Latest news with #SporticoSportsStockIndex
Yahoo
02-06-2025
- Business
- Yahoo
Sports Stocks Rebound as Tariff Fears Recede, TACO Trade Dominates
Sports stocks posted their first positive month since January as fears eased about tariffs, which had dragged the Sportico Sports Stock Index 23% lower from its mid-February peak to its late April lows. The benchmark sports index posted a 7% gain in May to close the month at 1,380, pushing the index back into positive territory for 2025. The strength in sports reflected the wider rebound seen in the broader markets, which saw action in the month dominated by knee-jerk reactions to Trump tariff announcements followed by sharp rebound days due what investors began calling the TACO trade. More from ESPN Bet Faces Make-or-Break Year for $2 Billion Disney-Penn Deal Chip Wilson Makes $600M as Trump Tariffs Barely Dent Amer Sports DraftKings the Exception to Sports SPACs' Dire Track Record 'The recent rally has a lot to do with markets realizing that the U.S. administration does not have a very high tolerance for market and economic pressure, and will be quick to back off when tariffs cause pain. This is the Taco theory: Trump Always Chickens Out,' wrote Financial Times columnist Robert Armstrong in May, popularizing an acronym that began with Wall Street traders. The buying-on-weakness TACO trade resulted in three trading sessions in May when the Sportico Sports Stock Index jumped at least 2%. That's unusually volatile in the history of the index, but actually calmer than April, which had four such up days and five days of outsized losses. Given the tariff obsession of the markets, it's no surprise that one of the sports stocks most potentially impacted by the Trump tariffs was the lead gainer in May. Amer Sports (AS) leapt 50% in the month as management told investors the worst-case scenario of Trump's 145% import tax on Chinese made goods would clip five cents a share from earnings in 2025. Since at the time of Amer's earnings announcement last week Trump's had already backed off the 145% rate, shares rallied under the realization the profit hit would be far less for the year. Amer, which has 11 sporting goods brands including Arc'teryx, Salomon and Wilson, estimates perhaps 10% of its worldwide revenue would be subject to any U.S. taxes on Chinese goods, given its ability to source goods from other, less-taxed countries and the fact most of its sales come from Asia and Europe. Other tariff-exposed components of the Sportico index also rallied in the month. Sneaker maker On Holdings (ONON) gained 24%; concession firm Aramark (ARMK), which expected some hit on its concessions supplies like drinking cups, rallied 22%; while Asia-dependent gear markers Under Armour (UAA, up 17%) and Nike (NKE, up 7%) also rose. All told, 28 of the Sportico Sport Stock Index components rose in May, 13 of those more than 10%. Still, odds are tariff volatility will continue, despite a court ruling last week that Trump doesn't have the authority to impose blanket taxes on most imports, including from China, Canada and Mexico. 'We are going to end up with tariffs, one way or another—Trump has plenty of alternatives,' Aniket Shah, a Jefferies economist, said in a Thursday note on a U.S. Court of International Trade's decision invalidating the president's reasoning. The ruling, added Shah, 'is a body blow to President Trump's America First Trade Agenda, but not a fatal blow.' Though not directly affected by tariffs, ticket reseller Vivid Seats (SEAT) had a brutal May on fears of consumers pulling back spending. The stock surrendered 45% of its market capitalization to close the month at $1.56 a share, making for a company value of $338 million. Vivid is down 66% year-to-date. 'As we've all witnessed, economic and political volatility has impacted consumer sentiment, and this uncertainty can also impact how and when artists and rights holders go to market,' Vivid CEO Stanley Chia said on a May 6 earnings call. Due to the competitive landscape and consumer uncertainty, Vivid suspended its habit of providing forward earnings guidance to analysts with that call, adding to the bearish sentiment for Vivid that has yet to let up. By comparison, larger ticket seller Live Nation (LYV) hasn't been nearly as hard hit—its shares gained 4% in May. In a mid-May investor conference, the company emphasized that two-thirds of its growth comes from international markets, places where consumer spending power won't be hurt by Trump's tariffs. The Sportico Sports Stock Index is a basket of 40 stocks that rely on sports for a significant portion of future growth. The index includes sports teams and leagues such as Formula 1 (FWOBA, up 9%), regional sports network owners including Sphere Entertainment (SPHR, up 38%), recreation operators such as Vail Resorts (MTN, up 15%) and sports data and analytics providers like Genius Sports (GENI, down 11%). To be included in the index, stocks must be traded in the U.S. with sufficient daily volume and a market capitalization greater than $50 million. The index was launched in August 2020 at 1,000. It's up 38% since and 1% in 2025. Best of Most Expensive Sports Memorabilia and Collectibles in History The 100 Most Valuable Sports Teams in the World NFL Private Equity Ownership Rules: PE Can Now Own Stakes in Teams Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-04-2025
- Business
- Yahoo
Tariff Shock Wipes $318 Billion From Sports Stocks in a Week
