The Wide World of Sport Stocks

The sports industry can be considered an economic force. It makes up a lot of consumer spending from equipment, apparel, experiences, and even esports. How do we see this translate to financial markets and strategies? In this episode we explore all that and more! Chris Katje, Benzinga Senior Contributor and Stock Market Reporter, joins Cassidy Clement to discuss.

Summary – Cents of Security Podcasts Ep. 90

The following is a summary of a live audio recording and may contain errors in spelling or grammar. Although IBKR has edited for clarity no material changes have been made.

Cassidy Clement

Welcome back to the Cents of Security podcast. I’m Cassidy Clement, Senior Manager of SEO and Content at Interactive Brokers, and today I’m your host for the podcast. Our guest is Chris Katje, Senior Contributor and Stock Market Reporter at Benzinga. 

The sports industry can be considered an economic force. It makes up a lot of consumer spending—from equipment, apparel, experiences, and even live sports. So how do we see this translate into financial markets and strategies? In this episode, we’re going to explore all of that and more. Welcome to the program, Chris. 

Chris Katje 

Hi Cassidy, thanks for having me. 

Cassidy Clement 

Sure. So since this is your first episode, why don’t you tell our listeners a little bit about your background—how you got started and what your exposure is to the sports stock industry? 

Chris Katje 

Yeah, for sure. So, I have been with Benzinga full-time since August 2020. I was previously a restaurant manager for over a decade. I always wrote about stocks part-time for various media outlets, and then during COVID, the work-from-home environment allowed me to transition into a full-time role with Benzinga. I took a chance—got out of the food industry and came into financial media—and I’ve loved it ever since. 

I’m an avid sports fan here in Michigan, so I love my Detroit-based teams and the University of Michigan. And I love writing about anything related to sports—whether it’s the business of sports or the recent Super Bowl as well. 

Cassidy Clement 

That’s perfect. I’m an avid Phillies fan—diehard baseball season. You’ll find me on the couch with the dogs watching, like an old lady with her coffee, just getting ready for the first pitch. 

But when we go into this now, it’s interesting that you bring up your time as a manager in the restaurant industry, because those get directly impacted by sports and live events. People want to go out and celebrate and enjoy themselves. 

So, with our listeners coming in here for a financial perspective, what companies would our listeners be familiar with? Because the industry can impact a lot of other areas—not just your standard-issue television, equipment, apparel, experiences, live sports, restaurant industry, hotels, etc. 

Chris Katje 

Yeah, within the sports industry, there are several different subsectors. You mentioned equipment and apparel—I would venture most of the listeners are familiar with some of the bigger names like Nike, Under Armour, and Adidas. 

You also have some of the newer companies like On Holding, right? They make footwear and have a deal with Roger Federer. They’re starting to disrupt Nike’s business model a little bit. Then you have Amer Sports, which recently went public. They own Wilson, Louisville Slugger, and other equipment companies for various sports. 

Then you have public sports teams—but not a ton of them. There’s Manchester United, a soccer team in England; Madison Square Garden Sports, which owns the New York Rangers and the New York Knicks; Rogers Communications in Canada, which owns the Toronto Maple Leafs and Toronto Raptors; Liberty Media, which owns the Atlanta Braves—you mentioned baseball, obviously, there. 

And then you’ve got Formula 1, the racing league, which is public under its own ticker. There are some various options there for sports fans to get exposure. 

And then also you’ve got your sports betting companies—DraftKings, FanDuel, MGM Resorts. And one of the bigger names in sports is obviously ESPN, which is owned by the Walt Disney Company. So it’s a smaller unit within that media conglomerate, but still one of the biggest pure-play sports names out there. 

Cassidy Clement 

Yeah, and for those listening who are skiers or snowboarders like myself—Vail Resorts is a huge one when it comes to winter sports. That’s a public company, along with a handful of other media networks. 

You mentioned ESPN. There’s also SiriusXM, where there are sports channels all the time for those traveling in your car who want to listen to sports coverage the day after the game—I know that’s me, as I commiserate with my other not-as-big Phillies fan friends, since last year’s playoffs didn’t go as we wanted. 

But you mentioned all of these different elements, and they all come together to create a sports-impacted economy—or the “sports economy.” 

So what are some ways that these impact economies—whether you’re at the stadium or if you live in an area where there is a sports team? I immediately think of the local economy to the wider economy. You start to see a stadium come in—let’s say, for a minor league baseball team—and then the restaurants pop up, and then the hotels pop up. 

Or on a bigger scale, maybe if you have something like Yankee Stadium, it might be so large that they can also hold concerts there. What are some ways that listeners may see these economic impacts? 

Chris Katje 

Yeah, for sure. Just piggybacking off of some of the restaurant and hotel ideas there—I think Las Vegas is a good example. 

