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April 11, 2006
News Wrap Up on NTL
Given Northlake's new long position, in NTL Incorporated (NTLI), I pay close attention to the press reports out of the UK. I follow them via Google News doing a simple daily search on NTL. Sunday's articles were particularly interesting. First, there is an interesting profile of Richard Branson's history with Virgin Mobile and some of his other investments. There is also a favorable profile of new NTL CEO Stephen Burch. If you are interested in the bear case for NTL and U.S. cable companies, this article outlines the potential pricing competition for triple play and quadruple play services. I touched on the pricing issues, especially for the low fixed cost business of high speed data and telephony on Media Talk in my Midwest Media Day summary when I reviewed the DirecTV meeting. Finally, there is an article outlining the fact that the Virgin Mobile deal terms include a requirement that Branson vote his shares with management in the event of a hostile deal. This could have relevance if strongly rumored private equity interest turns to reality.
Posted by Steve Birenberg at April 11, 2006 07:50 PM in NTLI
All the media stocks and especially cetv have taken large drops in the last week or so.Do you think this reflective of a lack of news at present or is something more substantial going on?
Posted by: mp at April 12, 2006 12:22 PMI think CETV is under pressure because of concerns about the advertsiing trends at TV Nova in the Czech Republic. First, the governemnt auctioned some new digital licenses. This will create several new competitors in the long-term. In the short-term, concenrs about how weak the first half of 2006 will be given that Nova is agressively raising prices and advertsiers are resisting. I sense that 1Q results in Nova will be a little worse than expected but that they will easily make that up later this year. I have always assumed 4% growth. Some analysts are assuminghigher than 4% growth so that is the potential issue.
Posted by: Steve at April 12, 2006 12:46 PM