Stocks of both broadcasters distributors can feel the pnch of a prolonged blackout, according to a recent analysis by research stalwart SNL Kagan, but it appears that the bigger a combatant is, the better they can whether the financial storm.
In a research report Thursday, SNL Kagan noted that Journal Communications, whose six stations in Milwaukee and Green Bay, Wis., Omaha, Neb., and Palm Springs, Calif., went dark to Time Warner Cable subscribers in those areas on July 25, the stock has dropped about 20% ($2.02 per share) to $7.30 each on Sept. 16. During the same period, Time Warner stock has fallen about 4%.
But Kagan noted the Time Warner decline may be more to the residual effects of a larger dispute with CBS, which was resolved on Sept.2, after the broadcaster’s owned & operated stations pulled their signal to about 3.2 million TWC subscribers in New York, Los Angeles and Dallas for one month.
According to Kagan, TWC stock felt the brunt of the impact from the CBS dispute – its shares were down as much as 9% to $107.35 per share on Aug. 30 from $117.68 on Aug. 1. On Sept, 2, TWC shares began their rebound, closing at $114.90 each on Sept. 18.
For CBS stock, the impact wasn’t as dramatic. Although the stock dipped about 7% to $50.85 on Aug. 21, its lowest point during the dispute, each from $54.53 on Aug. 2, it quickly gained that ground back, closing at $53.50 on Sept. 3. The stock fully recovered by Sept. 18, closing at $56.81 per share.