By: Jason Aycock, SA News Editor
Amid Friday's late stock rally, broadcast-related stocks are putting a button on a banner week.
- Fox is higher today (FOX +6.1%, FOXA +5.3%), and FOXA is up 18.3% over the past five days. Discovery (DISCA +1.3%) is on a five-day run of 22% gains. And AMC Networks (AMCX +1.2%) is up 28.4% in the past week.
- In some cases stocks are getting called out for having too-low valuations in recent weeks. BofA gave Fox a Street-high price target based on some unappreciated value among assets including its exposure to online betting - a hot topic this week - and its direct-to-consumer strategy.
- And a note from Stephens last week cited double-digit upside in broadcasters as the sector comes in for easy comparisons and "built-in" second-half gains. The firm favors Gray Television (GTN +2.4%) and Nexstar Media Group (NXST +3.1%). Gains this week for local-broadcast names: NXST +10.3%; GTN +1.5%; Tegna (TGNA +2.6%) down 1.3% for the week E.W. Scripps (SSP +5.1%) up 15.9% for week; Sinclair Broadcast Group (SBGI +0.5%) up 14.4%.
- ViacomCBS (VIAC +3.1%, VIACA +3.1%) is building on a few months' gains, up 15% this week, surrounding the high-profile launch of its streaming service Paramount Plus (likely the last of the big-service launches).
- The other major media story hitting broadcasters this week is the rapid development in NFL TV rights negotiations. Amazon.com (AMZN +0.2%) is pushing for the chance to exclusively stream more Thursday night games (which might cost it $1B or more), and Fox is at least hinting toward ceding Thursday night so it can focus on Sundays.
- That comes as the new deals look to be exploding in price, nearly doubling. Fox's annual average fee for Sunday afternoons is currently $1.1B, and looks to move to $2B; CBS will also probably pay $2B for its Sunday games, up from $1B, and NBC (CMCSA +2%) to $2B from a current $960M average as well.
- Those deals would lock in much higher payments for as long as 11 years, with deals set to start in 2022 or 2023.