The stock market reaction to the global Trump tariffs has chopped $318 billion in value from sports stock in a week, according to Sportico data. That's nearly 10% of the value of the sector. Sports stocks were worth $3.36 trillion last Wednesday. They're worth $3.04 trillion today. That bloodletting is after accounting for the market's bounce late Monday and into Tuesday. U.S. stocks fell more than 15%, peak to trough, from April 2 to the lows at the start of trading this Monday. They recovered slightly to be down about 11.5% through Tuesday, according to the Dow Jones Total Stock Market Index, which tracks every U.S. listed stock with a readily available price. More from Why Should Sports Fans Care About Tariffs? This Stock's Slide Is an Omen for Sports Teams Nike, Under Armour Headline Sports Stocks Crushed by Trump Tariffs The drop in sports stocks isn't a surprise; they largely sit in the consumer discretionary bucket of stocks, which is seen as vulnerable to tariffs. 'Industries like retail, luxury goods, entertainment and travel are typically negatively impacted in market downturns, as discretionary income and spending tend to dry up. These goods and services are not considered essential like their consumer staples peers,' LPL chief chief equity strategist Jeffrey Buchbinder said in a research note Tuesday. 'Many companies in this sector lack pricing power, as goods and services are discretionary and therefore typically expendable in a weaker economy.' While market cap losses may seem ephemeral—after all, stock prices rise and fall daily—the sharp drop in capitalization can have real effects on sports companies and how they conduct business. Lower market caps make debt appear worse on a company's balance sheet and skew numbers investors and lenders watch, such as debt-to-equity and enterprise value ratios. That makes them less attractive to investors who focus on financial metrics, can put companies at risk of violating debt covenants, and creates difficulties raising capital, since investors are less likely to buy new shares issued by companies experiencing weak stock market performance. Case in point: Ticket selling platform StubHub filed for an IPO three weeks ago with chatter that the company would seek to raise $1 billion. On Monday, the company put the offering on indefinite delay due to market conditions, according to published reports citing anonymous company sources. Its publicly traded peers have also been hurt badly. Vivid Seats has lost 14% of its market cap the past week and trades under $3 a share today, a price point many mutual funds won't buy at because of restrictions on low-priced stocks. The dominant ticket seller, Live Nation, is down about 9% over fears consumers will spend less. The plunge in the value of the U.S. sports market is measured by the market capitalization of the 40 stocks in the Sportico Sports Stock Index, plus another 12 that aren't in the index. The combined group covers at least 99% of the value of U.S.-listed stocks that rely on sports for a significant portion of their growth. Sports stocks include not just the handful of publicly traded sports teams and leagues like Formula One and Madison Square Garden Sports, which combined have lost $2.7 billion market value, but also broadcasters, apparel and gear makers, sporting goods retailers, sports betting companies and sports tech providers. The size of the drop is heavily skewed by one stock: which itself was worth $2.04 trillion a week ago. It accounted for a little more than half of the dollar-value losses. Excepting Amazon, sports-related stocks still lost 10% of their collective value in the past week. While Amazon is a diversified company with significant operations in online and physical retailing, cloud computing services and advertising sales, it's included in the Sportico index because sports programming on its Prime video service is a key facet of its strategy to retain customers. Amazon has 194 million members of Prime, its subscription service that includes shipping discounts and video streaming, according to Consumer Intelligence Research Partners, which tracks Amazon's business. Almost 173 million of those are regular watchers of the video service, worth more than $24 billion in direct annual subscription fees alone. Subscribers are more likely to order products and other services from Amazon. While Amazon was the biggest loser in terms of market capitalization dollars, Under Armour was the worst percentage-wise. Wall Street hacked nearly a quarter of Under Armour's market cap in five trading days, sending the maker of apparel and sneakers to its lowest valuation since 2009. Under Armour, like other sports apparel makers, has suffered outsized selling because it produces the vast majority of its goods outside the U.S., and Wall Street had been betting the Trump tariffs would only target China. As recently as February, executives were telling investors that they believed the company was insulated from tariffs, because only 3% of the goods it sells in the U.S. are sourced from China. In its last annual report, Under Armour noted 'substantially all' of its product is made in China, Indonesia and Vietnam, which will be subject to tariffs starting at 34% for Indonesia and going up to 104% for China. Reflecting the wide bearishness in the stock markets since the announcement of extensive tariffs last week, only one sports stock has gained value over the past week: Arena Group Holdings. The publisher of titles including Athlon Sports, The Spun, Powder, Surfer and Bike magazines is perhaps best known for losing its license to publish Sports Illustrated last year. Arena Group gained nearly 5% the past week as investors anticipate its latest earnings results to be released Tuesday. But the gain hardly helped the sports stocks sector as a whole: Arena is valued at just $93 million today. Best of The 100 Most Valuable Sports Teams in the World NFL Private Equity Ownership Rules: PE Can Now Own Stakes in Teams Most Expensive Sports Memorabilia and Collectibles in History Sign in to access your portfolio
Yahoo
03-03-2025
- Business
- Yahoo
