Harry, what is your thoughts on the gap from last August? Do you base it on London listing or ADRs? What do you see as the gap for London? A Google chart on London performing hand calcs for reverse split shows 189p and change but a chart Nige has referenced shows a close of the London gap already occurred.
Bingo Tiglet. That has been my point all along. I might be a broken record but nobody can put any valid argument back against my song. $68B for a contract that could be lost in a handful more years should it even be completed with DTV this go round. Last contract had four year term. If Sunday Ticket is so important to be renewed to be a deal breaker them why $68B for such a vital piece you could lose in another four years? The Stephenson logic doesn't add up here. Something smells like a stinky fish.
Search "DirecTV Said to Be Near Renewal of Deal for ‘NFL Sunday Ticket’" Quote from the Bloomberg piece dated Dec. 12, 2013
"Last year, about 2 million DirecTV customers paid for “Sunday Ticket” out of its 20 million U.S. subscribers." So roughly 10% of DTV subscribers might be retained while many others could migrate to streaming video which Ergen is preparing for with his web based bundle. Think about the DISH web bundle to be launched. All the core basics (package is said to leave out junk channels) plus Disney programming contract PLUS his Blockbuster Movie Ticket bundle likely included one way or another. Ergen setting up a solid streaming lineup package. Jose can you see, the light? If he grabs NFL Sunday Ticket from DTV's hands he will have the boom stick of all boom sticks in streaming packages. I don't know why anyone would bother with other streaming bundlers at that point. Same Bloomberg piece referenced above, "While the company has offered the package since 1994 and is one of the few pay-TV players with national reach, the NFL has said it talked with a wide range of suitors." DISH is flashing some leg at the NFL today....
Initial find was Australia network problems but now see "Vodafone slides on analyst downgrade" as Merrill Lynch cuts VOD from 'buy' list. Citing concerns of convergence strategy and infrastructure spending. If this is the case then ML-BOA shouldn't have any telecom bundler of any kind rated a buy given EU telecom competition is heating up. Commented that others may be expected to go toe-to-toe but one item not mentioned is a lot of the competition is debt laden/highly leveraged and can't afford the upgrades VOD is undertaking let alone enter a bundled market position.
Ergen even acknowledges the dire outlook for satellite with the long term trend of streaming video as he launches a web based bundle. T is paying $68B for rights to a $1B/yr NFL contract.
I do have some sting from VOD target being removed but I have yet to see one of you T longs make a solid case for a long term $68B dilution with a fading satellite purchase. I've got news for you today. Ergen threw out some fodder for NFL Sunday Ticket bidding today. Looks like some pressure is getting added for DTV to pay up or open the door to bidding. Ergen just reversed the tables. He has Disney in the pocket and just put DTV on notice he would dance for NFL. How does DTV keep within T's takeover guidelines while keeping DISH shut out? DTV could be forced to pay up for NFL and in doing so may end up breaking off its sale to T. Let the plot thicken as the dance continues....
There was/is a network problem in Australia due to Optus network transmission issue. Vodafone says issue has been resolved (*except from parts of Western Australia). Some technology goon will get a backside reaming out of this deal.
Well said jwaltz. Technology can change rapidly with the right disruptors. Fiber with WiFi wicks is the place to be. Streaming mobile video. LTE doesn't hold the mass capability which brings WiFi into the picture.
I would consider T relatively safe unless DTV deal closes. That asset will be slowly written down over time as satellite loses revenue to streaming. DTV and AT&T caught in a quagmire by this shift. DISH announcing its move to a web based (no frills) bundle to be launched by EOY 2014 puts DTV at a crossroads with T's U-verse. DTV moving to a web based bundle to compete with DISH would put DTV in direct competition with U-verse TV online bundle. T is choosing to become a competitor in a low moat online pay TV market = being pushed by Ergen more than a Comcast/Time Warner merger. T should be staying out of the bundler market and focus on becoming the delivery pipe of choice with fiber and fiber/g.fast deployments for capex. DTV is a dinosaur T will right down. Some of the revenue might be recaptured through U-verse TV markets but much will be lost to fiber/pay TV bundle providers in markets T does not server. +$60B write down in the making? possible but could take course of 5-10 years to prove out. AOL-Time Warner took about two years for doubts and another for the unraveling to begin with 10 years to full dead weight assumption.
Ergen signaling now he wants in the mix for NFL Sunday Ticket gives NFL reason to push a stronger price. Just something to keep an eye on here.
P.S. Dividend seeker is the one that brought up government default so I was responding to that "if". You can kiss that frog's rear bumper. Seems many here fail to question management with blind faith. Most in the industry see little strategic potential. Possibly some headache with regulators as pay TV in 25% of the U.S. market will have a competitor removed. Regulators should mandate never ending net neutrality for online (web based) TV bundlers if U-verse takes out pay TV competitor DTV. T might have second thoughts if they will NEVER be able to throttle competition from the internet.
