Money & Sports
>> there could be a battle aoe pherpbing for national hockey league broadcasting rights. the philadelphia inquirer says comcast is to reach a two-year deal with the league. espn remains interested and has the right to match the offer. in this week’s “money & sports,” we are joined by alan ceda. we talk about the outdoor life network and what it could mean for comcast. interest is re-aoe phefrpbling from espn. is there a way to handicap how this playstation out?
>> espn had hockey since 199 since they first broadcast. that’s been a corner stone sport. while there’s been a bidding war espn has the upper hand. they have a chance to match an offer of reported $100 million over two years which is less than they ht option before which they dropped two months ago. they can get it back for less. they’d like to keep the sport. it’s part of their winter sport tonage. they’d put it on espn2 whereas comcast would put it on outdoor life.
>> this would be key for comcast something they want to expand into. how much more could we see them potentially offer to pay?
>> they could go much higher. comcast has almost unlimited funds. brian roberts, c.e.o. and chairman, says he wants all sports eventually and we don’t want to compete with espn. what they want to do is start with a sport like hockey and add football or baseball in the months an years to come. football is the most valuable of all television sports. there’s still a handful of cable games starting in 2006 that would be on on thursdays and saturdays. comcast could put that on outdoor life or buy a stake in the nfl network.
>> in terms of the nhl, what this means for them. a tumultuous year. is it in its interest to stay with espn, have that consistency or perhaps need a fresh start?
>> there’s a school of thought on both sides. the idea that you stay with espn to stay with a known commodity. that’s where fans know you from. that’s they have the wrapup shows or pregame shows. or start fresh. bring viewers to a new place and start a new identity altogether after the league is changing some rules. they have a new logo. players are shifting all over the place so why not change everything. it’s going to come down to a deadline of next wednesday. espn has until then to match the offer that comcast made the league.
>> let’s talk about baseball if we can for a few minutes. washington nationals move from montreal increasing the price for the team. the team is in play. how high could the price go? how much interest is there?
>> there’s a lot of interest. the team has played well. they returned to the nation’s capital for the first time in 34 years since the senators left. they have been in first place for a couple of months. slipped lately. a lot of interest. eight groups are interested in buying the club. they hope to decide it by the end of this season. lots of interest could draw a price near $500 million, which would be the seconds highest paid for a baseball team. only the road sox when sold for $700 million was higher. the nation’s capital, while they were out baseball for this long is a mystery to many. now that they’re back and will have a new stadium to replace the aging r.f.k., lots and lots of interest. >> the frontrunner?
>> there is several. fred malik. there’s a soros group. there’s the previous owner of the atlanta braves. those three are the frontrunners. but of the eight, really anything can happen. there’s a lot of money in play and a lot of interest.
>> interesting. thanks. allan kreda covers sports at bloomberg. we take a break. when we come back, the latest world and national headlines. plus it will be time for the “world’s biggest mover” segment. moves in the turkish stock market . “after the bell” continues straight ahead.
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Listen Market briefing --- Ellen (slow)
Maytag --- Raymond (slow)
Energy price --- Su (fast)
Nasdaq --- Robert (slow)
crude today rising 1.6%, ending the day at $66.86. earlier on friday, passed $67 a barrel. as for the week, prices jumping 7.3%, played out in the stock market today. you had stocks lower across the board. also, hucomputer shares, the biggest drag on indexes, coming after dell came out with a sales forecast and profit forecast for its third quarter that disappointed investors. declines across the board, 21 of 24 industry groups in the s&p traded lower. as for the weekend in equities, the dow, and s&p ending the week higher. for the dow, the fifth week of gains in seven weeks. for the s&p, the sixth weekly gain in the past seven weeks. the nasdaq dragged lower this week by dell as well as cisco. after the bell, maytag said a sweetened $1.7 billion offer from whirlpool is superior to a rival bid, a step toward accepting the offer to create the world’s largest appliance maker. whirlpool is the largest u.s. appliance maker, raising its bid three times to $21 a share, also assuming $977 million in debt. maytag saying it’s withdrawing support for a $14-a-share bid from a group led by ripplewood holdings. for reaction, we have an analyst with raymond james, rating whirlpool a strong buy. he joins us by telephone. hi, sam.
>> hi, ellen.
>> it’s been a long tale. why did it take so long for maytag to make this determination?
>> there’s a lot of things that go on behind the scenes that oftentimes optically we don’t see or investors don’t see. sure, it would appear that $17, to $21, are obviously greater per share than $14. but you have the question that maytag shareholders and the board have to ask themselves, and that is, what are the chances that the f.t.c. allows the trade to go through and that you actually have a chance to see a $20 or $21-a-share price. i think ultimately whirlpool set the level at a place where the maytag board threw up their arms and said, yeah, this more than compensates for the chance that the f.t.c. does not approve.
