Bass Pro Shops and Under Armour (UAA) and are among the corporations known to have contributed to Hurricane Harvey relief efforts. The Bass Pro Cares Fund has donated supplies totaling $40,000 to disaster response organizations and an additional 80 tracker boats, that are being used by local police, fire and rescue teams on the ground in Houston and other Texas communities. Under Armour has pledged to match all donation’s to Team Rubicon, up to $500,000, for operation shallow draft. Athletes, owners and leagues have all pitched in as well, with Rockets owner Les Alexander making a $10 million pledge.
Houston area to get rescue boats from Bass Pro Shops
Howie Long-Short: While the hurricane has yet to come to an end, recovery costs could reach as high as $160 billion, or roughly the amount of destruction from Hurricanes Katrina and Sandy combined. Want to help? Here is how you can.
Fan Marino: Among athletes, no one has done more than J.J. Watt. The Texans star’s fund has raised over $10 million, after starting with a $200,000 goal.
Georgia Tech University has announced a 6-year deal that will make Adidas (ADDYY) the official apparel provider for 17 GT varsity sports. The partnership, which goes into effect on July 1, 2018, will replace the school’s existing deal with Russell Athletic (BRK.A). The mutually beneficial agreement provides Adidas with a presence in the Atlanta market, while providing GT with a boost in revenue and a significant improvement in apparel quality.
Georgia Tech to exchange Russell Athletic gear for Adidas starting in 2018
Howie Long-Short: When GT first signed on with Russell Athletic in 1992, sporting goods companies like Russell (BRK.A), Rawlings (NWL), Wilson (HEL: AMEAS) controlled the uniform market. 25 years later fashion and apparel retailers (NKE, ADDYY, UAA) dominate the space. Times have changed!
Fan Marino: You hear a lot of talk that GT’s relationship with Russell Athletic has damaged their recruiting efforts. I’m not buying that. Football struggles to recruit because they run a version of the wishbone offense that hasn’t been popular since the 1980s. Basketball can recruit. Josh Pastner has a 5 star, Nassir Little, on campus this weekend.
Formula 1 (FWONK) is entering the esports arena, launching a gaming series with the help of esports operator Gfinity (LON: GFN). The series will focus on the new official F1 video game published by Codemasters; and will coincide with the on-track world championship. The inaugural season which will run from September-November, is Formula One Group’s latest attempt at embracing digital media (they also recently announced a partnership with SNAP). Qualification will begin in September and the series will culminate with a 20 person, 3 race event, at the F1 season finale in Abu Dhabi. The “esports World Champion” will receive automatic entry into the 2018 competition, passes to the 2018 Grand Prix and will become a character in the 2018 F1 video game.
Formula 1 Entering Esports Arena With Official Championships To Start In September
Howie Long-Short: F1 has been around since 1950 and has a fan base that attracts +/- 400 million TV viewers. In 10 years, esports has amassed an audience that saw 320 million people watch video games on television in 2016, with that number expected to rise past 400 million this year. Wise idea for F1 to try and attract real fans through the virtual world.
Fan Marino: From the gamers POV, F1 2017 is receiving strong reviews. A new “championship” game mode and series of vintage racers are new to this year’s edition.
Harley-Davidson (HOG) announced 17 new bike models that will hit the streets in 2018, the 115 year anniversary of the company. The motorcycle manufacturer announced the upcoming releases of 12 new softails that will include the most powerful engine ever offered on a HOG cruiser, and 5 new touring bikes, each with 3 custom vehicle operations options. The release is the company’s largest product development project ever and part of CEO Matt Levatich’s plan to add 100 new models over the next 10 years.
Harley-Davidson Rolls Out 17 Stunning New Models
Howie Long-Short: Q2 sales were down 6.7% YOY, but that figure only tells part of the story. While the remainder of the industry is slashing prices to account for the industry-wide retail slowdown, HOG prices (and margins) remain at a premium. IF the company chose to discount, it would likely show growth. Oh, and even with the drop in sales, they still own 50% of the U.S. motorcycle market.
Fan Marino: The concern for HOG has been that as baby boomers continue to age, they’ll buy motorcycles less frequently. Recent reports indicate that motorcycle rider demographics are getting younger, more urban and more female, which would bode well for the industry; but as a 30-something who lives in NYC, that is certainly news to me.
ESPN (DIS) has enlisted creative ad agency Droga5 with the task of reaching its ever diversifying (i.e. women) and distracted viewer base (i.e. various online platforms). The ad agency that counts Under Armour (UAA), Tencent (HKG: 0700) & Dos Equis (AMS: HEIA) as clients, will handle both creative and strategic, for the overall brand and its feature show “SportsCenter”. Droga5 has big shoes to fill though, as former agency of record Wieden + Kennedy was responsible for the popular “This is SportsCenter” campaign. Rival Fox Sports has since hired Wieden + Kennedy as its agency of record to work on a new ad campaign for the start of college football season.
ESPN Taps Ad Agency Droga5 for New Branding Effort
Howie Long-Short: ESPN cut paid media promotion from $26.3 million in 2016, to under $9 million in H1 ’17. As the company continues to lose subscribers, I would expect ad spend continues to drop.
Fan Marino: The monkey see, monkey do game continues at Fox Sports, this time on the advertising side. If ESPN touches it, Fox Sports wants it. If you want to give one former ESPN personality a watch/listen on Fox Sports, make it Colin Cowherd.
