Lights, Camera, No Action
Entertainment stocks are finally feeling the heat from Wall Street as the writer’s strike drags on with no end in sight. Which media companies are best prepared to weather the storm as they stare at a long, cold winter with no new material?
CNBC’s Julia Boorstin reported that the strike couldn’t come at a worse time for the big media names. Traditional revenues – television viewership and DVD sales – are slowing and new revenues – digital distribution, international sales and HD DVD sales – aren’t growing at a fast enough clip to compensate.
And with the strike possibly carrying on through the winter, television programming will really start to feel the effects by the first quarter of 2008, according to Boorstin. Sports and reality programming will stand to benefit, but not every media company is well-equipped in those arenas. Disney (DIS) has ESPN. News Corp. (NWS) – probably the most diversified of any of the media stocks – has American Idol. CBS (CBS) is the most exposed to both the strike and an advertising downturn because it does not have a strong reality television roster, Boorstin said.
All this does is give investors more reason to turn to the web, Pete Najarian said. Stick with Google (GOOG) over any of the traditional media companies.
The way to go with the web is ValueClick (VCLK), Karen FInerman said, which is a play on internet advertising.
Guy Adami would stick with Disney, despite the flood of bad news it and its competitors are faced with. He thinks CEO Bob Iger should be given the benefit of the doubt.
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Trader disclosure: On Dec. 10, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Macke Owns (DIS), Macke Owns (ATVI); Najarian Owns (ETFC), Najarian Owns (PHM) Options, Najarian Owns (TSL) Options, Najarian Owns (BHP) Options, Najarian Owns (GOOG), Najarian Owns (BIDU), Najarian Owns (EMC) Options; Finerman's Firm Owns Russell 2000 Puts, Finerman's Firm Is Short (MDY) And Owns (MDY) Puts, Finerman's Firm Is Short (SPY), Finerman's Firm Is Short (IJR), Finerman's Firm Is Short (IYR), Finerman's Firm Is Short (IWM), Finerman's Firm Is Short (MBI), Finerman's Firm Owns (LEH) Puts, Finerman's Firm Owns (GS), Finerman's Firm And Finerman Own (HD), Finerman's Firm Owns (LOW), Finerman's Firm Own (XHB), Finerman's Firm Owns (SKS), Finerman's Firm Owns (NYX), Finerman's Firm Owns (NMX) And (NMX) Options, Finerman's Firm Owns (TWX), Finerman's Firm Owns (TXI); Vivendi Owns 20% Of NBC Universal, The Parent Company Of CNBC