This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Why I Am Long Madison Square Garden

Stocks in this article: MSG CMCSA

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( TheStreet) -- Early last week, I introduced two media stocks I consider sells -- Netflix (NFLX) and Sirius XM (SIRI) -- and six I consider buys -- Rogers Communications (RCI), Bell Canada (BCE), Time Warner (TWX), Disney (DIS), Pandora (P) and Madison Square Garden (MSG). Later in the week, I outlined my bull case for both Rogers and Bell. When I go long media stocks, I do so with a time horizon measured in years, not months and week. I also consider five key criteria when making my selections:

  • Massive and/or rapidly growing revenue
  • Multiple, diverse streams of revenue
  • Multi-platform delivery of premium content
  • Direct control over premium content
  • Ubiquity
  • In this article, I make my bull case for MSG, relating it back to each of the five points. When investors discuss the media space in North America, too few bring up the situation in Canada involving Rogers and Bell. My article from last week details how the two firms dominate the telecommunications, media and much of the sports landscapes north of the border. While I am fairly certain nothing even close to that level could happen in the United States, thanks to tighter (and often nonsensical) regulatory controls, I expect some companies to try to push the envelope.

    In 2012, we will see the continuation of something that picked up toward the end of 2011: various types of media partnerships and consolidation. Although we did not witness much meaningful M&A last year, partnerships hit the wires one after the other, ranging from Clear Channel's (CCMO.PK) iHeart Radio collaborating with competitors such as Cumulus Media (CMLS) and Disney hooking up on TV Everywhere ventures with the likes of Time Warner Cable (TWC) and Comcast (CMCSA).

    As the year unfolds, I expect more partnerships and M&A activity to pick up. Telcos and media companies in the U.S. need to be even more careful than their Canadian counterparts. Just have a look at what happened to AT&T (T) when it tried to add T-Mobile to its stable. In Canada, Rogers and Bell sometimes need to appease regulators. For example, Bell will have to divest several radio stations once it takes control of Astral Media. But, at day's end, Rogers and Bell run roughshod. In the States, companies will have to dance the dance with a bit more tact if they wish to pull off anything even close to the Rogers-Bell level. I anticipate more than a couple instances of American companies testing the regulatory waters in 2012.

    1 of 2

    Select the service that is right for you!

    Action Alerts PLUS
    Try it NOW

    Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

    Product Features:
    • $2.5+ million portfolio
    • Large-cap and dividend focus
    • Intraday trade alerts from Cramer
    • Weekly roundups
    TheStreet Quant Ratings
    Try it NOW
    Only $49.95/yr

    Access the tool that DOMINATES the Russell 2000 and the S&P 500.

    Product Features:
    • Buy, hold, or sell recommendations for over 4,300 stocks
    • Unlimited research reports on your favorite stocks
    • A custom stock screener
    • Upgrade/downgrade alerts
    Stocks Under $10
    Try it NOW

    David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

    Product Features:
    • Model portfolio
    • Stocks trading below $10
    • Intraday trade alerts
    • Weekly roundups
    Dividend Stock Advisor
    Try it NOW

    Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

    Product Features:
    • Diversified model portfolio of dividend stocks
    • Alerts when market news affect the portfolio
    • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
    Real Money Pro
    Try it NOW

    All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

    Product Features:
    • Real Money + Doug Kass Plus 15 more Wall Street Pros
    • Intraday commentary & news
    • Ultra-actionable trading ideas
    Options Profits
    Try it NOW

    Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

    Product Features:
    • 100+ monthly options trading ideas
    • Actionable options commentary & news
    • Real-time trading community
    • Options TV
    To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
    Submit an article to us!


    DOW 18,030.21 +6.04 0.03%
    S&P 500 2,081.88 -0.29 -0.01%
    NASDAQ 4,773.4720 +8.0480 0.17%

    Brokerage Partners

    Rates from

    • Mortgage
    • Credit Cards
    • Auto

    Free Newsletters from TheStreet

    My Subscriptions:

    After the Bell

    Before the Bell

    Booyah! Newsletter

    Midday Bell

    TheStreet Top 10 Stories

    Winners & Losers

    Register for Newsletters
    Top Rated Stocks Top Rated Funds Top Rated ETFs