While Donald Trump's election victory was credited for fueling a broad bump in stock prices, few sectors benefited as much as media did.
The S&P 500 media index gained 9.4% in the first quarter, led by high-profile Viacom (VIAB) (32.8%), 21st Century Fox (FOXA) (15.5%) and Disney (DIS) (8.8%). That compared favorably with the S&P 500 index, the benchmark market that was up a healthy 5.5%. Other stocks to outshine the broad market included Tegna (TGNA) (19.8%), Charter Communications (CHTR) (13.7%), News Corp. (NWSA) (13.4%) and CBS (CBS) (9%).
The generally upbeat performance by publicly traded media companies in the first quarter comes as national television advertising revenue continues to decline amid a nearly five-year drop in subscribers to pay-TV services. Heightening the challenges for media conglomerates, movie theater attendance also fell in 2016, an ominous sign for companies that own Hollywood studios.
But in the wake of a spirited presidential campaign topped off by Trump's surprising victory, media stocks have begun 2017 with a bang.
A handful of stocks -- Gray Television (GTN) (33.2%), Sinclair Broadcasting (SBGI) (21.4%), Tribune Media (TRCO) (6.5%) and Tegna among them -- have been bolstered by expectations that the FCC under Republican-appointee Ajit Pai will relax rules aimed at curbing media concentration. With fewer regulations designed to limit consolidation, Sinclair, among others, has made clear that it intends to acquire more television stations to better compete for national advertising.