The Pigskin Effect: These Stocks Welcome Back Football

Football is back!

I couldn't tell you how excited I was to hear that I was going to have something to watch for the next 20 Sundays and that my hopes for a fantasy football championship repeat weren't dashed. I can even pull out my Detroit Lions swag and root on my favorite team -- even though they haven't seen the playoffs in a long, long time.

Football time also means relief for many businesses out there that stood the chance of losing millions of dollars if the NFL lockout wiped out any portion of the preseason or regular season. Here are a few sectors and the companies within them that stand to benefit the most from the NFL lockout ending.

  • Media
    No company had more at stake to lose from the NFL lockout than DIRECTV (Nasdaq: DTV  ) . The company's Sunday Ticket satellite package with the NFL allows users who buy the package to view every NFL game. Through these subscriptions, DIRECTV is able to generate an estimated $600 million to $750 million in annual subscription revenue. This also doesn't factor in another $100 million in potential advertising revenue during NFL broadcasts. Considering that NFL games accounted for nearly two-thirds of the highest rated sports events in 2010, this was a crucial win for DIRECTV and its shareholders. Sirius XM (Nasdaq: SIRI  ) can also breathe a sigh of relief since it locked in a five-year deal for exclusive play-by-play coverage in December.
  • Food
    It's tough to just pick a few names here, because we all know what happens when you give a group of guys a big screen TV and a few beers -- they eat, endlessly. That's what makes eateries like Buffalo Wild Wings (Nasdaq: BWLD  ) and national pizza chains like Papa John's easy picks to benefit from the end of the lockout. And nothing goes better with football Sundays than an ice-cold beer. I'm certain domestic beer giants Molson Coors and Anheuser-Busch InBev (NYSE: BUD  ) are breathing a sigh of relief following today's agreement. Don't forget -- Bud Light is the official sponsor for the NFL.
  • Apparel
    Apparel is big business in the NFL. Nike (NYSE: NKE  ) recently inked a deal to become the NFL's official apparel company beginning in 2012. This is Reebok's last year as the NFL's official apparel company, and it stood to lose millions if the NFL season was lost. Even retail outlets stand to gain from the return of the NFL, including Foot Locker (NYSE: FL  ) , whose Champs Sports and namesake footwear locations will likely see a boost in sales.
  • Television
    Possibly the only thing propping up television sales and pricing is the pigskin effect. I would hardly call the seemingly endless decline in prices for televisions a bullish scenario, but the return of football definitely gives electronics retailer Best Buy (NYSE: BBY  ) room to crack a smile. While electronic retailers don't often see a major boost in sales until later in the season -- specifically closer to Super Bowl Sunday -- this should be a relief for the company's shareholders who have recently endured sluggish TV sales.

Excessive celebration
Throw the flag now, because I'm not shy about my love for football -- and my lowly Lions. I'm also not oblivious to the money-making machine that is the National Football League. These sectors can rest easy now that they won't be losing millions in revenue, and that the above companies are preparing to enter their bread-and-butter sales periods.

Can stocks and football truly co-exist? I believe so. But I'd love to hear your take on the issue. Does the NFL influence your stock-picking decisions? Share your thoughts in the comments section below.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong. The Motley Fool owns shares of Papa John's, Molson Coors, and Best Buy, and has written puts on Papa John's. Motley Fool newsletter services have recommended buying shares of Buffalo Wild Wings, Best Buy, Molson Coors, and Nike, as well as creating a diagonal call position in Nike. 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 that's ready for some football.


Read/Post Comments (3) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 26, 2011, at 9:30 PM, HarryCaraysGhost wrote:

    WhooooHooooo!!!!!!

    Looking forward to the season.

    One thing I was thinking about if a lockout actually occurred, all the jobs that would go away. Extra waitresses at sports bars, security at the games, the vendors.....

    I really believe that no NFL would have had a very negative effect on the economy as a whole.

    And just so I'm clear about this, after all these years are you finally saying that BUD and SIRI are buys... ;)

  • Report this Comment On July 26, 2011, at 11:52 PM, TMFUltraLong wrote:

    HarryCarysGhost,

    No....not calling BUD or SIRI a buy - merely pointing out that these stocks can breathe a sigh or relief now that football is back!

    Go Lions!

    TMFUltraLong

  • Report this Comment On July 27, 2011, at 3:33 PM, wolfman225 wrote:

    You forgot UnderArmour (UA). It's been a good performer for the last year+ and, while not the "official apparel of the NFL", I believe it remains very popular with fans and athlete's alike.

    It's currently trading a little below it's 52wk high, but I expect it to make a rebound on the settlement news and make new highs in the next 90 days.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1525005, ~/Articles/ArticleHandler.aspx, 12/19/2014 9:37:04 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement