Ford Performance (F) has announced that it intends on introducing (pending NASCAR approval) its iconic Mustang model to the Monster Energy NASCAR Cup Series in 2019. The “muscle car” would become the 4th model Ford has run in NASCAR’s most prominent series, in the modern era (since ’72); following the Thunderbird, Taurus and Fusion. While the body will be available to Ford Performance teams, on the Cup circuit, for the first time at the 2019 Daytona 500; Ford has been using the model in the Xfinity Series (#2 circuit) since ‘11. Chevrolet also changed its body style earlier this year, introducing the Camaro ZL1 to the Cup Series; a long-time rival of the Mustang.
Howie Long-Short: Ford Motor Company (F) has had a rough start to 2018, with shares down 12% YTD (17% since January 12th). The rising costs of aluminum and steel, thinning margins (5.4% operating margin in ’17, GM – 8.8%, Fiat – 6.4%) and underwhelming sales abroad (particularly China & U.K.) are to blame. Looking for a bright spot? Morgan Stanley says the company’s F-1 pickup franchise alone, could be worth 1.5x the company’s EV. The company will report Q1 earnings later today.
For those wondering, in 2017 Ford sold 20% more Mustangs (81,866) than Chevy (GM) did Cameros (67,940).
Fan Marino: Ford is having a strong season on the track. 5 of the Top 6 drivers in the Monster Energy Series standings drive a Fusion and the manufacturer has won 4 of the 8 races. As for Chevrolet, Austin Dillon won the 60th running of the Daytona 500 in a Camaro; but, their teams have struggled since.
It’s worth noting that 2 Ford drivers won Xfinity Series Championships driving a Mustang, Ricky Stenhouse Jr. (’11, ’12) and Chris Buescher (’15). Despite their Championships, no one has won more races driving the model than Brad Keselowski; with 17 trips to Victory Lane.
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The NCAA men’s basketball tournament remains “the second largest post-season sports franchise, trailing only the NFL playoffs”, in terms of television advertising expenditure; but, the ad spend growth rate for the Big Dance trails that of the NBA, MLB and NFL post seasons, over the last 5 years. Though 97 advertisers (a record) spent $1.28 billion (also a record) on television advertisements during March Madness ‘17, that total has grown just 3.3% annually since topping $1 billion for the first time in 2012. For comparison purposes, the NFL is growing +9.7% annually with advertisers having spent $1.55 billion during the most recent postseason. The NBA (3rd largest post season franchise) has experienced 11.7% YOY growth over the same period, with brands increasing their total postseason ad expenditure to $934 million in 2017.
Howie Long-Short: The prohibitive cost of advertising during the NCAA tournament, relative to global audience size (or lack thereof), is likely the biggest reason March Madness’ ad spend growth rate trails the NFL, NBA and MLB postseasons. NCAA bylaws preventing companies from using the names (or likeness) of the college athletes in their advertisements, also places them at a competitive disadvantage relative to the pro sports leagues. It should be noted that the NCAA’s ad spend growth rate is “in line with rights fees increases.” For informational purposes, General Motors (GM, $83 million), AT&T (T, $66 million) and Coca-Cola (KO, $56 million) spent the most among advertisers during the 2017 NCAA men’s basketball tournament.
Fan Marino: Loyola University-Chicago won its first NCAA tournament game since 1985, upsetting the University of Miami on a 3 pointer at the buzzer; a highlight that will live in March lore forever. Among those in attendance were 98-year-old team chaplain Sister Jean Dolores-Schmidt. Dolores-Schmidt is no front-runner. Prior to November (she broke her hip keeping her out of action), she had only missed 2 games since ’94. She has a plaque in the school’s hall of fame, had her own bobble head night at the arena and still issues scouting reports on upcoming opponents. Her 11th seeded Ramblers are scheduled to play 3rd seeded Tennessee on Saturday. No doubt, she’ll have some thoughts on how to stop Grant Williams; UT’s unanimous all-SEC first team selection.
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