As retail giant Amazon.com, Inc. (NASDAQ:AMZN) and social media titan Facebook Inc (NASDAQ:FB) make plays for the TV sports arena, GBH Insights analyst Daniel Ives sees the upcoming year and a half as a crucial period.
In other words, these tech titans are well underway to roaring through attaining professional sports programming rights.
As such, the analyst maintains a Highly Attractive rating on AMZN stock with a $1,500 price target and reiterates a Highly Attractive rating on FB stock with a price target of $240. (To watch Ives’ track record, click here)
Especially on back of last week’s buzz where the social media giant secured a deal to allow access to streaming 25 games each week beginning this year, Ives highlights this as a “tip of the spear” as far as sports programming content enterprises are concerned in the future.
As FB bolsters its original content video library, the analyst cheers these endeavors prioritizing sports programming as a well-devised and savvy move that will serve to fuel the company’s “content machine” all the more. Original content programming spend may even rise up to between $1 and $1.5 billion throughout 2018, wagers Ives.
Meanwhile, Amazon continues to boast “deep pockets,” meaning this giant has potential to be a mammoth competitor. By Ives’ estimation, Amazon intends to spend over $5 billion on content this year, and the company is raring to be a prospective wave-maker of a “disruptive force to future live sports rights.” Another “clear potential player” is FB standing in a corner, as all the tech rivals get ready for the big games to get rolling in the TV sports rights arena.
Ultimately, “These 25 games will be distributed via Facebook Watch as part of MLB Live show Page, making this MLB’s first digital-only distribution and was unanimously approved by 30 Major League Clubs. With a reported deal value in the $30 million to $35 million range, we believe this is only the ‘first inning’ of Facebook going after live sports programming over the coming years to add this key content piece to their streaming video franchise along with the recent hiring of former Eurosport CEO Peter Hutton to build out these new efforts. To this point, we believe the next 12 to 18 months is a pivotal window for platforms like Facebook and Amazon among others to aggressively secure the rights to various professional sports programming especially as the Disney/ESPN launch of ESPN Plus over the coming year will be at the epicenter to Iger’s master streaming initiatives and ‘raise the stakes’ for securing future sports content in our opinion,” Ives concludes.