Though the stakes were high, it’s clear CBS (NYSE:CBS) and Time Warner (NYSE:TWX) had a slam dunk with their March Madness coverage. Ad Week reported that ad revenues could amount to $875 million for the entire NCAA Tournament, a record for March Madness and the highest amount for any U.S. sporting event this year, including the Super Bowl.
The secret is in the longevity of the tournament, which dominates a slow month for U.S. professional sports and presents interesting twists as favorites fall and underdogs rise. Multiple storylines emerged throughout the 2013 tournament, all of which benefited the CBS and Time Warner stock prices. For CBS, the media company enjoyed a 7.33 percent increase from March 1 through the close of Friday trading. Time Warner clocked an increase of nearly 12 percent.
Analysts were skeptical that CBS and Time Warner — which broadcast games on TBS, TNT and truTV — would reap the spoils of a successful tournament. Yet there were enough headlines and upsets to make their strategy work, culminating in an epic finals match-up between Louisville and Michigan. If viewers tuned in at any point during the scintillating first half, they were going to stay on CBS for the remainder of the contest…
CBS’s 2013 has been impressive on the whole, beginning with Super Bowl coverage and continuing strong with March Madness and its successful network original series. Since January 1, stock prices have climbed over 22 percent. Considering its successful run, it’s hard to think of CBS taking any different approach in the coming years. Though ad revenues fell short of the billion-dollar mark in 2013, that number will likely be met next year.
Time Warner stock, for its part, has grown over 24 percent since the start of 2013, reaching an all-time high of $59.82 this week. Efforts in content distribution and movie production are spelling continued success. The release of “42″ in the early moments of the baseball season looks like a home run. Investors looking to add TWX to a portfolio would be wary of its potential, as it is unclear how much room the stock has to grow. Higher dividend yields and significant insider buybacks, however, suggest a strong company is only getting stronger.
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