Street Speculator

Last week was horrible. The stock market fell on every trading day, once falling over 500 points.

But, wait until the market opens after Columbus Day. The SPECs think the market will tumble more, with the DOW going under 7,000 points.

Our Rationale: The Credit Default Swaps payment on Lehman Brothers debt are due. It is estimated that the “issuers” of the Lehman Brothers Credit Default Swaps are on the hook for between $400 thru $600 billion. The problem is that the issuers of these CDS’s are not yet known. They can be anyone from AIG and Morgan Stanley to the various Hedge Funds and other asset management organizations..

We think that these issuers will have to sell assets (Including stocks) to settle the claims. Everyone knows that most of the companies issuing the CDS’s were undercapitalized, but got greedy in taking the million dollar premiums. There were no fundamentals attached. The Credit Default Swap saga will consume the media like the former ENRON once did.

All major economic indexes are dropping except the financials of Pro Sports Clubs. Is Professional Sports a truly “Recessionary-Proof” entity? Evidence seems to state in the affirmative.

There are new stadiums being built with none of the team owners complaining about the credit markets. Personal Seat Licenses (See NY Jets) and Luxury Suite sales seem to be on schedule and demand is on an upswing.

Maybe sports is the nerve calming outlet we all need created by the stresses generated by the stock market falls (A Daily Occurence). Sports seems to psychologically render above all else, especially when it comes to consumer spending.

Boston Red Sox CEO states that the team is doing fairly well (Look):

Forbes magazine annual ranking of NFL team values were published this week. There were no surprises with the top 3 highest valued teams: Dallas Cowboys, Washington Redskins, and the New England Patriots.

What was surprising was the fact that the NFL now has 19 teams worth at least $1billion dollars. This is unprecedented. These high valuations are definitely due to the proliferation of new stadium construction and those currently under construction. These new stadiums shower the owners and their respective teams with revenue, revenue not included in the league-wide revenue sharing system.

If you view the fundamentals, although valued at high dollar values, these teams generate a rather small amount of revenue compared to the values. The Washington Redskins generated $327 million in revenue, the largest amongst all 32 teams. However, of that $327 million, they made a profit of $58 million. A paltry sum compared to a commanding price in the event of a sale.

To the NFL as a league, CONGRATULATIONS. Stick around for more. The Major League Baseball Chicago Cubs is on the sales block. Word is, they may fetch between $1.1 and $1.3 billion.

It’s back! Arguably the most popular sport on the planet, football. While most people are pulling out their favorite team memorabilia or finalizing fantasy league teams, the SPECULATORS will give you the entities we feel will benefit the most financially from the upcoming season.

The Owners: Dan Snyder (Redskins), Steve Biscotti (Ravens, etc… from selling and leasing the suites and club seats. Some suite leases go for $200,000/yr.

Disney: ESPN is a subsidiary of Disney (Symbol: DIS)
Direct TV: NFL Sunday Ticket, $74.99/mo. (Symbol: DTV)
Molson Coors: The Official Beer of the NFL (Symbol: TAP)
Coca-Cola: Popular Soft Drink (Symbol: KO)
News Corporation: Broadcast and have the rights to the games, will generate a lot of cash from the advertising revenue. (Symbol: NWS)

The list is infinite, but I did not want to keep you any longer from the Giants-Redskins game.

Enjoy

- Gordon Gekko

Well folks, it’s football time again. Football, one of the most popular sports on the planet. Some people are set to make a lot of money when the season starts. And I am not talking about the players.

And be not drunk with wine, wherein is excess; but be filled with the Spirit EPHESIANS 5:18

Didn’t mean to get biblical. I love and respect any man’s religion as we all have to live together at some point in time or another. However, we at STREETSPECULATORS.COM love to point out hypocrisy.

The NFL makes a lot of money off of beer sales and sponsorships. The Official Beer of the NFL is MillerCoors , which will remain so through 2010 ($600 million + deal). I don’t mind beer sales at sporting events. What bothers me are the people selling the beer, so-called Christians.  The Moral Leaders. WHAT?

You heard me loud and clear. It would probably amaze you to find how many Bible toting, critical of other religions and beliefs, perfect walking, Christians are involved with the sale of beer at sporting events.

Kirbyjohn Caldwell: Part-Owner of the Houston Texans. Close confidant of president George W. Bush. Senior Pastor of Windsor Village United Methodist Church.

Dr. Claude Alexander: Part-Owner of the Charlotte Bobcats. Senior Pastor of The Park Ministries, University Park Baptist Church.

Bob McNair: Owner of the Houston Texans. Recipient of a Citizenship and Community Involvement award from the Fellowship of Christian Athletes. The same owner who stated he would never draft a player with a checkered past.

Now, for the simple minded, the teams they are affiliated are bound by league rules to sell beer and promote its consumption through advertising. Inside of the stadium and arenas, advertisements and promotions for beer consumption are everywhere. This is done because the leagues commands it and there is money to be made.  Lots of it. They want the patrons to Buy, bUy, buY!!!!

Hypocrites. What’s your opinion? I cannot in good faith (I just got spiritual again) listen to people who preach one thing then can those principles when it comes to making money. Why else would someone own a pro sports team? Unless you are extremely ignorant, you would know going in as an owner that these organizations are built on SUDS.

Readers, have a good day at church tomorrow!!   

I guess we buy beer first, get drunk 2nd, they pray for forgiveness last.