Deutsche Bank's Entertainment Spotlight

Deutsche Bank believes the entertainment sector is inexpensive at 6.3x EV/2011E EBITDA, well below the 9x average during the mid-90's, according to Deutsche Bank. Deutsche Bank reports that "threats are overstated as (1) many networks added significantly to their upfronts last August/September, and thus the 2010 upfront did not grow nearly as much in sell-out as reported; and (2) cancellations were at record lows last season due to the favorable upfront pricing, and are unlikely to remain as low this season – in other words, less of this year's upfront will stick than last year's. For many networks, this upfront vs. scatter price comparison will have little or no impact." Current Deutsche Bank entertainment ratings are as follows: CBS Corp CBS,$15.12 Hold Walt Disney Company DIS,$34.52 Buy Discovery DISCA,$41.98 Buy Scripps Networks SNI,$45.65 Hold Time Warner TWX,$31.25 Buy Viacom Inc. VIA,$35.26 Buy