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Stocks for Sports Fans: CBS Corporation (CBS), Time Warner Inc (TWX), The Madison Square Garden Co (MSG)

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Now that we’re passed the Super Bowl and on the cusp of March Madness, it might be a good time for you to consider the stock market.  While sports and stocks might not seem like a match, avid sports fans have good reason to consider investing in these companies.  Sports in the United States is big business, and the popularity of sports in America has led to big profits for some of the country’s biggest companies.  If you’re an avid sports fan and an avid investor to boot, you’d be wise to consider these stocks the next time you watch your favorite team.

Three titans of sports broadcasting

Speaking of the Super Bowl, CBS Corporation (NYSE:CBS) saw solid full-year 2012 results, including 3% growth in total sales, on the strength of its Entertainment and Cable Networks divisions, which include the company’s flagship CBS Network and the premium subscription service CBS Sports Network.

Football is America’s most popular sport, and CBS dominates football broadcasting.  CBS broadcasts weekly NFL regular season games, as well as AFC regular-season, post-season divisional playoff and championship games.  CBS Sports has rights to broadcast the AFC through the 2013 season, including the broadcast of the 2013 Super Bowl. A positive development for CBS Corporation (NYSE:CBS) came in December 2011, when CBS wisely extended its rights with the NFL to broadcast the AFC from the 2014 season through the 2022 season, including certain National Football Conference regular season games and the Super Bowls in 2016, 2019, and 2022.

The Walt Disney Company (NYSE:DIS) is a media conglomerate, with a market capitalization of $90 billion and a wide array of sports networks, including ESPN and ABC. Disney reported solid group 2012 results, with sales increasing 3% year over year on the strength of its Media Network segment, which saw sales increase by only 4%.

The Walt Disney Company (NYSE:DIS) also got off to a strong start to the new year, reporting that fiscal first quarter revenue rose 5% versus the same quarter a year ago.  Strength was particularly noticeable within the Media Networks segment, which contains the popular ABC and ESPN networks and saw 7% revenue growth year over year.

Time Warner Inc (NYSE:TWX) is a $50 billion company that also benefits handsomely from America’s love affair with sports, and the company depends heavily on its television networks.  The Network segment is the most important one for Time Warner’s future.

Television networks represent more than two-thirds of Time Warner Inc (NYSE:TWX)’s profits. Therefore, continued development of successful TV programming is critical for the company. Management is optimistic here, pointing to the newly arranged 14-year contract with CBS Corporation (NYSE:CBS) and the NCAA to broadcast the Division I Men’s Basketball Tournament, one of the most highly watched sporting events in the United States.

A more speculative play to consider

If you’re an investor interested in more highly volatile, speculative stocks, you might want to consider the The Madison Square Garden Co (NASDAQ:MSG).  The company carries a market capitalization of only $4 billion and holds a valuation befitting a high-growth stock, with a trailing P/E of over 30 times.

Buying this stock provides exposure to both broadcasting and sports teams themselves.  By investing in Madison Square Garden Co (NASDAQ:MSG), you’re pinning your hopes largely on the New York Knicks, New York Rangers, and New York Liberty.  MSG also operates the MSG Networks.  In February, the company reported fiscal second-quarter revenue rose 4% year over year.

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