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June 06, 2008
Kung Fu Panda and the Upfront
A few brief items in the media world for this morning:
Kung Fu Panda opens today. The film has received good reviews and there has not been a major child focused film in theatres since Horton Hears A Who. A strong marketing campaign, good tracking data, and the usual optimism about funny talking animals has box observers optimistic about the opening. Most estimates are in the low $50 million range but I sense that a higher number might be what the experts are really thinking. DWA shares pulled back more than 2% in yesterday's strong market from a new recovery high. I think the stock will rally on anything over $50 million but that a significant up move will require $60 million plus. Analysts are projecting a healthy $200 million for the total North American box office run. I think this is the minimum required to support DWA shares at current levels. $250 million or more is necessary for significant and sustained upside.
AdAge.com is reporting that NBC completed its upfront sales with $1.9 billion, up $100 million from a year ago....
....This is a better than expected performance and boosts confidence that the total upfront could eke out a gain. A small gain is not as much as it seems however, as NBC's "up" year is at least partially fueled by its decision to sell a greater percentage of its inventory in the upfront. Analysts are speculating that advertisers are willing to lock in current pricing to avoid a repeat of last year when scatter pricing on unsold inventory soared to a 15-20% premium to the upfront. ABC and FOX are generally thought to be in the lead in this year's upfront seeking prices increases of high single digits and low double digits, respectively. These levels would be enough to offset last TV season's ratings declines and produce a flat to slightly higher industry wide upfront on similar inventory sellout ratios. I'd consider this outcome a success as far as national ad-supported media stocks are concerned.
Posted by Steve Birenberg at June 6, 2008 07:40 AM in DWA
YESTERDAY,THE MARKET WENT UP 200 POINTS FOR NO GOOD REASON AND TODAY THE MARKET HAS DROPPED 200 POINTS FOR NO APPARENT GOOD REASON.IT SEEMS AS IF WE HAVE NOT GOT TO THE TURN ON EITHER THE RECESSION OR THE BEAR MARKET AND THAT ONLY THE BIG GUYS/TRADERS CAN MAKE MONEY IN THIS KIND OF MARKET.ONE HOPES THAT THERE WILL BE A RISE NEAR ELECTION TIME.IF THAT DOES NOT COME TO PASS ,CASH MAY BE THE BEST INVESTMENT.
Posted by: MP at June 6, 2008 09:31 AMWell it got even worse. Down $400. While I do agree that "we have not gotten that turn" and remain in a broad trading range, I think the action the last two days is understandable. On Thursday we had data suggesting that the economy is avoiding recession and could even begin to recover later this year. GDP growth is what the bulls need. On Friday, we got the worst possible combination: bad jobs and higher oil which equates to recession and inflation. Since I see the trading range as being within a bear market the risk is higher on negative news than the reward is on positive news. A breakout from the trading range remains more likely to the downside in my view so I would be cautious on making new buys and keep a well above average level of cash relative to your usual investment strategy.
Posted by: Steve at June 7, 2008 10:35 AM