Time Warner goes up on stock after a deal with NFL

Time Warner Cable struck a deal with National Football League (NFL) for exclusive television rights. The cable TV providers will now be able to run an NFL-exclusive channel that will be aired via traditional cable network and online.

The company was up 1.2 percent in the afternoon trading. Its stock value has increased more than 50 percent this year.

TWC had about 12.5 Million online subscribers to its video services in June and through a series of TV contracts and acquisitions the company plans to increase the number by sheer volume.

“Among cable operators, TWC lacks the flash of Comcast -owned  NBCU or the turnaround opportunity of Charter Communications. However, since 2009 it has returned about $5.5 billion in capital through dividends and buybacks while steadily growing its business,” Morgan Stanley analyst Benjamin Swinburne wrote. He raised the rating on stock from equal-weight to over-weight and stated an expected $110 share value from $96.

The cable television networks have been working hard on getting media rights to sports leagues and individual teams. Due to the increasing viewership of different sports like NFL, National Basketball Association and soccer, the sports coverage is becoming more and more strategic.

Time Warner Cable is also working on an exclusive regional sports channel for NBA in California. It is expected to be launched next month. The company finalized the deal with Los Angeles Lakers last year for exclusive rights for the next 20 years. That way they will not have to pay royalties ESPN or Fox Sports.

“This is really all about controlling our own destiny. It’s about managing our programming costs over a long period of time,” Marcus said.

ESPN and Fox Sports own rights to most of the sports leagues in the US and make hefty sums of money from media rights and royalties.

TWC is also in the process of penning a deal with online television networks, the likes of DirectTV, for exclusive streaming of the sports channels for increased viewership. However, these deals are still far from finish.

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Posted by Usman Khalid on Sep 25 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.