Sports Equities Reach 3.5-Year Peak Propelled by Rush Street and Rogers
Sportico Sports Stock Index Surges in July, Led by DAZN and Rush Street Interactive
The Sportico Sports Stock Index, a basket of 40 stocks that rely on sports for a significant portion of future growth, advanced nearly 2% in July, reaching its highest level since late 2021. This growth was driven by several key factors, including large broadcasting and content rights deals, strategic acquisitions, development of interactive digital features, e-commerce, and partnerships in sports betting data and media.
One of the top performers in July was DAZN, a sports media and technology company. The company had a strong year in 2022, with revenues reaching $2.3 billion, a more than 70% increase from 2021. Key growth drivers for DAZN in July included a major global broadcasting deal with boxer Anthony Joshua valued at £100 million per year, plans to add interactive features such as watch parties and sports betting integration, launching crossover boxing events with influencers (MF & DAZN: X Series), and expanding their market through acquiring Eleven Group—an Asian and European sports broadcaster—announced in September 2022 but likely in progress throughout the year. They also launched an e-commerce platform (DAZN Store) for fan merchandise in Germany, further diversifying revenue streams.
Another notable performer was Rush Street Interactive, which leapt 26% in July, finishing at $20.20, its highest level since the end of 2021. The gains are attributed to its BetRivers online platform and improvements in parlay and prop bet offerings.
The index, which is equal weighted with each stock starting off as 2.5% the value of the overall benchmark, also saw gains from companies like Genius Sports (NYSE:GENI), TKO Group Holdings (owns UFC and WWE), On Holding (sneaker makers), Paramount, Vivid Seats, and Rogers Communications.
However, not all stocks in the index performed well. Ferrari's stock declined due to slowing sales of its luxury cars, and Vivid Seats lost 10% of its value in July, nearing its all-time low.
The strength of the index is attributed to consumer spending, inflation, and a lack of fears of tariffs. The tech-heavy Nasdaq Composite index rallied nearly 4% and the S&P 500 gained more than 2%.
In July, the index closed at 1,522. The index is rebalanced every three months, with stocks dropped and added as needed at those times.
CEO Tony Staffieri of Rogers Communications mentioned there are various alternatives available, including private investors, IPO, or spin-out. The company expects to eventually merge the MLSE and Blue Jays divisions and find cost efficiencies. Rogers Communications advanced 13% in the month, with management sounding a bullish note on revenue from the Toronto Blue Jays and potential value creation from the acquisition of the majority of Maple Leaf Sports and Entertainment.
Despite the strong performance of the Sportico Sports Stock Index, some individual stocks like Ferrari faced challenges. Ferrari lost 11% in July, with a significant drop of 10% on a single day, due to higher tariffs on its cars from 27.5% to 15%.
In conclusion, the Sportico Sports Stock Index had a strong July, driven by the success of companies like DAZN and Rush Street Interactive, and the overall strength of the market. However, individual stocks like Ferrari faced challenges due to external factors. The index will be rebalanced every three months, providing opportunities for new stocks to enter and potentially drive growth.
- The surge in the Sportico Sports Stock Index in July was influenced by factors such as sports betting, commerce, and finance, as companies like DAZN and Rush Street Interactive planned to integrate sports betting into their offerings.
- Investing in the stock market, aside from sports, also played a role in the index's growth, with the tech-heavy Nasdaq Composite index rallying nearly 4% and the S&P 500 gaining more than 2% in July.
- Despite the overall strength of the Sportico Sports Stock Index, some individual companies like Ferrari faced difficulties in sports betting and finance, with higher tariffs on its cars causing a significant drop in July.
