Giving Investors a Sporting Chance
Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
No doubt America is a sports-obsessed country. We can't get enough of our favorite teams, players, or sports we play ourselves. And companies certainly know how to mine profits from this obsession. For example we can sing about our favorite team (while consuming a popular soft drink), choose our favorite all-time football players (and buy insurance), or watch football 24/7 (if we subscribe to cable TV).
Rocking the Stadiums
Music -- of the rock and pop varieties -- has long been part of the experience of attending a NFL game, and this season stadiums will be rocking to team-specific anthems penned by recording stars such as Kelly Clarkson, Kid Rock and Ice Cube. The NFL and PepsiCo (NYSE: PEP) have launched the Pepsi NFL Anthems Program, which Pepsi's Sports Marketing Director Todd Kaplan says, "will help bring the NFL's passionate fan base closer to their teams…" The songs will be available in retail stores on specially marked packs of Pepsi, Diet Pepsi and Pepsi MAX, and through downloads from the PepsiAnthems.com website.
Ms. Clarkson's Dallas-themed anthem is titled "Get Up." I haven't heard it yet but presumably she's urging Cowboys QB Tony Romo to get back on his feet after being sacked yet again. There's also a New York Giants anthem from Travie McCoy, "All In." Perhaps this one's theme is Giants fans unwavering loyalty to and support for Head Coach Tom Coughlin -- at least until the team loses a couple of games and they start calling for his immediate dismissal.
PepsiCo and the NFL also announced an agreement for PepsiCo to become the sponsor of the Super Bowl Halftime Show. The anthems idea is another one of this company's strokes of marketing genius -- it in effect links celebrating your team with consumption of the company's products. But that's why PepsiCo now has 22 brands that each generate more than $1 billion in annual retail sales.
Who Are the Greatest of All Time?
Allstate (NYSE: ALL) has posed this intriguing question to NFL fans: who are the greatest Hall of Fame players of all time? Fans will get the chance to vote for 23 players and one coach, at www.YourAllTimeTeam.com. Winners of the Allstate Pro Football Hall of Fame All-Time Team will be announced on the NFL Network on Feb. 2, 2013. This fan vote is meant to celebrate the 50th Anniversary of the Pro Football Hall of Fame.
Fans who cast a ballot are eligible for prizes such as passes to the Hall of Fame enshrinement ceremony and a meet-and-greet with pro football great Howie Long. The latter opportunity hasn't quite made it on my bucket list, but I'm sure other fans might be excited about meeting Mr. Long.
I think it would be a fantastic idea to have a CEO Hall of Fame. Let people vote for their All-Time Entrepreneur Team, and also Most Valuable CEO of the year. We'd appreciate our free enterprise system more if we recognized the accomplishments of business leaders.
Football fans love to argue about who the greatest players were. Imagine the spirited debates that could arise from the CEO Hall of Fame voting. "Henry Ford for all-time best? How hard could it be to compete against a horse drawn carriage?"
Fans also frequently argue about statistics: "Your CEO's got nothin'. His company's margins were down 50 basis points last quarter."
Fans also often debate whether a team owner has sacrificed the future in order to win now: "Sure their cash flow looks good -- they spent nothing on R&D. They're gonna pay big time for that mistake three years down the road, I'm telling ya."
No Such Thing As Too Much Sports
Let NFL fans rise up off their couches and rejoice: Cablevision (NYSE: CVC) recently announced that they signed a multi-year agreement to carry the NFL Network and NFL RedZone Channel. Cablevision subscribers will now be able to see the 13-game slate of Thursday Night Football as well as all the other NFL programming available on the channels 24 hours a day, 365 days a year.
I remember 15 years ago or so when these 24/7 channels dedicated to specific sports began popping up on cable. I wondered: Who wants to watch golf every day? Or even the NFL. Well, time has shown these channels to be hugely successful. And I think I finally figured out why: a lot of the programming on the traditional TV networks is lousy. How many more dramas about cops, lawyers or doctors do we have to endure?
I'd rather watch The Bowling Channel.
Yes: It's Possible to Actually Participate in Sports
Although you do get some exercise walking from your car to the gates of the stadium and up the ramp to your seat, participating in sports once in a while can be a great stress reliever and a boost to your overall health. Apparently, many Americans agree. Dick's Sporting Goods (NYSE: DKS), the largest full-line sporting goods retailer in the U.S., announced that second quarter earnings per diluted share increased 25 percent over 2011's results. Same store sales were also up nearly 4 percent despite the continued sluggish economy. CEO Edward Stack cited margin improvement through "emphasis on private brands" and "higher margin merchandise categories" as some of the drivers of the company's profitability and growth.
Specialty athletic retailer Foot Locker (NYSE: FL) announced that its second quarter net income per share was up an impressive 63 percent compared to the previous year, and comparable-store sales rose nearly 10 percent. CEO Ken Hicks was especially pleased with "the good profitability we achieved this quarter across our divisions, from the North American stores, to Europe and to our direct-to-customer business."
What These News Items Tell Us
The PepsiCo and Allstate announcements show how corporate marketing activities in the sports world have evolved beyond sponsorship of events to include creative ways to get fans more involved with their favorite sports -- and with the companies' brand names.
Dick's Sporting Goods and Foot Locker execs didn't mention this, but I would suggest that one reason their sales are increasing is because many Americans have discovered that focusing on exercising or playing sports provides a welcome mental break from worrying about these difficult economic times. I've found that watching the NFL Network can be a nice diversion as well -- unless of course my team is having a losing season.
PhoenixBrian has no positions in the stocks mentioned above. The Motley Fool owns shares of Dick's Sporting Goods and PepsiCo. Motley Fool newsletter services recommend PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. If you have questions about this post or the Fool’s blog network, click here for information.