A mystery Chinese buyer is reportedly preparing to line up and purchase publicly traded shares of Premier League franchise, Manchester United (MANU) in an attempt to control upwards of 8% of the futbol club. The Glazer family currently owns 80% of MANU, while the remaining 20% is held by investment funds in New York and London. It has been rumored that some members of the Glazer family would be willing to part with a large chunk of shares.
Chinese investor making moves to line up Manchester United shares, according to reports
Howie Long-Short: Forbes values the franchise at $3.69 billion, while MANU has a market cap in the range of $2.75 billion. Perhaps this mystery individual is onto something.
Fan Marino: Red Devils’ fans have never been pleased with the way the Glazer family operates. A new, powerful, voice in the room would be a welcomed addition.
Since Paddy Power Betfair (PDYPY) went public in 2000, the online gambling site is up 40-fold. With analysts projecting double-digit growth in both profits & revenue over the the next several years, it would seem as if investors would be bullish on the company. However, a recent 9% drop indicates otherwise. Investors are concerned about CEO Breon Corcoran unexpectedly stepping down, the company’s recent earnings report which reflected disappointing growth numbers within its online division and questions surrounding Britain’s pending review of the gaming industry. While shares are down 30% from their February high, they are currently trading at a 44% premium on enterprise valuation within the sector. For those who see an opportunity, a growing online sports betting business and strong balance sheet support their case for an investment.
Buy the dip with Paddy Power? A case for not betting on it yet
Howie Long-Short: Corcoran noted during the Q2 earnings call that the PDYPY consumer facing product is “not good enough” and that the “UI is a bit sloppy”. It’s also not an immediate focus for the company, with stack integration consuming 70% of technical resources. For an industry that is moving increasingly online, that must be a cause for concern.
Fan Marino: With college football season just 2 weeks away, I’m going to toss you an early winner. Auburn -34.5 (Caesars) vs. Georgia Southern. Take your antacid and give the 5 TDs.
The Walt Disney Company (DIS), who just last year acquired 33% of digital media darling BAMTech for $1 billion, has reached a deal to become the majority stakeholder in the company that will provide the infrastructure behind the media giant’s shift in to streaming. DIS announced it has picked up an option to purchase an additional 42% of the MLB Advanced Media spinoff for $1.58 billion. The technology, which currently acts as the backbone behind WatchESPN, will power ESPN’s newly announced OTT service, along with Disney’s ambitions to compete with Netflix (NFLX) in the streaming space.
BAMTech valued at $3.75 billion following Disney deal
Howie Long-Short: No surprise here. It was clear from the start that DIS sees BAMTech as the foundation for their digital sports platform going forward. Sure wasn’t cheap, but Disney has deep pockets.
Fan Marino: Each of the 30 MLB teams put up $4 million to develop BAMTech. It returned $50 million/team and collectively MLB and its teams still own 15% of the company. Not a bad ROI.
Sports Illustrated (TIME), looking to capitalize on the buzz its annual Swimsuit Edition creates, is taking a crack at the modeling business. With the creation of Sports Illustrated Swimsuit Enterprises, the company plans to turn their popular mid-February issue into a year-round business and licensing venture. SI announced it will be partnering on a high-end swimwear line, with Raj Swim, to be released early next year. Following a recent casting call, the newly created division signed 15 previously undiscovered models.
Sports Illustrated turning swimsuit issue into year-round enterprise
Howie Long-Short: SI Swimsuit has the eye for talent, name cache and a well respected editor in M J Day leading the new venture. I like this move for TIME.
Fan Marino: Seems like a long time coming. Every girl they put on the cover becomes a supermodel. Kate Upton is the GOAT.
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.
Tinder is reportedly planning to sponsor Manchester United’s new uniform for $16 million
Fan Marino: I’m a grown man, so I don’t buy jerseys. If I were 20 again, I would not be buying a jersey with a corporate logo on it. Reminds me of a stadium giveaway.
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.
Loria agrees to sell Miami Marlins to Sherman and Jeter, source says
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.
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.
Casino Mogul Wants To Use Congress To Shut Down Online Gambling Competition
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?
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.
Amazon in talks to offer event ticketing in US
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.
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.
SoftBank to invest $1 billion in sports retailer Fanatics amid aggressive spending spree
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!
In an effort to offset the steady decrease in television subscribers, Walt Disney Co. (DIS) will launch an independent ESPN OTT streaming service in 2018. The platform will provide subscription packages (some as small as a single game broadcast), consisting of content not airing on the ESPN television networks. ESPN anticipates the platform will provide access to an additional 10,000 live game broadcasts/year, including those from BAMTech partners, MLB, NHL & MLS. Viewers who want to watch the NFL, CFB & NBA action shown on ESPN’s linear television networks will still require a cable subscription.
What the ESPN streaming service will offer
Howie Long-Short: Disney is belatedly inching ESPN into the OTT world. But the real question is, how many digital subs will they be able to win when they feel it’s time to sell full stack ESPN OTT at $20-$30?
Fan Marino: How did I just get suckered into paying MORE for sports programming?