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What The NFL Streaming Deal Means To Twitter's Valuation

Summary

Twitter has reportedly won a non-exclusive deal to stream Thursday night NFL games.

Twitter will only be able to sell 15 of the 75 ads for the game.

Is this the spark Twitter needs to reignite growth in its stagnant US user base?

Having fallen sharply from its highs, Twitter (NYSE:TWTR) has partnered with the NFL in an effort kickstart its stalling user growth. Let's take a look at what the deal means for Twitter's stock.

How It Affects Twitter

  • Part of the deal is that Twitter will be rebroadcasting NBC (NASDAQ:CMCSA) and CBS (NYSE:CBS) feeds, which means that Twitter will have to show NBC and CBS ads. Due to this, Twitter is estimated to only be able to sell 15 of its own ads during the stream.
  • The average Thursday night football ad costs $547,151. Assuming Twitter is able to sell 150 ads for the same price as TV ads, then they would be adding approximately $82 million dollars to their revenue. Twitter should be able to get close to the same price per ad, because TV broadcast Thursday night football averages 17.6 million viewers, which is similar in size to the 15.2 million viewers Yahoo received during their live stream. Internet ads also allow consumers to interact with them in real time, which makes them more attractive to advertisers.
  • The main goals of the deal are to further establish Twitter as the go-to brand for live content and to attempt to reignite...

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