Sports Finance Brief: Mayweather Vs McGregor Causes Worst Box Office Weekend In 15 Years
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…
MAYWEATHER/MCGREGOR CONTRIBUTES TO THE WORST BOX OFFICE WEEKEND IN 15 YEARS;
While August has been a predictably slow month for movie theatres, not since 2001 have U.S. weekend box office revenues been this low; with revenues totaling just $65 million. Lionsgate’s (LGF.A) “Hitman’s Bodyguard” finished #1, earning a mere $10.1 million. While hurricane Harvey may have contributed to the low figures coming out of Texas, it was Saturday night’s Mayweather/McGregor fight that likely had the bigger impact. The fight generated more than $600 million in revenue, one of the highest grossing PPV events in history. Fathom Events (AMC, CNK, RGC) which showed the fight in theatres across the country, had a big night. The one-night closed-circuit event would have placed in the Top 10 for weekend movies, earning $2.6 million.
Howie Long-Short: $65 million equates to roughly 7 million tickets sold. You must reach all the way back to WWII to match the low attendance figures. Theaters had more viewers in the weekends following the Kennedy assassination and 9/11.
Fan Marino: Had the fight even through 6 rounds. Far from the sham many were predicting.
NEULION SERVERS OVERWHELMED BY TRAFFIC; FANS WHO PAID $100 MISSED MEGA FIGHT
NeuLion (TSE: NLN), the digital streaming service who streamed Saturday night’s Showtime (CBS<) PPV event on behalf of the UFC, SKY Sports (LON: SKY) and Eleven Sports Network to over 180 countries around the world; experienced significant technical difficulties during its most watched event ever. Transaction volume overwhelmed servers in Florida and California causing widespread outages, a 20-minute delay to the main event and some very disappointed fans to miss the fight. Fans who ordered the PPV event through UFC.tv powered by NLN software, paid $100 for the Mayweather McGregor headliner, but were unable to log-in. Those individuals have since been directed by UFC.tv to email NeuLion for a refund.
Howie Long-Short: Not sure NLN is long for the streaming business with BAMTech coming on strong, but the company has a growing business licensing technology to consumer electronics companies. Samsung (KRX: 005930), Sony (SNE), LG (KRX: 066570), Panasonic (TYO: 6752), Sharp (TYO: 6753), Philips (PHG) and Toshiba (TYO: 6502) all use NLN video players within their TVs to ensure up to 4K clarity.
Fan Marino: Amateur move to wait until right before the main event to test the stream. You need to leave yourself time to get to the bar, in the event you encounter any issues.
JAWBONE PIVOTS FROM FITNESS WEARABLES TO MEDICAL DEVICES
Jawbone, the liquidated consumer technology turned fitness wearables company, is now rebranding itself as Jawbone Health Club and planning to enter the medical device market. While the new business plan and product line are yet to be released, according to the company’s investor presentation products under consideration include; sensors that track body metrics (hydration, respiration, blood pressure, alcohol level), a bracelet that can detect a heart attack or failure and applications to assist with diabetes, hypertension, heart rhythms and stress management. The company plans on pursuing a partnership with Microsoft (MSFT), where the tech giant would distribute the Jawbone Health Club’s devices and wellness software, and data collected would sync with MSFT email & calendar products.
Howie Long-Short: Medical grade devices are certainly the next generation of wearables, so from a conceptual POV, I like the pivot. However, to get insurance reimbursement, they will need FDA approval on products. R&D is expensive and they blew through $590 million the first time around. Are they going to be able to raise enough money to flush this business out?
Fan Marino: I always thought the idea of a “fitness tracker” to count steps was nonsense. Just a matter of time until we toss it in the same bucket with our shake weights, thigh masters and ab vibration belts.
FINISH LINE LOOKING TO CONNECT CUSTOMERS & SNEAKER CULTURE; SIGNS MIGOS AS CREATIVE DIRECTORS
The Finish Line, Inc. (FINL) has signed Migos to creative director roles with the retailer. The platinum award winning hip-hop trio will lead several marketing initiatives that will feature themselves along with other social media influencers. FINL is giving Migos the freedom to pick product and to style it, to develop the themes for upcoming product shoots and to direct their vision on the production set. The group plans to focus specifically on the shoe market, as FINL is looking to connect customers to sneaker culture.
Howie Long-Short: FINL has posted 2 straight quarters of annual revenue declines, so a shake up on the creative side is welcomed. While this partnership may provide a short-term boost as Migos has reach, it doesn’t solve the problems associated with the shift to direct to consumer selling.
Fan Marino: Woah kemosabe, I guess expect a lot of same color tee shirts. White.
CHICK FIL-A TO HAVE STAND IN FALCONS NEW STADIUM; STAND WILL BE CLOSED ON SUNDAYS
The highest grossing franchise in the U.S. ($4.4 million/store; $1.7 million more than #2 on list), Chick Fil-A, will in fact sponsor a stand in Atlanta’s new football stadium, despite being famously closed on Sundays. Company Founder, Truett Cathy, was a devout Christian who closed his restaurants on the 7th day to observe the Sabbath. Perhaps odd to some, no exceptions will be made for the location at Mercedes Benz (OTC: DDAIF) Stadium despite the Falcons hosting only one non-Sunday game in 2017. The sponsorship isn’t a total loss though for Chick Fil-A as the stadium is also home to MLS’ Atlanta United, concerts and college football games.
Howie Long-Short: Did you know that it only costs $10,000 to open a new Chick Fil-A franchise? Have that laying around? Don’t get too excited, only .4% of applicants are selected to become “operators”.
Fan Marino: Never understood the hype behind Chick Fil-A. Give me Wendy’s (WEN) spicy chicken sandwich all-day-long and twice on Sunday.