Time Inc. (TIME) has released an all-new free app for Sports Illustrated Play, their youth sports SAAS company. The company’s series of digital tools are designed to help youth leagues and teams operate more efficiently. For the first time, all teams regardless of league affiliation, can utilize the mobile platform to distribute news & content, schedule events, get real-time scoring, update its members and share social content. SI Play which launched in 2015, has 17 million monthly users and a top 5 mobile application; is the official technology provider of US Lacrosse and Babe Ruth League baseball and softball.
Time Inc. launches all-new Sports Illustrated Play mobile app
Howie Long-Short: While there are no shortage of competitors in the space (Bonzi, TeamSnap & LeagueApps etc.), none have the financial backing and distribution platforms (SI, SI.com, SI Kids) that SI Play does. That is going to make them tough to beat in the estimated $18 billion market.
Fan Marino: SI Play streamed the semifinals and finals of the Cal Ripken Major/70 World Series on the SI.com Facebook page. How cool is that for those kids?
Chip Ganassi Racing has announced a sponsorship deal with First Data (FDC) that will make the credit card processor the primary sponsor on Kyle Larson’s #42 car, for two races during this season’s Monster Energy (MNST) NASCAR Cup Series. Ganassi has been working to find a permanent replacement for current sponsor Target (TGT), whose contract expires at the end of the season, and is hopeful the partnership with First Data will grow in 2018. First Data has been making a big push in to the NASCAR space, targeting small business decision makers that comprise part of the sports’ overall fan base. The company recently signed a deal with International Speedway Corporation’s (ISCA) Martinsville Speedway, to act as the title sponsor of the playoff race in October (First Data 500) and will serve as the credit card processor at 2 additional races this year (Phoenix & Miami).
First Data Signs On With Chip Ganassi Racing, Will Sponsor Races For Kyle Larson
Howie Long-Short: The firm’s Global Financial Solutions division (retail & credit processing) recently reported it is up 12% YOY. With Clover helping to drive merchant on boarding, the future looks bright for First Data.
Fan Marino: First Data has been active in the sports sponsorship space of late, signing a 10-year deal with the Mets and purchasing the naming rights to their spring training facility in Port St. Lucie (First Data Field).
Drive Shack Inc. (DS) delivered Q2 earnings and reported just $7 million in profit for the quarter (down from $14 million in Q2 ’16). The company however is in the process of opening 3 interactive driving ranges (think Topgolf) within the next 18 months. The first two locations scheduled to open are Orlando, FL (Q1 ’18 open) and Richmond, VA (Q3 ’18 open). Raleigh, NC (H2 ’18) will follow.
Drive Shack Inc. Announces Second Quarter 2017 Results and Declares Third Quarter 2017 Preferred Stock Dividends
Howie Long-Short: Not interested in ELY? DS is another way to invest in the interactive driving range space. It is certainly worth noting that each Topgolf location earns +/-$20 million/year in revenue, roughly 50% coming from food/bar.
Fan Marino: Topgolf has 35+ locations in the U.S. but none in NY (there is one in Edison, NJ). Makes sense though, while the driving bays are heated, the range is open. December-March wouldn’t seem like an ideal time to spend a Saturday night outdoors.
Nielsen (NLSN) has announced the launch of a new vertical that will track Esports analytics; providing growth and fan engagement insight. Nielsen Esports will offer sponsorship valuation, industry specific research and consulting services to rights holders, media platforms and brands who currently lack the data necessary to understand the value they are providing, receiving or missing out on. The newly created division will track sponsorship exposure and ROI, both on and off air.
NIELSEN LAUNCHES NEW ESPORTS BUSINESS TO HELP DEFINE AND QUANTIFY VALUE FOR THE COMPETITIVE GAMING MARKET
Howie Long-Short: Esports is rapidly growing with 1 in 3 fans having just started to follow competitive gaming in the last 12 months. It’s estimated that by 2021 the industry will be worth $1.1 billion. I don’t understand the appeal, but Esports are here to stay.
Fan Marino: It is time to accept the fact that there will be a day when people are more interested in the Madden Championship game, than the Super Bowl.
Talks have stalled between Amazon (AMZN) and Ticketmaster, that would have made AMZN a ticket distributor for the Live Nation (LYV) subsidiary. AMZN found success selling tickets in Europe, but has been unable to crack the U.S. market with Ticketmaster (LYV) controlling 80% of all seats through a series of exclusive contracts. That dynamic has forced the retail behemoth to work with Ticketmaster, as opposed to competing against them. While Amazon’s reluctance to share consumer purchase data remains the biggest sticking point, fundamental differences remain. AMZN wants to drive Prime memberships by shopping tickets to the best shows, while Ticketmaster is looking for a partner to help unload the 40-50% of tickets that are typically unsold.
Amazon Meets Its Match as Ticketmaster Negotiations Stall
Howie Long-Short: There is simply no advantage for a venue/team to distribute tickets through a single channel. As existing contracts expire, look for an open, non-exclusive ticketing marketplace. That isn’t great news for LYV.
Fan Marino: A $200 face value ticket to Thursday’s U.S. Open has $33 in fees. In a non-exclusive ticketing marketplace, you could pay an additional $66 for the year, get all the benefits of being a Prime member and not pay another ticketing fee for 12 months. This needs to happen.