Editor’s Note: Welcome to Sports Finance Brief, a new daily column we’re running here at BroBible breaking down the day’s biggest stories in sports finance. It comes to us via our friends at John Wall Street, a new sports business e-mail newsletter worth subscribing to. Here’s what you need to know today…
John Wall Street 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, broadcast networks, apparel & footwear retailers, sporting equipment manufacturers, 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.
Softbank Group Invests $1 Billion In Fanatics At $4.5 Billion Valuation
Japanese telecom giant Softbank Group Corp (TYO: 9984) has made a $1 billion investment into Fanatics Inc., a leading sports merchandise licensor that handles e-commerce sales for a variety of teams & leagues, including the NFL and MLB. The deal places a $4.5 billion private market valuation on the company. Fanatics sells everything from t-shirts to lawn chairs and has built a burgeoning memorabilia business with the likes of Steph Curry, Ronda Rousey and Peyton Manning, signed to exclusive contracts. Softbank is looking to compete with the likes of Nike, Adidas and Under Armour within the licensed sports apparel space.
Howie Long-Short: Want to invest in Fanatics, but not interested in Softbank? Alibaba (BABA) contributed to a $170 million round in June 2013, at a $3 billion valuation.
Fan Marino: Fanatics is the ONLY place I shop for licensed sports apparel. Just make sure you don’t pay full retail; they are always running 20-30% off sales!
Amazon Looking To Disrupt Event Ticketing Space; Consumer Data Ownership Remains The Holdup
Amazon (AMZN) is actively negotiating deals with U.S. venues in an effort to break into the lucrative event ticketing marketplace. Ticketmaster, the clubhouse leader in the space, generated $1.6 billion in revenue in 2016, without including the estimated $250 million they earned on the resale market. Amazon’s latest industry disruption would seem to benefit everyone, except Ticketmaster (LYV). Consumers strongly dislike Ticketmaster’s costly processing fees, AMZN wants to increase Prime subscriptions and venues, leagues & teams could use the help boosting ticket sales. The hold-up thus far remains who will own the consumer data. While Amazon; who is willing to pay millions of dollars in ad revenue to the venues understandably wants the data, venue owners use that information to create social campaigns and book future acts.
Howie Long-Short: The beginning of the end for Ticketmaster. See Barnes & Noble, Circuit City and most recently Blue Apron.
Fan Marino: Charging service fees, delivery fees and a facility charge for the right to purchase a ticket should be criminal. Sorry Ticketmaster, pigs get slaughtered.
Sheldon Alderson Trying To Stop Online Gambling In Own Self Interest; Looks To Extend Obscure ’61 Act
As online gambling becomes closer to being legalized, Sandy Alderson, the Las Vegas casino (LVS) mogul who has made a $35 billion fortune in legalized gambling, is looking to Congress to shut down his competition. Alderson, who was influential in bringing the Raiders to Vegas, has spent both years and millions lobbying to ban online gaming; even going as far as to bankroll RAWA (an extension of the Federal Wire Act of 1961 designed to curb organized crime). Alderson’s opponents say that the law was not designed to prevent states from legalized online gambling and argue the extension of government would serve to benefit just one man. It should be noted that Alderson is only looking to prevent online gambling that competes with his casinos and not daily fantasy sports.
Howie Long-Short: Gambling companies trying to influence politics? What else is new? Casinos have generally succeeded by perpetually delaying online gambling efforts.
Fan Marino: Easier sale? Casinos as a healthy alternative to the “bad and addictive” online gaming sites or ice to an eskimo?
Tinder In Talks To Sponsor Manchester United Kit
Tinder (MTCH) is in talks with English Premier League club Manchester United (MANU) to sponsor the team’s new kit. The deal would place Tinder’s flame logo on the left sleeve of player jerseys. Worth a reported $16 million, it would become the most lucrative sponsorship of its kind for English clubs. While it may seem like a surprising match for the dating app, it would actually be their second futbol partnership. The company currently has a shirt sponsorship deal in place with Italian Serie A side Napoli.
Fan Marino: I’m a grown man (no, I’m not 40), so I don’t buy jerseys. If I was 20 again, I would not be buying a jersey with a corporate logo on it. It reminds me of a stadium giveaway.
Jeter Group Wins Marlins Bid
Miami Marlins owner; Jeffrey Loria, has agreed to sell the franchise to a group of investors led by venture capitalist Bruce Sherman, and former Yankees shortstop, Derek Jeter for $1.2 Billion. Sherman will be the “control person” while Jeter, who only put up $25 million of his own money, will run business and baseball operations for the organization. Jeter has his work cut out for him. The team is expected to lose $60 million this season, with the league’s worst TV deal and among the lowest attendance in all of baseball. On the field, the Marlins haven’t made the playoffs since 2003. The deal, which must be approved by 3/4 of MLB owners is expected to be voted on in early October.
Howie Long-Short: Forbes valued the team at $940 million. Jorge Mas wasn’t going over $1.1 billion. I’m surprised by the winning number.
Fan Marino: Rumors are circulating that the Jeter group may remove the home run sculpture in left center field. I was a regular attendee at games during the ’12 season. Never has something brand new seemed so outdated from the start.