Are These Sectors About to Hit It out of the Park?
That's right, folks: The American pastime is back! Baseball is once again here, causing husbands nationwide to retire to their dens on the weekends while the rest of their family pleads to change the channel. Gosh, I love baseball!
But I'm not the only one benefiting from the entertainment value of a good game. Based on figures released from the Team Marketing Report that researches Major League Baseball ticket prices, cable companies could find themselves having an incredibly profitable year.
The data released on Friday show that the average ticket price at an MLB game increased by just $0.01 over last year! That's the smallest increase in the research firm's 21-year history of tracking MLB data, and it's down from a 1.2% gain in 2011 and a 1.5% uptick in 2010. I presume this to mean consumers are unwilling to accept price hikes at the ballpark. This means only one of two things to me: They're choosing to watch it from the comfort of their own home or they're heading out to a local casual dining restaurant to watch the game. Either way, baseball looks like big business for these sectors in 2012.
News Corp. owns the Fox network, which currently has the exclusive rights to the World Series, the All-Star game, and the ALCS and NLCS in alternating years. Time Warner, owner of TBS, will broadcast all Division series games and one "game of the week" for 26 consecutive Sundays. However, the night wouldn't be complete without the daily highlights on ESPN, which is owned by Disney. In addition, ESPN is benefiting from increased online MLB merchandise sales. With ticket prices flat, these networks have an opportunity to aggressively pick up viewership, which could in turn translate to higher premiums for the advertising spots on their programs. This seems like a win-win for the TV industry.
You shouldn't discount the casual diner, either. A company like Buffalo Wild Wings (NAS: BWLD) could use flat ticket prices to get customers to come into its restaurants and watch the game, rather than spend a small fortune at the ballpark on food and drinks. Same-store sales growth of 12.9% through the first six weeks of Buffalo Wild Wings' current quarter shows this trend may already be under way.
We're only a few games into the season, so any real effect on these companies' bottom lines will naturally be tough to gauge, but flat ticket prices may indeed portend a shift away from America's ballparks and back into the home or local restaurant. This could finally be the year News Corp., Time Warner, and Disney hit their sales figures out of the park.
Do you think these broadcasting companies are ready for a grand slam, or will they strike out looking? Tell me and your fellow Fools about it in the comments section below.
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