5 NFL Stocks That Are Leading the League
When it comes to professional sports leagues, it is basically the NFL followed by everyone else. The NFL is one of the most successful sports leagues of all time. Unfortunately, you can’t invest in the league itself. However, you can invest in NFL stocks.
The NFL is a private trade organization made up of 32 teams. These teams are all privately owned, except for the Green Bay Packers. But the NFL is such a huge moneymaker. There’s got to be another way to profit off the NFL’s popularity, right?
Luckily, there are a few public companies that are in a great position to profit off the NFL’s success. So let’s take a look at five of the best NFL stocks to buy.
How The NFL Makes Money
The NFL is a super interesting market. This is mainly because there are so many different organizations taking a slice of the money pie. The league itself earns billions from its TV rights deals. Investopedia estimates that half of the league’s $16 billion yearly revenue comes from TV deals alone. The NFL divides this money up evenly among all 32 teams.
From there, each individual team makes money via their own stadium, merchandising and advertising. Players and coaches obviously get paid to show up and play the game. Major apparel brands sign lucrative deals to outfit teams. Advertisements and endorsements are seen virtually everywhere during Sunday, Monday or Thursday night football. Owners and team stakeholders make money based on the overall profitability of the franchise. Then there are the stadiums to consider.
Each stadium acts like its own separate business. It has an owner, management team, employees, 3rd party concession stands, ticket sales, merchandising deals, sponsors, etc. On game day, money is trading hands all over the place.
Once you examine the different pieces of the pie, it becomes easier to find NFL stocks to buy.
NFL Stocks to Buy
Major Apparel Provider: Nike (NYSE: NKE)
Nike is an easy choice for one of the top NFL stocks to buy. This is because it has an exclusive partnership with the NFL through 2028. This partnership allows Nike to outfit all 32 teams with uniforms and sideline apparel. For the next six years, everything on the field will be Nike. From the quarterback’s jersey to the ball boy’s socks. That’s a lot of Nike Swooshes running around the field every single game day.
Nike did not release how much it spent on this partnership. However, it’s probably close to $1 billion. Nike also has similar partnerships in place with the NBA, MLB and many college sports teams. This portfolio of partnerships is just part of the reason why Nike is one of the four best fashion stocks to own.
In total, there are 30 NFL stadiums. For the most part, each one has a primary sponsor. Owning the naming rights to an NFL stadium is incredibly valuable. Just think about how many people show up to the stadium or tune in on game day. Sponsors’ names are mentioned dozens of times per game.
Most stadiums are sponsored by major multi-conglomerate companies. For example, Gillette Stadium in New England. Gillette is already popular, and these naming rights probably do not put a huge boost in its sales. Additionally, these stadium sponsors rarely change. For example, the Bank of America Stadium, in North Carolina, was named in 1996. By this point, consumers have grown accustomed to it.
When looking at stadium sponsors, there isn’t a lot to get excited about. Except for one exception. Which is what makes this next company one of the best NFL stocks to buy.
NFL Stocks: SoFi Technologies (Nasdaq: SOFI)
SoFi is a jack-of-all-trades online financial company. It has products for saving, investing and money management. SoFi just recently received a bank charter so that it can offer its own banking services (instead of partner products). It also won the naming rights to SoFi Stadium in 2020.
SoFi Stadium is home to the Los Angeles Chargers and Los Angeles Rams. With two franchises, SoFi gets double the exposure during the season. Both franchises are also new to Los Angeles in the past few years. These fanbases are extra excited to have these franchises back in LA. This means higher attendance and more support. Of course hosting the most recent Super Bowl also helped to get this company even more exposure.
SoFi is one of the best NFL stocks because it offers a great product, is a quickly growing company and gets tons of exposure during both Rams and Chargers games.
Gambling and football used to go together like toothpaste and orange juice. Mentioning gambling in the same sentence as football was disrespectful to the integrity of the game. However, this stigma is changing quickly. Today, sports gambling is legal in over two dozen states. It looks like many more states will continue to legalize over the coming years. There’s good reason to believe that the NFL will embrace gambling much more openly than people think.
Remember that the NFL is a business at the end of the day. Everyone involved in the organization cares about one thing at the end of the day…making money. Due to this, the NFL is constantly searching for new ways to grow. Its primary method for growth is signing more lucrative TV deals. This worked well in the past. Unfortunately, apart from this, there are not a ton of other options.
Increasing stadium seating is one option. However, this is usually a very costly and time-intensive process. On top of that, increased ticket revenue is still just a fraction of what TV deals generate.
Sports betting could be the next big growth generator that the NFL is looking for. In fact, gambling is already starting to infiltrate the NFL.
A Bet on Increasing The NFL’s TAM
The total addressable market (TAM) is the entire revenue opportunity for a product or service. For example, Uber’s TAM is anyone who needs a ride in locations where Uber operates. It has an incredibly big TAM, which is why it’s worth billions.
The NFL’s total addressable market is everyone that likes football. While this is a huge TAM, it’s safe to say that this market is very saturated. Almost everyone already knows what football is. Most people already have the teams they support and have supported them for years. People who don’t like football are probably not going to suddenly buy season tickets. Due to this, the NFL doesn’t have a lot of options for expanding its TAM. Except for maybe one way…
Sports betting is one very legitimate way that the NFL could increase its revenues. This is because sports betting has the potential to attract an entirely new audience. There are most likely plenty of people in the U.S. that don’t care about football but love to gamble.
For example, I don’t closely follow horse racing and I don’t own a horse. However, I’ve been to the horse track dozens of times. This is because I enjoy hanging out with friends and wagering a few bucks. Do I really care which horse wins? No. It’s just fun to play. A similar situation could happen with the NFL.
Sportsbooks are already allowed in casinos in certain states. It’s a logical next step for sportsbooks to be included in stadiums. This could attract a whole audience that isn’t necessarily there to watch the game, but are there to gamble. Which is why the three final NFL stocks are all gambling companies.
Sports Betting Giant: DraftKings (Nasdaq: DKNG)
DraftKings is one of just three sports betting companies that has partnered with the NFL. This agreement allows these companies to use the NFL’s intellectual property and trademark for promotions. This intellectual property includes everything from league data to highlights. It essentially means that NFL bettors will use one of these three companies. DraftKings is still the NFL’s exclusive Official Daily Fantasy Partner.
FanDuel (OTC: PDYPY)
FanDuel, owned by Flutter Entertainment, is the second company to partner with the NFL. It is DraftKings’ main competitor and has a very similar platform. To read more in-depth about FanDuel, check out my FanDuel stock forecast.
NFL Stocks to Buy: Caesars Entertainment (Nasdaq: CZR)
Caesar’s is the final company that received official sports betting partner status from the NFL. It’s also the only one of the three that owns casino resorts. This means that Caesars will be able to tie in this partnership at all its locations. In total, Caesars owns 51 properties in the United States.
When it comes to gambling, casinos want to bring people in and have them stay as long as possible. The longer people play, the more the house wins. This NFL partnership could be a huge draw to bring people into Caesars properties that wouldn’t normally visit a casino. Additionally, Sunday, Monday and Thursday are low-traffic casino days. That could change quickly if people are coming to bet on that night’s NFL game.
I hope that you’ve found this article on NFL stocks to be valuable! As usual, please base all investment decisions on your own due diligence and risk tolerance.