The following is an excerpt from Charles Passy | July 31, 2012 | Smartmoney.com |
Does record Olympic viewership on NBC translate into a gold medal for Comcast (CMCSA), the broadcast behemoth’s majority owner?
That’s the question some investors may be asking, given the network’s generally impressive showing — at least in terms of raw numbers — since the start of the London Summer Games last week. NBC reached a record-breaking 40.7 million viewers with its tape-delayed presentation of Friday’s opening ceremony, representing a 17% spike from the Beijing Olympics in 2008. It also attracted 28.7 million viewers on Saturday, another record. (Not that the coverage itself hasn’t merited its share of criticism, as evidenced by this story in the Los Angeles Times.)
But with Comcast, which acquired its majority share (51%) of NBC from General Electric in early 2011, already trading near its 52-week high of $32.78, some analysts say it’s doubtful the Olympics will have a significant impact in the short term, considering the hefty sum of $1.18 billion paid for securing the rights.
In the longer term, however, some analysts say it could herald a turning-of-the-corner — particularly as Comcast, the country’s largest cable and internet provider, emphasizes its “TV everywhere” philosophy of building an audience beyond the TV set itself and connecting its broadcast and online audiences. With the Olympics, NBC is taking a split approach to coverage, emphasizing live streaming as much as the evening telecast.
“You see the rationale working. This is an early proof of the concept,” says Todd Mitchell, an analyst with Brean, Murray, Carret & Co. who recently reiterated his “buy” rating on shares of Comcast, with a target price of $35.
To read more visit: Smartmoney.com
