Media Musings: Time Warner's Lucky Friday the 13th

Time Warner Leads a Strong Week at the Box Office

The weekend box office was up 36% for the top 12 films, keeping alive this year's winning streak. So far, 2009 is up 15% vs. 2008, a truly impressive performance. Time Warner (TWX - commentary - Cramer's Take) got a nice boost from Friday the 13th, which opened to a massive and much better than expected $42 million. The film is easily on track to be the best ever in the series. At a rumored production cost of just $19 million and with lots of old DVDs to revive, this is just the type of profitable hit every studio is after.

Time Warner also got a nice hold for He's Just Not That Into You, the weekend's No. 2 film, which was down a modest 29% in its second weekend.

The sustained early strength in the box office this year is also good news for theater stocks including Regal Entertainment (RGC - commentary - Cramer's Take), Cinemark (CNK - commentary - Cramer's Take) and the cinema advertising play National Cinemedia (NCMI - commentary - Cramer's Take).

Private Equity Invests in Bob Marley

A private-equity firm is investing in Bob Marley's legacy. According to The Wall Street Journal, Marley products generate about $600 million in sales annually, with most of the products being produced without permission of the Marley family. The family has made a deal with a private-equity firm to tighten up licensing. The economics will be a 5%-10% royalty, potentially generating $30 million to $60 million in annual revenue to be split among the family and investors.

If I had money to invest in Marley, I'd do it. The guy retains his massive popularity on a global scale almost 30 years after his death. The Marley legacy also fits nicely with today's other huge merchandising opportunity, Barack Obama. The lesson here for investors is that major media companies have lots of content that generates extremely high-margin licensing revenue if managed correctly. Disney (DIS - commentary - Cramer's Take) is the runaway leader, but look for other studios to do a better job as weakening DVD sales require new ways to generate profits.

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At time of publication, Birenberg owned TWX in personal and client accounts, and had client accounts that own GE, although holdings can change at any time.

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Steven Birenberg is president and chief investment officer of Northlake Capital Management, LLC. Northlake specializes in managing equity portfolios using a combination of exchange-traded funds and special situation stocks. Birenberg appreciates your feedback; click here to send him an email.