Need to have an 'all of government' approach to make our electricity grid great again: Steve Milloy

The text is a television programming schedule (Fox Business/Fox News channels) and contains no financial news, economic data, corporate results, policy statements or market-moving information. There are no figures, announcements or actionable items for investment analysis; therefore it provides no basis for trading or portfolio decisions.

Analysis

Market structure: The TV schedule signals continued structural demand for live linear news/talk programming—a direct win for Fox Corp (FOXA) via sticky affiliate fees and political-ad CPMs; pure-play streamers (NFLX, DIS) and digital ad platforms face offsetting headwinds as advertisers reallocate to guaranteed live reach. Pricing power for network-affiliate contracts should support mid-single-digit annual revenue growth for entrenched news networks; cable operators (CMCSA) benefit from lower churn versus expectation. Cross-asset: stronger cash-flow visibility supports FOXA credit spreads and equity; expect muted implied vol in FOXA options vs elevated vol in streamers.

Risk assessment: Tail risks include regulatory crackdowns on political content, large advertiser boycotts (>5% ad-spend withdrawal) or a carriage dispute that removes affiliate fees—each could shave >10% off free cash flow in a quarter. Immediate (days) impacts are ad-sales volatility around political events; short-term (weeks/months) hinge on quarterly ad reports; long-term (quarters/years) depend on contract renegotiations and cord-cutting trajectory. Hidden dependencies: reliance on cyclical political ad windows and retransmission consent timing; a delay in elections or lower ad intensity would expose leverage.

Trade implications: Direct play—establish a 2–3% long position in FOXA (6–12 month horizon) to harvest affiliate-fee resilience and election-driven ad upside; trim on +15% move or if ad revenue dips >5% QoQ. Pair trade—long FOXA (2%) vs short NFLX (1.5%) for 3–9 months to capture rotation from subscription-growth to live-ad monetization. Options—buy a 9-month FOXA call spread (buy 10% OTM, sell 30% OTM) sized to ~1% notional to limit capex while keeping upside exposure.

Contrarian angles: Consensus underprices stickiness of live news; historical parallels (2016–2020) show political cycles delivering outsized linear ad inflections—if midterms or geopolitical events intensify, FOXA could out-earn by >10% in a quarter. Overdone risks: if regulators or advertisers force boycotts, downside could be rapid—hence use size limits and protective stops. Unintended consequence: rising reliance on political revenue increases regulatory and reputational beta; prefer staggered entries and options protection.

Key Decisions for Investors

• Establish a 2–3% long position in Fox Corp Class A (FOXA) for a 6–12 month horizon to capture affiliate-fee resilience and election-driven ad upside; set a stop-loss at -12% and trim on +15%.
• Implement a relative-value pair: long FOXA 2.0% vs short Netflix (NFLX) 1.5% for 3–9 months to exploit rotation from subscription-growth to live/ad monetization; rebalance if FOXA/NFLX spread tightens by >10% or Netflix reports subs growth >3% QoQ.
• Buy a 9-month FOXA call spread sized to ~1% portfolio exposure (buy 10% OTM, sell 30% OTM) to cap premium while retaining upside; roll or take profit if FOXA rallies >20% or implied vol rises >30% from entry.
• Reduce exposure to Disney (DIS) and other stream-first names by 2–4% and reallocate to cable/media (FOXA, CMCSA) where affiliate fees and live-ad CPMs provide nearer-term cash-flow visibility; reassess after next two quarterly ad reports.
• Monitor over the next 30–60 days: (a) quarterly ad revenue/CPM trends for FOXA and CMCSA (watch for >5% QoQ deviation), (b) retransmission consent negotiation headlines, and (c) political calendar (advertiser spend windows); act if any metric crosses threshold to add/remove exposure.