I don't think expenses are a factor here.
Programing costs, too some extent are, since PAX had to
prove to potential buyers that they could make a go of
it on their own, by getting quality advertisers.
This was done, so now the main issue--selling the
channels and stations is on the table. If Bud's initial
purpose was to just air family programs and make a
profit, he didn't have to buy 70plus stations and have 7
channels. His primary objective would have been to develop
successful programing first, then expand his empire. Without
any indication that family tv would succeed, PAX
continued to purchase stations. What Bud has done is create
a very salable product that will make him a fortune
for a short term, high risk gamble.
That is very cute, web. I like it and agree with
the implications for PAX.
I remain an admireor
of Bud Paxson. He is smart and decent. His
conception for PAX is brilliant and important for American
society. I believe the professor on CNBC a while back who
proved there is a great supply/demand imbalance for G
rated programming. Among other things, he said that
only 2% of movies made are rated G while 30-40% of
Americans have a strong preference for G rated movies.
There are many millions of people, thruout the USA, who
are seeking a steady diet of family programming who
are only kept from it because they don't know where
to find it.
I do doubt whether Bud has the
skills to manage operations sufficent to grow PAX to its
full potential without getting bored. That doesn't
mean I think he is a loser. To the contrary, I think
his heart is strong and worthy of our investment
In a nutshell, I think Bud should sell; I hope he
does sell but I do think he is resisting. I also hope
his idea continues to live on, that PAX might keep
its identity and basic mission, and that we would
someday see a 4.0 rating. How that gets PAX as big as
MSFT, I dont quite see.
NBC is a know and profitable name...it's a
business like McDonalds. Pax is the POTENTIAL for a
business...like a charcoal grille.
Why was Bud able to buy
all these stations???
Because he paid too much for
Was he smart...maybe...if he bought them to
But he says he's NOT selling
Is he a liar...no I
don't think so
Is he a fool...right now...yeah he
He's feeding his ego...not his stock holders
wants to own a network...he ALREADY live like a
Being richer won't put him on the cover of Time...being
the owner of a network will.
When will he wise
up....when the money runs out
Will the money run
After a full year there aren't 5 pax stations paying
their own way...There is NO demand for a one
71 charcoal grilles isn't a chain of
resturants...and it's dumb to compare them to McDonalds
Female 47 average income
Why do you think that
all the newer networks (Fox, UPN, WB) are young
skewing??? That's where the ad dollars are.
one hope for the new Pax shows?? That it would take
them younger...have they?? NO!!
Older women ("50 to dead" is the broadcast
expression) make up PAX's largest demographic segment. This
is the group that watches more TV period. It is less
desirable to advertisers who tend to covet Persons 18-34
and persons 18-49.
FCC hammers out new rulings...2 months
goes bust.................6 more months
Pax...............3 more months
more months (it's 71 stations)
approval..................6 more months
I wish they'd sell TODAY...but
it's 6 to 9 months fast track
25 to 35
dollars...that's what the FCC paper is worth
Umedium...informative link!!! I am interested in
Dreyfuss now that I see their interest here. Let's call it
"Reverse Investing". Catspro, thanks for the breakdown on
ask/bid, etc. Very informative. The more I find out
regarding MM, etc, the more I question how "invisible" the
hand is in our economic model.
programming...even if the ratings are low, don't we need to take
into account earlier Sagansky statements saying high
ratings are not critical?
The post volume is
incredible to L-T members!!!
TV stations are businesses...that sell
ADVERTISING. When they sell it's their ability to sell ads
that sets there value.
The Pax Network does a
.7 that's LESS then 1% of the audience. Out of 71
Pax stations there aren't 5 that are making money (
actually just 2)
The NBC affiliate in Sacramento
that sold for $540M was sold for a very high 18X cash
flow. That's how stations are sold. That station is
turning a $30 million profit. It's an NBC affiliate a
know and valuable name brand. The stations averages a
11 rating (16X the pax rating)
Pax is loosing
about 8 million dollars a month...count the program
contracts and add another 1 mill...that's minus 9 million
How much is a business that looses money
worth...NOTHING. If Pax sells for a 100X cash flow that's NO
That leaves selling the stations wholesale for what
they are broadcast spectrum. In TV you are only as
good as your shows...the BEST Pax shows only do a 1.
First...Last week Pax did a 1.1 rating...do any
of you know what they did the week before??? I
do...a .9 that's no change
This "news" article is
a PR piece from the Pax HQ in WPB...the new season
is a disaster...up only slightly from the re-runs
they were running the week before.
A 1 in prime
ISN'T good news. Usually programs premiere bigger than
they end up doing (people sampling a new show). Bud
says he only needs a 1 to make money...he's had
several (but not many) stations doing 1's for
months...how many of those stations are making money??
These stations will HAVE to sell...Pax wil NEVER make
money. Sale price 25 to 32 dollars per share
What is the worst that could happen with PAX?
1) The GE/NBC talks could fall apart
There are other potential buyers for a cleaner
2) No other buyers show up...
The stick value of
PAX covering 70% of U.S. is probably around
PAX will have reduced expenses going forward.
expected to relax rules further.
Approaching year 2000,
quadrennial year, elections are all bullish for advertising
3) PAX could announce a partial deal with GE/NBC for
33% of company keeping the dream alive.
probably send PAX into the 20's at
Conclusion: downside $12 short of major market meltdown