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What an NFL Deal Means For CBS

NEW YORK (TheStreet) -- CBS (CBS - Get Report) announced Wednesday it had won the right to broadcast 16 NFL games for the 2014 season, with an option for an additional year at the football organization's discretion. This is welcome news for those who tire of incessant Big Bang Theory reruns, but is it also good news for investors?

CBS says yes.

"CBS is a premium content company and the NFL represents the best premium content there is. I look forward to all this new deal will do for us not only on Thursday nights, but across our entire schedule," said CBS CEO Leslie Moonves in a statement.

Though CBS is already the highest-rated network on Thursday evenings, sports programming with broad domestic appeal could spark a halo effect, drawing a larger pool of viewers to existing programs.

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Bernstein Research, though, isn't as certain.

"CBS is already #1 on Thursday nights. This deal hampers their ability to launch and maintain their entertainment lineup, which in turn puts their syndication pipeline at risk," wrote analyst Todd Juenger.

The transaction cost between $250 million to $300 million, according to sources speaking with The Hollywood Reporter, and even for that chunk of change, it's not a deal of exclusivity. CBS will simulcast the first eight Thursday night games, while they are being shown on NFL Network. Then, CBS will produce the next eight games (six on Thursdays, two on Saturdays) to be jointly broadcast on both networks.

So what's the upside thinking behind CBS' latest deal? To Bernstein Research, it was a defensive move.

"They must be concerned with trying to keep these games from ending up on a competitive network, which they feared would significantly damage their Thursday night audiences and ad revenue," wrote Juenger. "We believe they factored in a sizable opportunity cost for what would happen if they didn't do the deal."

According to The Hollywood Reporter, competitors ABC, Fox and NBC were also involved in the bidding war.

The investment firm reiterates CBS as "market perform" with a target price of $60.

By market close, shares had added 1.9% to $58.94.

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