MSG Networks, Inc. (NYSE:MSGN) engages in sports production, content development, and distribution. Its shares fell -8.68% during the quarter despite reporting better than expected results—with subscription deceleration likely weighing on its stock price. Although the actual rate of decline was the second-slowest since MSGN became a standalone company, cable providers are not eager to pay MSGN premium prices. Additionally, the company’s Chairman is widely believed to be open to selling the business. As a result, MSGN’s share price thrashes in reaction to the evolving headlines surrounding Disney’s disposition of the regional sports networks that accompanied the Fox acquisition. Ultimately, we still believe in the power of live sports and like MSGN’s strong cash flow-generating characteristics.
- From John Rogers (Trades, Portfolio)' fourth-quarter 2018 Ariel Fund shareholder letter.
