Collateral Damage To TV Station Groups From Charter-Disney Issues?

The spillover effect of the Charter-Disney stalemate of a TV network distribution deal is hurting TV station groups over the last week, with stock prices plummeting.

Stock prices for Nexstar Media Group, the biggest U.S. TV station group, are down 19% over the last five days since news broke of the Charter-Disney carriage issues.

Nexstar is also down 22% year-to-date, with its stock now at $135.56 through mid-day Thursday trading of its stock. 

The second-largest TV station company, Sinclair Inc., is 21% lower to $10.05. Sinclair’s stock has fallen 34% since the beginning of the year.

Analysts are speculating that Charter Communications, the second-largest pay TV company with 15 million subscribers, is ruminating a radical change in its carriage deals with TV broadcasters: Dropping some TV networks and stations entirely from its lineup.

The concern is that other pay TV carriers will do the same.

Curry Baker, media analyst at Guggenheim Securities, says these issues should be viewed as limited in scope.

“The Charter-Disney dispute is more related to Disney's unique set of assets and less relevant to broadcast TV station groups (we note several station groups have renewed with Charter over the last 12 months without disruption).”

The broader viewer shows TV broadcast stations have since their stock prices sinking since the first of the year -- as cord-cutting by TV consumers of pay TV bundles continues to rise.

Among other TV station groups, Tegna is off 7.0% to $15.43 -- down 27% since the first of the year -- while Gray Television has declined 15% to $7.02, and 36% year-to-date.

One of the biggest hits came with E.W. Scripps -- which had a steep drop of 26% to $5.74, and fell sharply by 57% since the beginning of 2023.

As part of this major change, Charter is demanding that part of its overall carriage deal with Disney should include carrying streaming platforms -- like Disney+ and ESPN+ -- with no cost to them.

Disney's stock price has been down 5.2% over the past five days to $80.13 through midday Thursday trading, while Charter has dropped 5.3% to $416.44.

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