Nik Wallenda's 'Skywire' Will Pay Dividends For Discovery Communications

If you weren't one of the 13 million people that witnessed Nik Wallenda walking a tightrope over the Little Colorado River Gorge, you missed an exciting television event. More importantly, you might have missed an exciting investment opportunity in the television network that made it all possible, the Discovery Channel owned by Discovery Communications (NASDAQ:DISCA).

"Skywire," the name given to the Wallenda stunt, scored high ratings for Discovery Communication's namesake channel. The event was watched by 12.98 million total viewers. The event had strong numbers in the key age demographic of 25-54. The pre-coverage of the walk (8 PM to 9:10 PM) also had strong ratings with 6.5 million total viewers.

Discovery walked away from the night with its fourth best prime time average ever. The 4.77 rating for the walk segment was the best in company history. The entire program ranked as the third best special in Discovery Channel history.

"Skywire" also helped Discovery with its online presence. The event was streamed online by 2.1 million people and generated strong traffic to the company's website. Twitter also enjoyed discussing the walk, where peak mentions of "Skywire" and Wallenda hit 40,000 mentions a minute. Throughout the 9pm to 10pm segment, over 648,000 mentions hit Twitter. Discovery Communications also saw another program trend on Twitter during "Skywire."

A commercial from Discovery Communications showed Snuffy the Seal being eaten by a shark. This commercial was the company's own promotion for Shark Week, the annual television event that airs content aimed around sharks. After the commercial, Shark Week, #SharkWeek, #SnuffytheSeal, and Poor Snuffy, were all trending on Twitter. Shark Week premieres on August 4th and could see its strongest numbers ever thanks to the "Skywire" commercials.

With strong advertisements during "Skywire," Discovery Communications also saw viewers tune into the premiere of "Naked and Afraid," which aired after the Wallenda special. The show had over 4 million viewers and earned a 2.75 rating. The show was also trending on Twitter during "Skywire" and its own premiere on the Discovery Channel.

Discovery Channel actually stole Wallenda away from regular network television. Back in 2012, Wallenda walked over the Niagara Falls in an event called "Megastunts: Highwire Over Niagara Falls Live!" That television event on ABC had 10.1 million total viewers, including an average of 8.7 million. The event had a 2.5 rating during its two-hour airing. The reason Wallenda left ABC had nothing to do with numbers and everything to do with pride.

ABC forced Wallenda to wear a harness as he crossed the falls. This move by ABC did not sit well with Wallenda. Wallenda told his father, "I just feel like a jack ass wearing a harness." Earlier this year, Wallenda also reminded an interviewer why he would be walking across the area near the Grand Canyon with this:

· "I'm walking over the Grand Canyon without a tether, and I signed up with a new television partner because of that."

The strong partnership between Discovery and Wallenda will pay off going forward. Wallenda has already announced his plans to walk between buildings in New York or a similar stunt. This would be set to air on the Discovery Channel once again. Discovery will be able to attract extra sponsors and raise the amount of 30 second advertisements thanks to the success of "Skywire." In the world of live stunts, Wallenda's events are the "Super Bowl" and Discovery gets to charge large amounts for coveted commercial spots.

Wallenda's walk was aired in 178 countries. Discovery could greatly benefit from the international exposure it received from the airing of "Skywire." International expansion was one of the keys I gave to Discovery Communication's future in a recent article.

On July 30th, Discovery Communications will report second quarter earnings. Analysts on Yahoo Finance are estimating earnings per share of $0.90 for the second quarter. Discovery Communications posted a profit of $0.76 in the prior year. Revenue is expected to increase 29.6% to $1.48 billion. The strength of "Skywire" and strong advertising rates from online streams and television may lead to a revenue and earnings beat in the second quarter.

Shares of Discovery Communications do come at a high valuation. Analysts expect the company to post earnings per share of $3.35 for fiscal 2013 and $4.26 in fiscal 2014. Shares of Discovery trade above $77 and appear close to breaking out of 52-week range. Over the last year, shares have traded between $48.59 and $81.43. In 2013, shares are up 18% and have not dipped below a closing price of $65. Consider investing in this great media brand company before second quarter earnings are announced.

One television event won't change the face of a media company. However, a strong event like "Skywire" sets up two other television shows in "Naked and Afraid" and "Shark Week". Nik Wallenda's walk also sets Discovery Communications up well for international expansion and future Wallenda events. Discovery Communication stock remains a buy ahead of second quarter earnings and should be in for a bright 2013 and 2014.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.