Editor’s Note: Welcome to a daily column we run here at BroBible breaking down the day’s biggest stories in sports finance with commentary from the equities analyst and sports fanatic perspectives. It comes to us via our friends at JohnWallStreet, publisher of a free e-mail newsletter focused on sports related public equities and their subsidiaries. You can sign up here.
Blockchain-Supported Football League Will Give Fans Ability to Run Team, Call Plays
The Fan Controlled Football League (FCFL) will debut in Summer 2018, with fans having complete control over front office decisions, player roster formation and play calling. Powered by Ethereum (ETH) blockchain technology, fans can purchase tokens that enable engagement across the FCFL platform; with the blockchain recording all league transactions, ensuring transparency and user confidence in the decision-making processes. The one-hour, 7-on-7 games will be played in a production studio, enabling the league to reduce travel costs and “become a development league for sports technology.” The league will consist of 8 teams; with players, coaches and the top fans of the winning team splitting a $1 million championship prize.
Howie Long-Short: Anyone can invest in this new league; participating in the public presale (raised $5 million to date) of FAN tokens. For those new to cryptocurrency, Bitcoin and Ethereum (or its digital currency Ether) are not competitors and the terms cannot be used interchangeably. Bitcoin is a digital currency that operates on blockchain technology; while Ethereum’s “smart contract” ledger technology allows for decentralized applications (like the FCFL) to be built on top of it. BTC is a medium of payment transactions and is a way to store value (i.e. an alternative to money), while ETH facilitates peer-to-peer contracts and applications via its own internal currency. Though both have been on a tear of late; BTC is up 70.62% over the last month (to $16,039), while ETH is up 59.11% over the last 30 days (to $747.88).
Fan Marino: The FCFL isn’t the first sports league looking to make a name for itself on the back for the crypto-currency craze; Rungsted Seier Capital, a hockey team that plays in the top Danish league, renamed its home Bitcoin Arena and has begun paying players in digital currency. Rungsted star Nikolaj Rosenthal became the first professional athlete to be paid solely in Bitcoin (BTC). The contract does contain measures that protect him in the event BTC value falls off a cliff; a possibility considering the price has dropped 30% 6x in 2017.
Indian Takes ’17 AFT Championship, Harley Davidson Investing Heavily to Win in ’18
Harley Davidson, Inc. (HOG) is investing a record $562,500 in contingency program funding for the 2018 American Flat Track race schedule, after rival Indian Wrecking Crew riders took the Top 3 spots in the 2017 AFT Twins class; the brands’ first championship after a 60-year absence from the sport. The contingency program money serves as an incentive for unaffiliated riders to race specific bike models; with riders receiving payouts for winning (and placing in) the 18 circuit races. Flat Track, where competitors race on a 1.5-mile-long tracks at over 140 MPH, is valued by motorcycle manufacturers; seen as an entry point to the valuable 18-24-year-old demographic, riders who choose their allegiance and remain loyal as they age.
Howie Long-Short: Indian Motorcycle Co. was acquired by Polaris Industries (PII) in 2011; relaunching its racing team for the 2014 season. PII had a great Q3’ 17, increasing revenue 25% YOY to a record $1.479 billion; with a net income, up 153.6% YOY to $81.9 million. Indian Motorcycle retail sales (up 16% YOY) helped to drive the growth; with the brand’s market share exceeded 10% in September.
Fan Marino: HOG is serious about taking back the title in 2018, offering $35,250 per race (winners take home $10,000) to “privateers” riding XG750R or XR750 models. To put that amount in perspective, HOG’s entire 2015 program cost just $96,000! For those wondering, Indian riders won the ’17 Championship racing Scout FTR750s. Indian isn’t just handing the ’18 Championship to HOG though, PII is offering $350,000 in performance bonuses ($18,500 per race) for “privateers” who prefer their bikes.
Seahawks, Microsoft Partner to Prevent Player Injuries
The Seattle Seahawks are using Microsoft (MSFT) technology (Microsoft Azure and Power BI) to analyze and plot sports-science data as the team tries to prevent player injuries. MSFT’s Sports Performance Platform utilizes machine learning, predictive analytics and historical data to spot trends between “practice loads and player durability”, with coaches and trainers using the actionable insight gained to customize training regimens for individual athletes. Not everyone is on board though: some players are concerned that the data collected could be used against them (and lead to cuts), while others question the efficacy of the program, with several key Seahawks on season-ending I.R. (Sherman, Avril, Chancellor). Microsoft has plans to “deploy the platform to a broader set of customers.”
Howie Long-Short: MSFT grew revenue 12% YOY (to $24.5 billion) in Q1 ’18, with net income up 16% (to $6.6 billion) over the same time frame. Sparta Science is another company playing in the sports-science space; creating money ball methods to assess injury risk. The company which already works with the Cavs and Falcons, recently signed its first EPL partnership with Stoke City F.C. Sparta Science is privately held, but Qualcomm Ventures, the investment arm of Qualcomm, Inc. (QCOM) participated in the company’s seed round.
Fan Marino: Speaking of Microsoft, the company will remain the NFL’s official sideline technology sponsor through the 2018-2019 season; meaning MSFT will continue to supply Surface tablets (it’s not an iPad, Mr. NFL announcer) for officials to use on video reviews. Coaches and players will also have access to Surface tablets on the sideline, giving them the ability to review previous plays. The deal comes as the existing 5-year $400 million contract comes to an end. Financial terms of the new deal were not disclosed.
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.