So far, in my opinion, ABC (a division of Disney (DIS)) gets my vote for delivering the best new shows of the television season. We (my wife and yours truly) really enjoy watching Dirty Sexy Money and Big Shots. Both shows are quirky, avoid the formulaic model churned out by network TV, are not retreads and don’t have Law and Order or CSI in the title. The Disney Channel release of High School Musical 2 at the end of the summer was a formulaic hit which will generate secondary revenues for DIS in the months to come. ABC also premiered Cavemen this week which we unfortunately missed but plan to catch up on and watch in the future. Two new shows premiered this summer which I also highly recommend. The first one is also an ABC show, Greek. Our kids like to watch Greek with us, especially when I interject my experiences at Pi Kappa Alpha at the
So does this translate into an investible idea? Perhaps. First, I would eliminate General Electric (GE) the parent of NBC and NBC Universal. Why did NBC lack patience with Studio 60 on the Sunset Strip? CBS is stuck in CSI mode and is still a company operated by and for Sumner Redstone. I would avoid CBS as well. DIS will bore you to death but it has delivered consistent positive returns to shareholders despite some of the boardroom drama the company loves to surface every few years. I would not exactly categorize DIS as a growth company but if I was looking to down shift some risk, DIS would be a top candidate. Finally, there is News Corp (NWS). I really like what Rupert Murdoch is doing with the Dow Jones (DJ) acquisition and how it fits in perfectly with his new concept, Fox Business Network (best of luck to my dear friend and colleague Cody Willard). NWS has a similar risk profile to that of DIS. In fact, if you overlay a 5 year chart of DIS over that of NWS, the two companies’ stocks nearly tracks each other. So, I would put NWS in the same category as DIS and would be indifferent to add either one if those conditions I discussed above were presented to me.