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Movie Mogul Says Don’t Give Up on Netflix

Sometimes the best market insights come from the people who are in the thick of things and few business titans are more in the middle of media than Todd Wagner, the co-founder of Broadcast.com and co-owner of 2929 Entertainment with Mark Cuban.

Wagner is among the nation’s most dynamic entrepreneurs; he launched his business from nothing in 1995, took it public in 1998 and then sold it Yahoo! for $5.7 billion in 1999.

Using his success at Broadcast.com as a platform, Wagner then built the Wagner/Cuban Companies, an innovative portfolio of companies that spans content creation, distribution and exhibition.

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Wagner also has a stake in the Dallas Mavericks, and he continues to invest in and nurture start-ups. He holds interests in Lions Gate Entertainment, and The Weinstein Company.

Among Wagner's claims to fame - he revolutionized how movies are distributed by putting them on demand first then releasing them in theaters.

Considering his strong connection to the media industry the Fast Money pros were eager to hear his thoughts on a number of companies – but none more than Netflix. Following are his comments:

Netflix

”I wouldn’t give up the ship on Netflix ,” Wagner tells us. He compares Netflix’ current state of affairs to the early days of Amazon when investors were skeptical of Jeff Bezos. But Amazon, not only survived, it thrived as the Internet evolved.

Wagner suggests that Netflix CEO Reed Hastings may be like Jeff Bezos. “I believe that Netflix has enough time - they get that they've made mistakes and I wouldn't give up the ship."

And if you have a long term time horizon Wagner says, “I would bet on a guy like this.”


Yahoo!

“Yahoo! is facing a classic case of brain drain – they have to get their mojo back,” says Wagner.

Although that my sound challenging, Wagner doesn’t think it’s impossible by any stretch. “They need the right leader," he says. "And they need to take drastic measures." But with the right CEO and an aggressive game plan, Wagner adds that they could certainly turn around. Time will tell.

LinkedIn

”LinkedIn may be a fabulous company, but we have to wait and see. It's always difficult to predict how to a company will go from start-up to public firm. It's like annointing Lebron as the next Michael Jordan - how about he wins a few times first.”

LionsGate

”I like these guys and I believe they will do what's right for the business. At LionsGate the TV side of the business has done well and they’re sorting through what to do with the movies. They’ve done a good job.”

Gridlock in Washington

We also talked with Wagner about the gridlock in Washington, a topic about which Wagner feels strongly.

”(Americans) are tried of the far left and the far right owning the conversation,” he says. It comes at the detriment to what most Americans believe – which is we need compromise.”

Here’s what Wagner would like to see.

1. Either raise takes on mega rich of have each hire 10 people and generate new jobs
2. Implement $1 per day “proud to be an American Tax” for 50% of people not paying Federal income tax
3. Raise the age on Medicare gradually
4. Remove mega-rich from social security and Medicare



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Trader disclosure: On Dec. 6, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Cortes is long Treasuries; Cortes is long TSN; Cortes is long K; Cortes is short AAPL; Cortes is short EUR; Cortes is short MXN; Cortes is short GBP; Cortes is short AUD; Cortes is short XRT vs. S&P long; Terranova is long EMC; Terranova is long SU; Terranova is long NCR; Terranova is long UPC; Terranova is long TRLG; Terranova is long VRTS; Terranova is long LQD; Terranova is long MUB; Terranova is long AXP; Terranova is long IBM; Terranova is long HES; Terranova is long CAT; Terranova is long SWN; Terranova is long CNI; Terranova is long DECK; Terranova is long SBUX;

Lou Kerner
Owns Facebook shares

Tony Wible
Netflix (NFLX): I, Tony Wible, the Primarily Responsible Analyst for this research report, hereby certify that all of the views expressed in this research report accurately reflect my personal views about any and all of the subject securities or issuers. No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views I expressed in this research report on.

Robin Farley
1. UBS AG, its affiliates or subsidiaries beneficially owned 1% or more of a class of the following companies' common equity securities as of last month`s end (or the prior month`s end if this report is dated less than 10 days after the most recent month`s end): MGM Resorts International, Wynn Resorts

2. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided.: International Game Technology, Las Vegas Sands, MGM Resorts International, Wynn Resorts

3. Within the past 12 months, UBS Securities LLC has received compensation from this company/entity: International Game Technology, Las Vegas Sands, MGM Resorts International, Wynn Resorts



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