Will News Corp. (NWS) Get a Super Bowl Bump?

super-bowlThe Super Bowl is big business. And especially for the network that airs the game.
Fox has the honor this year. Rupert Murdoch’s network – owned by News Corp. (Nasdaq: NWS) – will air this Sunday’s Super Bowl XLVII between the Denver Broncos and the Seattle Seahawks. Over 100 million viewers will tune in to watch for four hours, which is why companies pay an average of $4 million per 30-second spot — $133,000 per second.
That’s all money in the pocket of the network. And that’s why networks like Fox, CBS and NBC pay a pretty penny to air the game. The Super Bowl is, without fail, always the most-watched television event of the year.
But do the companies that air the game see a significant short-term bump in their stock price? Recent results say “yes.”
Consider the impact in three of the last four years (2011 data was not available):
–          2013: CBS (NYSE: CBS) aired the game between the Baltimore Ravens and San Francisco 49ers. Over 108 million viewers tuned in. The result? CBS shares rose 5% in the ensuing month. Meanwhile, the S&P 500 was essentially flat.
–          2012: NBC aired the game, and Comcast (Nasdaq: CMCSA) – which owns the network – was the beneficiary. A record 111.4 million viewers tuned in to watch the New York Giants upset the New England Patriots. Perhaps not coincidentally, Comcast shares shot up nearly 8% in the following month. The S&P rose just 2% during that time.
–          2010: The then-record 106 million viewers that tuned in to see the game between the New Orleans Saints and the Indianapolis Colts benefitted CBS. Shares of “America’s Most Watched Network” popped 11% over the ensuing month. The S&P was up less than 7% during that time.
It’s a small sample size. But recent Super Bowls have clearly been a boon for the networks’ share prices.
The network that aired the Super Bowl has seen its stock pop an average of 7.8% in the month following the big game. That’s more than double the average 3% gains in the S&P 500 during that time.
If you want to take it a step further, the average return among the network stocks in the year they aired the Super Bowl was 53.5% in the three years of our study period. The average return in the S&P 500 during those three years? 18.6%.
So perhaps this is more than just a one-month phenomenon. It could be a coincidence. But you could probably do worse than investing in News Corp. before this Sunday’s Super Bowl airs on Fox. If we’re to believe the recent trend, it could result in a nice pay day by year’s – or even month’s – end.

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