Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains dives into Puma’s partnership with global soccer powerhouse Manchester City, and then takes a look at ESPN’s (DIS - Free Report) first big push into the sports betting scene.
German sportswear firm Puma announced what is reported to be a record-breaking deal with Manchester City. Puma will take over one of the world’s biggest clubs from Nike (NKE - Free Report) . The deal, which is said to be worth as much as $86 million a season comes not too long after the firm lost its biggest asset, Arsenal, to Adidas (ADDYY - Free Report) . “Puma's partnership with City Football Group is the largest deal that we have ever done—both in scope and ambition,” Puma CEO Bjorn Gulden said a statement on Thursday.
Puma’s partnership is somewhat unique in the world of soccer as it includes all of the teams under City Football Group’s larger umbrella of clubs around the globe—aside from one notable exception. The German sportswear firm will soon see its logo on the chest of one of the biggest and quickly ascending teams in the world, which should help it compete against its rival Adidas, who spent upwards of $100 a year to steal Manchester United (MANU - Free Report) away from Nike a few years back.
Puma has aggressively pushed into the global sports market over the last year, after French luxury conglomerate Kering spun off most of its controlling stake in the German sportswear maker last year. The company jumped back into basketball in a big way in 2018 and saw its revenues climb by double-digits.
On top of its ability to penetrate the sports performance market, Puma has been able to expand its business through popular culture. Puma has deals in place with some of the biggest names in fashion and music that help expand its reach across the quickly growing Instagram (FB - Free Report) , which is only going to become more important in a mobile retail age.
All of this has helped Puma stand out against Under Armour (UAA - Free Report) as it struggles to roll out compelling athleisure offerings and on-trend footwear. Puma’s ability to expand its fashion-based clothing and sneakers could help them grow in a market that has seen Lululemon (LULU - Free Report) and the Gap’s (GPS - Free Report) athleisure businesses expand.
The episode then closes with a look at ESPN’s recently announced daily sports betting show. ESPN will air Daily Wager five days a week on multiple outlets as the legal sports gambling market continues to expand in the U.S. Investors should pay attention to this market as it becomes more mainstream. For instance, all four major North American professional sports leagues have deals in place with either MGM (MGM - Free Report) or Caesars (CZR - Free Report) .
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