Sports Finance Report: College Basketball Corruption, Sunday Ticket Refunds

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Adidas (ADDYY) executive, Jim Gatto, has been arrested on federal fraud and corruption charges; accused of conspiring with HS coaches to drive players to sign with a school sponsored by the brand. Gatto allegedly made and concealed payments to HS athletes and/or their families. The federal indictment goes on to allege payments were made to college coaches to influence student-athletes to sign endorsement deals with the company once they turned pro. Adidas has since put out a statement saying, “We’re unaware of any misconduct and will fully cooperate with authorities to understand more.”

Howie Long-Short: ADDYY shares have taken a hit since the news broke, finishing down 2.5% on Tuesday. The good news for shareholders though is that these charges are unlikely to hurt the company long-term. Their sneaker and apparel rights deals are all long-term contracts and there isn’t another P5 program set to hit the open market anytime soon.

Fan Marino: The schools wrapped up in this; Arizona, Louisville, Auburn and Oklahoma State are going to get hit hard with sanctions. Arizona and Louisville have the most to lose; heading into the 2017-2018 season with Top 5 teams. The threat of program crippling penalties now hangs over both teams, as does the potential of self-imposing a tournament ban in a year where they have Final 4 aspirations. As an Arizona fanatic, I prefer the school let the NCAA do an investigation (which will take months), make a run at its first Final 4 since 2001 and worry about vacating wins later.


AT&T (T) subsidiary DirectTV is offering NFL Sunday Ticket subscribers offended by recent on-field player protests, the option to cancel the service and receive a full refund ($280). Sunday Ticket policy expressly states that refunds are not issued once the season begins, but the satellite provider has decided to make exceptions for customers who cite players kneeling during the national anthem as the reason for their cancellation. DirectTV does not intend on releasing the number of customers who choose to cancel the service.

Howie Long-Short: Sunday Ticket is DirectTV’s competitive advantage, so customers who cancel the NFL package may be inclined to cancel the satellite service entirely. With that said, I strongly doubt there are enough people, with strong enough convictions, to walk away from the NFL; to negatively affect revenues.

Fan Marino: I need to correct both Fox Business and President Trump for incorrect statements made. Fox Business referred to the players kneeling and locking arms as a “national anthem protest”.  The players aren’t protesting the national anthem, they’re protesting racial inequality and police brutality. As for Trump, he tweeted on Tuesday morning that “the booing at the NFL football game last night, when the entire Dallas team dropped to its knees, was the loudest I had ever heard. Great anger.” Fake News. He’s been to Jets games with Sanchez or Geno starting at QB.


Facebook (FB) and the NFL have announced a multi-year partnership that will bring game highlights and recaps to the Watch platform. Users worldwide will be able to view video from all 256 NFL regular season games + the playoffs & Super Bowl; while domestic users also get access to programming content from the league’s production arm, NFL films. It is important to note that the agreement does not provide Facebook with the rights to deliver live NFL game action. Financial terms of the agreement have not been released.

Howie Long-Short: Seems like a sensible partnership. Facebook adds premium content to their burgeoning Watch platform; while the NFL gets access to 2 billion users world-wide. The NFL needs to grow its game internationally for the value of its franchises to continue to skyrocket. U.K, Mexico, Germany and China are going to be the first to adopt the game.

Fan Marino: It’s only a matter of time until the Jaguars move to London. The Rams saw a 100% increase in value (from $1.4 billion to $2.9 billion) after moving from STL to LA; while the Chargers saw a 36% bump ($1.525 billion to $2.08 billion) after making the move from SD to LA. Jacksonville plays in the NFL’s 4th smallest market and London has a larger population than Los Angeles. Once Shad Khan can get the votes, he’s gone.

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.

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