Forbes released its annual list of the 50 most valuable sports franchises for 2017, and despite the NFL’s slipping TV ratings for the 2nd straight year, the Dallas Cowboys are #1 (valued at $4.2 Billion). Sports franchises are more valuable than ever, with the cutoff to qualify for the Top 50 up 18% this year, to $1.75 Billion and a total of 87 teams world-wide with a valuation exceeding $1 Billion. The highest ranked team you can buy on a U.S. exchange is Manchester United (MANU), ranked 3rd and up 11% over the last year ($3.69 Billion).
The Cowboys And Yankees Top The World’s Most Valuable Sports Teams Of 2017
Adam Dow-Jones: How do these values change as the mediums through which we watch them evolve? Can new media fill the gap, and even bid up the TV Contracts? Or do the broadcasters cry uncle and we stop seeing nutty deals for Thursday Night Jags-Titans matchups?
Fan Marino says: The players are rich. The owners are richer. Fun Fact: In 1998, John Elway passed on the opportunity to purchase 10% of the Denver Broncos for $15 Million. The franchise is worth $2.4 Billion today.
The NBCUniversal (CMCSA) backed Olympic Channel made its TV debut on Saturday in 35 million homes. The television channel, which has a digital counterpart, will provide 24/7 coverage of Olympic sports and the American athletes who star in them. Live events, original olympic-themed content and archived footage will fill the broadcast schedule. Despite its large potential viewership base, questions certainly remain about public interest during non-Olympic periods. Programming Note: Beginning on August 28th and running through September 4th, the channel will replay all eight original broadcasts of the 1992 Dream Team’s run to gold.
Olympic Channel hits TVs Saturday, will air 1992 Dream Team games in late August
Howie Long-Short opines: ZzzZZZzzz. This only works because NBC has a big brother in Comcast to pick up carriage of the channel.
Fan Marino says: Mark Twain once said “Too much of anything is bad, but too much good whiskey is never enough.” I say too much curling is bad, and there isn’t enough whiskey in NYC for me to watch synchronized swimming and fencing. Hard pass, though I will tune in for the Dream Team broadcasts.
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.
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.
Liberty Media’s (LMCA) Formula One and Snap, Inc. (SNAP) have partnered, encouraging fans to shoot and upload video at upcoming F1 events, starting with this weekend’s British Grand Prix. F1, which would actively look to prevent race highlights from hitting social media prior to the Malone takeover, is now looking to grow interest in the circuit by building a social media presence and reaching a younger demographic. The companies will split all ad revenues generated, but no additional terms of the deal have been released.
Formula 1 and Snap Inc. announce new global partnership
Fan Marino says: My F1 knowledge goes 2 drivers deep. Michael Schumacher and Mario Andretti. That is in the HISTORY of the sport. Marketing their stars, has never been F1’s strength. This deal will help bring attention to, if not interest in, the circuit within the U.S.
Howie Long-Short opines: I can add Ayrton Senna to the list–but only because his documentary is on Netflix. I don’t know a single fan of F1. USA is a huge opportunity for F1 under Liberty’s control, but they have a long way to go.
The NFL’s 4 main broadcast partners: ESPN (DIS), NBC (CMCSA), CBS & FOX (FOXA), are bracing for a fall in advertising revenues for games during the 2017 season. A decline in TV ratings, the recent switch of advertisers from traditional TV to online media, the overabundance of games being shown on television and drastic spending cuts by the drug and auto companies, are all contributing to the poor ad performance. Even with an increase in price of spots for the 2017 season, total ad revenues are trending a few points below the 2016 season.
ESPN, Broadcasters Are Said to Confront Football Ad Slump
Fan Marino says: No one needs 9 hours of football on a Sunday, eliminate SNF. The short week kills the quality of play, eliminate TNF. No Saturday Games. 2 games on Sunday, 1 on Monday. Boom! Problem solved.
Howie Long-Short opines: Way too early to call a trend here r.e. ratings. Lot of horrible games last year, plus that whole election thing. For broadcasters like CBS and FOX, sports are still their safest bet for viewership. But with their over-reliance on advertising, an economic slowdown is the bigger risk.
Madison Square Garden (MSG) has signed a booking and marketing partnership with the Prudential Center (home of the Devils), in an attempt to bring more marquee events to New Jersey. MSG, which owns world class venues and has won various booking awards, is in a heated battle for venues with AEG Live, with the companies preventing acts from performing at competitor owned venues. Irving Azoff, Jim Dolan’s partner in Azoff MSG Entertainment, explains in a must read 400 word statement, the MSG side of the story.
