With the decline in ratings slowing, second-quarter ad revenue is likely to be flat as media companies start to report Q2 earnings, analyst Michael Nathanson of MoffettNathanson Research said.

In a report Thursday (July 19), Nathanson upgraded his ad revenue forecast to a 0.5% decline to $9.2 billion. The slight decrease follows five straight quarters of much steeper declines.

Cable networks show a 0.7% increase to $6 billion. Nathanson adjusted Disney upward to flat because of additional NBA playoff games, and lowered Viacom because of ratings issues. The big gains in the quarter are at 21st Century Fox, Discovery Inc. and Time Warner. Viacom is expected to be down 3% in ad revenue.

Nathanson sounded a note of concern in regard to domestic cable affiliate fees. He said he sees their growth slowing to 4.5% in the quarter, which could be the smallest increase in four years as the impact of big-bundle pay TV cord-cutting takes hold.

On the broadcast side, Nathanson sees revenue down 2.6% to $3.2 billion, factoring gains at ABC from the high ratings Roseanne garnered before being canceled and revenue Fox generated for early World Cup action.

Related: Fox Sports Finishes World Cup Coverage on High Note

The quarter has been a good one for media investors, mainly because of the bidding war for 21st Century Fox and the closing of AT&T's acquisition of Time Warner.

“The upshot of all this craziness is that media stocks enjoyed their best quarterly performance in a long, long time, with almost every company – except Viacom – significantly outperforming the S&P 500, driven by multiple expansions,” Nathanson said.

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