Mediacom: Pali Downgrades, Stock Slides

Mediacom Communications (MCCC) shares are trading lower today after Pali Research analyst Richard Greenfield cut his rating on the cable company’s stock to Neutral from Buy.

Greenfield cited four reason for the reduced rating:

• Growth expectations have increased. The company now sees EBITDA growth of 8.%-9.5%, up from 7%-8%.


• DISH Network (DISH) is increased its marketing spending on its Tubo HD package.


• Programming costs are rising. He notes that the company last week signed an agreement last week to carry the Big Ten Network, which it had once declined to do. “With the top U.S. cable operators agreeing to BTN carriage, we believe MCCC was left with little choice but to acquiesce to BTN demands.” He thinks they could be paying as much as $1/sub per month on at least 600,000 subscribers who fall in core Big Ten markets.


• Weak local advertising results. “Despite the benefits from political advertising, we sense local advertising remains weaker than expected throughout the local cable industry,” he writes.

MCCC today is down 38 cents, or 4.5%, to $8.02.