5 Companies Glad the NBA Lockout Is Finally Over
It was no layup, but the NBA season is back on track.
After months of bitter negotiations, the owners and players finally agreed to terms that will result in an abridged basketball season that tips off on Christmas Day.
The public didn't seem overly passionate about the league lockout. It was multimillionaire players battling it out with billionaire owners to arrive at the appropriate revenue split over the next several years. The real economic casualties here are the arena concession workers and other NBA staffers that will take a hit from the cancelled games this season.
However, it wasn't just NBA fans applauding the surprising resolution in the wee hours at a time when it seemed as if the entire season would be lost. Several publicly traded companies popped higher on Monday after the impasse passed.
Let's take a look back at how these five hoops-centric companies fared.
Madison Square Garden (MSG)
Foot Locker (FL)
Buffalo Wild Wings (BWLD)
Madison Square Garden posted double-digit percentage gains on the news, and rightfully so. This is the owner of both the New York Knicks and the namesake arena where the team plays its home games. More than a million shares traded hands on Monday, making it the stock's most active trading day in three months.
The other publicly traded company that had some skin in actual team ownership was Comcast (CMCSA). The cable giant owned a piece of the Philadelphia 76ers, before agreeing to sell it this summer.
Where would Nike be today if it wasn't for its line of Air Jordan basketball shoes? One can also argue that while Michael Jordan was clearly the best player of his generation -- if not of all time -- his celebrity status was raised by the popularity of the sneakers that bore his name.
Nike and Adidas continue to jockey for endorsements from NBA superstars. Investors who don't want to play favorites -- or deal with investing in Germany's Adidas -- can buy the entire basket of basketball shoes through retailer Foot Locker. It may surprise investors to see Foot Locker post a healthier pop than either Nike or Adidas, but it makes sense. Basketball shoes just don't sell all that well when the stars aren't on the court.
Buffalo Wild Wings may be a surprising name on this list, but sports are a big deal for this fast-growing chain of family friendly sports bars known for its signature chicken wings. Buffalo probably didn't need the NBA. Many will argue that college hoops are more exciting. However, after March Madness ends come three months when the NBA season and postseason heat up.
Finally we have Disney. The parent company of ABC and ESPN feasts on basketball. ABC is the contractual home of the Christmas Day games, and ratings will only be higher now that it's the opening day for the shortened season. The fact that one of the games will feature a rematch of last season's NBA Finals between the Dallas Mavericks and the Miami Heat will make sure that ABC locks in top advertising dollars.
ESPN also has several games on tap throughout the season, though the real appeal here is the company's undisputed reign as the top dog in sports. Whenever there's a monster slam or a dramatic buzzer-beater, folks will be tuning in to see the highlights on the cable giant that has carried Disney during some of its performance lulls.
Coming Off the Bench
If you want more names than these strong starting five, then Time Warner (TWX) is a capable sixth man. The media giant owns TNT, which will broadcast a number of basketball games throughout the season. It also owned the Atlanta Hawks until 2004.
Then we get to the ticketing side of the game. Hot contests sell out, and sometimes buyers can't make it to certain games. Several teams have deals in place with Live Nation's (LYV) Ticketmaster to let season ticket-holders offer their seats in exchange for team credit. eBay's (EBAY) StubHub is another hotbed of legal ticket exchanges. The shorter season will eat into the moneymaking potential of hooking up buyers with sellers, but there's clearly more dough to be made now than if there wasn't a season at all.
So start getting pumped, NBA fans. Even if the lockout soured you on the sport at a time when bickering over billions seemed economically insensitive, we all know exactly where you'll be on Christmas Day once the holiday festivities come around.
You'll be watching the Heat take on the Mavericks, marveling at the coincidence that both teams play their games in arenas where AMR's (AMR) American Airlines holds the naming rights.
You didn't see AMR on this list because the financially strapped legacy carrier filed for bankruptcy reorganization two trading days after the lockout lifted. I guess there can't be winners if we don't have losers.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article, except for Disney. The Motley Fool owns shares of Madison Square Garden and Buffalo Wild Wings. Motley Fool newsletter services have recommended buying shares of eBay, Walt Disney, Buffalo Wild Wings, and Nike. Motley Fool newsletter services have recommended creating a diagonal call position in Nike.