributor (they didn't mention AT&T/DirectTV by name, but that's who they meant). Super Bowl will be streamed/aired in 4K for the first time this season. Fox Business unveiled a new brand refresh ~1 month ago with a new logo and redesigned digital properties. Beginning to integrate Credible Labs' services into Fox Business' digital properties.

BOD has authorized a $2B stock buyback. $500M of this will be completed "in the near term." "We believe we are undervalued in respect to our peers and other investment opportunities."

TV advertising market remains strong. News ad market is a little weaker than sports and entertainment markets as news competitors haven't held the line on price. Super Bowl ads are selling through well and they are confident that the price per 30 second ad will be the highest of any Super Bowl to date.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: brycepeterson on November 06, 2019, 05:30:02 PM
Thank you.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: walkie518 on November 08, 2019, 07:30:33 AM
Doesn't FOX have the vote?  Why buy FOXA for a premium when FOX should have it?
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Spekulatius on November 08, 2019, 10:54:33 AM
Doesn't FOX have the vote?  Why buy FOXA for a premium when FOX should have it?

FOXA is a bit more liquid, not that it should matter for any of us, since FOX is plenty liquid. The two used to trade at almost the same price, but recently FOXA has diverged and started to trade at a premium for really no good reason.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Okonomen on November 16, 2019, 02:00:24 AM
Can anyone explain to me why the EBITDA-margin in Television is only around 8%? Is it because sports rights are incurred here and in such case, what are the EBITDA-margins on the TV-stations? Afaik sports rights costs are incurred in the cable segment, right? So what is putting so much pressure on Television EBITDA?
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Spekulatius on November 16, 2019, 05:25:53 AM
Can anyone explain to me why the EBITDA-margin in Television is only around 8%? Is it because sports rights are incurred here and in such case, what are the EBITDA-margins on the TV-stations? Afaik sports rights costs are incurred in the cable segment, right? So what is putting so much pressure on Television EBITDA?

According to the Q3 report (Page 17) The EBITDA from Television is $251M/$1356M or ~18.5%. It seems a somewhat low number, but itís much higher than 8%.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Okonomen on November 16, 2019, 05:31:14 AM
Ah yeah was looking at the last couple of fiscal years. Not the most recent Q. Maybe theres some seasonality ? Otherwise i dont understand the huge improvement. Maybe something to do with entertainment?
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: KJP on November 16, 2019, 05:40:38 AM
Can anyone explain to me why the EBITDA-margin in Television is only around 8%? Is it because sports rights are incurred here and in such case, what are the EBITDA-margins on the TV-stations? Afaik sports rights costs are incurred in the cable segment, right? So what is putting so much pressure on Television EBITDA?

Sports rights are incurred primarily in the Television segment (Fox Network), not the Cable Segment (primarily Fox News).  See, e.g., this description of the Television segment results in the Q4 2019 earnings release:

Television reported full year segment revenues of $5.98 billion, an increase of $873 million or 17% from the amount in the prior year.      Advertising  revenues  increased  $394  million  or  11%,  primarily  due  to  the addition of Thursday  Night  Football and the broadcast of one additional NFL Divisional Playoff game, record cyclical political advertising revenues at the FOX Television Stations and additional FIFA World Cup matches in the current year.    The increase in advertising revenues was partially offset by the broadcast of two fewer MLB World Series games in the current year compared with the prior year.  Affiliate revenues increased $326 million or 24% led by an increase in programming fees from third-party FOX affiliates.  Other revenues increased $153 million or 62%, primarily due to higher digital content licensing revenues.

That is why Cable earnings are so much higher than Television earnings.  To be sure, Fox does show sports on some of its other cable networks, but those sports rights (NASCAR, college sports, etc.) do not compare to the rights fees Fox TV pays to the NFL, which airs only on Fox Network, not any of the Fox sports cable channels.
Title: Re: FOXA - Twenty-First Century Fox Inc
Post by: Okonomen on November 16, 2019, 10:14:43 AM
A back-of-the-envelope attempt to value Fox could be this:

Normalized EPS: ~3 USD (earnings will be somewhat lumpy due to political elections, sports events and renegotiations (affiliates and sports rights)
Multiple: 15x (Peers trade lower but Fox has unique assets, significant growth opportunities and a strong moat. S&P trades significantly higher and I think Fox boasts much more quality than peers both on biz model and on balance sheet strength)
Non-core assets ex cash: 7 USD/share (roku stake, STG stake, studio lot and the tax asset. The tax asset alone I value at around 4 USD/share)
Excess cash: 3 USD/share

Total value per share: 55 USD (~64% upside)

I don't really have an idea of how much earnings flow thru the P/L from non-core assets, but I think it's minor?

Have I forgotten something here? EPS considers interest expense so I don't think I forget anything regarding debt. I think it would be double counting to assume share count reduction from the recent buyback announcement