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30 April 2012
U.S. MEDIA TV Upfronts: What Investors Should Expect
As the annual TV upfront ad-selling process gets underway, the tone of the US TV advertising market remains fairly upbeat. We think this could be another strong upfront, although it may not be as robust as last year’s. We estimate 2012-2013 broadcast TV upfront revenue will increase 4% y/y, and we think cable will fare slightly better with dollar volume up 6% y/y. We expect another strong upfront…CBS continues to have the best ratings story of the broadcasters, which should support best-in-class pricing. We project CBS will lock in CPM increases of +10%, ABC +8%, Fox +9%, and NBC +7%. We believe this year the broadcasters will generally sell slightly less inventory in the upfront compared to the historically high levels of sell-out from last year. …although it may be difficult to top last year’s upfront. This time last year, the economic outlook was generally optimistic and broadcast scatter pricing was pacing an impressive ~25-40% above 2010-2011 upfront levels. While sentiment has improved year-to-date, we believe the “set-up” for this year’s upfront is not quite as favorable as last year’s; macro uncertainty and European contagion risks remain, which could modestly limit upside. Auto advertising driving ad improvement. The seasonally adjusted annual rate (SAAR) for light vehicle sales in the US has sequentially increased for eight straight months from June of last year through February of this year; March SAAR of 14.4M, while slightly down sequentially from February, was still a solid result. We believe these datapoints bode well for auto advertising since it is the largest category and represents an estimated 20% of all network and cable TV advertising. Digital “newfronts” involving online advertisers in the upfront conversation. For the first time ever, several digital media firms including AOL, Google, Hulu, Microsoft, and Yahoo! will be having upfront presentations, in hopes of accelerating the shift of ad budgets to the internet. Some digital media firms are emulating the TV sales process by selling gross ratings points and guaranteeing impressions for online ads, much in the same way that is currently done with TV. Tweaking up US ad forecast, driven by higher internet estimates. Owing largely to the improved / “not as bad as once thought” macro outlook, we are taking the opportunity to tweak up our 2012 US ad forecast to +4.6% y/y (from +4.0%). We have raised our estimates the most for internet advertising and have also tweaked up our political advertising estimates.
INDUSTRY UPDATE U.S. Media 2-NEUTRAL Unchanged U.S. Media Anthony DiClemente, CFA 1.212.526.1341 email@example.com BCI, New York Bo Tang 1.212.526.9297 firstname.lastname@example.org BCI, New York
Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. PLEASE SEE ANALYST(S) CERTIFICATION(S) AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 14.
Barclays | U.S. Media
2012-2013 Upfront Preview
The upfront process has already begun for some networks—including those for The Disney Channel, Nickelodeon, FX, Discovery, Scripps, and MTV—with the broadcasters’ upfront presentations to take place during the week of May 14. While the annual TV upfront adselling season should be viewed as only one indicator of the health of the broader advertising market, it is important to the networks as it allows them to book a significant portion (75-80% for the broadcast networks, 50-60% for the cable networks) of their inventory in advance. We think that for the networks best positioned heading into the upfront, double-digit CPM increases could be within reach. This is consistent with comments from CBS CEO Les Moonves at a competitor conference in late February in which he predicted that CBS is “going to get double-digit increases in the upfront.” On the cable side, Fox Cable ad sales president Lou LaTorre predicted at the FX upfront in late March that “the high end of the cable market would secure CPM increases of 11-12%.” 1 Based on season-to-date ratings and current pricing in the scatter market, we estimate upfront prime-time sales to increase 4.3% y/y to $9.49 billion for the “big 4” broadcasters (ABC, CBS, FOX, and NBC) and 6.3% y/y to $9.88 billon for the cable TV market. Figure 1: 2012-2013 Upfront Calendar
February & March Network BBC America Fox News Channel The Hub Disney Channel Nickelodeon NBC News/MSNBC The Hub ABC Family Scripps Network IFC Fox News Channel AMC Discovery Scripps Network Nickelodeon Cartoon Network Scripps Network BBC America FX April Network Scripps Networks Bravo Discovery BET Networks BET Networks BET Networks Scripps Networks Style Network Discovery Hulu NewFront Bravo BBC America Nickelodeon Scripps Networks MSFT Ad Digital… AOL Digital NewFront Syfy Yahoo Digital NewFront Bravo Oxygen DIS Interactive NewFront MTV Scripps Networks E! May Network NBCU Digital NewFront YouTube Brandcast Scripps Networks A&E Networks NBC Fox ESPN Univision ABC Discovery U.S. Hispanic Telemundo Turner Broadcasting NCM Media Networks Fox Hispanic Media CBS The CW USA Network
Date Mar. 7 Mar. 8 Mar. 8 Mar. 13 Mar. 14 Mar. 15 Mar. 15 Mar. 19 Mar. 20 Mar. 20 Mar. 21 Mar. 22 Mar. 22 Mar. 27 Mar. 27 Mar. 28 Mar. 29 Mar. 29 Mar. 29
City LA LA CHI NYC NYC NYC LA NYC BOS NYC CHI NYC CHI DET LA NYC MIN CHI NYC
Date Apr. 3 Apr. 4 Apr. 5 Apr. 12 Apr. 16 Apr. 18 Apr. 18 Apr. 18 Apr. 19 Apr. 19 Apr. 19 Apr. 19 Apr. 19 Apr. 23 Apr. 24 Apr. 24 Apr. 24 Apr. 25 Apr. 25 Apr. 25 Apr. 26 Apr. 26 Apr. 30 Apr. 30
City DAL NYC NYC LA CHI NYC CHI NYC LA NYC DAL NYC CHI NYC NYC NYC NYC NYC CHI NYC NYC NYC ATL NYC
Date May 1 May 2 May 3 May 9 May 14 May 14 May 15 May 15 May 15 May 15 May 15 May 16 May 16 May 16 May 16 May 17 May 17
City NYC NYC LA NYC NYC NYC NYC NYC NYC NYC NYC NYC NYC NYC NYC NYC NYC
Source: CAB, Digital Content NewsFronts, MediaBizBloggers.
“Upfront and Center,” Ad Week, 4/16/12.
