President Obama made it clear today that he does not plan to cut the auto industry a blank check– and that’s bad news for media companies. That sentiment is playing out in the market this morning, as some big media stocks are taking a hit. The media companies with the most exposure to national ad dollars (that’s where the auto companies spend a lot of their marketing budgets) are suffering largest percentage declines: CBS (NYSE: CBS) (which owns national TV and radio assets) was down 18 percent as of noon EST; Gannett (NYSE: GCI) (publisher of USA Today) was down 10 percent. A dour report by SNL Kagan on the prospects for the radio and TV industries is probably also contributing to today’s decline.
The car industry is the single-biggest source of subscribers for Sirius XM (NSDQ: SIRI), which is certainly part of the reason the stock was down 10 percent this morning (though even in normal times Sirius tends to swing more widely than most media companies).
Update: Media stocks didn’t recover much by the close of the market. CBS finished down 18 percent, helped by a downgrade to “Sell” rating by UBS analyst Michael Morris, Gannett slipped further ending the day down 12 percent, and Sirius XM Satellite Radio rebounded somewhat to end the day down 7 percent. CBS received particular attention from traders, trading 16 million shares througout the day, 30 percent more than its daily trading volume.