GO
Loading...

No Hollywood Ending For Major Studios

A recent court ruling could chew into profits at some of the nation’s largest media titans. Find out what’s just happened!

Earlier this week, Redbox, a DVD rental kiosk company, won a partial victory over Universal Pictures after a judge in Delaware let antitrust claims stand.

Redbox, owned by Coinstar, is suing Universal and other studios, claiming restrictions on their movies artificially raise DVD prices and limit customer choice.

Specifically, Redbox takes issue with mandates from Universal that prevent its films from being made available in Redbox’s $1-per-night rental kiosks for at least 45 days after they go on sale. In a statement late Monday, Redbox President Mitch Lowe said, "The federal court's decision marks an important step forward in our effort to protect consumers' right to convenient, affordable access to new release DVDs at Redbox locations nationwide."

But what does this ruling mean for investors?

Pali Capital media analyst Rich Greenfield tells Fast Money the case could have very negative implications for media stocks because it impacts profits generated from the highly lucrative DVD market. “I think this is a real fear, says Greenfield. “For example, News Corp has 25% of earnings coming from the film business.”

If you hold media stocks he recommends keeping a close eye on developments. A court decision should come in 2010.


______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On Aug. 18th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Najarian Owns (HD) Sept. Call, Is Short (HD) Aug. Call; Najarian Owns (HPQ) Sept. Calls, Is Short (HPQ) Aug. Calls; Najarian Owns (MSFT) And Is Short (MSFT) Calls; Najarian Owns (PALM) Call Spread; Najarian Owns (TRLG) Calls; Najarian Owns (YHOO) Call Spread; Najarian Owns (BUCY) And Is Short (BUCY) Calls; Najarian Owns (INTC) And Is Short (INTC) Calls; Terranova Owns (AMZN), (STT), (MSFT), (KBHH); Terranova Owns (GOOG) Puts; Terranova Is Short (GOOG), (AVB); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Grasso Owns (ASTM), (BAC), (C), (COST), (PRST), (V), (WMT), (FAZ), (XLF)

NBC Universal Is The Parent Company Of CNBC

For Steve Grasso
Stuart Frankel And Its Partners Own (CUBA)
Stuart Frankel And Its Partners Own (GERN)
Stuart Frankel And Its Partners Own (MSFT)
Stuart Frankel And Its Partners Own (NWS.A)
Stuart Frankel And Its Partners Own (NXST)
Stuart Frankel And Its Partners Own (NYX)
Stuart Frankel And Its Partners Own (PDE)
Stuart Frankel And Its Partners Own (PRST)
Stuart Frankel And Its Partners Own (RDC)
Stuart Frankel And Its Partners Own (ROK)
Stuart Frankel And Its Partners Own (TLM)
Stuart Frankel And Its Partners Own (TMK)
Stuart Frankel And Its Partners Own (TRV)
Stuart Frankel And Its Partners Own (XOM)
Stuart Frankel And Its Partners Own (XRX)
Stuart Frankel And Its Partners Own (SDS)
Stuart Frankel And Its Partners Are Short (QQQQ)
Stuart Frankel And Its Partners Are Short (CL)

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO
Virtus Diversifier PHOLIO Owns (IGE)
Virtus Diversifier PHOLIO Owns (DBC)
Virtus Diversifier PHOLIO Owns (DBV)
Virtus Investment Partners Owns More Than 1% Of (ABD)
Virtus Investment Partners Owns More Than 1% Of (CAL)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (DBC)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (SKT)
Virtus Investment Partners Owns More Than 1% Of (TNB)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (CLB)

For Brian Stutland
Stutland Owns (MDAS)
Stutland Owns (BAC)
Stutland Owns (SPY)

For Rich Greenfield
Pali Capital Is A Market Maker In (NFLX), (CSTR), (NWS.A)

CNBC.com with wires

Symbol
Price
 
Change
%Change
OUTR
---
FOXA
---

Featured

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET

Halftime Report