Sports Finance Report: Bumble Signs Jersey Sponsorship Deal with Clippers

by 2 weeks ago

LONDON, ENGLAND - MARCH 03: Ashley James attends a private dinner hosted by Whitney Wolfe founder and CEO of Bumble dating app at Soho House on March 3, 2016 in London, England. (Photo by Tabatha Fireman/Getty Images for Bumble)

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Bumble Signs Jersey Sponsorship Deal with NBA Franchise Advancing Workplace Equality

Bumble has signed on to be the official jersey sponsor of the Los Angeles Clippers, becoming the 20th NBA team to take advantage of the 3-year pilot program. The female-led dating and networking app chose to align itself with the Clippers, in-part because of their reputation as a progressive organization; the team employs the league’s only female President of Business Operations (Gillian Zucker) and has several other women in key leadership positions. The Clippers will refer to the corporate logo on the front of the jersey as an “empowerment badge”, a symbol meant to promote gender equality and the advancement of workplace equality.

Howie Long-Short: Unlike traditional dating apps, Bumble requires women to make the first move. Founder Whitney Wolfe Herd, launched the company in 2014 after claiming she was sexually harassed, stripped of her co-founder title and forced out of rival dating app, Tinder. Herd is no longer Bumble’s majority shareholder (Badoo owns 79%, Herd owns 20%), but she continues to run the company (26 million users) as CEO. Badoo (privately held) is reportedly seeking a sale that would value the company at $1.5 billion.

Fan Marino: Chelsea F.C. has the 2nd biggest jersey sponsorship deal (MANU) in the English Premier League, valued at over $275 million (5 years). How did they do it? They sent out an RFP to 33 companies, “appealed to the emotional side of CEOs” and initiated a bidding war. As a result, Yokohama Rubber (TYO: 5101) agreed to pay more twice the amount Samsung had on the team’s previous deal.

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Churchill Downs Preparing for Legalized Sports Betting, Closes at 52-Week High

Churchill Downs, Inc. (CHDN) has announced it will be acquiring casinos in Pennsylvania and Mississippi, as it prepares to capitalize on legalized sports betting. The company will buy the Presque Isle Downs & Casino in Erie, PA (for $178.9 million) and the Lady Luck Casino (for $50.6 million) in Vicksburg, MS, from current owner, Eldorado Resorts (ERI). Both PA & MS have passed sports betting legislation that would change their laws, should the SCOTUS strike down PAPSA. CHDN also owns brick and mortar casinos in Illinois, Kentucky and Louisiana, 3 other states actively working towards sports betting legalization.

Howie Long-Short: Churchill Downs released Q4 ’17 financials on February 28th. Q4 ’17 adjusted EBITDA was +23% YOY (to $37.6 million) on net revenue that rose 11% YOY (to $179.8 million). Changes to the recent U.S. tax code added $57.7 million to Q4 net income. CHDN shares are up 4.5% since the company issued their Q4 earnings report, closing at a 52-week high on Tuesday ($268.20).

Fan Marino: While Presque Isle Downs & Casino is among the lowest revenue generating casinos in Pennsylvania, it’s a significant acquisition for CHDN; PA recently legalized online gambling and the law passed covers mobile wagering on sporting events (assuming permitted by federal law). While land based casinos are profitable, it’s mobile sports betting that really has CHDN excited. TwinSpires, the company’s online horse betting platform, accounted for $256.7 million in ’17 revenue (+15% YOY). One can safely assume the company will look to turn their database of users betting on the ponies, into mainstream sports gamblers.

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Twitch Rewarding Gamers as OWL Viewership Declines, Activision Blizzard Hits 52-Week High

Twitch (AMZN) has begun encouraging gamers to watch exclusive Overwatch League broadcasts, by awarding Overwatch League tokens that can be used to buy team-based character skins, as the live streaming video platform seeks ways to increase viewership. OWL’s opening day drew 408,000 concurrent viewers, but that figure has steadily declined in the weeks since; compelling Twitch to run a program that encourages OWL gamers (and fans) to watch more. Viewers will earn one token per live map finish (roughly 3-4/hour), with a “percentage” of those watching the conclusion of the final map randomly winning 100 tokens during the live cast. Skins (and team specific gear) will also be awarded to users who tip (with paid emotes) during live streams. For reference purposes, users need 100 tokens to unlock OWL skins; they have a cash value of +/- $5.

Howie Long-Short: Blizzard Entertainment (ATVI) is the publisher behind Overwatch and the OWL is their most ambitious esports endeavor. Once thought to be overpriced at $20 million/franchise, CEO Michael Morhaime said on the company’s Q4 earnings call that he’s “pretty confident” the price is going up for the next group of owners that buy in; indicating there’s been an increase in global demand for OWL expansion franchises. ATVI posted Q4 ’17 earnings on February 8th, reporting an 8% YOY increase in revenue (to $2.64 billion). The company hit a 52-week high Tuesday morning ($75.41), before closing the day at $73.92.

Fan Marino: To put OWL’s opening day success in perspective, you can compare it the viewership figures Amazon (AMZN) and Twitter (TWTR) received for their initial TNF livestreams. Amazon’s first TNF game drew 372,000 viewers per 30 seconds; Twitter saw just 243,000 viewers per minute, during their first broadcast. While OWL viewership has since declined, Blizzard Entertainment managed to negotiate a 2-year, $90 million deal to stream OWL Season 1 & 2 games exclusively on in English, French and Korean (they do not hold the rights to broadcast in Chinese).

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What is JohnWallStreet?

JohnWallStreet, located at the intersection of sports and finance, is 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 business news, in easily digestible bites, with commentary from both the sports money and sports fanatic perspectives.

We’ll cover publicly traded professional teams & stadiums (MSG, RCI, BATRA, MANU), television networks (DIS, FOXA, CMCSA, CBS, TWX, MSGN), apparel & footwear companies (NKE, UAA, ADDYY, FL, LULU), equipment companies (GOLFELY, FIT), ticketing companies (EBAY, LYV) content and facilities providers (CHDN, DVD, ISCA,TRK, LMCA).  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.

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