Sports Finance Report: NFL Provides Fans with the Worst Game-Day Experience

by 4 months ago

KANSAS CITY, MO - SEPTEMBER 17: The Kansas City Chiefs prepare to take the field for their first home game of the 2017 season prior to the game against the Philadelphia Eagles at Arrowhead Stadium on September 17, 2017 in Kansas City, Missouri. ( Photo by Jamie Squire/Getty Images)


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 sports money 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.

NFL Provides Fans with the Worst Game-Day Experience

The Fan Experience Benchmark: U.S. Professional Sports report (10,000 surveyed) indicates that the National Football League gives its fans the worst game-day fan experience among American pro sports leagues (included Big 4 + NASCAR, PGA, MLS, WNBA and ATP). The NFL finished last in 8 of the 9 live-event experiences tracked by the Tempkin Group, scoring the lowest in parking, concessions and bathrooms. The news wasn’t all bad for the league though, it remains the most popular sport to watch on television by a wide margin; 50.8% of those surveyed enjoy watching the league on their couch (MLB 2nd with 37.9%).

Howie Long-Short: Those surveyed rated parking as the worst part of the NFL game-day experience. The price to park your car outside of an NFL stadium varies across the league, but can cost between +/- $25 and $75 (Dallas); often still requiring a 10-15 minute walk to the stadium entrance. It’s a valid concern and one that the league could (and should) solve with minimal financial impact; but, I’m not in the camp that believes the NFL has a poor game-day experience. Sure, it’s expensive, but there’s nothing better than being in the building on days like these; plus, the tailgate is great!

For those who think this survey is another sign that the league is failing, think again. Back in December, Yahoo! (AABA) agreed to pay $2 billion over 5 years to stream league games (without exclusivity, I might add) and Amazon (AMZN) recently signed a 2-year $130 million deal for the rights TNF; $15 million more/year than they paid last season. NFL broadcast deals are so large, the league could play games in empty stadiums and still generate more revenue than any other pro sports league in the U.S. In 2016, the league generated 16.35% of its total revenue ($13 billion+) from ticket sales; using that same percentage on 2017 revenue (the percentage has declined, the new revenue is from TV) and the league still generated $1.8 billion more than MLB (hit $10 billion for 1st time).

Fan Marino: Monday Night Football fans are going to have to get used to 2 new voices in 2018 with Joe Tessitore and Jason Witten, replacing Sean McDonough and Jon Gruden. Witten’s hiring is particularly confusing. He’ll make $4-4.5 million/year to be the “face of MNF”, despite never doing color commentary and lacking mainstream recognition (i.e. he’s not Peyton Manning, their 1st choice). ESPN continues to burn good money after bad (see: $14.5 million on Get Up!). If they had to have Witten, they could have for less; no one could have offered a comparable stage.

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Puma Joining Wearables Sector, Sued by Nike for Patent Infringement

Puma SE has announced it will be joining the wearables sector, signing a 10-year global licensing partnership with Fossil Group. The 2 companies will collaborate to bring Puma branded watches and smartwatches to market by the end of 2019. Fossil Group (FOSL) will design, manufacture and distribute the sport-focused line of watches, as it does for several high-end fashion labels (see: Diesel, Michael Kors). It is expected that the Fossil x Puma line will run on Wear OS (formerly Android Wear) software.

Howie Long-Short: Puma SE is a subsidiary of Kering, trading over-the-counter under the symbol PMMAF. The German athletic footwear and apparel brand reported net profit rose +36% YoY (to $82.5 million) in Q1 ’18, with sales increasing double-digits across all product categories and markets (+15.6% in U.S.). China/Asia experienced “exceptionally high growth” (+35%), while the running, training and sportstyle categories grew the fastest. In early April, with currency adjusted sales +21% YoY, PMMAF slightly increased FY18 guidance (from +10% to +10%-12%).

Puma SE’s cautious approach to entering the wearables sector (with a licensing partnership, as opposed to building their own technology) is a wise one. Both Nike and Adidas have already tried and failed, only to later sign partnerships with Fitbit (Nike) and Apple (Adidas) respectively. There’s no reason to believe Puma would have had a different result.

On a separate note, Nike is suing Puma, accusing the competitor of patent infringement in federal court. Nike alleges the unauthorized use of “Flyknit, Air and cleat assembly technologies”, related to Puma’s Ignite, The Jamming and evoSpeed SL FG products. NKE is seeking a permanent injunction and has asked that damages be awarded. Puma plans to dispute the charges and has no intention of stopping production in the interim.

Fan Marino: In other Puma news, the company announced it will become the official kit sponsor of AC Milan for the 2018-2019 season; and the official kit sponsor of Sao Paulo Palmeiras (Brazil) for the 2019 season. Those clubs join Borussia Dortmund (BORUF), Arsenal FC and the National Football Associations of Italy, Switzerland, Austria, Cameroon, Ivory Coast, Ghana, Czech Republic and Senegal in the Puma football portfolio.

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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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