30 April 2012
66 7. 4.60 13.95 7. rather than upfront (the only time in recent years when scatter paced below upfront pricing was in 2008.2% 5.53 (3.95 39.4% 1.60 2.90 2.9%) 9.0% $2.0% 1.5% 6. SNL Kagan.59 1.20 1.00 37.4% 1.3% Y/Y Broadcast Network Prime-time Upfront Sales CBS FOX NBC $in Billions Y/Y % $in Billions Y/Y % $in Billions $1.5% 5.37 9.0%) 7.5% 40.1%) 44.8% 5.40 (13.7%) 7.6%) 1.5%) (12.94 2.65 8.04 (5.3% above last year’s all-time high of $9.01 1.20 11.0% (6.8% 8. FOX.2%) (29.05 1.49 13.5%) 1.63 (5.60 1.45 1. CBS.21 16.60 23.1% 6.3% 1.20 1.45 28.9% 8.8%) (3.2% 2.4% 9.0% $0.9% 0. and our upfront pricing assumptions reflect management commentary on fairly robust 1Q scatter pacings (Figure 3).60 24.8% 1.9%) 23.0% 3.5%) 0.39 8.7%) (6. One reason is that sell-out ratios obscure the Y/Y comparisons.50 1.” the networks can disincentivize advertisers from exercising their options by giving the ones who do cancel less favorable programming spots and charge them more in the scatter market.2% 31.8%) 8. since advertisers must pay a premium for the flexibility to purchase ad inventory later on in the scatter market.1%) $1.6%) 4. This year.02 1.5% 1.50 20.7% 1.0% 6.3% (8.4%) 21. hold back for the scatter market. Barclays Research. Another reason is that scatter pricing typically paces above upfront pricing.40 2.49 27.5% 9.88 (21.61 (17.30 7.15 (2.7%) 6.0% 1.49 4.39 (3.97 1.0%) 31.5% 2.41 2.3% 9.30 13.5% (20.2% 4.7% 1.1% 2.62 15. FOX +9% Y/Y.0%) 2.91 (23.55 1.8% Y/Y % (4. Lastly.70 2.34 (1.80 (1.1% 1.49 billion.1% 1.15 1.8% (23.96 (4.59 (0. and NBC) to increase to $9.8% 1.60 1.2%) 0.92 10.8% 5.21 1.2%) 1.60 2.8% 7.74 2.7% 1. FOX.2% 5.10 2.81 11.7% 1.8% 6.1% 1.3% 8.45 1.54 45.10 7. CPM pricing is a more relevant indicator of projected advertising performance than sales / dollar volume.50 2.8% (19.0% 2.6%) (26.3% Source: Media Week.5% 3. 30 April 2012 3 . According to comments from the February earnings season.30 0.92 1.72 17.Barclays | U.15 (4.6%) 1.80 5.7% 1.0% 2.8%) 1.6%) (8.75 2.4% 1.9% $9. Scatter pricing remains fairly resilient YTD Upfront prices usually key off of scatter prices.1% 5.4% (0.90 2.2%) 1. CBS.10 1. Portions of the advertising contracts signed during the upfront season can be cancelled in the 1st–3rd calendar quarters.62 1.9% 5. Networks have full control over inventory levels and can adjust how much inventory to sell in the upfront market vs.40 21.9%) 26.75 $2.5% 18. we project CBS to lock in pricing increases of +10% Y/Y.65 Y/Y % 2. reflecting concerns around the imminent downturn).50 1.73 32.74 2.4% 44.1% (34.9% $1.7% 5.0% (2.6% 2. Broadcast TV upfront: CBS could be leading the pack again We estimate 2012-2013 upfront dollar volume for the “Big 4” (ABC.35 1.0% 1.30 0.20 12.09 (3.8% 1.21 2.4% 19.S.10 10.70 1. which is particularly notable given the strong upfront from last year.00 2.4%) 31.7%) 8.4% Total "Big 4" $in Billions Y/Y % 3.20 (19. Media We remind media investors that when looking at upfront statistics and trends.18 (9.2% 5. upfront contracts are cancellable.7% 1.36 2.3%) 4.43 22. To be fair though.98 23.10 billion.46 2.30 (0. and NBC +7% (Figure 4).50 $2.85 1.78 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 ABC $in Billions $0.2% 7.34 1.1%) 2.75 2. ABC +8% Y/Y. and NBC) to increase 4.45 2.1%) 13.60 0. Figure 2: We estimate 2012-2013 upfront sales for the “Big 4” (ABC.8%) 8.70 1.3% 0.10 14.46 3. even though these cancellations don’t carry any formal “penalty.40 1.15 4.90 1. scatter was pacing up in the mid-teens (above upfront levels).
0% 7.0% 80. CBS.Barclays | U. On the whole.9% 2008-09 9.5% 9.0%) (2. Media Figure 3: Scatter market still relatively strong Scatter Pricing (Above Upfront Levels) 1Q11 QTD Pacings 1Q12 QTD Pacings Up 30% Up "mid-teens" Up 40% Up "mid-teens" Up 25-40% At "a premium" NA NA ABC CBS Fox NBC Source: Company transcripts.5% 78.0% 9.5%) ABC CBS FOX NBC Weighted Average 2007-08 9.1% 2012-13E 8.0%) (7.0% 70.0% 80.3% 9. and NBC) will sell slightly less inventory in this year’s upfront compared to the historically high sell-out levels from last year’s upfront (Figure 5). On the other hand.0% 80.0% 8.0% 8.0% 75.2% 2011-12 76. we think sell-out is likely lower this year as some advertisers may want to maintain some flexibility in case of macro choppiness.0% 78.5% 8.0%) (2.5% 8.0% 80. which has more holes in its schedule and weaker ratings momentum.9% 2010-11 8.3% 67.0% 7.0% 78. Upfront sell-out levels could be modestly below last year’s levels We estimate that the “Big 4” broadcasters (ABC. a network like NBC. as we saw in the second half of 2011.9% 2012-13E 76.0% 77.5% 13.4% 78.0% 5.0% 8. may seek to try and hold back more inventory in the hopes of getting better rates later on in the scatter market. We think that a network like CBS that is well-positioned going into upfront negotiations will be able to maximize sell-out while maintaining substantial pricing increases.0% 65.0% ABC CBS FOX NBC Weighted Average 2007-08 80.0% 10.0% 65.0% 7. Barclays Research.0% 75.3% Source: Ad Week.0% 11. Figure 4: We project high single digit CPM increases in this year’s upfront CPM Pricing increases 2009-10 0.0% 80.0% 78.7% Source: Ad Week.0% 77.S.2% 2011-12 10. SNL Kagan.0% (2. Figure 5: We estimate sell-out levels to be down slightly versus last year Primetime Upfront Inventory Sold 2008-09 2009-10 2010-11 80.0% 74.0% 5. 30 April 2012 4 .0% 80.0% 80. Barclays Research.0% 80.3% 6.0% 9.5% 8.0% 77.0% 70.5% 10.0% 78.0% 75. SNL Kagan. FOX.
but there are two key assumptions that we wanted to specifically call out. We have detailed our calculations in the tables below. we used total U. The first is that as a proxy for estimating the potential ratings shortfalls at a given network. for example. Another key assumption is that the broadcast networks guarantee advertisers 2% ratings growth for spots sold in the 2012-2013 upfront.S. we used the season-to-date change in TV ratings for total U. appeals towards older audiences.S. we believe the broadcasters remain optimistic about their ratings trajectory and think this ratings erosion will flatten out and potentially reverse. competitiveness of schedule on a given night. Media Broadcast upfront analysis by network: CBS should lead in dollar volume We present our outlook for the 2012-2013 upfront by broadcast network below in Figure 6.Barclays | U. and we believe 2% ratings growth to be a reasonable assumption for the broadcasters. while Fox skews towards younger audiences). TV networks typically guarantee a certain percentage increase in impressions to advertisers. ratings guarantees differ by network based on various factors including perceived strength of programming line-up. etc. 30 April 2012 5 .S. households as our target demo because it encompassed the broadest reach. Since the broadcast networks skew differently towards various demos (CBS. households. Also. While broadcast viewership growth has been tepid over the years.