Las Vegas was traditionally known as a casino and tourist destination, and now you have multiple pro sports teams there. So now you’re seeing these hotels get booked every weekend throughout the year—not just for people going to the casinos. But on that note, you have people making trips who are going to a sports contest, and then they’re also going to a casino, going to the restaurants within that city. 

And that happens in all of these different cities. I like your mention of minor league sports teams because obviously that has a much bigger impact on the local economy. 

With these sports teams and all those home games that happen throughout the season—depending on which league it is and how many home games there are—you also have the sponsorships and stadium deals. Like SoFi has the rights to the stadium in Los Angeles. They hosted a Super Bowl there, so they got that immediate kind of impact of having their name on it. 

You have jersey sponsorships—especially over in Europe, where soccer teams have a ton of sponsorship logos on them. The NBA and some of these other leagues also started having the smaller patch logos and sleeve logos as advertising. 

And you, as a Phillies fan, maybe you’re more likely to support companies that have sponsorship deals with your team over a rival company. So it’s something for some of the diehard fans to think about. 

Cassidy Clement 

Yeah, and I definitely think that there’s an edge to having a—we’ll say—home-state team when they sponsor one of these events. There’s a sense of tribe for people, where they’re able to see, for example, Yuengling beer—it’s a huge one in Pennsylvania. And when you see that everywhere and you watch these games, it’s a broader market. 

It is marketing, but it’s able to cast the net a little bit wider, and it’s on one of the larger stages if it’s something that’s nationally broadcasted. So with that, we can see how these events will impact the economy. But what about things on a more personal level? 

Are there certain strategies—or theories, maybe—that are associated with sports events and their stocks, as they look to cause ripple effects? Sometimes in the stock market, we just came off of a Super Bowl—that can impact things in different ways. March Madness is coming up, or even the Olympics. I know that can usually be on a scale where we’re looking at what place it’s in. But how exactly would we see it from the financial market perspective? 

Chris Katje  

Yeah, I’ll stick with the Olympics first, since you mentioned that one recently. The Olympics—right now, media rights here in the U.S. are held by NBC and Peacock, which is their streaming platform. They were able to get a ton of subscribers for Peacock after this last Olympics because they did 24/7 coverage. 

When the Olympics are happening in different time zones, it’s really hard to get all those events into primetime coverage here in the U.S., so people are looking for that: “I want to watch this live. I want to be able to know who wins. I don’t want to have to wait until the 8 o’clock primetime coverage.” So people are subscribing to these streaming platforms to get access. 

Also worth noting, NBC actually has the rights to the next Super Bowl in 2026. They have the Winter Olympics, and they have the NBA All-Star Game. So in the month of February, they’re now going to have three major events they can package into advertising deals and do some streaming exclusives. 

You mentioned economies, right? When we have the World Cup—which happens every four years—wherever those World Cups are, sometimes stocks in that region see a little bit of a boost. When it happened in Brazil or South Africa, sometimes the same thing happens for the winning nation. If Brazil wins, there are parties in the streets. Investors go looking and think: “Hey, who are the local beer companies in Brazil? Who are the hospitality companies? Who are the trickle-down beneficiaries of this World Cup victory?” 

And I think you can say that kind of about every sport. But some of these international competitions—like the Olympics or the World Cup—that happen every four years may have a bigger impact on some of those stocks. 

Cassidy Clement 

Yeah, and the Olympics can sometimes—just as a good example—yield up to 500,000 new people embarking to go to these places. And that can really impact their tourism revenue. And then also, for those companies—if they’re public—how they’re going to expand, or whether they’ll see a spike in growth or a steady spike in growth. 

When you start to look at adding any of these stocks—where they’re aligned with a sport or maybe adjacent to a sport—what are some things to keep in mind? Because some of them may have a cultural base of interest that could limit their growth, or maybe it’s something a little bit trendier, etc. 

Chris Katje 

Yeah, definitely. I think one of the things I mentioned before is those team ownership stocks, right? You can be a fan of a team—and maybe your team is not publicly traded—so it’s like, “Hey, I want exposure to the baseball sector, but I don’t like the Atlanta Braves. Am I going to invest in the Atlanta Braves stock when my team plays them?” 

Who do I root for then? Do I root for the stock I own, or do I root for my favorite team? So there’s a little bit of a conflict of interest there, and that culture comes in a bit. 

We also see trends, like you mentioned. Golf stocks were hot for a while when Tiger Woods was playing. Once he stopped and wasn’t at the top of his game—took a step back—a lot of these golf stocks dropped off in interest level because golf didn’t have as many of the big names. 

