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Why Media Investors Will Tune Into AT&T's Earnings Call

Like cabin dwellers preparing for a storm, media investors are getting ready for second-quarter earnings reports that are likely to show the biggest quarterly decline ever in pay-TV subscribers.

Fewer subscribers likely will translate ultimately into lower fees for cable network owners, which in turn likely will spook media investors. Company executives will probably talk about stabilizing trends, but the reality of subscriber declines can only be explained so far.

All told, analysts are expecting a loss of more than 1.2 million video subscribers in the second quarter. If that's accurate, the decline would amount to a 2.4% drop for the quarter from the size of the pay-TV universe at the end of the second quarter in 2016. Many observers are bound to use the word "acceleration" given that the pay-TV subscriber decline in the first quarter was about 750,000 subscribers, or 1%.

Investors will get their first look at the extent of pay-TV subscriber declines when AT&T Inc. (T) , owner of the DirecTV satellite service and a large but shrinking DSL business, reports its second-quarter numbers at the close of trading on Tuesday, July 25. AT&T will be followed on Thursday by Comcast Corp. (CMCSA) , Charter Communications Inc. (CHTR) and Verizon Communications Inc. (VZ) .

As usual, much attention will be placed on Walt Disney Co. (DIS) , owner of ESPN, the most-widely distributed and most expensive cable network. ESPN is often used as a barometer for the cable TV industry. Shares in the world's largest entertainment company, have gained 2.3% in 2017, trailing the benchmark S&P 500 index, which has advanced 10.8% this year. Disney...