8%) – $2.20B / 80% Y/Y change in Total HH season-to-date ratings $2.0%) – $3.31 (2.75B x (1 + 9.31B – $0.48B x 76% Y/Y % change in upfront sales 5.0%) ($0.29B – $0.07B + $0.65B / 80% Y/Y change in Total HH season-to-date ratings $3. Ad Week Upfront sales if 100% of inventory were sold ($B) $3.0%) – $3.31B $3.48 $3.02) 2% $0.31B Barclays Research estimate $3.0%) – $3.25 $2.02B + $0. Ad Week $2.75 80% $2.29B Total upfront sales assuming 100% of inventory sold ($B) $3.29B x (1 + 8.07) 2% $0.75B / 80% Y/Y change in Total HH season-to-date ratings $2.50B / 76% % change in ratings (4.07 $3.0%) – $3.19 (0.75B x (1 – 9.26B % of inventory sold in '12-'13 season 76% Barclays Research estimate Total upfront sales based on 76% of inventory sold: $2.4% 30 April 2012 6 .04B + $0.2%) – $3.8% Y/Y change in upfront sales CBS Total upfront sales from '11-'12 season ($B) % of inventory sold in '11-'12 upfront Upfront sales if 100% of inventory were sold ($B) % change in ratings Sales erosion from ratings shortfalls % growth in impressions from ratings guarantees Sales uplift from increased impressions % change in CPMs (cost per thousand) Sales uplift from higher CPMs Total upfront sales assuming 100% of inventory sold ($B) % of inventory sold in '12-'13 season Total upfront sales based on 80% of inventory sold: Y/Y % change in upfront sales FOX Total upfront sales from '11-'12 season ($B) % of inventory sold in '11-'12 upfront Upfront sales if 100% of inventory were sold ($B) % change in ratings Sales erosion from ratings shortfalls % growth in impressions from ratings guarantees Sales uplift from increased impressions % change in CPMs (cost per thousand) Sales uplift from higher CPMs Total upfront sales assuming 100% of inventory sold ($B) % of inventory sold in '12-'13 season Total upfront sales based on 77% of inventory sold: Y/Y % change in upfront sales NBC Total upfront sales from '11-'12 season ($B) % of inventory sold in '11-'12 upfront Upfront sales if 100% of inventory were sold ($B) % change in ratings Sales erosion from ratings shortfalls % growth in impressions from ratings guarantees Sales uplift from increased impressions % change in CPMs (cost per thousand) Sales uplift from higher CPMs Total upfront sales assuming 100% of inventory sold ($B) % of inventory sold in '12-'13 season Total upfront sales based on 75% of inventory sold: Y/Y % change in upfront sales Source: Media Week.80 77% $2.29B x (1 + 2.75B x (1 + 2.19B Barclays Research estimate $2.19B x (1 – 0.26) 2% $0. Nielsen.0%) – $2.65 80% $3.8%) ($0. Ad Week $2.29 $2.65 $3.29B % change in CPMs (cost per thousand) 8% Barclays Research estimate Sales uplift from higher CPMs $0.07B + $0.Barclays | U.64 80% $2. Ad Week $1.06 9% $0.3%) – $2.20 80% $2.14) $3.19B – $0. Ad Week Per SNL Kagan.75B – $0.0% Description Per SNL Kagan.33B Barclays Research estimate $3.75B Barclays Research estimate $2. SNL Kagan.29B % growth in impressions from ratings guarantees 2% Barclays Research estimate Sales uplift from increased impressions $0.1%) $1.26 $3.75 (9.29B x (1 – 4.14B + $0.3%) ($0.0%) – $3.75B Barclays Research estimate $2.75B $2.37B x 75% Y/Y change in upfront sales $2.19B x (1 + 7.15B Barclays Research estimate $2.31B x (1 + 10.19B Barclays Research estimate $2.78 1.2%) Y/Y change in Total HH season-to-date ratings Sales erosion from ratings shortfalls ($0.15 $2.07 10% $0.80B x 77% Y/Y change in upfront sales Description Per SNL Kagan.31B x (1 – 2.26B + $0.50 Per SNL Kagan.33 $3.S. Media Figure 6: We estimate CPM pricing increases of ~9% y/y and sell-out levels of ~77% for the “Big 4” 2012-2013 Upfront Sales By Broadcast Network ABC Description Total upfront sales from '11-'12 season ($B) $2. Barclays Research.15 (2.0%) – $2.04 7% $0.07B + $0.31B x (1 + 2.92 10.0%) – $2. $2.06B + $0.0%) – $2. Ad Week Per SNL Kagan. Ad Week % of inventory sold in '11-'12 upfront 76% Per SNL Kagan.37 75% $1.64B x 80% Y/Y change in upfront sales Description Per SNL Kagan.19B x (1 + 2.31B Barclays Research estimate $3.25B Barclays Research estimate $2.19B $2. Ad Week Per SNL Kagan.
At the CBS network. 30 April 2012 7 .” While CBS’ ratings for total households in the season-to-date are currently down 2. Fox is comping against the 2011 Super Bowl this year. It continues to see strong ratings for its sitcoms including “The Big Bang Theory. CBS has very few holes in its schedule. Also. including its newest hit sitcom New Girl.0%) (6. which somewhat obscures ratings trends.” “How I Met Your Mother. We think Fox goes into the upfront slightly less well-positioned than in prior years. and Once Upon a Time has quietly kept up in the ratings race. which we estimate contributes roughly one-third of Fox’s gross ratings points in an average week. we are modeling 8% Y/Y increases in CPM pricing. Desperate Housewives). We estimate 80% sell-out this year. ABC continues to find success with Dancing with the Stars and Modern Family. We estimate that the network will hold back slightly more inventory in the upfront and sell 77%. The network’s dramas—“The Good Wife. we are modeling 10% y/y increases in CPM pricing. This is partly due to ratings softness from American Idol. below the 80% it sold last year.2%) (9.0%. The network has been #1 in 18-49 for seven consecutive seasons.S.0%) ABC CBS FOX NBC (2.6%) Source: Nielsen Media Research.” and its newest hit “Two Broke Girls.0%) (25. Note: Season-to-date defined as 9/25/11 to 4/22/12.0% 0.0%) (15. the same level as last year. Media Figure 7: ’11-’12 Season-to-Date Live Ratings – Total HH 5. We assume that ABC sells 76% of its inventory this year.8%) Figure 8: ’10-’11 Season-to-Date Live Ratings – Total HH 10.7%) (8. Season-todate. many of Fox’s other shows have performed well.0%) (10. However.0%) (10.0%) (15. but its ability to capture the 18-49 ratings crown this season could be in question.” “Mike & Molly. Source: Nielsen Media Research.0%) (20.0%) (4. we are modeling 9% Y/Y increases in CPM pricing. Although some of the network’s franchises are aging (Grey’s Anatomy. ABC ratings have been down 4. In light of our expectation for 10% pricing increases given CBS’ relative ratings outperformance (which gives us confidence in its pricing power).” “NCIS”.0% (5.Barclays | U. Happy Endings has also become a breakout hit this season. At Disney’s ABC network. Note: Season-to-date defined as 9/26/10 to 4/24/11. we think that CBS will seek to maximize its sell-out levels. they are the best-performing of the four major broadcasters after adjusting for NBC’s airing of the Super Bowl.3%) (0.” “Two and a Half Men” has also held up remarkably well post-Sheen. At News Corp’s Fox network.0% 5. and “Criminal Minds”—have continued to generate solid ratings this season. same as last year.2%.0%) (20. which is consistent with CEO Les Moonves’ comments at a competitor conference in late February about getting “double digit increases in the upfront.0% (5.0%) ABC CBS FOX NBC (19.0%) (5.0%) (25.0% 0.
