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Kevin Harvick’s Investment Portfolio, DANICA Premiers Tonight
Kevin Harvick won the Monster Energy (MNST) NASCAR Cup Series race at Texas Motors Speedway last weekend, which gives him a spot in the “Championship Four”; the 4 remaining drivers who will race for the title at Homestead-Miami Speedway on November 19th. JWS got the exclusive opportunity to sit down Kevin to discuss his investment portfolio, sponsorship partners and sports marketing agency.
JWS: How important is it to you to have sponsors that you would invest in?
Kevin Harvick: The companies that you believe in and invest in, are the companies that you want on your car. I can tell you Exxon Mobil (XOM) is in my portfolio.
JWS: How have you managed to maintain long-term partnerships with several of your sponsors?
Kevin Harvick: We’ve been fortunate through the years to develop what we have with the Busch Brand (BUD), Jimmy John’s, who’s been with us since 2009 and Textron (TXT), who started with us back in 2007. We’ve kind of found the niche with each of those companies in terms of what they like to do, how they like to entertain and where they like go.
JWS: Does having KHI Management (his sports marketing agency) help in terms of signing NASCAR sponsorship deals?
Kevin Harvick: The thing that makes us unique and different is that we have a sports agency that represents 2 PGA golfers, Donald Cerrone (UFC) and Harrison Burton (motocross). We’ve tried to make ourselves more diverse so that when we are trying to cut a deal for a NASCAR sponsorship, we have a family of assets that we can blend in; golf tournaments, UFC fights, etc.
JWS: How closely do you follow the market?
Kevin Harvick: I wake up with Maria (Bartiromo). I like to understand what is happening in the world. I spend a lot of time paying attention to it because I’m intrigued by it.
Howie Long-Short: Metro-Goldwyn-Mayer (MGM) acquired Epix, buying out Viacom (VIAB) and Lionsgate (LGF.A) back in April for $1.031 billion. The company has underperformed over the last 6 months (+2.8% compared with industry-wide growth of 15.6%), and analysts are projecting Q3 earnings ($.33/share) that would be a 43% YOY decline. The company will report later today.
Fan Marino: If you enjoy sports documentaries, check out DANICA; premiering this evening at 8p EST on Epix (or for free at epix.com). The film, directed by broadcasting pioneer Hannah Storm, focus on Danica Patrick; the most successful woman in the history of professional motorsports. It’s a rare, candid look at Danica as a competitor eagerly preparing for her next race; a woman confidently considering when she wants to start a family; and a budding mogul carefully considering thinking about her next steps.
Disney Looking to Acquire 21st Century Fox, Deal Would Not Include ESPN
The Walt Disney Co. (DIS) has reportedly held talks with 21st Century Fox (FOXA), that would result in DIS acquiring the FOXA movie studio, TV production studio, several television networks (FX, National Geographic), their international TV services (Sky, Star) and 30% of Hulu. For our purposes, it is what will not be included that is most noteworthy; Fox’s Sports Programming. There is a belief that combining those assets with ESPN could be construed as anti-competitive and lead to anti-trust violations. For those same reasons, DIS will not be purchasing the Fox Broadcast Network, Fox News or Fox Business Channel. Negotiations are currently on hold, though certainly not dead.
Howie Long-Short: 21st Century Fox doesn’t believe it has enough desirable content to compete in the OTT entertainment streaming space, so the company will strip down to just news and sports programming; content that still draws live viewers (and advertisers). As for DIS, adding the 20th Century Fox catalog, as they prepare to launch a new DTC service, must be considered a boon. FOXA shares are up more than 10% since the story broke on Monday (DIS is up nearly 3%). The company will report fiscal Q1 earnings later today. DIS will report fiscal Q4 earnings tomorrow.
Fan Marino: I find Fox’s NFL coverage, from the studio talent to the graphics, to be unwatchable; so, it’s disappointing to hear ESPN won’t be taking over production of Fox’s sports properties. Perhaps in another lifetime we’ll get a Gus Johnson/Bill Walton college basketball broadcast.
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Trends Point to a Future of Multi-Purpose Venues, Away from Single Sport Facilities
There is a trend in stadium/arena development to diversify venues, moving away from single purpose facilities that sit vacant for long periods during the calendar year, towards ones that can host a variety of non-traditional events (i.e. marathons, conferences, video game tournaments etc.) and draw spectators with varied interests. These new facilities are being built in more desirable locations (see: downtown) to encourage more visitors to attend. Flexible venues are also easier to finance with multiple parties contributing; as the public funding that used to subsidize the development of new sports facilities has, for the most part, dried up.
Howie Long-Short: New stadium construction can now cost more than $1 billion, so it makes fiscal to maximize ancillary revenue from stadium event rentals. Still, 86% of economists say that public funding for sporting venues is likely to cost taxpayers more, than any economic benefits realized by the finished facility; and most taxpayers are unlikely to ever step foot in the building. I’m all for multi-purpose venues, so long as the total expenditure for construction is coming out of owner(s) pockets.
Fan Marino: The Washington Redskins have released plans for a new 60,000 seat stadium that would offer locals far more than a place to watch football games. The proposed venue will include a moat that can be used for kayaking and surfing in the summer, and ice skating in the winter; while the stadium’s exterior will double as a climbing or rappelling wall. That doesn’t sound like a modern stadium, it sounds like an urban outdoor enthusiast’s dream.
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What is JohnWallStreet?
JohnWallStreet is not a person or location, but a destination for the educated sports fan.
While we won’t be publishing “hot takes” on LeBron’s relative greatness to Jordan, we will be offering up the most relevant sports related finance news, in easily digestible bites, with commentary from both the equities analyst and sports fanatic perspectives.
We’ll cover publicly traded professional teams & stadiums, television networks, apparel & footwear companies, equipment companies, ticketing companies, content and facilities providers. If it trades on Wall Street, and has a sports angle, it’s in our wheel house.
Howie Long-Short and Fan Marino will be providing their expert opinions on each story. They have slightly different areas of expertise. Fan Marino is a firm believer that the SEC is the premier football conference. Howie Long-Short knows it as the Security & Exchange Commission. Fan Marino lives and dies with the college selection of 5 star, blue chip recruits. Howie Long-Short spends his days analyzing blue chip stocks. Howie Long-Short knows that Black Monday occurred on October 19th, 1987. Fan Marino swears it happens every January after Week 17. You get the point.