Dodgeball
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Here’s what you need to know today…
SPORTS ILLUSTRATED PLAY RELEASES ALL NEW FREE APPLICATION FOR YOUTH SPORTS MANAGEMENT
Time Inc. (TIME) has released an all-new free app for Sports Illustrated Play, their youth sports SAAS company. The company’s series of digital tools are designed to help youth leagues and teams operate more efficiently. For the first time, all teams regardless of league affiliation, can utilize the mobile platform to distribute news & content, schedule events, get real-time scoring, update its members and share social content. SI Play which launched in 2015, has 17 million monthly users and a top 5 mobile application; is the official technology provider of US Lacrosse and Babe Ruth League baseball and softball.
Howie Long-Short: While there are no shortage of competitors in the space (Bonzi, TeamSnap & LeagueApps etc.), none have the financial backing and distribution platforms (SI, SI.com, SI Kids) that SI Play does. That is going to make them tough to beat in the estimated $18 billion market.
Fan Marino: SI Play streamed the semifinals and finals of the Cal Ripken Major/70 World Series on the SI.com Facebook page. How cool is that for those kids?
ESPN HIRES POWERHOUSE AD AGENCY DROGA5; FOX SPORTS HIRES INCUMBENT WIEDEN + KENNEDY AS AGENCY OF RECORD
ESPN (DIS) has enlisted creative ad agency Droga5 with the task of reaching its ever diversifying (i.e. women) and distracted viewer base (i.e. various online platforms). The ad agency that counts Under Armour (UAA), Tencent (HKG: 0700) & Dos Equis (AMS: HEIA) as clients, will handle both creative and strategic, for the overall brand and its feature show “SportsCenter”. Droga5 has big shoes to fill though, as former agency of record Wieden + Kennedy was responsible for the popular “This is SportsCenter” campaign. Rival Fox Sports has since hired Wieden + Kennedy as its agency of record to work on a new ad campaign for the start of college football season.
Howie Long-Short: ESPN cut paid media promotion from $26.3 million in 2016, to under $9 million in H1 ’17. As the company continues to lose subscribers, I would expect ad spend continues to drop.
Fan Marino: The monkey see, monkey do game continues at Fox Sports, this time on the advertising side. If ESPN touches it, Fox Sports wants it. If you want to give one former ESPN personality a watch/listen on Fox Sports, make it Colin Cowherd.
HARLEY DAVIDSON INTRODUCES 17 NEW MODELS TO BE RELEASED IN 2018
Harley-Davidson (HOG) announced 17 new bike models that will hit the streets in 2018, the 115 year anniversary of the company. The motorcycle manufacturer announced the upcoming releases of 12 new softails that will include the most powerful engine ever offered on a HOG cruiser, and 5 new touring bikes, each with 3 custom vehicle operations options. The release is the company’s largest product development project ever and part of CEO Matt Levatich’s plan to add 100 new models over the next 10 years.
Howie Long-Short: Q2 sales were down 6.7% YOY, but that figure only tells part of the story. While the remainder of the industry is slashing prices to account for the industry-wide retail slowdown, HOG prices (and margins) remain at a premium. IF the company chose to discount, it would likely show growth. Oh, and even with the drop in sales, they still own 50% of the U.S. motorcycle market.
Fan Marino: The concern for HOG has been that as baby boomers continue to age, they’ll buy motorcycles less frequently. Recent reports indicate that motorcycle rider demographics are getting younger, more urban and more female, which would bode well for the industry; but as a 30-something who lives in NYC, that is certainly news to me.
FORMULA ONE INTRODUCES ESPORTS SERIES TO COINCIDE WITH ON TRACK CHAMPIONSHIP; F1 2017 VIDEO GAME RELEASED TO STRONG REVIEWS
Formula 1 (FWONA) is entering the esports arena, launching a gaming series with the help of esports operator Gfinity (LON: GFN). The series will focus on the new official F1 video game published by Codemasters; and will coincide with the on-track world championship. The inaugural season which will run from September-November, is Formula One Group’s latest attempt at embracing digital media (they also recently announced a partnership with SNAP). Qualification will begin in September and the series will culminate with a 20 person, 3 race event, at the F1 season finale in Abu Dhabi. The “esports World Champion” will receive automatic entry into the 2018 competition, passes to the 2018 Grand Prix and will become a character in the 2018 F1 video game.
Howie Long-Short: F1 has been around since 1950 and has a fan base that attracts +/- 400 million TV viewers. In 10 years, esports has amassed an audience that saw 320 million people watch video games on television in 2016, with that number expected to rise past 400 million this year. Wise idea for F1 to try and attract real fans through the virtual world.
Fan Marino: From the gamers POV, F1 2017 is receiving strong reviews. A new “championship” game mode and series of vintage racers are new to this year’s edition.
GEORGIA TECH ATHLETICS LEAVING RUSSELL ATHLETIC; SIGNS 6 YEAR APPAREL DEAL WITH ADIDAS
Georgia Tech University has announced a 6-year deal that will make Adidas (ADDYY) the official apparel provider for 17 GT varsity sports. The partnership, which goes into effect on July 1, 2018, will replace the school’s existing deal with Russell Athletic (BRK.A). The mutually beneficial agreement provides Adidas with a presence in the Atlanta market, while providing GT with a boost in revenue and a significant improvement in apparel quality.
Howie Long-Short: When GT first signed on with Russell Athletic in 1992, sporting goods companies like Russell (BRK.A), Rawlings (NWE), Wilson (HEL: AMEAS) controlled the uniform market. 25 years later fashion and apparel retailers (NKE, ADDYY, UAA) dominate the space. Times have changed!
Fan Marino: You hear a lot of talk that GT’s relationship with Russell Athletic has damaged their recruiting efforts. I’m not buying that. Football struggles to recruit because they run a version of the wishbone offense that hasn’t been popular since the 1980s. Basketball can recruit. Josh Pastner has a 5 star, Nassir Little, on campus this weekend.
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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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