35 16.60 14.1% 46% 7. NBC ratings in the season-to-date are down -1.5% 23% 1.97 18.54 5.67 50.1% 20% 1.75 31. While cable networks typically sell less inventory in the upfront than broadcast networks do (50-60% for cable vs.88 billion. Figure 9: We estimate Cable TV to maintain its share of upfront dollars committed Cable Network Upfront Sales Cable Cable as % of $in Billions Y/Y % Total Upfront $0.29 16. cable’s upfront dollar volume has caught up with that of broadcast as well. the 1992-1993 cable TV upfront was only $0.8% 32% 3.3% 51% 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 Source: SNL Kagan. Barclays Research.11 23.88 6.9% 38% 4.00 18.90 11. We estimate NBC to sell 75% of its ads in the upfront as opposed to 80% last year.3% 39% 6. with cable upfront dollar volume representing 51% of total upfront commitments.6% 46% 6.Barclays | U. we are modeling 8% Y/Y increases in CPM pricing. 70-80% for broadcast). 30 April 2012 8 . or 6.60 8.3% y/y growth. total cable TV upfront revenues surpassed that of broadcast for the first time in history. although this is helped by NBC’s carriage of the Super Bowl this past February. the cable TV upfront has nevertheless become as important as the broadcast TV upfront.4% 43% 6.9% 46% 7.0%.S.0% 45% 6.00 6. Media At Comcast’s NBC network. For this year.4% 35% 4.4%) 49% 8.81 billion in size.0% 26% 2.73 (11.2%) 39% 4.81 8.60 0.60 32. the lowest decline of the major broadcasters.03 (15.1% 38% 5.1% 51% $9.23 16. we estimate cable to retain its 51% “share” of the upfront.72 18. We think NBC will try to hold back more of its inventory for the scatter market in the hopes that ratings trends will improve. equating to a total upfront haul of $9.9% 49% 9. representing 18% of total upfront dollars. Last year. As cable penetration approaches that of broadcast.2% 28% 2.29 16.0% 18% 0. Cable TV Upfront: Could be up in the mid-to-high single digits A decade ago.3% 20% 1.
According to a recent Wall Street Journal article 2. 30 April 2012 D ec -1 1 ar - ct -1 1 .7 11. Some advertisers have already indicated their plans to increase advertising spending on online video. Media Auto advertising driving ad improvement The seasonally adjusted annual rate (SAAR) for light vehicle sales in the US has sequentially increased for eight straight months from June of last year through February of this year. “February sales continues surge.1 13.2 13. Microsoft. Hulu.0 12.4mn on strong fundamentals”).4 ov -1 1 N M O US Light Vehicle SAAR Source: Barclays Research. which will be mostly in online video. We believe these data points bode well for auto advertising since it is the largest category and represents an estimated 20% of all network and cable TV advertising.2 12. using its TV and print ad budgets to fund the new digital expenditures.0 6. 4/23/12.0 14.S.5 12. while slightly down sequentially from February. Google. Figure 10: SAAR improved sequentially for eight straight months from June 2011 – February 2012 16. Samsung Mobile plans to take 30% of its 2 “Online Video Turns Up Heat.0 13.6 13. While it’s unclear how much upfront commitments these digital newfronts will generate. Barclays Autos & Auto Parts analyst Brian Johnson recently raised his US SAAR estimate to 14. March SAAR of 14. GM plans to increase its digital ad spend by 3-5% this year. was still a solid result. (We attended Hulu’s newfront a couple of weeks ago. please see our 4/19/12 note “Hulu Upfront Highlights Increasing Focus on Originals” for more info.4M for the full-year.1 13. Bigger picture. several digital media firms including AOL. please see his 3/2/12 note. SAAR still remains below the peak levels of 16M-17M reached in 2005-2007. Digital “newfronts” joining the upfront conversation For the first time ever. raising 2012 SAAR forecast to 14. we think they are emblematic of digital media playing a larger role in advertising budgeting and planning.4M.0 8.2 13.0 10. much in the same way that is currently done with TV.2 14.Barclays | U.” Wall Street Journal.6 14. Note: SAAR in millions. and Yahoo! will be having upfront presentations of their own—called “newfronts”—in hopes of accelerating the shift of ad budgets to the internet.) Some digital media firms are emulating the TV sales process by selling gross ratings points and guaranteeing impressions for online ads.0 11 Ap r11 M ay -1 1 Ju n11 Ju l-1 1 Au g11 Se p11 Ja n12 Fe b12 M ar -1 2 9 15. which implies approximately 13% y/y growth (for more info.1 11.
Within internet. This is also the first time that the IAB has explicitly disclosed mobile online advertising revenue. Within political. But the impact of these super PACs has been larger than we expected. 30 April 2012 10 . and we believe we are still in the very early innings here. please see our 1/31/12 note. giving way to the rise of super PACs (for more info. While the display market recorded weaker overall growth than we had projected in 2011. Media upfront money and put it into online video. another positive for political advertisers. Tweaking up US ad forecast owing largely to higher internet estimates We are tweaking up our U. offset by lower traditional/print media estimates. as we believe the mobile market is in large part incremental to PC-based search. we had previously written about how this year would be a record election season for political advertising as two judicial decisions in 2010 essentially lifted restrictions on corporate spending for federal candidate elections. As a result of all of these factors. If nothing else. we have raised our online ad forecast following the release of the Interactive Advertising Bureau’s 2011 results.6% Y/Y) in 2013E.3% Y/Y (from +1.0% Y/Y) in 2012E and to +2. we continue to forecast robust growth in certain formats such as Digital Video. some advertisers believe the added option of buying online ads gives them added leverage in its negotiations with the TV networks. Our estimates are driven primarily by higher internet estimates (where we are raising our estimates by ~500 bps in 2012 and 2013) and a slightly higher political advertising forecast. the volume growth in mobile has served to offset softness in pricing. Not only do these court decisions allow the PACs to raise and spend unlimited amounts of contributions. which is recording impressive growth as advertisers continue to seek ways to reach audiences on mobile devices. “Does Political Advertising Drive Media Stocks?”). While there have been some concerns around the ability to achieve similar CPCs and CPMs on mobile as on PC. Our estimate changes are summarized in Figure 11. The desktop-based search market continues to see solid volume growth. Feel free to email us for the detailed model. with paid search and mobile driving much of the upside. It’s important to point out that the candidates can purchase political ad spots at discounted rates (called the “lowest available rate”).Barclays | U. but the PACs must also pay full-fare / market rates for the ads it purchases. even in light of the rapid proliferation of mobile devices and mobile search.6% Y/Y (from +4. The reported results came in above our expectations.S. then it must pay the market rate. but if the money comes from a PAC. advertising forecast to +4. which we believe is becoming an increasingly attractive brand advertising platform for large advertisers.S. we are tweaking up our 2012 political advertising estimate.
