EchoStar Soars 360% as Cable Sector Reorders, S&P Flags Decline Stage

Media & Entertainment Sector: 2025 Financial Analysis

The 2025 financial year has been marked by a dramatic transformation in the media and entertainment sectors, with S&P signaling that the traditional cable TV industry is now entering a "decline stage." This conclusion follows a year in which streaming giants like Netflix and Paramount have reshaped market expectations. Analysts note that the shift is not a sudden collapse but a long, slow bleedout, with investors increasingly turning to satellite and digital platforms for growth.

The year's financial data reflects the changing landscape. The Gabelli Media Mogul Fund, which focuses on telecom, media, and entertainment, saw mixed performance in Q3 2025, with its net asset value at $10.73 and a 5% turnover. The fund remains sensitive to industry-specific risks, yet its continued focus on media suggests confidence in the sector's evolving structure according to the fund's Q3 commentary.

EchoStar Corporation emerged as the top-performing stock in broadcasting and cable, with a year-to-date gain of over 360%. The company's aggressive moves in the satellite sector, including recent spectrum deals with AT&T and SpaceX, have drawn both investor interest and regulatory scrutiny. Meanwhile, Fox Corporation and Gray Media also posted strong returns, signaling a broader shift in how content is distributed and consumed according to Seeking Alpha's analysis.

How Markets Reacted

Investor sentiment toward traditional cable stocks has waned over the past year, but satellite and digital media have taken over as the new battleground for growth. EchoStar's meteoric rise is emblematic of the sector's reordering. The company's stock surged after Morgan Stanley became bullish about its spectrum sale opportunities. This optimism has spilled over into related markets, including iHuman Inc., which reported strong Q3 2025 results with a net income of $11.235 million and a basic earnings per share of $0.22.

In contrast, Webtoon Entertainment, which focuses on digital content for Gen Z audiences, reported a net loss of $11.1 million for Q3 2025, despite a 8.7% year-over-year revenue increase. The company's gross margin dropped to 21.9%, and it warned of further EBITDA losses in Q4 as it invests heavily in marketing and product development. The Korean market, however, showed resilience, with 22.2% revenue growth, indicating that digital content remains a strong draw according to market analysis.

Optical Cable Corporation, meanwhile, saw modest revenue growth of 9.5% in FY2025 and a reduced net loss of $1.5 million. The company's gross profit margin improved to 30.9%, and it has expanded into the data center market through a partnership with Lyttera. Despite this, its stock fell 26.79% to $7.16, reflecting continued investor uncertainty among investors.

What Analysts Are Watching

With the sector in flux, analysts are closely watching how traditional media firms adapt. The S&P 500, as a barometer of broader market sentiment, remains a key benchmark. However, many are shifting their focus to emerging trends in AI and digital content, as illustrated by Brand Engagement Network's recent AI deal with a global advertising agency. Under the agreement, BEN expects to recognize $250,000 in Q4 2025 and anticipates recurring revenue in 2026, potentially signaling a new direction for media engagement.

Meanwhile, accounting issues continue to complicate the sector's narrative. Gerresheimer AG, a pharmaceutical packaging company, had to correct its 2024 revenue figures after an independent investigation found systematic non-compliance with International Financial Reporting Standards. The firm's bill-and-hold revenue, previously booked too early, will now be shifted into 2025, reducing reported 2024 sales by about 1%.

What This Means for Investors

For investors, the evolving media landscape offers both risk and opportunity. The Gabelli Media Mogul Fund remains a barometer of the sector's health, with its 0.91% net expense ratio and 5% turnover suggesting a cautiously managed approach. With the cable TV industry in a long, slow decline, the focus is increasingly on companies like EchoStar, iHuman, and even niche players like Brand Engagement Network, which are leveraging AI and digital platforms for growth.

However, the path ahead is not without challenges. Companies like Webtoon and Gerresheimer highlight the financial and operational pressures faced by firms navigating a rapidly shifting market. For now, the S&P's assessment of cable TV's decline stage underscores the broader transformation underway in media and entertainment. Investors are advised to closely monitor these trends as they evolve into 2026.