CBS/Palotay – Thanks for reminding me (though the above news item did too!).  That offer is one of the reasons they began to drop off and I knew this was coming as their CBS subscription service is not getting the traction they'd hoped with just Star Trek and a couple of other unique things (though Star Trek Discovery is great).  Now they are trying to buy LGF, who own Starz so they can get their film library but are you going to cancel Comcast and go with CBS because you can't get Starz anymore?  I hate the way this whole industry is going…

LGF has $4Bn in revenues and makes about $150M a year yet CBS is willing to pay $5Bn (33x) even though they are valued at $18Bn on $2Bn in earnings (9x) so they want to spend $5Bn – effectively diluting you by 25% in order to add 7.5% to earnings?  That seems silly, right?  They are doing this to cover up the mistake they made with CBS All-Access, not because it's a good decision.

The VIA deal is another thing but at least VIA is a more similar operation with a similar valuation and, of course, if you put those two together first then the dilution of LGF becomes negligible but still hard to justify.  Either way they'll be taking on a lot of debt so there's forward execution risk they didn't have before (but, as I said, All-Access is an execution failure that hasn't been admitted yet).  

Still, content is king and they will have lots of it and, worst case, NFLX ($152Bn) will buy them all so it's not such a bad idea of a play down here and I'd go with the 2021 $40 ($11.50)/$50 ($6) bull call spread at $5.50 (no more than $6) and be very happy to make 66% if it goes straight up but, if it falls $5 (10%), THEN I would sell 1/2 the 2021 $42.50 puts (now $3.50) for $5+ and use that money to roll the $40s down to the $35s (now $15) and then you'd be in a nice, conservative spread with a not-too-bad entry – even if things did turn lower on you.