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.
NBC will host the first “home” Olympics since 2002, with the announcement that the 2028 Summer Games are set to take place in Los Angeles. The network, which set records for consumption during the Salt Lake City games, will broad marquee events like track & field and swimming in primetime. Just don’t expect those broadcasts to necessarily be on traditional television. NBC has exclusive rights to broadcast events on cell phones, tablets and any other forms of technology that develop between now and then, making it likely the network will set records for advertising revenues.
What a Los Angeles Olympics means for NBC
Howie Long-Short: This should help make up for the 3 games in Asia, but 2028 is a long way away.
Fan Marino: Biggest regret I have as a sports fan is failing to attend the ’94 World Cup & the ’96 Atlanta Games. I won’t blow it this time around.
Churchill Downs Inc. (CHDN) is building an 85,000 sf, $60 million facility, to host historical race wagering by the fall of 2018. Historical race wagering; or instant racing, is similar to slot machines and models games after previously run races. The company will start with 600 machines, and if successful, could look to add similar facilities to its portfolio in the future.
Churchill Downs CEO sheds more light on $60M gaming facility, Derby’s huge TV showing
Howie Long-Short: What is this, CHDN’s attempt to hedge in case PETA ever gets horse racing banned, like Shamu? Biff Tannen is delivering me a horse racing almanac as we speak. Retirement, here we come.
David Price/Earnings: Sounds like this could be quite profitable down the stretch, if marketed right.
Fan Marino: How big of a degenerate does one have to be, to gamble on a horse race that’s already been completed? Asking for a friend.
Madison Square Garden Company (MSG) has purchased a controlling interest in Counter Logic Gaming, an eSports powerhouse, with millions of fans across various social platforms and significant growth potential. While CLG gets access to MSG’s experience in completing marketing partnerships and media rights deals, MSG is now positioned as a power player in the world of competitive gaming. With the global eSports market estimated to be worth $1.5 billion, by 2020, that would seem to be a desirable place to sit. It should be noted that MSG has hosted and sold-out eSports events in the past, giving CLG the confidence it will be able to create and operate ticketed events at the World’s Most Famous Arena.
Madison Square Garden Company Buys Counter Logic Gaming (CLG)
Howie Long-Short: HotShotGG? This makes me feel old. I don’t get eSports and I haven’t seen a real revenue model yet, but it clearly is receiving a ton of attention.
David Price/Earnings: A great move for both sides, although quite hard to call video gamers ‘professionals’.
Fan Marino: Do eSport athletes have a signing day? Do they line up hats? A lot of questions to be answered here.
Colleges & Universities that were once were steadfast against beer company sponsorships are now coming around on the revenue potential associated with beer sales, in stadium signage, media and licensing opportunities. Texas, which began to sell beer in 2015, reported $1.3 million in profits from beer sales during the 2016 season; so it’s no surprise that others are looking to get in on the action. 36 on-campus stadiums will sell beer during the 2017 season (with 14 more pouring at off-campus venues), while the number of school marks and intellectual property being used in beer marketing campaigns at an all-time high. There is no doubt that the change in thinking is driven by revenue potential, but school administrators maintain that controlling beer sales will keep students safe, helping to curb the binge drinking that occurs prior to and during halftime of games.
Colleges chug beer dollars
Howie Long-Short: This makes sense, though I’m surprised given the politics.
David Price/Earnings: Beer marketers’ thirst for new income streams have found a new home in the perfect spot; colleges & universities. Sounds like a slam dunk to me.
Fan Marino: I’m not sure it’s going to curb the binge drinking, but it certainly seems sensible. Why shouldn’t adults of legal age be permitted to purchase a beer at a football game?
As WWE (WWE) continues to strive domestically with record profits and ratings, the company sees the potential for additional growth with global expansion. WWE has partnered with Lagardère Sports, a subsidiary of Lagardère Group (EPA: MMB), to provide global sponsorship support and analysis, with a focus on the Indian market. With more than 500 live events/year, WWE is looking to take advantage of the increased amount of live, in-ring content shown on the company owned WWE network. The company has acknowledged that in order to continue recording record growth numbers (subscriber base up 16% since Q1), and to continue increasing its brand power, global expansion is a necessity.
The WWE Is Exploring Overseas Opportunities For Further Revenue Growth
Howie Long-Short: Does what sells in the trailer park really sell in China too? I think WWE will have a tough time expanding globally. But they’ve already done better than I expected since launching their own network.
Fan Marino: With India a focal point, it’s no surprise that Vince & Co. are pushing Jinder Mahal.
2017 hasn’t been kind to ESPN. In April, the company laid off 200+ employees and then in June reported their lowest rated second quarter in 4 years. ESPN’s struggles don’t seem to be hurting parent company Disney (DIS) as much as some may think. In April of 2017, DIS neared an all-time high of $120 (the stock is at $109 at the close on Aug. 2). Helping them soar are increased revenues from their theme parks, as well as the success of their Star Wars & Marvel franchises. Rumors of a possible acquisition by Verizon (VZ) are likely not hurting the stock either.
Disney: 30% Less Dependent On ESPN
Howie Long-Short: No doubt, ESPN is facing a tough task as it is overpriced and overdistributed. But Disney is still the premier media company out there. They will be fine.
David Price/Earnings: Disney continues to un-web their core business from ESPN. Definitely a wise decision based on recent stock performance.
Fan Marino: ESPN fired top notch reporters like Marc Stein and Jayson Stark, while keeping high priced carnival barkers like Steven A. Smith. Certainly seems like a Mickey Mouse organization to me.
Smart enough not to spend $100 on Mayweather/McGregor, but still want to watch the fight live? Fathom Events, owned by AMC Entertainment (AMC), Cinemark Holdings (CNK) and Regal Entertainment Group (RGC), will be showing the fight (and undercard) at movie theatres across the country on Saturday August 26th. The theatre broadcast will be identical to the Showtime PPV telecast (CBS). Ticket prices will vary, as they are determined by the theatre, but are expected to be roughly $40.
Floyd Mayweather-Conor McGregor tilt headed to movie theaters
Howie Long-Short opines: The theatre exhibitors have been talking up the potential of non-film content from time to time for ages, with minimal impact on the bottom line. Including boxing, though this one intrigues me. But without beer? I don’t know.
Fan Marino says: I’m a few years too young to remember, but in the 70s & 80s before PPV, boxing was regularly broadcast in movie theatres and arenas. I always thought that atmosphere would be more fun than watching with 3 dudes on a couch. I’m in for the $40!
Under Armour (UAA) reported higher than expected sales and experienced less in losses during Q2, but that didn’t stop the stock from reaching its all-time low ($18.20) as the company cut full year sales forecasts due to weak demand in North America. In an effort to regroup, UAA has said it will cut 280 jobs, terminate leases, work to increase the speed in getting product to market and expand its digital capabilities. Moving forward the company intends to focus on men’s training, women’s, running, basketball and lifestyle, with CEO Kevin Plank, emphasizing lifestyle.
Under Armour shares reach record low as retailer cuts 2% of its workforce, trims 2017 sales outlook
Howie Long-Short opines: The company has tried to grow beyond its legacy in the performance niche, and is discovering competition is much more brutal in the broader market.
Fan Marino says: Once you lose the “cool” factor, it’s over. Under Armour is no longer cool with the kids.