On publicly-traded sports companies
Excerpted from Moag & Co.'s Industry Analysis Winter 2002 edition
A. Publicly-traded sports companies generally
The sports industry is not widely represented in the public equity markets. Sports franchises generally are privately owned investments. The Sporting 40 Index, however, tracks publicly traded companies that have links to the sports industry. The index breaks sports companies into the following eight categories:
- Media/Team Owners
The Sporting 40 Index has outperformed the Dow Jones Industrial Average (DJIA), Nasdaq, and S&P 500 since March 2000. Until 2001, the Sporting 40 mimicked, but underperformed, the S&P 500 and the DJIA. As the U.S. economy moved toward a recession in early 2001, the Sporting 40 index began to outperform first the S&P 500 and, shortly thereafter, the DJIA.
B. Specific publicly-traded sports sectors
We have concentrated on three sports-focused industry segments for this analysis: sports-related products, sport facilities operators, and motorsports.
Sports-related product companies include companies that produce content-oriented products such as scoreboards or digital viewing enhancements, and do not include equipment manufacturers. These companies maintain a similar performance record versus the S&P 500. They underperformed the S&P 500 until the overall U.S. economy appeared heading toward a recession. During March 2001, shares of sports product companies began to outperform the S&P 500 and currently are trading over 20% higher than the S&P 500 index.
Operators of sports facilities, such as Churchill Downs, have outperformed the S&P 500 recently. From June 2000 through late November 2000, facilities companies outperformed the S&P 500 by approximately 20%. Beginning in 2Q 2001, facilities
companies began to steadily outperform the S&P 500. Both facilities companies and the S&P 500 were trading below their relative values at the beginning of 2001; however, shares of facilities companies are performing comparatively better than the S&P.
The motorsports sector is currently trading at values 40% greater than those of the S&P 500. Similar to other sectors in the community of publicly traded sports companies, motorsports companies underperformed the broader market until signs of a declining economy appeared. At the beginning of 2Q 2001, motorsports companies surpassed the S&P 500 performance and continue to trade at values well
beyond the S&P index.
|Sporting 40 Index, Street & Smith's Sports Business Journal
|AOL Time Warner||AOL|
|Fox Entertainment Group||FOX|
|Tribune Co.|| TRB|
|Princeton Video Image||PVII|
|Dover Downs Entertainment||DVD|
|Bull Run|| BULL|
|Clear Channel|| CCU|
|Foot Locker|| Z|
|Interpublic Group|| IPG|
|The Sports Authority|| TSA|
|BSkyB Group (London)|| BSY|
|Manchester United (London)|| MNU|
|Wembley (London)|| WMY|