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Telefonica (TEF) Secures Spain's Football Screening Rights

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Telefonica SA (TEF - Free Report) recently secured the television rights to screen the premier division football matches of Spain for the next three seasons till 2022 for €980 million ($1.15 billion) per season. The package will offer the company direct control over the domestic TV rights for all matches of La Liga (men's top professional football division of the Spanish football league system), strengthening its position in the market as a leading provider of premium content.

Telefonica will showcase its leading brand in the country, Movistar, while screening the matches. Movistar has long been associated with various sporting events in the country and associated regions. By promoting Spain’s premier division soccer matches that feature celebrated teams like Barcelona, Real Madrid and Atletico Madrid, and icons like Lionel Messi and Cristiano Ronaldo, the company aims to boost its Movistar+ pay-TV service.

While gaining the television rights in the auction, Telefonica outbid rivals like Mediapro, a multimedia communications group in Spain. Mediapro was only able to secure the television rights for highlights and broadcasts in public spaces, such as bars and restaurants. Per the La Liga sources, total cost for the packages of TV rights was €3.4 billion.

Telefonica has outperformed the industry in the past six months with an average loss of 11.2% compared with a decline of 14.4% for the latter. The company is successfully capitalizing on the opportunities in the digital world through several growth strategies. Moreover, Telefonica has significantly accelerated the deployment of ultrafast networks. Notably, the company continues to witness increased traction in the smartphone arena. Continued rollout of fiber and LTE are set to drive considerable growth for the company. Moving forward, Telefonica expects revenues in 2018 to grow around 1.9% year over year.

Telefonica currently carries a Zacks Rank #4 (Sell). Better-ranked stocks in the broader industry include Comtech Telecommunications Corp. (CMTL - Free Report) and Motorola Solutions, Inc. (MSI - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Ubiquiti Networks, Inc. (UBNT - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Comtech Telecommunications has a long-term earnings growth expectation of 5%. It surpassed estimates in each of the trailing four quarters with an average positive earnings surprise of 123.7%.

Motorola has a long-term earnings growth expectation of 8%. It surpassed estimates in each of the trailing four quarters with an average positive earnings surprise of 12.1%.

Ubiquiti Networks has a long-term earnings growth expectation of 18.6%. It topped estimates thrice in the trailing four quarters with an average positive earnings surprise of 8.9%.

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