I've been watching USSB for that reason. Remember, the stock was once $37 per share on the expectation of a merger. I am not saying a merger is likely as yet, but if enough people believe that this channel move is a percursor to merger, there should be a big upside. Also, USSB is going to get a nice little hit from the additional revenue. It's not too often that you get to add 1.5m subs, even if it is only for 3 channels. Plus, since there is no inventory until it is sold, and since they have zero acquisition cost, it is practically a passive revenue stream!
The move may have some impact on DISH, but as long as DIRECTV has a higher cost for those channels, it will test the willingness of DIRECTV to give up even more margin to compete. Deep pockets or not, they are spending enormous amounts on sub acquisition. At some point they have to tighten up, or they will keep pushing their break-even into the future. Remember, when they launched it was 3m subs. Now? 4-5m (guess)... I haven't seen that published.
Finally, USSB still holds HBO, MAX, Showtime and TMC. The "crown jewels" of cable, USSB's existence is now (if it wasn't before) squarely on the shoulders of its premium offerings. As long as there's a USSB, DISH network will have a cleaner, less costly offer.
Regards,
NOEL |
