Sports stocks fell for the third month in a row, as the JohnWallStreet Sports Stock index did not hold up on the broad bear market. IN Sports The index fell about 3% to end at a 19-month low, but marked bright spots among video game publishers, broadcast networks and the WWE.
Paramount (PARA) topped the 40-component sports index with 18% profit in May, suggesting there may still be a media force bigger than the Super Bowl: Tom Cruise. Paramount, before ViacomCBS, started the month with a 6% drop in revenue for its largest segment, television media, because it did not broadcast the Super Bowl this year, after generating $ 545 million from it last year. The downturn has exacerbated the upcoming difficulties for traditional media – part of the reason the company changed its name and focused on its streaming platform, which includes a large selection of sports content. The opening of Cruise’s blockbuster Top Gunn: MaverickParamount, which is distributing, amassed shares by the end of the month, with the film raising $ 248 million by the middle of the opening of Remembrance Day over the weekend. Colleagues broadcasting NextStar Media (NXST, 11% increase) and Sinclair Broadcasting (SBGI, up 10%) also won the JohnWallStreet index this month.
Electronic arts (EA) was the second best performer of the month, at almost 18%, even when it announced that its licensing agreement with FIFA was expiring. The company FIFA football and Apex Legends, a favorite among e-sports competitors, both posted record engagements in the first half of the year, according to a report by a Credit Suisse analyst. Although EA will no longer be able to label its football game as FIFA or include the World Cup in the game, the company still has licensing agreements with major football leagues as well as players and will save perhaps $ 180 million in annual fees for global football body. Other video game manufacturers, Take two (TTWO, 4% increase) and Activision (ATVI, up 3%) were also among the 11 winners in the sports index in May.
Another remarkable winner was World Wrestling Entertainment (WWE), which rose 14% due to signs that the company’s first-stream strategy is attracting more viewers and laying the groundwork for more frequent media rights sales. WrestleMania 38, the latest version of WWE’s annual showcase, was Peacock’s second most-watched programming, streaming service from Comcast (CMCSA, 11% increase). According to WWE, it lags only behind the Super Bowl in 2022.
For most of the 40 stocks in the JohnWallStreet Sports Stock Index, it was another month of bearish growth that he saw Sports the index retreated from a peak of 1763 in November to a close of 1185 yesterday. Sports betting campaigns continue to struggle with declining enthusiasm for opening up markets in North America. Nine components of the index lost more than 10% in May, including the operator Betway Super band (SGHC, down 27%), Sport radar (SRAD, down 25%), Caesar Fun (CZR, down 24%), genius Sports (GENI, down 20%) and Barstool sports parent Penn National Gaming (PENN, down 13%). The cost of acquiring customers and various rights at the data and state levels continue to frighten Wall Street.
“Currently, there is a significant burnout of money from many of these operators facing the United States, which is worrying, especially with the closure of funding sources and the tightening / shifting of debt markets,” said Gambling.com Group co-founder and CEO Charles Gillespie in an email. Gambling.com (GAMB, down 2%) is not part of the sports stock index, but is owned by Bookies.com and Rotowire, both of which have strong exposure to sports betting. “While I believe that the core business of these gambling operators has a brilliant unit economy and is very profitable, the pace and scale of the introduction of regulated online gambling in the United States is breathtaking and requires huge investments in launching any new state under pressure. on the balance sheets. “
The wider bearish stock market also did not help sports betting stocks, as inflation fears led investors to recalculate the fair value of future growth. However, the end-of-month action in the broader market suggests that the market may be exhausted and take a fresh look at rising stocks. The S&P 500 made the fewest gains in May, down about 13% in 2022. The sports stock index fell 22% from a year.
“I don’t think investors are particularly negative about online gambling stocks; rather, investors are negative about the particular category of technology-based, unprofitable, high-growth stocks – which overlaps with online gambling, ”Gillespie said. “I believe that the power of online gambling cash flow will be impossible for investors to ignore.”
Sportiko The JohnWallStreet Sports Stock Index aims to reflect the state of the sports business through 40 equally weighted companies traded in the United States. To be included in the benchmark index, the shares must be traded in sufficient volume on the US stock exchange and have a minimum market capitalization of $ 50 million. Companies that do not meet the requirements, experience a significant corporate event (think: bankruptcy, sale) or deviate from their strategy of professional sports, may be excluded from the index. The index is rebalanced quarterly.