Sports Finance Report: Female-Male Sponsorship Pay Gap Growing

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Simone Biles Wins Sportswoman of the Year Award, JWS Gets an Exclusive Interview

JohnWallStreet had the pleasure of attending the 34th Annual March of Dimes Sports Luncheon, presented by Ford (F), on Tuesday afternoon. The event honored ’86 Mets pitcher Ron Darling (Sports Legend of the Year), 4x Olympic Gold Medalist Simone Biles (Sportswoman of the Year), NFL EVP, CMO Dawn Hudson (Corporate Leadership) and Pro Football Hall of Fame CEO David Baker (Sports Leadership). Attended by more than 700 leaders and influencers within in the sports business industry; the event raised $1.17 million for pregnancy and baby health research, education, vaccines, and breakthroughs. JWS had a chance to catch up with the Sportswoman of the Year, Simone Biles, to discuss the financial side of an Olympic sport.

JWS: You don’t get in to gymnastics for the money or to play in the “big leagues”. What is the goal of a young gymnast?   

Simone: When most gymnasts get in to it at 6 years old, they say “I want to go to the Olympics”; but you don’t really think much about that. You think, I want to be a college athlete and you strive for the college scholarship. It’s hard to be a professional gymnast because our careers are very short; your peak age is 16-18 years old and then you are kind of done.

JWS: When did you decide to turn professional and can you tell us about the experience of signing your first endorsement deal?

Simone: After my second World Championships, I was being scouted by agents; but I wasn’t ready to go professional yet, so I waited another year. When I turned 18 years old we decided to look for an agent. We got one signed and she asked what were some of the things I liked; obviously, the first thing was athletic clothes because I’m in them daily. Nike (NKE) reached out, Under Armour (UAA) reached out and you go with what is best for you. I like to do what represents me. I chose Nike.

JWS: Do you feel as if signing lucrative endorsement contracts has validated your athletic career?  

Simone: I don’t like to think like that. I try to think of what I have achieved and go from there; rather than focus on the money.

Howie Long-Short: Based on the public information available, it appears as if Simone has an estimated net worth between $2.6 million and $3 million; far more than most gymnasts will make in their careers. Gymnast compensation is tied to placing in competition (and endorsements, which don’t come without medals). Speaking in the most general terms, gold medals are worth $25,000, silver medals are worth $15,000 and bronze medals are worth $10,000 in prize money.

Fan Marino: While on the topic of the Olympics, NBC is going all out with their 2018 Olympic coverage from PyeongChang, South Korea. The network has announced they’ll be airing primetime coverage live, across all time zones, for the first time; crucial for those that don’t live on the East Coast and want to avoid “spoiler alerts” on social media. NBC Universal will be airing 2,400 hours of programming, a record for the Winter Games.

Female-Male Sponsorship Pay Gap Growing: ESPN’s Jessica Mendoza 

Despite the national female-male earnings ratio growing to record high (80.5%) in 2016, the gap in sports sponsorship pay has widened since 2014. The size of the sport’s television audience and athlete’s social media following are often cited as the reasons for discrepancy. Men’s tennis star Novak Djokovic, who earned more in endorsement money ($28 million) than Serena Williams ($19 million) in 2017, was recently quoted saying, “the stats are showing that we have much more spectators on the men’s matches. I think that’s one of the reasons why maybe we should get awarded more.” In April, the USWNT was successful in garnering “equitable” (not equal, as the compensation is structured differently) pay; after arguing their performance on the pitch was far superior to that of the men’s team and that the USWNT is more profitable.

Howie Long-Short: There would seem to be value in female endorsement deals. Women control 70-80% of consumer purchases and the women’s active wear market is booming ($18 billion in annual sales). As OTT niche programming becomes more prevalent, the audience size for women’s sports will rise. That will help women close the gap in endorsement pay.

Fan Marino: ESPN Baseball analyst Jessica Mendoza emceed the 34th Annual March of Dimes Sports Luncheon, presented by Ford, on Tuesday. JWS had the chance to get her thoughts on the growing sports sponsorship pay gap.

Jessica: As much as you (brands) want to get young boys to buy because Steph Curry is wearing that shoe, there are just as many girls that would do the same if Skylar Diggins was wearing them (signature shoe). I believe in my heart girls play sports. I know I bought a bat based on who I saw swinging it. I think the key is being able to get that (message/product) out there enough, to where you (brands) start to see the return. At the end of the day, it’s not a charity. It’s not like “oh we’re going to give women more money because it’s the right thing to do”; you’re going to make decisions because it’s the business thing to do.

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Formula One Undergoes Rebrand

Formula One (FWONK) is undergoing a corporate rebrand for the first time since 1993. The company is replacing its iconic “flying one” logo (see Fan Marino below) with a simplified version. The balance of the company rebrand will occur in March 2018, prior to opener in Australia, and will include; new graphics and production elements for the world feed, a new web platform and both live and on-demand OTT services. All marketing and business strategy will be focused on what the fans want (according to a Flamingo study); the race, the drivers and the rivalries. Fans initial response to the logo change has not been positive.

Howie Long-Short: Want to play F1 from within the telecom sector? Tata Communications (NSE: TATACOMM), the connectivity and hosting partner of the Formula One Group; repurposes, reformats and distributes content for OTT broadcasters (including: Vice Media & Red Bull Media House). TATACOMM also works with 7 F1 teams (including: Mercedes) on remote operations and technical support (i.e. capturing data, video feeds) at the track; enabling teams to run race simulation and create pit strategy. Note: FWONK is a tracking stock. F1’s commercial rights and other assets are owned by Liberty Media Corporation.

Fan Marino: Look at this logo. What do you see? A black F and a red 1 (made up of a bunch of lines to indicate speed), right? Nope. Focus your eyes on the negative space between the black F and red 1; you’ll see a white 1. Don’t feel bad, you weren’t the only one who didn’t notice this for the last 20+ years.

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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 Securities & 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.