Now you have the LIV Golf vs. PGA Tour battle going on, and people may be staying away from that industry instead of getting in. Then you have this rise of pickleball lately, right? So people are looking, “Hey, what are some of the trends with pickleball? Who makes pickleball paddles? Who owns some of these courts? Is there a way to invest in that?” 

But then in the back of your mind, it’s always, “How long is this going to last for? Is this a short-term trend or a long-term trend?” That’s something to be thinking about as well. 

Cassidy Clement 

Yeah, and as we start to head into the summer—or at least spring on the East Coast—but if you go a little more south, it gets warmer quicker. Are you noticing any types of trends, or are there maybe seasonal trends that come along with these stocks? I mentioned Vail earlier—there are some environmental constraints now, as some winters aren’t lasting as long. 

Chris Katje 

Yeah, definitely. I think that’s a huge factor. You mentioned Vail Resorts—publicly traded—and your ski resorts. We’ve got plenty here in Michigan. And summer stocks as well, right? Like how long do some of these seasons last? That can also impact your hospitality industry, your hotels, and some of these sports leagues. 

I think one of the bigger trends we’re starting to see, too, in the world of sports regarding weather, is a lot of these massive stadiums that are being built—whether it’s in Europe for soccer or for the NFL here in the U.S.—they’re enclosed with roofs, right? Indoor stadiums. 

If you’re a team in the Midwest, it used to be an advantage to have an outdoor stadium. Teams would have to come play you in the playoffs in the snow. But we’re starting to see less of that, and I think a lot of it has to do with the ownership groups. If you have an indoor stadium, you can also book concerts year-round. You can book other sporting events year-round. You’re not just relying on those eight home NFL games. 

So I think the environment and the weather are also having a huge impact on some of those decisions being made as well. 

We also have the unfortunate disasters that happen from time to time—the wildfires in California, hurricanes in Florida. Sometimes you see these sporting events that have to be moved to other cities. We had an NFL playoff game that had to be moved from California to Arizona due to wildfires. 

You have some of these games that get delayed or postponed. During COVID, we saw the NBA play a whole season in the bubble—so all their home games were played in Florida. That impacted a ton of local restaurants and hotels. And then also, the stadiums that normally host these games—where fans can come and pay for tickets—lost out as well. 

Cassidy Clement 

Yeah, there’s definitely a need, I think—whether it’s interest from the people watching or environmental changes—for a little bit more diversification in what’s on the schedule for these stadiums. I mentioned farm teams or minor league teams throughout the country—they’re usually not just dedicated to the local hockey or baseball team. 

They usually have five to ten other events throughout the year to consistently generate income for the surrounding area and that small economy—but also to justify the ginormous—usually pretty big—buildings and stadiums that are now in that town. 

Since we’re coming right out of the Super Bowl over the past weekend, was there anything that you noticed as an initial impact from that? Maybe some of the key players in the big advertising spots? Or is it more about keeping an eye on things from the Super Bowl to March Madness to see how sports stocks are performing as we start to go into, I guess you could say, baseball season? 

Chris Katje 

Yeah. One of the weird things out there is the Super Bowl Indicator, which is kind of made up—it originated in 1978 by a sportswriter who decided, “Hey, if an NFC team wins the Super Bowl, the stock market fares better.” That was based on research from the years before that. And for a while, it proved true—for several decades—where if the NFC team won, it was better for the stock market. 

In recent years, when an AFC team wins, it actually seems good for the stock market as well. One thing I would point out—you’re a Phillies fan, so I don’t know if you want to hear this—but the last couple of times a team from Philadelphia has won a major sporting event, like a World Series or Super Bowl, it was actually followed by some economic downturns. 

Obviously, I’m not saying that will happen this time around—but it’s one of those things where people look at trends. I even saw one that said if the Chiefs or Eagles won by 20 or more points, it would be better for the stock market. They ended up winning by 18—so how does that impact the market? 

It’s fun to play around with these different past trends and historical averages for the S&P 500 based on who wins and who’s in the Super Bowl. 

Cassidy Clement 

Yes, I have heard—unfortunately—about the “Philly impact,” if you will, after they win a title here and there. The last time they won the World Series, yeah, was followed by a little bit of a tough few years. 

But definitely interesting to hear all the different theories and strategies that come around these—let’s call them “major sports holidays” throughout the year: the Super Bowl, March Madness, World Series, etc.—and how they impact the stock market and portfolios, especially if you’re investing in discretionary-type stocks. 

Because, as you noted, there’s definitely a speculation element or a fandom element—but also the thing America is most famous for: the consumption element. How much people are consuming around sports, and the associated media and products. 

But you brought up some awesome points today. Thanks so much for joining us, Chris. 

Chris Katje 

Thanks for having me. 

Cassidy Clement 

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