Coca-Cola Extends Long-Standing Partnerships with NASCAR, International Speedway Corporation

Coke

Coca-Cola (KO) has extended partnerships with NASCAR and International Speedway Corporation (ISCA) through 2023, extending a 50-year association that has made the brand one of the “most recognized sponsors” in the sport. The integrated agreement means that KO will remain the “Official Soft Drink of NASCAR” and be the leading (non-alcoholic) pour of 21 NASCAR sanctioned race tracks (ISCA owns 12) for the 2018 season. In addition to pouring rights, KO’s immersive NASCAR marketing approach includes race entitlements (Coca-Cola 600, Coca-Cola 400) and the Coca-Cola Racing Family; a group of top drivers that make appearances and are featured in advertising, promotions and packaging.

Howie Long-Short: Back in early October, ISCA reported revenue for the quarter ending August 31st rose 2.2% (to $131.9 million), despite race attendance continuing to decline; with the hosting of non-traditional events, food, beverage & merchandise sales offsetting sagging ticket sales. The company has set 2017 revenue guidance at $660-$670 million; for comparison purposes, ISCA generated $661 million in 2016. The race track owner/manager will report 2017 full year earnings on January 25th.

Fan Marino: The Coca-Cola Racing Family includes 3 of the Top 11 in the Monster Energy NASCAR Cup Series standings; Denny Hamlin (6), Kyle Larson (8) and Austin Dillon (11). Prior to last season’s playoffs, I had a chance to sit down with Austin Dillon (a market buff) and talk to him about the personal stock portfolio he manages (i.e. not his retirement account). I asked him, if there was a trade you could take back; what would it be?

Dillon: I messed up on Tesla (TSLA), badly. I had it at $44. One of my engineers was like ‘it’s not going anywhere’ and I sold it (currently at $344). I had around 200 shares.

Fun Fact: Dillon played for the South-East team in the 2002 Little League World Series.

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MLB Sets Record for Sponsorship Revenue Generated in a Season

MLB has set a league record for sponsorship revenue generated in a season, taking in $892 million in 2017; a 7.9% increase YOY and up 26% from just 5 years ago ($663 million). Newly signed deals with Coke (KO), Nathan’s Famous (NATH), Old Dominion Freight Line (ODFL) and 5-Hour Energy along with the addition of presenting sponsorships for the playoffs and World Series, are credited driving the growth. New Era, StubHub (EBAY), Budweiser (BUD), Majestic Athletic and State Farm were the league’s 5 most active sponsors. The data was compiled by ESP Properties, a sports & entertainment research and consulting firm owned by WPP (WPPGY).

Howie Long-Short: MLB finished a distant 2nd among the 4 major U.S. professional sports leagues in sponsorship revenues generated. The NFL brought in $1.2 billion during the ’16 season, the NBA did $880 million and the NHL generated a league record $505 million in ’16-’17 (5.9% increase YOY). With the addition of the Adidas (ADDYY) contract, the NHL is expected to set another record this season.

Fan Marino: While on the topic of baseball, Astros OF George Springer hit a HR in the 7th inning of Game 5 of the World Series, that appeared to explode upon landing. You can check out the video here. While logic points to perfect placement and immaculate timing by the Astros pyrotechnic staff, conspiracy theorists will claim the balls are juiced…with TNT. I suppose it’s possible. The teams have combined for a World Series record 22 home runs through 5 games.

Behind Coke, YouTube, Camping World, MLB Sponsor Spend Hits $892M In 2017

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SPORTS ETFS LAUNCHES INDEX FUND FOR SPORTS FANS; CONSISTS OF OFFICIAL LEAGUE SPONSORS

Looking to invest in sports, but not confident in your ability to select individual equities? SportsETFs has launched a Pro Sports Sponsors Index, consisting of 66 companies that are official sponsors of the 4 major sports leagues. Trading under the symbol (BATS: FANZ), the equally weighted index is a collection of highly recognizable brands including Coca Cola (KO), Pepsi (PEP) and McDonald’s (MCD). With sports media rights set to increase at a compound annual rate of 5.5% through 2020 and with sports sponsorships expected to increase at a compound annual rate of 3.9% over that same time period, the ETF hopes to capitalize on the growth potential associated with pro sports league partners.

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There’s a new way to bet on the companies that bet on sports

Fan Marino says: I found it noteworthy that NASCAR sponsors were not included. I was looking forward to seeing Carl Long’s marijuana-vaping company, on the list.