S. Advertising (excl.4% (0.0%) (7.6% 3.0% 2.4% (1.8%) (16.3% 2.7%) (18. Current vs.8%) (12.3% 7.S.S.1% Current 2013E (1.6% 2.0% 17.3% (1.0%) (6.1% (in bps) +0 bps +10 bps +0 bps +470 bps +0 bps +0 bps (120 bps) +0 bps (100 bps) (100 bps) +60 bps +60 bps (in bps) +20 bps (60 bps) +0 bps +500 bps +0 bps +0 bps (70 bps) (100 bps) (200 bps) (400 bps) +70 bps +80 bps National Broadcast TV (including Olympics) (1) Local Broadcast TV (including political) National Cable TV Internet (local & national) Outdoor Radio Magazines Direct Mail Newspapers Directories Total U. political & Olympics) Current 2012E 9.0%) 2.0%) (6.7%) 8. 30 April 2012 11 .S.9% Prior 2012E 9.6% 3.3% 3.4% 7.6% 1.0%) (5. Advertising (incl.1%) (6.3% 3.5% 18.7%) (6.5% 13.9% 0. (1) English networks only. Advertising (excl.6% 1.0%) 1. political & Olympics) Source: Barclays Research.9% 0. political & Olympics) Total U.3% (1. political & Olympics) Total U. Advertising (incl.2% 15.0%) (4.0%) (6.3% 3.1%) 8.7%) (17.5% Prior 2013E (1.0%) 4.S.0% 12.5%) (7.7%) (7. Prior (2012E-2013E) National Broadcast TV (including Olympics) (1) Local Broadcast TV (including political) National Cable TV Internet (local & national) Outdoor Radio Magazines Direct Mail Newspapers Directories Total U.Barclays | U. Media Figure 11: Barclays Advertising Forecast.0%) 4.1% 15.
784 (6.529 (5.3% (1.1% $15.826 (6. Nielsen has neither reviewed nor approved this report and/or any of the statements made herein.907 (7. Barclays Research.164 (6.0% 5.645 5.3% $15.8%) $13.896 4.6% 3.8% $64.9% $2.3% $6.1% $16.3% $14.5%) $2.806 3.9%) $11.8% 7.099 1.0%) $55.572 2.0%) $13.6%) $194.0% $168.9%) $6.765 5.17% 2010A $22.6%) 1.041 14.195 (10.9% $37.126 17.7%) $4.629 18.7%) $3.3% $3.4% 3.751 4.090 (27.0% $173.7% 1.4%) $8.7%) $15.436 (21.5% $26.5% 1.604 (5.1%) $20.3% $54.5% $61.6%) $13.390 3.554 (20.970 8.084 3.041 (7.0%) $19.241 8.303 (19.5%) $192.0% $31.1% $26.677 4.0%) $13.8% $34.318 2.6% $30. Advertising Spending Forecast (2008A-2013E) 2008A Newspapers (Local / National) • Annual Growth / Decline Radio (Local / National) • Annual Growth / Decline Outdoor • Annual Growth / Decline Online • Annual Growth / Decline Magazines • Annual Growth / Decline Directories • Annual Growth / Decline Direct Mail • Annual Growth / Decline Network Television • Annual Growth / Decline Cable Television • Annual Growth / Decline Local Broadcast Television • Annual Growth / Decline Other Television • Annual Growth / Decline Total Television • Annual Growth / Decline TOTAL EXCL.208 (1.456 (18.991 (4.889 (5.4%) $12.1%) $20.821 (28.8%) $15.1% $181.18% 2011E $20.796 22.0%) $14.397 3.795 (8.132 (7.472 (4.0%) 3. POLITICAL & OLYMPICS • Annual Growth / Decline TOTAL ADVERTISING • Annual Growth / Decline Total Advertising as a % of GDP Source: MAGNA.459 (5.901 (15.1% $6.7% $3.469 (0.1% $173.728 (9.6% $15. 2009A $24.042 (3.2%) $14.6% $14.573 0.S.6%) $14.756 (9.003 3.1% $170.5% $185.9%) $50.4% $6.401 9.3% 17.7%) $5.533 (6.5%) $162.092 0.5%) $2.239 7.7% $16.955 (15.661 1.6%) 0.463 (0.600 3.7%) $17.448 10.389 4.8% $6.725 4.743 (16.6% $15.4%) $5.938 2.661 (3.992 4.9% 3.36% 4.3% $28.0%) $17.4%) (6.9% $185.279 3.1%) $23.8% $12.9% $15.039 0.0%) $23.596 5.261 6.106 4.244 3.5% 7.991 (376.286 1.1% $178.356 4.762 (14.6%) $22.740 (17.408 7.6% $44.3%) $21.2%) $163.853 (15.3% 1. Note: Dollars in millions.989 0.851 7.S.12% '11-'14 CAGR (6.Barclays | U.890 (23.0%) 1.168 12.5%) (15.1%) $15.4%) $15.6% $19.949 (1.3% $6.0%) $19.15% 2012E $19.961 6.899 (6.143 4.1% $3.15% 2013E $17.410 (16.3% Note: The Nielsen material contained in this report represents Nielsen estimates and does not represent fact.9% $57. Media Figure 12: Barclays Annual U.7%) $22. 30 April 2012 12 .956 (20.6% 1.8% $24.
