I don't follow sports -- let me state this at the outset. I have no idea what the Patriots are doing right now, I'm not sure when hockey begins, and I have only a passing understanding about the evil curse that seems to plague a certain team from Boston. I actually find sports entertainment -- such as the programming developed by World Wrestling Entertainment (NYSE:WWE) -- to be a vastly superior form of diversion, since the endings are dependent upon proper fulfillment of a previously constructed creative arc (incidentally, this is why the XFL failed, as it represented a devolution from the core competency of Linda and Vince McMahon's business model).
And I don't really possess any affinity for the Super Bowl; I couldn't even tell you what number Bowl they're up to without checking (OK, I'll check: It's No. 39). About the only thing I recall from this year's outing was the Janet Jackson "wardrobe malfunction."
Like a lot of anti-sports enthusiasts, however, I do find a certain fascination with the crazy commercials that are shown during the game. Whether it's PepsiCo (NYSE:PEP) trying to sell us its cola and snack products via a cavalcade of humorous images or a movie studio attempting to pump up one of its potential summer blockbusters with a powerful and ominous extended trailer, the stakes are so high because of the culture-grabbing pomp and circumstance of this particular showcase that the marketing geniuses usually go for broke and produce some compelling, jaw-dropping spots. So companies get one of the best deals ever: a ton of viewers who basically tune in just for the commercials. This is really kind of amazing if you stop and think about it.
Which is why Fox (NYSE:FOX), understandably, wants more money for handing out 30-second opportunities to connect with consumers. According to a recent CBS MarketWatch article, Fox will attempt to get somewhere between $2.4 and $2.5 million for a half-minute of ad time; the previous championship game garnered an average rate of $2.3 million for the same amount of seconds. This should make any stakeholder in Fox glow with pride and satisfaction.
My only criticism would be this: Why not go for more? Fox should've tried for a higher increase, as the range mentioned in the article seems intuitively too low. Trying to figure out what people -- or institutions -- will pay for such a hot commodity as the Super Bowl is like figuring out the pricing stress point of a concert by the Rolling Stones; in other words, you'd be surprised what people would pay for a 30-second spot during the game (as well as elderly rockers still searching for satisfaction).
The broadcast should be an earnings driver for the Fox network in the first quarter of 2005. Time will tell, of course, and it is worth noting that the stock has experienced something of a run-up recently. And then there is the issue of published reports indicating that Rupert Murdoch might be interested in taking Fox back entirely; his News Corp. (NYSE:NWS) conglomerate owns 82% of Fox and could easily swallow up the 18% it doesn't own. Nothing definitive has been stated concerning this issue, but it is something individuals must consider carefully before making any long-term bets; a scenario like this could end up being more of a trade than an investment proper.
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Fool contributor Steven Mallas owns none of the companies mentioned.
