• by Wayne Friedman , October 9, 2017

On news of an analyst’s estimate of expected weaker revenue from future carriage deals, Viacom stock was sharply down on Monday.

In a note to investors, Jason Bazinet, media analyst of Citigroup, is particularly worried about upcoming negotiations with Charter Communications, a large cable operations group. Bazinet says many cable network groups can no longer count on steady and growing affiliate fee increases.

Viacom’s stock closed down 6.4% to $25.41 on Monday. Another cable network-only group, Discovery Communications, lost 2.7% to $20.83.

Discovery’s stock was the subject of a media analyst note from Michael Nathanson of MoffettNathanson Research: “At Discovery, the continued decline of traditionally distributed MVPDs will likely pressure future affiliate fee growth.”  

Nathanson is also concerned about Discovery’s potential acquisition of Scripps Networks Interactive, as he downgraded near-term advertising revenue projections for Scripps. He continues his sell recommendation of Discovery.

On a day where the broader indexes were relatively flat for Dow Jones Industrials (down 0.06%), S&P 500 (losing 0.2%), and Nasdaq (also losing 0.2%), a number of traditional TV-based stocks were also sharply down, including TV station groups.

Sinclair Broadcast Group was down 2.6% to $31.40, while Tegna lost 3.3% to $12.97 and Nexstar Media Group lost 1.4% to $61.85.

Pay TV satellite provider Dish Network was also sharply down 3.1% to $51.67, while cable network group AMC Networks lost 2.1% to $57.76.

The Dow Jones U.S. Broadcasting & Entertainment Index slipped 0.8% to 1253.94.