217 678 $15.3% 14.8% 22.06x 0.40 1.382 16.18 8.1% 9.6x (0.0x 3.0% 15.2% 14.2% 12.8% $4.4% 13.07 963.1x) 2.6% 10.6x 9.64x $1.67x $0.5x (0.'14E) Fully-Taxed P/FCF 2012E 2013E Adj.4% 9.7x 12.403.781 $515 (422) $7.6% 9.3 $20.1% 10.460 $6.2% 10.1% $1.7x 9.0% Scripps Networks Interactive SNI $50.4 $22.9% 13.102 $1.35 1.91 72.2x 8.7% 8.4x 16. Media Figure 13: Media Valuation Comparables ($ in millions.4x 1.5x 11.017 2.7% 11.1% 6.1% 5.421.2% 19.0% 1.1% 6.5% 19.4 $5.4x 4.508 2.4% 5.05 2.3 $25.2x 1.83x 0.86x $0.4x 655 697 9.6 $77.9% 14. DIS $43.35 $2.219 7.3x 5.2% 9.676 11.3x 0.0% 7.227 $2.857 8.24 2.2x 1.44 9.5% 8.5% 8.6% 9. Note: All years are calendarized for the purposes of comparable valuation.60 1.6% 6.249 $94.2% 16.79x 0.0% 7.Barclays | U.2% 5.1x 1.2% 6.81x $0.6x 2.0x 1.131 4.5x 1.4x 426 542 (28.2% 7.7% 7.4% 15.0% $3.311 2.1x 6.5% 6.2% 7.4x 10.75x 0. 30 April 2012 13 .4% 14.037 1.3% 1.2x Source: FactSet.6x 1.1% 10.874 1.0% 7.56 1.48 0.89 382.19 1.48 $5. 2012.8% 13.42x 1.2% Walt Disney Co.85 25.3% 9.890 --$4.956 2.37 523.3x) 0.7x 12.4% Discovery Communications News Corp.3x 1.0% 14.7% 8.3% 11.00 6.4x 11.4% 14.048) $22.778.5x 1.62x 1.1% 13.362 (548) $54.5x 2.5x 9.7x 1.245 8.7% 10.0x 0.5%) 27. Figures are in millions except for share values.031 $7.829 11.46x 1.5% 9.9% 11.3%) 15.9x 8.061 $1.1% 11.5% 18.7% 8.144 34.24x $0.668 5.5% 8.687 4.2% 16.6% 9.6% 5.05 15.3x 12.36 8.466 3.0% $3.0x 7.6% 6.1x 13.3x 6.291 (11.42x NA NA $19.3x 6.16 $3.71 21.6x 10.55 $1.7x 17.0x 9.2x 1.931 2.04 $3. Company documents.9x 11.9% 8.7x 1.3 $7.0% 7.6x 6.5% 17.93x 0.6x 0.99x 0.2% $2.2% 14.230 4.4% 12.0% 8.5x 7.7% 9.82 21.2 $47.8 $14.4% 10.1% 19.7% 11.6% 6.7x 3. TWX $38.8x 7.435 10.250 (150) $32.0% 15.3x) (0.665 $18.20 2.0x 0.0x 11.85x 0.73 459.552 (0. Barclays Research.25 $2.4% 22.102 $12.6% 15.0% 6.090 (8) $28.3% $3.0% 7.S.4% 9.6x 0.6x 6.58 2.81 $1.085 5.3% AMC Networks AMCX $42.1x 15.7x 0.139 5.5% 6.8x 0.0% 9.96x 0.9x 1.0% Omnicom OMC $51.0x 12.01 2.17 $3.7x 5.54 272.881 10. Fully-Taxed FCF Yield 2012E 2013E Earnings Per Share 2012E 2013E 2012E Growth 2013E Growth 3-year CAGR ('11A .1% 20.674 7.857 7.399 4.76 153.6% $2.4x 16.2% 11.6x 9.12 $111.157 10.6% 15.0x 0.7x 0.6x 1.2x 7.'14E) P/E 2012E 2013E PEG Ratio 2012E 2013E DIVIDEND YIELD Dividends per share Dividend Yield LEVERAGE Net Debt/ EBITDA 2012E 2013E CBS Corp.9% 7.7x 7.83x $0.8x 1.8% 16.6x 13.6x 12.33 653.1% 13.5% $0.0% $102.2x 12.130 3.0x 1.073) $41.5% 6.2% 8.9% 15.B $47.9% 10.7% 26.3x 17.8x 5.7% 9. As of April 27.7x 9. except per share metrics) Company Ticker Price Diluted Shares (CY'12E) Market Capitalization (CY'12E) Net Debt (CY'12E) Total Other Firm Value (CY'12E) EBITDA 2012E 2013E 2012E Growth 2013E Growth 3-year CAGR ('11A .1x 7.52 15.34x $28.2x 3.66 10.4% 5.1% $3.8% Viacom Inc.438 4.2x 6.2x 6.640 $5.8%) (3.3% 6.4x 4.43x 1.92x $1.542 3.8% 22.8% 7.283 1.24 14.2%) 32.1% 11.1% $2.68 $4.6% 15.'14E) EV / EBITDA 2012E 2013E Adjusted Fully-Taxed FCF 2012E 2013E 2012E Growth 2013E Growth 3-year CAGR ('11A .31x $1.0% 17.67x NA NA Media Weighted Average S&P 500 Average $1.110 2.4% 11.5x 202 194 (16.0x 9.0% 12.1% Interpublic Group IPG $11.3 $3.68x $0.039 1.930 (1.1% 8.9% Time Warner Inc.092 3.9x 8.7% 7. DISCA NWSA $54.0% 17.388 ($285) 501 $5.104 2.3x 2. VIA.965 7.24 10.00 2.9% 6. CBS $34.730 3.2x 0.7% 17.0% 4.604 886 989 5.5% 12.6% 7.79 $3.479 6.2% 9.991 474 510 11.1 $36.1x 1.7x 0.0%) (3.1% 19.
(IPG) CBS Corp. Price) CBS Corp. (LAMR) . New York. CFA. hereby certify (1) that the views expressed in this research report accurately reflect my personal views about any or all of the subject securities or issuers referred to in this research report and (2) no part of my compensation was. but Barclays policy prohibits them from accepting payment or reimbursement by any covered company of their travel expenses for such visits. USD 19.The rating and target price have been suspended temporarily due to market events that made coverage impracticable or to comply with applicable regulations and/or firm policies in certain circumstances including where the Corporate and Investment Banking Division of Barclays is acting in an advisory capacity in a merger or strategic transaction involving the company. Analysts regularly conduct site visits to view the material operations of covered companies.html. The analysts responsible for preparing this research report have received compensation based upon various factors including the firm's total revenues. 2-Neutral . (CBSA.S. hold and sell is not the equivalent of our rating system.72).The stock is expected to underperform the unweighted expected total return of the sector coverage universe over a 12-month investment horizon. In order to access Barclays Statement regarding Research Dissemination Policies https://live.The stock is expected to perform in line with the unweighted expected total return of the sector coverage universe over a 12month investment horizon.sector coverage universe fundamentals/valuations are improving. 2-Neutral or 3Negative (see definitions below). is or will be directly or indirectly related to the specific recommendations or views expressed in this research report. Date.87). (DISCA) Lamar Advertising Co. please send a written request to: Barclays Research Compliance. USD 19. a portion of which is generated by investment banking activities. fundamental analysis.com or call 212-526-1072. 3-Negative . methodologies. 27-Apr-2012. please refer to The Corporate and Investment Banking division of Barclays produces a variety of research products including. "Barclays"). (CNK) DreamWorks Animation SKG Inc. Below is the list of companies that constitute the "sector coverage universe": U. RS-Rating Suspended .58). we provide sector views which rate the outlook for the sector coverage universe as 1-Positive. (CBS) Clear Channel Outdoor Holdings (CCO) Interpublic Group of Companies Inc.sector coverage universe fundamentals/valuations are deteriorating.sector coverage universe fundamentals/valuations are steady. Media ANALYST(S) CERTIFICATION(S) I. 745 Seventh Avenue. or otherwise. 2-Equal Weight/2-Neutral Walt Disney Co. (DIS. 27-Apr-2012.S. Stock Rating 1-Overweight . USD 34. Recommendations contained in one type of research product may differ from recommendations contained in other types of research products. quantitative analysis.barcap. USD 43.Barclays | U. Anthony DiClemente. Investors should carefully read the entire research report including the definitions of all ratings and not infer its contents from ratings alone. 2-Equal Weight .com/publiccp/RSR/nyfipubs/disclaimer/disclaimer-research-dissemination. IMPORTANT DISCLOSURES CONTINUED Barclays Research is a part of the Corporate and Investment Banking division of Barclays Bank PLC and its affiliates (collectively and each individually.barcap. 2-Equal Weight or 3-Underweight (see definitions below) relative to other companies covered by the analyst or a team of analysts that are deemed to be in the same industry sector (the "sector coverage universe"). Primary Stocks (Ticker. 3-Underweight . and Procedures. USD 34. 2-Equal Weight/2-Neutral Guide to the Barclays Fundamental Equity Research Rating System: Our coverage analysts use a relative rating system in which they rate stocks as 1-Overweight. neither improving nor deteriorating. 2-Equal Weight/2-Neutral News Corporation (NWS. equity-linked analysis. Media AMC Networks (AMCX) Cinemark Holdings Inc. (CBSA) Discovery Communications Inc. For current important disclosures regarding companies that are the subject of this research report. 27-Apr-2012. (DWA) 30 April 2012 CBS Corp. Sector View 1-Positive . In addition to the stock rating. 17th Floor. 27-Apr-2012. A rating system using terms such as buy. and trade ideas. whether as a result of differing time horizons. 2-Equal Weight/2-Neutral News Corporation (NWSA. 2-Equal Weight/2-Neutral CBS Corp. 27-Apr-2012.The stock is expected to outperform the unweighted expected total return of the sector coverage universe over a 12-month investment horizon.33). NY 10019 or refer to http://publicresearch.35). but not limited to. (CBS.