The Madison Square Garden Company and Prudential Center Announce Booking and Marketing Partnership
Fan Marino says: No terms of the deal have been released, but the new revenue should help to offset at least a fraction of Tim Hardaway Jr’s generous new contract.
Howie Long-Short opines: MSG has a long way to go to make this a real business for shareholders. I’m not ready to bet on JD and the Straight Shots here.
Jawbone; the company that pioneered Bluetooth headsets and wireless speakers before turning its focus to health & fitness trackers, is going out of business and has begun liquidating assets, after 18 years. With 450 employees and a valuation of $3 Billion in early 2015, the company had among the most hyped fitness trackers; but logistics issues, competition from companies like FitBit (FIT) and a softening market for wearable fitness tech has caused the company to struggle since. Jawbone has a pending lawsuit against Fitbit (FIT) and 5 former employees over the alleged theft of trade secrets.
Jawbone Is Going Out of Business
Howie Long-Short opines: Sounds like a lot of Silicon Valley investors took a hard one to the jawbone. The wearables business is deadly competitive.
Mrs. Fan Marino says: Bummer! Their blue tooth headsets were great for an active runner (like me). Fitbit counts steps and calories for the lazy (like Fan Marino). Should have stayed in their lane!
YogaWorks, which owns and operates 50 yoga studios within 6 U.S. markets, has plans to raise $65 Million by offering 5 Million shares between $12-$14. The yoga chain, which plans to list on the NASDAQ Global Market under the symbol YOGA, is not currently profitable, losing $9.4 Million in 2016. Net Revenues however, are growing, and the company says it’s been deferring revenue by converting members from a subscription based to class pass model.
YOGAWORKS, A US YOGA STUDIO CHAIN, SETS TERMS FOR $65 MILLION IPO
Howie Long-Short opines: Dare I say it’s a stretch to call this a hot IPO? Oh God. Sorry. Really though, a yoga studio roll-up sounds even worse than a golf club roll-up (MYCC). This one smells.
Fan Marino says: I’m not convinced stretching can be considered a workout. If you have to crank up the heat to 95 degrees to work up a sweat, are you actually working up a sweat?
Kagan, a media research group within S&P Global Market Intelligence, is predicting that traditional pay TV companies (i.e. CMCSA, T) will lose another 10.8 million subscribers by 2021, while virtual services like Sling TV (DISH) and Playstation Vue (SNE), grow collectively to 11 million users. It has been estimated that 18 million households (14% of U.S.) will rely solely on over the top, self aggregated, online content, by that time. The news isn’t all bad though for traditional providers, as households with multichannel subscriptions are expected to remain the solid majority for at least the next 5 years.
Kagan Releases Multichannel projections through 2021
Howie Long-Short opines: 10.8 million more cord cutters, fully offset by 11 million OTT subs, in 5 years? This would probably be good news, at least for the cable companies that can charge streamers $100 for high-speed broadband.
Adam Dow-Jones comments: Has the furor over cord cutting gone to far I wonder? Not while these numbers continue to be abysmal. Mr. Dow-Jones smells some value in media though as market overprices these declines.
Fan Marino says: I’m literally just ESPN and ESPN2 away from making the move to FuboTV. Look at the channel lineup, what else do you need?
ClubCorp Holdings (MYCC), the owner/operator of over 200 private golf & country clubs, has been acquired for $1.1 Billion by Apollo Global Management, a P.E. firm. Apollo has agreed to pay $17.12 per share in cash, nearly a 31% premium over the July 7th closing price. The deal, expected to close in Q4 ’17, comes just 3 months after Longtime CEO Eric Affeldt announced his retirement and the firm stated it would not be seeking a sale, despite mounting debt and lagging memberships.
Dallas-based ClubCorp agrees to be bought by private equity giant for $1.1 billion
Howie Long-Short opines: Golf course roll-up strategy, really? Never bought this one. Less than fantastic return for any long-term MYCC shareholders participating in the $14 IPO in 2013. Fortunately for them, Apollo continues the trend of buying out companies flagged for questionable accounting or business models. Good luck.
Adam Dow-Jones comments: Oh boy what a saga this was, between activists on both long and short side. Hardly a great return for IPO shareholders but a nice opportunity for those able to value these hard assets, geared to experiential consumption.
Fan Marino says: If you believe Golf is on the upswing, Acushnet Holdings Corp (GOLF), the owner of Titleist, and Callaway Golf (ELY), both remain public.