Can the NFL Save Twitter With This New Deal?
Twitter Inc. (NYSE: TWTR) announced Monday morning that it entered into a two-year content deal with the National Football League (NFL). The NFL already had single-year content deals with Twitter in both 2013 and 2014, but it seems that this deal gives more of a vote of confidence for this social media giant.
Ultimately the NFL and Twitter will offer brands the opportunity to present official NFL content created specifically for the Twitter platform, on personal computers and mobile devices. What comes to mind is the advertising hubbub of the Super Bowl, albeit on a smaller scale, surrounding a new platform to reach fans.
As for Twitter, the objective of this deal appears to be expanding to a broader audience that it would not traditionally reach. Not to mention this gives Twitter somewhat of an avenue to monetize its service, which has been a large concern among investors and analysts alike.
According to the agreement, Twitter users will have increased access to official NFL content, including infographics, pre-game highlights, game recaps and behind-the-scenes content.
Twitter plans to highlight NFL material even if users have not chosen to follow the league. The company does this by tracking people’s activity on the service to determine their interests. Ads featuring NFL content will be targeted using similar analytical tools.
The NFL’s massive popularity within the United States as the most watched sport (by televised viewership) could help Twitter find ways to get people to check into its service more frequently and lure visitors who might not necessarily sign into the service, but could still see ads.
In a show of good faith, along with the announcement of the NFL deal, Jack Dorsey, co-founder and interim CEO of Twitter, bought 31,000 shares of Twitter, valued at roughly $875,000. However he was not alone, another Twitter board member, Peter Currie, bought about 9,200 shares, valued at roughly $250,000. Peter Fenton, a venture capitalist and Twitter board member, purchased about $200,000 in stock on Friday, while Anthony Noto, Twitter’s chief financial officer, bought roughly the same amount.
Twitter shares have slid on the year as confidence fell with the departure of former CEO Dick Costolo. In fact year to date, shares are down nearly 25%, while in the past 52-weeks shares are down 37%.
Shares of Twitter were up 7% at $28.95 Monday afternoon. The stock has a consensus analyst price target of $40.48 and a 52-week trading range of $26.87 to $55.99.