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Does a Deal with the NFL Make Twitter Stock a Buy?


I was getting worried about Twitter TWTR there for a little bit. Old people started using it and startups like Snapchat started becoming more and more relevant for people old enough to have driver’s licenses. But since Jack came back it looks like it’s back on track. Today Twitter and the NFL announced a deal to stream 10 Thursday night football games to the public for free while they are also shown on NBC, CBS, and the NFL Network.

Financial details were not disclosed but Twitter beat out Verizon Communications VZ, Yahoo! YHOO, Amazon AMZN and Facebook FB to win the bid. NBC and CBS each pay $225 million to split those games between the two networks. Last season Yahoo dished out $17 million to stream a game played in London at 9:30am Eastern. Thanks for playing Yahoo, now it’s Twitter’s turn to impress the man who gets paid $34 million a year to run what was a non-profit organization until last year.

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The NFL has a history of being a pioneer in media. NBC was the first major TV network to cover an NFL game. On October 22, 1939 they showed the Philadelphia Eagles against the Brooklyn Dodgers. It was carried by only 2 affiliates and of course, the Eagles lost. By 1959, big-market teams like the New York Giants and Chicago Bears had all their games televised. A lot people credit the leagues understanding of TV with its ability to surpass baseball as the most popular sport in the US sometime during the sixties. Today the NFL’s broadcasting contracts are among the most valuable in the entire world. Four of the ten highest rated TV broadcasts of all-time are Superbowls.

But…I like watching football games in high definition on a big screen TV. Not on my phone. I’ve got a big phone but it’s not Monday Night Football big. How am I supposed to see the soul get crushed out of Jay Cutler on a 6 inch phone? I want to see the spit fly out of his mouth and his eyes roll back in his head. I need 55 inches on my wall. After all, football is a game of inches.

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We’ve seen four analysts increase their earnings estimates for the current quarter and next quarter on Twitter. The bullish sentiment on Wall Street was enough to push them up to a Zacks Rank #2 (Buy) but not enough to push them into the green. Looks like our Zacks Consensus Estimate is calling for a 13 cent loss this quarter and a 12 cent loss next quarter.

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AMAZON.COM INC (AMZN): Free Stock Analysis Report
YAHOO! INC (YHOO): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
FACEBOOK INC-A (FB): Free Stock Analysis Report
TWITTER INC (TWTR): Free Stock Analysis Report
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