"DISH Network May Bid for NFL Sunday Ticket Rights" Piece also briefly discusses DISH's online establishment and terms of Disney network agreement. Ergen just threw out a bone for NFL to consider. I'm sure a Comcast/Time Warner would be interested in an open auction as well.
Could get interesting if NFL pulls the plug on exclusive talks with DTV.
If the U.S. gov't full fledged defaults then AT&T stock won't be a good place to be hiding either. Capital preservation under T could end up being a slow bleed from an asset purchase which will be slowly written down. Satellite is not a strategic acquisition as that market peaks.
Never say never because...
"31 January 2012
Sky builds on broadband growth with increased coverage, 10,000 WiFi hotspots and new fibre launch"
"BSkyB Broadband Plans With TalkTalk Challenge BT in U.K.
By Amy Thomson and Sam Chambers Apr 15, 2014"
"BSkyB Appeal for Vodafone Grows Amid Deal Spree: Real M&A By Amy Thomson and Kristen Schweizer Jan 29, 2014"
Problem is Sky has found themselves in a bloody match with BT who is getting very aggressive on futbol bidding and is launching a high speed fibre network buildout. I've not studied who owns the lion's share of U.K. wired market but with G.fast technology nearing commercialization I would think Sky might be a decent target as infrastructure costs would be vastly cheaper installing a fiber backbone instead of a 100% fiber-to-the-home expense. Never say never Nige but Sky was caught flat footed by BT.
I'm talking about a MINORITY foreign ownership stake in VOD vs. all of T takeover that was proposed. VOD's markets served covers a massive number of countries. Most of those don't want the U.S. or China spying. No net difference from a VOD network ownership as both are foreign spies. I understand your point as the British are U.S. allies and most rightfully distrust the Chinese but from a pure intrusion standpoint you still have someone looking over your shoulder. The imbedded phone spyware was not the matter of discussion here. A 5-20% ownership stake possible by CHL in VOD was under discussion. There is little U.K. law could do to prevent such a deal from happening IF VOD became such a target for CHL.
He is correct. My point is you won't know what OCC will determine on the options until after the deal gets approval through regulators.
LOL Most in the industry still scratching their head over this move. One went as far as saying everyone is laughing at Stephenson's move for DTV.
T has a bean counter shot caller playing financial engineering games. "never" say "never" applies beyond T so I laugh at the thumbs down.
AOL-Time Warner. DTV is the AOL in this situation and T is short sighted enough to want those assets. DTV is a mature market with heavy competitive pressure coming via streaming video. The market moat isn't deep or wide for online bundlers. Cable and satellite had an entry moat of good size but pay TV being piped over internet from land line ISPs (which would include cable ISP) is starting to render the value of satellite and cable castles much, much lower. AOL got blind sided and the premise for AOL-Time Warner was bundling potential. Bundling potential. Sound familiar? DTV will be a massive write off in due time. Will take a fair number of years but it will happen. DTV is all financial engineering with one exception. NFL Sunday Ticket being tucked into an online TV bundle would help differentiate U-verse TV from the field. That is the only strategy but one that is subject to periodic contract negotiations. Is a contract with NFL worth $68B? I don't think so when NFL could potentially exit the deal when the next contract expires.
Sentiment: Strong Buy
I'm leaning towards the bottom has been made. That breakaway gap from last August finally closed, per your chart, although a few months back I would have called you nuts to state it would. I posted yesterday I have no dry powder left as I bought in.
Machine-to-Machine (M2M) is growing and set to blossom. Could be a wise move but we know little about the underpinnings for the purchase. Do think it is a smarter play than buying a satellite provider. With M2M the big item is data transmission and Colao has wisely spent VZ Wireless proceeds to properly position VOD for communications of the future.
It isn't like AT&T would be any different. Instead of preloaded the NSA just logs into the system and checks you out. What's the net difference between T or CHL?
Buying a dinosaur video delivery pipe in DTV. Fiber is the future of mobile video. $68B is a steep price to pay for NFL Sunday Ticket which has to negotiated periodically.
Revisited that link you gave. Looks like that breakaway gap closed on last Friday on your split adjusted chart. I have no dry powder left at this time but my buy was pushed by MACD indicator before I looked at your chart. The more one watches, it appears to always holds true on gap fills. Some just take longer than others. Thanks for the chart reference Nige. Bookmarked now. Your chart has a couple upside gaps needing filled now with highest needing closed up to 223.40p from May 12.
There were rumors once in the not-so-distant past that China Mobile wanted to take a minority stake of between 5-20% in Vodafone. "Chinese state-backed telecom giant China Mobile looks at buying Vodafone stake" January 2014. Some analysts believed it would not happen on the basis that T would buy VOD keeping CHL from getting a deal struck. A Joint Venture with CHL would be interesting given the mobile wallet population exposure SmartPass could be presented to in China.
Stephenson took a wrong turn down a dead end street.