Sports Stocks Slump in February as Consumer Spending Worries Emerge
Souring consumer sentiment knocked sports stocks back 4% in February, as apparel and gear makers bore the brunt of a market wide slump. The Sportico Sports Stock Index slipped 62 points in February, ending at 1,415 and failing to follow through on a scorching start to 2025. The index declined more than the broad market, which dropped a little more than 1% in the month, as consumer discretionary stocks across the board dragged down the S&P 500. Most sports stocks fit into the consumer discretionary category. More from Rainbow Six Crowd Shows Esports Still Alive After Wall Street Bust NASCAR's Revamped TV Slate Features New Streaming, TV Partners Fox Rides Streaming Wave to Record 127.7M Super Bowl Viewership Splash 'After a strong 2023 and '24, '25 follows one of the best retail environments ever seen. However, heightened uncertainty, tougher comps and a less robust consumer, combined with increasing inventories and peaking margins could spell trouble for consumer discretionary in 2025,' Jefferies analyst Randal Konik said in a late February research note. 'Although metrics point to general consumer health, consumers remain selective in their spending behavior… prioritizing non-discretionary items and moderating big-ticket spending in non-essential categories.' While there are a number of factors playing into weaker discretionary stocks—global freight rates are higher due to conflict in the Red Sea area, and many companies face a tougher climb to top their excellent 2024 sales—it is mainly consumer worries about inflation that are dragging stocks lower, according to Konik. Weaker sentiment has caused the dollar to drop relative to foreign currencies, creating headwinds for Under Armour (UAA, down 15% in February) and Topgolf Callaway Brands (MODG, down 20%), two of the worst Sportico index performers in the month. The tariffs being implemented by President Donald Trump also add concern, even though for most sports-related organizations they're not especially impactful; tariffs on China-sourced goods will cost Topgolf Callaway about $5 million in 2025, for instance. Still, sneaker maker On Holdings (ONON down 22%) and Amer Sports (AS, down 8%) were other losers with notable exposure to tariffs. Sports-centric streamer Fubo (FUBO) saw the largest decline of any stock last month, shedding 31%. The drop largely came Friday when the company issued weaker guidance for the current quarter, with subscriber count slipping about 4% year-over-year largely as a result of Fubo losing the ability to offer Univision and Discovery channels. Wall Street analysts also expressed some concern about the potential effect of ESPN not renewing its deal with Major League Baseball after this year and how that might affect Fubo's ability to offer baseball games once it is majority-owned by Disney in a planned merger of Fubo and Disney streaming assets. 'The primary goal is to continue distributing live channels,' Fubo CEO David Gandler said on a conference call Friday. 'Should Major League Baseball decide to go in [the] direction as it did—managing some of the local sports teams, such as the Padres—we will certainly look to figure out a way to work together.' (Fubo carried the league-produced in 2024 and will again this season.) Overall, 28 of the Sportico Sports Stock Index components fell in February. Even with the monthly decline, the index is up 3% for 2025, besting the S&P which is barely up year-to-date. Of the dozen sports stock gainers, Fox Corporation (FOX) led the pack, advancing 13% on strong 2024 results stemming from positive World Series, NFL and college football ratings, along with heavy political ad spending around the 2024 elections. The company also announced February's Super Bowl generated more than $800 million in gross revenue. Fox said it is benefitting from the rise in 'skinny' bundles offered by DirecTV and Comcast. 'Pretty much the entirety of our portfolio, our bouquet of channels, a couple of small exceptions are in those bundles,' Fox executive chairman Lachlan Murdoch said on a call with analysts at the beginning of February. 'So from a Fox perspective, this [sic] is not a skinny bundle. This is a lean and mean bundle. So, it's jacked, this bundle.' Murdoch also said the company will offer its own direct-to-consumer streaming bundle by year's end. Video game publisher Electronic Arts (EA, up 12%) and Take Two (TTWO, also up 12%) rounded out the top three performers for the month. Take Two said it expects 2025 to be its best year ever, revenue-wise, as a slew of new titles make their way to market and its NBA 2K franchise showed great performance to end 2024. EA, on the other hand, is still down 12% on the year having been hammered in January on weakness in its soccer game franchise EA Sports FC, the former FIFA-branded game, and in a new role-playing title. The Sportico Sports Stock Index is a basket of 40 companies that rely on sports for a significant portion of their future growth. The index includes sports teams such as the Atlanta Braves (BATRA, up 3%), league owners such as Pro Bowlers' parent Lucky Strike Entertainment (LUCK, up 4%) and sports technology businesses like Sportradar (SRAD, up 1%). The index was launched on August 1, 2020, at 1,000 and is up more than 40% since. To be included in the index, stocks must trade in the U.S. in sufficient volume and maintain a market value of at least $50 million. The index is equal-weighted, which means every quarter the 40 stocks are reset to constitute 2.5% of the index weighting. Stocks are dropped and added as needed on a quarterly basis. Best of NFL Private Equity Ownership Rules: PE Can Now Own Stakes in Teams Most Expensive Sports Memorabilia and Collectibles in History Why Sports Tickets Are More Expensive Than Ever
