Classic Lakers - Celtics Final Great for Disney

by: FP Trading Desk posted on: June 03, 2008 | about stocks: DIS    

The classic showdown between the Los Angeles Lakers and Boston Celtics for the NBA championship should provide a strong advertising boon for The Walt Disney Co.'s (DIS) ESPN, ABC and KABC, according to UBS analyst Michael Morris, who maintained a "buy" rating on the stock, as well as a price target of C$38 per share.

The analyst was optimist that the clash between the two large-market, elite teams should improve advertising from 2007 levels, the lowest in 25 years.

Mr. Morris. Tellingly said:

The [Lakers-Celtics] pairing features teams in two of the top designated market areas, or DMA's, as Los Angeles ranks second in the US and Boston is #7 increasing the likelihood that the telecasts achieve improved ratings.

Last year's dismal ratings featured teams ranked low on the DMA standings, respectively #17 (Cleveland) and #37 (San Antonio).

Despite current concerns over a potential softening in the advertising market, Mr Morris believes that live sports telecasts remain an essential, "DVR-resistant" (i.e. little-affected by piracy issues) programming to reach male demographics.

Also, Disney derives a lower proportion of revenues from advertising than competitors and enjoys a high contribution from affiliate fee revenue. The analyst also noted that Disney owns Los Angeles' KABC network which should further benefit its overall local programming.

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This article has 2 comments:

  •  
    HarMegiddo
    Jun 03 05:00 AM
    If you are around my age, 32. the visions of Bird and Magic going at it just brings a smile to my face.
    This will probably be the first NBA finals i have watched in a decade and I'm sure I'm not the only one.
    This will be good for DIS and don't forget about WALL-E coming out in a couple weeks. Everyone seems to have written it off. Well, if it is the year of the 80's comebacks, then I also remember a little movie called Short Circuit. I think WALL-E might be a sleeper hit.
  •  
    K. Lewis
    Jun 03 05:07 PM
    My Website
    I'm a lifelong Lakers fan and while I enjoyed watching Shaq and Kobe win 3 rings this STILL tops those final even if they don't win. I can't even remember who Shaq and Kobe beat but I remember the Lakers Celtics matchups in the 80s. I'm grinning with anticipation over this matchup.
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