Jon Lafayette

The creation of a new media giant with the acquisition of Time Warner by AT&T could cause strategic challenges for Disney and its ESPN unit, according to a new analyst report. Omar Sheikh of Credit Suisse notes that AT&T-Time Warner will have significantly larger earnings and cash flow than Disney. It will also have more than 50 million direct customer relationships in the US alone. “This will confer an enhanced ability to bid for sports rights from 2021 onwards, and thereby put pressure on Disney to invest further in ESPN’s direct to consumer distribution capabilities,” Sheikh said.

AT&T owns DirecTV, which has had to spend aggressively to keep its exclusive Sunday Ticket deal with the NFL. Sheikh suggests that Disney could grow by buying Twitter or Netflix, the companies it has been linked to recently. Or it could build its own capabilities. “We believe the organic option would be significantly less costly and give Disney the opportunity to tailor new services around its own IP,” he said. Credit Suisse continues to rate Disney stock “Outperform,” but Sheikh has lowered his earnings forecast for 2017. He cut his 2017-18 forecast 2%-4% to a range of $6 to $6.79 per share from $6.13-$7.09 a share. The cuts were driven by double-digit reductions in expectations for Disney’s cable networks and its consumer products group. He also cut his target price for Disney stock to $125 from $128.

Nielsen’s estimate of the number of TV homes in the US for the 2016-17 is 118.4 million. That figure is up 1.7% from 116.4 million home estimated before the 2015-16 season, which was little changed from the prior year. The number of people age 2 and up in those U.S. households is 201.7 million, up 1.6% from last year, Nielsen estimates. Increases in U.S. Hispanic, black and Asian households were also seen, the ratings company said. A year ago, people 2-plus, was up 0.3% The percentage of total U.S. home with television receiving traditional TV signals via broadcast, cable, satellite or telco, or having a broadband Internet connection is currently at 96%, up 0.8% from last year, but still down slightly from the 2014-15 season.

Univision said it filed a breach of contract lawsuit against Charter Communications claiming that rather than negotiate a new carriage agreement, Charter is attempting to impose rates and other terms of Univision’s agreement with Time Warner Cable, which was acquired by Charter. In papers filed at the Supreme Court in New York, Univision also claims that in government filings and public statements that Charter would be the continuing business after the merger and that Charter is acting in bad faith by enforcing Time Warner agreements in Charter cable systems.

Univision’s carriage agreement with Charter expired June 30. At the time of the merger in May, Time Warner Cable was larger than Charter and received more favorable terms from programmers such as Univision. Univision says Charter “has outright refused to negotiate a renewal agreement with Univision.”

Global advertising spending will rise 4.5% in 2014 and another 5% to $580 billion in 2015, according to a new forecast from media agency holding company GroupM.

The 2015 level of ad spending would exceed the previous pre-financial crisis and recession peak of 2007-2008 adjusted for inflation. In the US, GroupM sees spending rising in 2014 and 4.2% in 2015. TV spending is expected to rise 3% to $79.1 billion in 2014 and increase 4% to $81.9 billion in 2015.

Rentrak said it signed a multi-year agreement with the NBC Owned Television Stations to provide audience measurement and other data for three of its stations.

KNBC in Los Angeles, KXAS in Dallas-Ft. Worth and WTVJ in Miami will use Rentrak data, including single-source information about automotives and political advertising, to demonstrate the value of its inventory to reach customers.

Political advertising is expected to reach $8.3 billion in 2014, according to a new report from Borrell Associates.

Borrell says that two thirds of that money will be spent between July 1 and Election Day and that the bulk continues to go towards traditional media, rather than digital outlets.

Borrell says that candidates and political organizations will spend $37 per voter in 2014, up 9% from the last mid-term election. It expects spending to jump to $51 per voter in 2016, up 21% from the previous presidential election year in 2012.

The media business has been anticipating mergers on the programming side since Comcast agreed to buy Time Warner Cable.

In a new report, analyst Todd Juenger lays out a bunch of potential combinations and looks at their pros and cons. The major advantages would be increased leverage to grow affiliate fees as distributors consolidate, added international exposure and chances for cost savings by combining assets such as studios with networks.

Federal Court denied Viacom’s request to dismiss a suit by Cablevision Systems that charges the programming for antitrust violations in the way it bundles its cable networks.

In the suit, filed in February 2013, Cablevision charged that Viacom was forcing it to carry and pay for 14 low-rated networks in order to carry popular channels like Nickelodeon, MTV and Comedy Central. The cable operator also claims Viacom is unlawfully block-booking in the way it sells its channels.

“We are gratified the Court has ruled that Cablevision has stated a valid antitrust claim against Viacom for illegal channel tying,” Cablevision said. “We continue to believe that Viacom’s tying of its popular networks to carriage of its lesser-watched ancillary networks is illegal, anti-consumer, and wrong. We look forward to further pressing our case at the next stage of the proceeding.”

The ruling was made by the US District Court for the Southern District of New York.

A top CBS executive crowed about an agreement with GroupM to do ad deals using the C7 measurement scheme, but other media buyers said the deal wouldn’t affect their willingness to shift from the old measurement system.

CBS COO Joe Ianniello acknowledged reports that CBS had an agreement with the biggest media agency to do deals based on C7, which includes more viewers watching ads on a delayed basis.

“I think that [C7] is now going to become the standard. It only makes sense,” Ianniello said. “There is significant viewership outside of the first three days, and we think it’s fair that we get paid for it. I think you’re going to see more and more of these types of deals.”

Ianniello reiterated CBS’ estimate that counting more delayed viewing represented a “nine-figure” revenue opportunity. Ianniello said that the switch to C7 will highlight the disparity in viewing between CBS and its cable competition. He said that CBS would be focusing on generating ad dollars by using C7 for ad buys of primetime programming, or if some advertisers want to stick to C3, by selling those delayed impressions using dynamic ad insertions.

A new study by Nielsen finds that a small group of viewers watch way more than their share of TV. Nearly 50% of all TV watching is done by 20% of TV viewers.

These heavy TV viewers spend an average of 705 minutes a day in front of the tube, or almost 12 hours. Since 2009, heavy viewers have increased their TV viewing by 8%, or about a half hour a day.