[opendtv] Re: Bank Projects Broadcast Growth in 2010
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Sat, 31 Oct 2009 09:12:56 -0400
At 4:20 PM -0500 10/30/09, Manfredi, Albert E wrote:
Seems like good news for broadcasting. Especially because what ails
broadcast is nothing more than reduced ad revenues. It's not lack of
public interest in their content. (Much as some people would like to
pretend it is.)
Bert
"The consensus forecast for 2010 GDP growth is 2.8 percent. We
therefore expect broadcast revenue to grow at 5.6 to 6 percent.
Moreover, after the cost cutting of the last 20 months, most of that
incremental revenue should be margin."
Aside from the fact that this is just one analyst's opinion, one must
question the reality that a business in decline could grow at these
rates. The ONLY positive on the horizon is the 2010 Congressional
elections, which should pump a few billion into the TV ad market.
There is, however, one way to have broadcast revenue growth at the
levels predicted by this analyst, but not in the 2010 to 2012 time
frame.
The analyst suggests that GDP will grow 2.8%, which is a bit lower
than what the government just reported for the last quarter.
Unfortunately, all of the current "growth" was created by government
spending - in particular the cash for clunkers and home purchase
credits. The rest of the economy continues to decline.
If the government decides to buy out the licenses they gave
broadcasters, there will be a significant one time growth in
broadcast revenues, but not the kind that banks are looking for to
provide capital for future growth.
In short, this report is highly optimistic and questionable at best.
Regards
Craig
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