BOTTOM LINE: Investors we have spoken to have expressed understandable confusion given stories in the press in recent weeks regarding Nielsen "restatements" in context of concerns around cord-cutting and declines that appear to disproportionately impact Disney's ESPN. More confusion will inevitably arise given comments on yesterday's Disney earnings call where Disney's CEO stated that "Nielsen has significantly lowered its estimate of losses of multi-channel households in 2015" and that "Nielsen corrected…numbers." More accurately phrased, Nielsen redefined numbers in relation to the Cable Plus universe, returning the definition of that term in early 2015 to what it was in late 2013. Importantly, we note that changes were made following consultations with Nielsen's clients. Nielsen neither lowered its estimates of multi-channel households as most investors would define them, nor altered its estimates of the total universe of households with televisions nor altered its estimates for the numbers of homes with ESPN, which on Nielsen's estimates continue to exhibit declines that outpace overall industry levels.
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