Sports Finance Report: Sponsored Tailgates Coming To Your City, Adidas Gives Louisville 4th Largest Apparel Deal In College Sports

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6 SECOND IN-GAME ADS COMING TO FOX NFL BROADCASTS
Fox (FOXA) Networks Group has announced that it will be introducing 6 second ads to NFL game broadcasts this season, making it the first legacy TV network to introduce the shorter ad format. Ads will appear in a small box adjacent to players on the field during stoppages in play or just prior to kickoff, with the most premium slots going for upwards of $200,000/spot. While traditional TV ads run 15 or 30 seconds, with 15 second ads gaining popularity in recent years (36% of ads in 2017 vs. 29% in 2014), YouTube (GOOGL) has championed the 6 second format since last year.

Howie Long-Short: Fox is charging roughly the same amount for a 6 second spot as it does for a 15 second spot, with justification being that the ads’ placement gives it greater attention/value. Expect 6 second ads to become an industry standard. If you can increase revenues and appease the viewer, you are on to something.

Fan Marino: Makes sense to me. The average NFL game take +/- 3 hours to broadcast, but only contains 11 minutes of actual game action. Plenty of time for brands to engage the fan, while glued to the game (i.e. not halftime, commercial time-outs).

 

SPONSORED TAILGATES COMING TO A CITY NEAR YOU

CFB season is underway and with that, the opportunity to BBQ in parking lots across America. Corporate sponsors are once again eager to participate in the tailgate fun, and we here at JWS wanted to bring your attention to some of those campaigns, as they make their way to a city near you.

Dr. Pepper (DPS) vendor Larry Culpepper and his new vendor dream-team, which will be unveiled throughout the new brand campaign, will host tailgates at the following games:

  • Atlanta, Georgia on December 1st and 2nd, 2017 for the SEC Championship Game
  • New Orleans, Louisiana on January 1st, 2018 for the Allstate Sugar Bowl
  • Atlanta, Georgia on January 8th, 2018 for the National Championship Game

Hyundai (KRX: 005380) will be providing a fun place to hang-out prior to the kickoff of 11 highly anticipated games. The Hyundai Fan Base is going to offer interactive elements (i.e. football toss contests) and provide fans with the opportunity to meet legends from the host school for photos & autographs. The game schedule includes:

  • 9/16 – Florida State vs. Miami
  • 9/23 – Georgia vs. Mississippi State
  • 9/30 – UCLA vs. Colorado
  • 10/7 – Florida vs. LSU
  • 10/14 – Tennessee vs. South Carolina
  • 10/21 – Texas vs. Oklahoma State
  • 10/28 – Arizona State vs. USC
  • 11/4 – Alabama vs. LSU
  • 11/11 – Ohio State vs. Michigan State
  • 11/18 – Penn State vs. Nebraska
  • 11/25 – Michigan vs. Ohio State

Wendy’s (WEN) will be hosting tailgates in 11 cities, with their food truck in tow. The home of the Official Hamburger of the NCAA will be serving cheeseburgers and offering fans a chance to compete in games of corn hole on the following college campuses:

  • 9/9 – Ohio State vs. Oklahoma
  • 9/22 – Arizona vs. Utah
  • 9/30 – Virginia Tech vs. Clemson
  • 10/7 – Syracuse vs. Pittsburgh
  • 10/14 – Nebraska vs. Ohio State
  • 10/21 – Ole Miss vs. LSU
  • 10/28 – Baylor vs. Texas
  • 11/4 – Air Force vs. Army
  • 11/11 – South Carolina vs. Florida
  • 11/18 – Arkansas vs. Mississippi State
  • 11/25 – Michigan vs. Ohio State

Howie Long-Short: College football tailgates are an intriguing place for brands to advertise. The average tailgater is a 25-44 year-old college educated male, spending 3-4 hours pre-gaming. Plenty of time to get your message across.

Fan Marino: There is nothing I enjoy more than eating and drinking in a parking lot prior to the start of a college football game. If the food, beer and entertainment are free, it becomes that much more enjoyable. Big fan of these promotions.

 

LULULEMON REPORTS Q2 GROWTH FIGURES; REMAINS ON TRACK TO HIT $4 BILLION IN REVENUE BY 2020

Lululemon (LULU) reported Q2 profits ($.39 compared with $.35) and sales (7% compared with 4%) that beat analysts’ estimates and updated full year forecasts ($2.35-$2.42/share) that topped projections. CEO Laurent Potdevin attributed the continued growth to improved marketing, an effort to drive international sales and an increased focus on their e-commerce business. The company has also been working to increase its appeal to men and add technical innovations to their clothing that set them apart in a crowded athletic-apparel marketplace. Potdevin reiterated that the yogawear brand remains on a trajectory to hit $4 billion in revenue by 2020.

Howie Long-Short: You keep reading about the warning signs of the athleisure trend coming to an end, but I don’t believe that to be the case. FINL and FL are struggling because brands are going DTC, not because the consumer no longer wants to be comfortable outside the gym.

Fan Marino: Part of the reason analysts projected lower Q2 profits/earnings numbers was because of an uptick in online markdowns. That’s great news for fans of the brands! I checked out their “we made too much” section and it has a TON of stuff with at least a 25% discount.

 

STOX PREDICTION MARKETPLACE HEADS TO ALPHA TESTING; SUBMITS LOI TO PURCHASE COMPANY WITH 2 U.K. GAMING LICENSES.

Barcelona star Luis Suarez announced on behalf of Stox, that the prediction marketplace is headed for Alpha testing. The news comes less than 30 days after the company’s $33 million (current market cap is $47 million) ICO and just 2 weeks after the announcement that they had submitted an LOI to purchase a company that holds 2 U.K. gambling licenses. The Stox platform is used for investors to place digital currency tokens on event-based outcomes (i.e. sporting events).

Howie Long-Short: Stox is well positioned in its competition with Augur and Gnosis. Invest.com Group, which is behind Stox, has a large existing client base and has proven successful at driving traffic to similar projects.

Fan Marino: Suarez announced he put his STX tokens on Federer to win the U.S. Open. Not exactly picking the underdog. Roger was the favorite coming in at +175 (OddsShark). He won last night to advance to the quarterfinals.

 

ADIDAS SIGNS LOUISVILLE TO 4TH LARGEST APPAREL DEAL IN COLLEGE ATHLETICS; HAS A NEW FLAGSHIP UNIVERSITY

Adidas (ADDYY) has signed a 10-year extension to remain the official footwear & apparel provider of University of Louisville athletics. The deal, worth $160 million, gives Louisville the 4th richest apparel agreement in college sports. The University will receive $10 million/year in base compensation between 2018-2021 and then $7 million/year through 2028, a significant increase from $1.575 million they will receive for the 2017-2018 academic year.

Howie Long-Short: Considering UCLA got $280 million over 15 years from Under Armour (UAA), ADDYY got good value on the deal. But, in 2013-2014, Louisville finished 24th in merchandise sales. That doesn’t seem to warrant the 4th largest deal in college athletics. Sounds like both sides got a good deal.

Fan Marino: The next school to get a massive payout? The University of Washington. Their contract with Nike (NKE) expires in 2019. Oregon, Oregon State and Washington State are all under NKE contracts through at least 2025. Under Armour and Adidas want to expand their footprint to the Pacific NW. A bidding war is coming.

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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.

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