for purposes of mandatory regulatory disclosures. 54% of companies with this rating are investment banking clients of the Firm. New York) Tokyo Barclays Capital Japan Limited (BCJL.S. Tokyo) São Paulo Banco Barclays S. 49% of companies with this rating are investment banking clients of the Firm. The price target represents that analyst's expectation of where the stock will trade in the next 12 months.A. a division of Absa Bank Limited (Absa Capital. 42% have been assigned a 1-Overweight rating which. Hong Kong) Toronto Barclays Capital Canada Inc. is classified as a Hold rating. Media IMPORTANT DISCLOSURES CONTINUED National Cinemedia Inc. (BCCI. (VIAB) News Corporation (NWS) Scripps Networks Interactive. (SNI) Viacom Inc. represent potential upside/potential downside to each analyst's price target over the same 12-month period.Barclays | U. for purposes of mandatory regulatory disclosures. is classified as a Buy rating. Mexico City) Taiwan Barclays Capital Securities Taiwan Limited (BCSTW. Hong Kong branch (Barclays Bank. Upside/downside scenarios. is classified as a Sell rating. (BBMX. (BCI. Singapore branch (Barclays Bank. (VIA) 30 April 2012 . where provided. (TWX) Walt Disney Co. Toronto) Johannesburg Absa Capital. São Paulo) Hong Kong Barclays Bank PLC. (OMC) Time Warner Inc. (BBSA. London) New York Barclays Capital Inc. Taiwan) Seoul Barclays Capital Securities Limited (BCSL. Barclays offices involved in the production of equity research: London Barclays Bank PLC (Barclays. (NCMI) Omnicom Group Inc. for purposes of mandatory regulatory disclosures. Mumbai) Singapore Barclays Bank PLC. Seoul) Mumbai Barclays Securities (India) Private Limited (BSIPL. Singapore) News Corporation (NWSA) Regal Entertainment Group (RGC) Viacom Inc. 13% have been assigned a 3-Underweight rating which. 39% of companies with this rating are investment banking clients of the Firm. (DIS) Distribution of Ratings: Barclays Equity Research has 2308 companies under coverage. S. Johannesburg) Mexico City Barclays Bank Mexico. 42% have been assigned a 2-Equal Weight rating which.A. Guide to the Barclays Research Price Target: Each analyst has a single price target on the stocks that they cover. Inc.
35 17.00 17.64 16. through Barclays Market Makers. Valuation Methodology: Our $32 price target represents a 2012E P/E multiple of 13. At any given time.00 9. Valuation is also supported by a discounted cash flow analysis. which is listed on the New York Stock Exchange.00 18.Barclays | U. Risks which May Impede the Achievement of the Barclays Research Price Target: Risks include: 1) Slowdown in local and national advertising..33 (27-Apr-2012) Rating and Price Target Chart .12 30 25 20 15 10 5 Rating Change Link to Barclays Live for interactive charting Barclays Bank PLC and/or an affiliate is a market-maker and/or liquidity provider in securities issued by CBS Corp. stock. its associated Designated Market Maker may have "long" or "short" inventory position in the stock.7x on $2.59 6.48 13.S.09 Jan.76 10. Segment multiples are based upon comparable public market and private market multiples of comparable companies and segments. a non-investment banking client (securities related services) of Barclays Bank PLC and/or an affiliate.75 12.10 Jan.00 11.00 19. is a Designated Market Maker in CBS Corp. (CBS) USD 34.10 Closing Price Jul.00 13.11 Jan.. or one of its affiliates.00 12.72 11. 30 April 2012 .01 15. Media IMPORTANT DISCLOSURES CONTINUED CBS Corp.67 22. Barclays Capital Inc.21 24.18 27. is. Barclays Bank PLC and/or an affiliate has received non-investment banking related compensation from CBS Corp.00 31.11 Target Price Jul.00 23.00 35 04-Nov-2011 04-May-2011 25-Mar-2011 17-Feb-2011 05-Nov-2010 04-Aug-2010 23-Apr-2010 03-Feb-2010 06-Nov-2009 11-Sep-2009 11-Aug-2009 15-May-2009 Jul. 2) Continued significant declines in radio listenership.00 21.70 2-Equal Weight Rating Sector View 2-NEUTRAL Price Target 32. or during the past 12 months has been.0x. 3) Increased secular shift of viewers to cable television from the national broadcast networks and local station affiliates. and its associated Designated Market Maker may be on the opposite side of orders executed on the floor of the New York Stock Exchange in the stock.USD (as of 27-Apr-2012) Stock Rating 2-EQUAL WEIGHT Currency=USD Date 16-Apr-2012 Closing Price 32.31 25. Barclays Bank PLC and/or an affiliate trades regularly in the securities of CBS Corp.00 30.00 25. CBS Corp.35 of EPS. Our sum-of-the-parts valuation model is based on a target EBITDA multiple of 9. within the past 12 months.
Barclays Bank PLC and/or an affiliate trades regularly in the securities of CBS Corp..35 of EPS. 30 April 2012 .00 30. (CBS/A / CBSA) USD 34.11 Jan. or during the past 12 months has been. 3) Increased secular shift of viewers to cable television from the national broadcast networks and local station affiliates. Barclays Bank PLC and/or an affiliate has received non-investment banking related compensation from CBS Corp.57 27. Valuation is also supported by a discounted cash flow analysis..09 Jan.52 16.72 (27-Apr-2012) Rating and Price Target Chart . CBS Corp. 2) Continued significant declines in radio listenership. Risks which May Impede the Achievement of the Barclays Research Price Target: Risks include: 1) Slowdown in local and national advertising.Barclays | U. or one of its affiliates.00 31. stock. Barclays Capital Inc.USD (as of 27-Apr-2012) Stock Rating 2-EQUAL WEIGHT Currency=USD Date 16-Apr-2012 Closing Price 33.0x. At any given time. its associated Designated Market Maker may have "long" or "short" inventory position in the stock. which is listed on the New York Stock Exchange.00 21.7x on $2. Media IMPORTANT DISCLOSURES CONTINUED CBS Corp. and its associated Designated Market Maker may be on the opposite side of orders executed on the floor of the New York Stock Exchange in the stock.S.11 Jul. Valuation Methodology: Our $32 price target represents a 2012E P/E multiple of 13. Our sum-of-the-parts valuation model is based on a target EBITDA multiple of 9. is. through Barclays Market Makers.32 22.00 23. Segment multiples are based upon comparable public market and private market multiples of comparable companies and segments.97 Rating Sector View 2-NEUTRAL Price Target 32.12 Target Price Link to Barclays Live for interactive charting Barclays Bank PLC and/or an affiliate is a market-maker and/or liquidity provider in securities issued by CBS Corp.00 35 04-Nov-2011 04-May-2011 17-Feb-2011 30 25 05-Nov-2010 20 15 10 5 Jul.10 Closing Price Jan.15 25. is a Designated Market Maker in CBS Corp. within the past 12 months.10 Jul. a non-investment banking client (securities related services) of Barclays Bank PLC and/or an affiliate.
