Comey ratings soar, but media stocks founder | Media Investment | Business | News | Rapid TV News
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Former FBI director James Comey’s blockbuster live testimony before the Senate intelligence committee was ratings gold — but the performance of media stocks certainly didn’t reflect that this week.

comey 11 june 2017Roughly 19.5 million Americans tuned in on Thursday to watch Comey lay out the details of his encounters with President Trump, which Comey characterised as ethically questionable. He also accused the president of lying at five separate points during the hearing.

It was must-see TV, even though the hearing kicked off at 10am ET on a workday, according to Nielsen. To put things in perspective, this is about the same number of people who watched Game 2 of the NBA finals between the Golden State Warriors and the Cleveland Cavaliers.

The hearing was carried live across major broadcast networks and cable news channels. The Nielsen number, however, doesn’t take into account viewership on PBS, C-Span or the FOX broadcasting affiliates, so the audience was undoubtedly larger. The number also doesn’t account for those who congregated at viewing parties across the country.

Many more followed the proceedings on the radio or online. Twitter and Bloomberg News said that their joint livestream reached an average of 129,000 viewers a minute.

The Comey hearing (so anticipated that Thursday trended as #ComeyDay) is the latest piece of political theatre that has delivered renewed interest in news-watching. Trump’s election has been a ratings boon, with FOX News' viewership up 40% over last year in the key demographic of 25 to 54-year-olds, while CNN's total viewing has skyrocketed by more than 60%. MSNBC has seen its prime time line-up, with shows from Rachel Maddow, Lawrence O'Donnell and Brian Williams, win the time slot among viewers 25 to 54-year-olds.

Even so, investors punished TV stocks last week. Sinclair Broadcasting, the country's largest owner of local TV affiliates, fell 1.9%, FOX declined 0.7% and Comcast (owner of NBC and MSNBC), dropped 2.3%. The results come against the backdrop of a tough earnings season, which saw Disney (owner of ABC) and CBS both dropping in share price by at least 7% during the past month of trading.

RBC analyst Steven Cahall said that despite good ratings, the stock picture is likely to continue to be uneven for media overall.

Q1 2017 earnings weren’t pretty for media as cord-cutting fears became far more acute following MVPD reports, and the ad market showed signs of a potential slowdown, he said in an investor note, adding: “As this one-two punch of secular concerns returned with a vengeance, investors quickly headed for the exits. Media's average NTM P/E went from 14x to 12x in a matter of days and it underperformed Consumer Discretionary + the S&P by ~500bps during EPS season. We trimmed target P/Es by 4% on average and by 9-14% in many cases. We think stock-specific attributes, such as Viacom's impressive efforts to right the ship, will generally be taking a back seat until the secular concerns of cord-cutting and advertising are less worrisome. We think sentiment could worsen (or not improve) in Q2 as it's seasonally bad for subscriber loss.”