That may be a faint hope.
TV viewers are taking a pass on the best-of-seven series. Ratings for this year's postseason have been dismal, according to Adweek, because the Rangers and Cardinals don't have big fan bases. Viewership for Game 1 was down slightly from last year, and the numbers will probably continue to decline because teams with big fan bases in major media markets such as the New York Yankees, Boston Red Sox, and Philadelphia Phillies, who had the best record in baseball, either did not make the postseason or got eliminated early.
For New York-based News Corp., this is bad news. News Corp.is the parent of Fox Sports, which has broadcast baseball's championship for more than a decade. It has more than a passing interest in America's pastime.
In 2006, baseball renewed its broadcasting deal with News Corp. and Time Warner's
Sports are a big business for News Corp., which also broadcasts NFL games and will televise this year's Super Bowl. Its television business, which includes Fox Sports, generated $223 million of the company's $1.35 billion in operating income in the latest quarter, second only to Cable Network Programming. Revenues were $1.12 billion out of $8.96 billion.
Broadcasters sell most commercial time for big events such as the World Series months in advance by offering advertisers guarantees that a certain number of viewers will watch their spots. If fewer people watch these spots than News Corp. expected, than the New York-based media conglomerate will have to offer "make goods," essentially free commercials of equal value.
For News Corp., lackluster World Series ratings couldn't come at a worse time. Shares of the parent company of 20th Century Fox and Fox News Channel were pounded this year because of the U.K. phone-hacking scandal that lead to the closure of the News of the World tabloid. The stock has rebounded since July after the conglomerate announced a $5 billion share buyback that came one day after it delayed plans to buy the 61% of BSKyB (OTC: BSYBY.PK), a satellite broadcasting and telephone company, that it didn't already own. Reporting better-than-expected quarterly results certainly helped, too.
Nonetheless, News Corp. shares are pricey. The company trades at a price-to-earnings ratio of 14.85, ahead of the 12.81 multiple for the peers in its sector, according to Reuters. Analysts expect it to see a 3.3% revenue increase in the current quarter and a 1.7% increase in the December quarter. They have an average price target of $20.53 on the stock, ahead of the $16.98 level where it recently traded.
Sports-mad investors should consider ESPN parent Walt Disney
Unfortunately for News Corp., the World Series is the least of its worries. Investors should avoid the stock for now.