00 11.10 Closing Price Jan.10 Jul.58 (27-Apr-2012) Rating and Price Target Chart .00 14. Risks which May Impede the Achievement of the Barclays Research Price Target: News Corp's revenues and earnings are very dependent on the performance of its Fox assets given that the latter contributes roughly 60% of News Corp's consolidated group revenues and 70% of its operating profits.00 12. Barclays Bank PLC and/or an affiliate trades regularly in the securities of News Corporation. Global advertising markets have a significant effect on News Corp's earnings as close to half of the group's revenues are advertising based.S.00 18.9% FCF yield.11 Jan.12 13.00 20.Barclays | U.45 Rating Sector View 2-NEUTRAL Price Target 22.11 Jul.00 15. Our target price is also supported by sum-of-the-parts and DCF analysis. 30 April 2012 .2x EV/EBITDA and 5.60 9.55. News Corporation is.94 8. News Corporation is. or during the past 12 months has been. Media IMPORTANT DISCLOSURES CONTINUED News Corporation (NWS/A / NWSA) USD 19.09 Jan.60 16. an investment banking client of Barclays Bank PLC and/or an affiliate. Barclays Bank PLC and/or an affiliate has received compensation for investment banking services from News Corporation in the past 12 months.52 11.67 12.12 Target Price Link to Barclays Live for interactive charting Barclays Bank PLC and/or an affiliate is a market-maker and/or liquidity provider in securities issued by News Corporation or one of its affiliates.00 22 20 23-Apr-2010 03-Feb-2010 28-Jan-2010 05-Nov-2009 15-May-2009 07-May-2009 18 16 14 12 10 8 6 Jul. a non-investment banking client (securities related services) of Barclays Bank PLC and/or an affiliate.USD (as of 27-Apr-2012) 24 Stock Rating 2-EQUAL WEIGHT Currency=USD Date 09-Feb-2012 04-Mar-2011 Closing Price 19.2x our CY2012E EPS of $1. or during the past 12 months has been. Barclays Bank PLC and/or an affiliate has received non-investment banking related compensation from News Corporation within the past 12 months. This implies a 6. Valuation Methodology: Our $22 target price is based on 14.00 16.21 17.
9% FCF yield.2x EV/EBITDA and 5. News Corporation is. a non-investment banking client (securities related services) of Barclays Bank PLC and/or an affiliate.10 Closing Price Jan.10 Jul.00 22 20 18 16 14 12 10 8 Jul. Risks which May Impede the Achievement of the Barclays Research Price Target: News Corp's revenues and earnings are very dependent on the performance of its Fox assets given that the latter contributes roughly 60% of News Corp's consolidated group revenues and 70% of its operating profits. Valuation Methodology: Our $22 target price is based on 14.Barclays | U.87 (27-Apr-2012) Rating and Price Target Chart . Barclays Bank PLC and/or an affiliate trades regularly in the securities of News Corporation. Barclays Bank PLC and/or an affiliate has received non-investment banking related compensation from News Corporation within the past 12 months. or during the past 12 months has been.S.11 Jul.12 Target Price Link to Barclays Live for interactive charting Barclays Bank PLC and/or an affiliate is a market-maker and/or liquidity provider in securities issued by News Corporation or one of its affiliates. Our target price is also supported by sum-of-the-parts and DCF analysis. 30 April 2012 .2x our CY2012E EPS of $1. an investment banking client of Barclays Bank PLC and/or an affiliate. News Corporation is.11 Jan.00 20. Barclays Bank PLC and/or an affiliate has received compensation for investment banking services from News Corporation in the past 12 months.72 Rating Sector View 2-NEUTRAL Price Target 22. Global advertising markets have a significant effect on News Corp's earnings as close to half of the group's revenues are advertising based. This implies a 6. or during the past 12 months has been.USD (as of 27-Apr-2012) 24 Stock Rating 2-EQUAL WEIGHT Currency=USD Date 09-Feb-2012 04-Mar-2011 Closing Price 19. Media IMPORTANT DISCLOSURES CONTINUED News Corporation (NWS) USD 19.55.09 Jan.96 18.
35 (27-Apr-2012) Rating and Price Target Chart . Walt Disney Co.00 52. its associated Designated Market Maker may have "long" or "short" inventory position in the stock.00 42.10 Jan. stock. or during the past 12 months has been. Disney could be vulnerable to the structural shift of media properties from TV to the internet.63 31. is. Media IMPORTANT DISCLOSURES CONTINUED Walt Disney Co.00 32. Our price target is also supported through sum-of-the parts and DCF analysis. At any given time.. impact advertising trends at ABC & ESPN. or one of its affiliates.00 46.00 50.00 36.00 50 45 40 35 04-Dec-2009 21-Sep-2009 06-May-2009 30 25 20 15 Jul. Valuation Methodology: Our target price of $44 is based on a 14.USD (as of 27-Apr-2012) 55 Stock Rating 2-EQUAL WEIGHT Currency=USD Date 10-Jan-2012 10-Aug-2011 23-Mar-2011 09-Feb-2011 01-Feb-2011 08-Oct-2010 Closing Price 39.. Barclays Capital Inc. Barclays Bank PLC and/or an affiliate trades regularly in the securities of Walt Disney Co.09. and its associated Designated Market Maker may be on the opposite side of orders executed on the floor of the New York Stock Exchange in the stock. The recessionary environment could result in weaker advertising revenue for the ABC network and ABC TV station groups.54 42. And finally. Barclays Bank PLC and/or an affiliate has received compensation for investment banking services from Walt Disney Co.10 Closing Price Jul.12 Rating Change Link to Barclays Live for interactive charting Barclays Bank PLC and/or an affiliate is a market-maker and/or liquidity provider in securities issued by Walt Disney Co.84 28. 30 April 2012 .S. (DIS) USD 43.00 34.00 25. Deteriorating consumer confidence could impede the consumer's ability to spend on Disney vacations. which is listed on the New York Stock Exchange. is a Designated Market Maker in Walt Disney Co.87 1-Overweight Rating 2-Equal Weight Sector View 2-NEUTRAL Price Target 44.2x multiple of our CY2012E EPS of $3. Risks which May Impede the Achievement of the Barclays Research Price Target: Disney's theme park operations are sensitive to economic cycles.11 Jan. in the past 12 months.51 30.88 34.09 Jan. Disney could struggle to produce successful movie/TV content.36 39.Barclays | U. through Barclays Market Makers.24 43. an investment banking client of Barclays Bank PLC and/or an affiliate. and/or impact Consumer Products.11 Target Price Jul.
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