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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.
Cuban Foresees Upcoming Boom, Compares Opportunity to Dotcom Era
Dallas Mavericks Owner and Shark Tank investor Mark Cuban, foresees an upcoming boom; with investment opportunities unlike anything we’ve seen since the rise of the dotcom era, in the late 1990s. Cuban is qualified to speak on the subject, having sold Broadcast.com to Yahoo! (AABA), at the peak of the dotcom bubble, for $5.7 billion (in stock). In an a short interview with Brandon “Scoop B” Robinson, on Scoop B Radio, Cuban pointed to several fields that could experience similar growth over the next few years including; “deep learning, machine learning, machine vision, bio analytics and biomechanics.” As for his thoughts on virtual reality, “I don’t think that’s going to be quite as successful as people think”.
Howie Long-Short: Cuban mentions several technological advances that may not be in everyone’s vernacular, so I’m going to try and explain them. Machine learning is the practice of using algorithms to parse data, learn from it and then make determinations based on the large amount of data the machine was trained on. Deep learning is a technique for implementing machine learning, that relies on artificial neural networks (like a brain), where large amounts of data are run through the system to train it. Machine vision refers to a computer’s ability to see (think OCR). Bio analytics relates to the measurement of substances within a biological system, while biomechanics focuses on the movement or structure of living organisms.
Fan Marino: While Cuban may not be particularly bullish on VR from an investment standpoint, the technology appears useful within the sports world. Set to launch in 2018, RBI-VR (from Monsterful VR) will be used by MLB players to enhance pitch recognition and timing, while minimizing the risk of injury. RBI-VR compiles and calculates data to recreate the throwing mechanics, biomechanics, vertical and horizontal release point of any pitcher in the league with near 100% accuracy. Considered by the MLB Player’s Association to be “best-in market”, the technology has been built with input from an advisory board that includes Lloyd McClendon, Dusty Baker, Gene Orza, Don Mattingly and Edgar Martinez.
EA Sports Reports “Strong Quarter”, Kicks Off Qualifying for FIFA eWorld Cup 2018
Qualifying tournaments for EA Sports’ (EA) FIFA eWorld Cup 2018 are underway and will run through July ’18, narrowing the field down to 128 participants (64 PS4 (SNE), 64 Xbox One (MSFT)) who will compete in the FIFA ’18 Global Series Playoffs. The tournament will include both players signed to professional teams as well as amateur tournament winners. Those who advance will play in in the FIFA eWorld Cup Grand Final, with the winner of each playoff (PS4, Xbox One) receiving a $35,000 prize.
Howie Long-Short: EA Sports announced fiscal Q2 revenues rose 7.4% YOY on an adjusted basis (to $1.18 billion), reducing the company’s net loss to $22 million (from $38 million in ’16). CEO Andrew Wilson called it a “strong quarter”, writing that “the company benefited from the customer’s response to EA Sports games (Madden NFL, FIFA), and its mobile games”. CFO Blake Jorgensen said that the company had experienced notable growth in its high-margin digital business (+21.7% to $689 million) during the quarter. As of the close on Wednesday, the stock is up more than 45% on the year.
Fan Marino: More of an NBA 2K gamer than a FIFA one? 2K Sports has announced that the latest release of NBA 2K18 features verified users. That means gamers will know if they’re playing against NBA players, celebrities or members of the 2K development team. Fans are going to flip when they realize they’re playing as LeBron, against LeBron.
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WWE Experiences “All-Time Best Quarter”
Stephanie McMahon called Q3 ’17, the WWE’s “all-time best quarter”, as the company grew revenue 14% to $186.4 million, set a company quarterly record for Adjusted OIBDA ($40.4 million) and saw net income rise to $21.8 million (from $11.1 million YOY). The growth is being attributed to an increase in TV rights fees, a rise in WWE network subscriptions (4.4% to 1.52 million subscribers) and the proliferation of live events. As a result, WWE Chief Strategy and Financial Officer George Barrios said the company has increased 2017 guidance; calling for “record revenue, record Adjusted OIBDA results and record subscriber levels.”
Howie Long-Short: 2018 projects to be a banner year for the WWE, with the company anticipating setting another record for revenue generation and targeting Adjusted OIBDA of at least $115 million; which would also set a record. Those records may not last long, though. The company’s television broadcast deal with NBC expires September 30, 2019 and broadcast deals in U.K. and India (2nd and 3rd largest broadcast deals revenue-wise) expire on December 31, 2019. I expect the total value of broadcast rights to increase and for 2020 to be another record setting year for the WWE.
Fan Marino: While the financial picture is pretty, there is speculation that the WWE could be facing a mass-exodus of talent (despite Lesnar staying and Rousey joining); with wrestlers who feel underutilized or underpaid, looking to leave the company. While once the only game in town, Ring of Honor, New Japan Pro-Wrestling and a booming independent circuit now provide viable alternatives. The success Cody Rhodes, Ryback and Alberto Del Rio have found outside the organization has forced guys (and girls) to evaluate their options; and apparently, at least for some, those options more lucrative on the other side.
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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.