2Q16: Core TV Network Growth Decelerates -- Drexel Hamilton

Normalized ad revenue growth accelerated for cable networks in 2Q16 and moderated for broadcast networks as ratings weakness mounted. While ad growth looks to be improving, the results are skewed by outlying performance at AMCX and are still trending below our programing cost inflation benchmark - the growth rate we often refer to that is needed to maintain stability in the TV ecosystem. Furthermore, the strong upfront may not be indicative of a sustainable improvement as results are partly tied to a one-time rebalancing of ad spend away from scatter and digital allocation. Broadband-only homes grew 16% YOY.