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?
GoPro (GPRO) shares soared with news that the company grew 34% YOY, generating $297 million in Q2 2017. While shares have fallen 40% over the past year amid a series of delays, recalls and general poor software quality, CEO Nick Woodman is pleased with the company’s growth across all markets internationally. GPRO appears to be well positioned for future growth as well, with a growing virtual reality market, high-end drone business and mobile video editing app (usage up 112% YOY).
GoPro shares surge 20% after earnings: ‘We still have significant room to grow,’ CEO says
Fan Marino: Even if I were an outdoorsman (I’m more like an indoorsman), what do you do with all that raw footage?
Callaway Golf Company (ELY) has agreed on terms to acquire TravisMathew, LLC, a high-growth golf and lifestyle apparel company, for $125.5 million. The price of sale values the brand at +/-11.8x projected 2017 EBITDA. The company has projected net sales to be in the range of $55-60 million for 2017, $10-15 million of which will count towards Callaway’s H2 financials. TravisMathew currently has distribution at high-end country clubs, resorts, department stores and experiential retail locations.
Callaway Golf Company To Acquire TravisMathew For $125.5 Million
Fan Marino: TravisMathew is a more modern/casual take on Lacoste/Polo. I’m a fan of the brand and Callaway continuing to target a younger demo.
Adidas (ADDYY) reported a huge 20% YOY increase in sales for the 2nd quarter, with e-commerce growth up 66% from the same time period last year. The growth was largely driven by sales in the U.S and China, up 26% & 28% respectively. Despite the significant growth, CEO Kasper Rorsted believes the company has plenty of room to grow; announcing a commitment to spend nearly an extra billion dollars on marketing by the end of the decade, to grow key territories and build out its digital initiative.
‘We’re by no means where we need to be,’ says Adidas CEO as sales rise 20%
Howie Long-Short: After being tossed in the dumpster in 2014, Adidas has been on a tear for two years, taking share from the competition. Clearly they’ve been getting something right design-wise. I have no idea what. My obsession with athletic shoes ended around age 18.
Fan Marino: I said I wouldn’t do it. I said I was firmly in the Nike camp. I sold out.
Despite a 40% YOY decline in devices sold, Fitbit (FIT) managed to exceeded analyst expectations during the 2nd Quarter. FIT reported sales of $353 million (compared to estimates of $341 million) and losses of $.08/share (compared to estimates of $.15). The once high-flying fitness band company is hoping a pivot to becoming a digital health company, focused on corporate wellness, will change its fortunes. CEO James Park announced the company’s new smartwatch will be released in time for holiday shopping, and is expected to drive second half sales.
Fitbit Tops Sales Estimates on Renewed Demand for Fitness Bands
Long-Short: The beauty of low expectations. There’s not much room downward left for this stock.
Fan Marino: The FIT stock has dropped 90% in 2 years. A pivot is in order, but I don’t see a need/market for the smart watch.
While space colonization isn’t likely to occur in our lifetime, the space economy is booming (space suits represent a $20-$25 million annual market) and big name retailers like Reebok (ADDYY) & Y-3 (ADDYY) want in on the action. Reebok teamed up with space outfitter David Clark Company to release the first updated space boot in 50 years, the SB-01. The boots, which use Reebok’s patented Floatride foam, “will accompany the final space suit that will shuttle astronauts to and from the International Space Station”.
Work It! How Reebok, Adidas, and Y-3 Will Dress Future Space Explorers
Fan Marino: How did Reebok go from Dave & Dan to Neil Armstrong in 25 years?
It has been nearly a month since Cabela’s (CAB) shareholders voted to approve a merger with Bass Pro Shops, but the company’s future remains as murky as ever. CAB‘s Q2 earnings report revealed a 9.3% decrease in revenue from the same time last year and a big EPS miss (reported $.41/share; analysts expected $.60/share). The outdoor recreation retailer had agreed to a buyout worth approximately $61.50 per share, but after recent bad news, Bass Pro Shops could be looking for a way out of the $4.2 billion deal, and may just have it. If Cabela’s fails to gain Federal Reserve approval to sell its credit card business to Synovus Financial prior to October 3rd, then Bass Pro Shops can walk from the deal without penalty.
Cabela’s reports drop in second-quarter sales, largely due to slump in firearm purchases
Howie Long-Short: Add Cabela’s to the list of companies hurt by weak gun sales. Amazing how much politics drives this.
Fan Marino: My uncle is a hunter. 21 years. 1 deer. True Story.