>> in the release today, maytag says it is a reasonable, capable chance of being pleted. what’s your assessment?
>> there’s a couple of twists to this. first, whirlpool’s case seems reasonable. i will not profess to be an expert in the f.t.c. regulatory process. but, you know, a couple things. first off, there have been no customers from whirlpool’s perspective that have implicitly or explicitly opposed the deal, which is often the litmus test that the f.t.c. will use. a few other things, too. even though there’s fairly heavy potential market share with the combination, in the mid 50% range, much of that is o.e.m. business from kenmore, which is actually sear’s domain. you also have a technology-based product whereas if you build a better mouse trap you’ll pick up more market share so there’s easy entry into the industry. so there’s a realistic chance this thing goes through. there are other interesting things, too. there appears to be language in the merger agreement that gives whirlpool some flexibility within the ultimate negotiations should there be some issues arising with the f.t.c. the bottom line is, whirlpool is in a fantastic negotiating position at present.
>> briefly, do you think we’ll see ripplewood come back in with a higher offer?
>> you could. the original proxy language said that they were offering $23.5 per share for maytag back in december. although, quite frankly, the business has deteriorated dramatically since then. they could, and they could argue that because of the f.t.c. issues that they don’t have to bid $21 to make this thing enticing. but, again, the difference between the two bids is pretty pronounced and i would imagine that once the shareholders vote, they’ll vote on whirlpool.
>> sam, thanks so much for joining us.
>> thanks for having me.
>> let’s turn our attention back to the top story of the day and that is the rally in energy prices. oil not alone in reaching a record. a hat trick for gasoline, natural gas and home heating oil. all reaching new records. speculation production will not keep pace with rising demand. let’s bring in su keenan who follows the story.
>> a lot of factors weighing on the energy market today, ellen. in the past three weeks, there have been at least 14 unplanned closures of u.s. refinery units and that is one element raising concern about production capacity. among those problem areas, a power failure at the conocophillips plant in illinois and sunoco reported a fire at a pipeline in texas. oppenheimer and company’s fadel gheit says this, combined with a growing number of other factors, sets the stage for record prices.
>> we have refinery problems in the u.s. we have the summer driving season. we have fears of hikerarchy in corruption and disruption. we also have global tension in iran so when you combine all of these factors, you get $57 oil.
>> meanwhile, prices will likely continue to close in on the $70 market , the view of analysts and traders polled by bloomberg. 55% predict prices rise next week and only 35% predict a drop. boone pickens with the energy fund out of dallas that gained 200% by midyear, he sees oil reaching $75 a barrel. paramount options ray carbone says he has a lot of credibility, given his recent predictions.
>> he is three for three recently, $50, $60 and $3 a gallon. i’m in complete agreement with $75 d.looks tame to predict that. to get into the upper reaches, we’ll have a hiccup, a geopolitical event, whether an iron sanction―iran sanction, saudi arabian terrorist attack, something like that to force us up there quickly.
>> nymex crude oil futures have rallied 58% so far this year. ellen, back to you.
>> su, thanks so much. and along with that oil story, dell, another important factor for investors today. robert gray has details on today’s nasdaq trading from the market site in times square.
>> the nasdaq composite fell for the second consecutive week on the dell effect. brian williamson with the boston company saying dell was the trigger, a trickle-down effect permeating throughout the market , combined with higher oil. not a lot of people on the buy side. institutional plays were quiet on friday’s session, it feels like the dog days of august. dell shares closing down 7.5%, the worst decline in four years for dell, taking down microsoft, as well, down 1% and intel down 2%, as well. as we did see late in the session, stocks making a comeback here on the nasdaq and much of that, as brian williamson said, it was oil closed and the market ripped. volume was well below the average daily volume on the nasdaq. apple shares surged late in the session, helping to lead that comeback off the lows. it was up 5%, closing at a record today. there was speculation among traders, the trader at s.g. cowen, that apple would team up with google to offer itunes so google shares rising 2%. gene munster with piper jaffray says he did not think, if investors are buying apple shares because of this speculation, it’s the wrong reason. google may host mac applications such as safari browser but didn’t see it adding to apple’s bottom line and the rumors are a stretch. he pointed to new products with apple gaining market share for apple and the paris expo coming up in september. he also pointed to mac world 2006, where they debut new products and that’s within the time horizon that would make sense for investors to invest in apple. we did see napster falling 30% off midday shares. napster shares did recover, closing up eight cents on the session. the nasdaq composite closing down 17 points at 2156. back to you.
>> and coming up, we’ll continue to look at the stock market . we’ll bring in ken tower, chief market strategist with cyber trader, state tread. ahead.
