txvalue

I loved the Boyar Group response to this deal and hope that some of the larger holders like Ariel and Gabelli are pushing back. It could be as simple as MSGE wanting cash to help better fund things, but they have to realize that the move is being done at the expense of both MSGN and MSGS holders. MSGS would be much more valuable if this was rolled back into the fold. Dolan gets hate but he is smart, I would love to know what the real strategy is behind this. I have a reasonably low cost basis so I'm holding and I've voted against the deal. Like Greg mentioned it's certainly an interesting situation but the size of the deal and float might make it more difficult for someone to come in and really make some noise.

Issuing shares again, with the pace of this dilution and their stated goal to play offense they are going to have to acquire circuits much larger than Pacific/Arclight, there are probably 10 locations in that mix of value and several of those locations are going to have multiple interested groups. To back into this type of elevated EV they are going to have to buy much larger things if they are not going to pay down debt.

Ha, well to be fair his past growth plans have been “offensive” to shareholders! This guy certainly has 9 lives. Ever the PE type CEO, interested to see if this means taking a run at someone like Cineplex. Not sure what else it could be, new builds would be crazy with material costs at these levels and their debt load.

This thread is such a surreal turn of events. From (what I thought was) deep value, to value destruction, to global pandemic to now this... I thought I was pretty clever leaving just a few options in and rolling into Cinemark and Cineplex. Going to close out CNK this morning at this rate since it is already up over 3x. Everything is happening so quickly now, spend a lot of time in a name expecting a longer term investment.

I am skeptical that these new VOD-type revenue sharing deals between the studios and exhibitors are going to be much of a boon to exhibitors given that they are negotiating from such a position of weakness. Do we know the details of any of them? I don't think we are going to see much recovery in North America box office until vaccine is widely available. So maybe next spring? Agreed, I think Spring may even be a bit early at this point. You need a distributed vaccine, declining case numbers, Cali, NYC and Chicago opening up and then product. I don’t have firm numbers but for Universal and Cinemark the rumor is Exhibitors get 10% of PVOD and the Cinemark would get around 15% of that slice. Still unclear how smaller exhibitors will fit into the structure if they do at all. So you are looking at a NA landscape with many screens closing permanently - declines happening from the mom and pop operators and the large circuits closing down older big multiplexes. The new sweet spot for things seems to be under 18 screens and chains like AMC are quietly taking old large theaters offline. The first question is obviously which circuits have the cash to limp through Q1 2021. Those that survive may wake up to less competition as the weaker circuits and screens close permanently. As the window gets compressed the only bright spot is that studios haven’t yet found an economic model for VOD/PVOD that is a slam dunk.

No disrespect meant to you at all. WW84 terms are certainly different. Things still leaking out but it seems like it will be available 30 days on HBOMax as well as theaters and then exclusively in theaters for 30 days then day 61 PVOD. I’ve also heard there was talk of some additional payment going to exhibitors for this deal and/or the studio take will be down from 60% to in the 40s.

Stock has quietly jumped from $4.8 to $10 over the past month with the vaccine news rolling out. Lots of interesting things in play, especially to see how the recent PVOD deals influence how studios release pictures in North America. With Universal inking deals with both Cinemark and AMC it will be fun to watch what happens next with Cineworld and the various other studios.

To add to FT's comment it is going to make things tough for the American circuits. Many were getting favorable treatment from landlords but now with these big releases pushing back circuits are going to have to make another decision - to stay open with no product or to shutter things again until the end of the year. Many other smaller operators are likely to close up shop. I like Cineplex and Cinemark here, but Cineworld and AMC continue to be in hot water. AMC did get a fairly nice break from EPR so their liquidity is probably ok. AMC finally started selling some assets dumping their Baltic region cinemas for 77 million in August, but they are also looking to modify a court order so they can reacquire some theaters they had to let go in the Carmike deal (the owners defaulted in July). Where there is an unnecessary acquisition to be had you can bet Aron will be nearby.

Anyone have thoughts on the deal w/ Comcast Universal to shrink the window to 17 days before PVOD in certain cases? Details are scant so it is hard to tell how it will play out and what the deal will mean for other studios and exhibitors. The general industry feedback seems to be that it was an unforced error on AMC's side. Anyone have color on what the PVOD splits might look like? I could see this being not a big deal if it just applies to smaller titles or films that underperform but I wasn't expecting the window to get this compressed this quickly. https://deadline.com/2020/07/universal-amc-theatres-theatrical-window-crush-pvod-agreement-1202997573/

The plan to cut minor league organizations is worth following. They are trying to eliminate 42 teams to help trim player development expenses. Most of the teams are in lower level Rookie type leagues which tend to have really low fan turnout and subpar ballparks. As an example the Braves Florida Class A affiliate in the Florida league averaged just over 300 fans per game. https://www.baseballamerica.com/stories/which-milb-teams-are-on-the-list-to-be-eliminated-its-impossible-to-say/ I think the plan makes good sense if they can get it to happen. Bring minor league teams closer to their "parents", making travel more regional and organizing things into 4 leagues: AAA AA A+ A MILB franchises are trying to improve facilities and the fan experience to help make their case to avoid the chopping block. If all goes to plan you end up with less overlap, a better fan experience and hopefully improved finances. To be sure there will be pushback from the minor league teams but the CV-19 landscape might tilt the scales towards MLB in negotiations.

Why aren't you making a distinction between NBA and MLB teams? The average value for NBA & MLB teams is similar - both are a touch under 2 billion. I tend to think NBA teams are worth a bit more but valuations are more related than you'd think at first blush in terms of revenue, markets etc. With so few comps I think its a useful barometer to see where things stand. As a side-note really interesting to see PE money flowing into the space, the minority stake sales seem to be pretty active and under reported. Lots of investors/value investors hold stakes in teams everyone from big names to guys like David Abrams.

First challenge of the young season is a breakout of CV-19 on the Marlins which has caused tonights NY v. Phil game to be postponed. Stock is fading on the news

Sales like the Royals and Marlins have pretty well shown the bottom of the market for teams. If the T-Wolves can get 1.2B plus w/o moving the team, which is the rumored starting point for discussions it will be yet another data point corroborating that.

Over the past several years there has been no revenue growth, and EPS has cratered over the past 10 years. They have a very well compensated team but made essentially no capital investments from 2016 until now. If their resource markets are challenged there have to be acquisitions to be had for distressed prices right? If you expect a bounce back why not buy land/timber, oil/gas, even Met coal instead of these ag investments? Is the fortress balance sheet being preserved just to make sure employees can continue to get their annual raises? This is basically an OK asset wrapped in a package that siphons off a lot of cash each year while bragging that the employee count is lower than years ago because of their efficiency. I think management is coasting off past success that was achieved mostly before the current CEO arrived.

I completely agree. This presented years ago as a company that was a sharp natural resource operator that flew under the radar. They owned large amounts of land with a coal cash cow & timber assets that were worth substantially more than they were on the books for - they were going to use their pristine balance sheet & this impressive cash flow to opportunistically acquire similar things at a discount to add to their multi-use plan for royalties on their land. Fast forward to today: Coal is eventually going away and over the past several years they have wasted huge amounts of time and money on poorly time buybacks, odd new ventures, ponzi schemes, poor acquisitions and high exec comp. Seemingly every move management makes takes them further and further away from the original company mission.