All for the want of a nail. Anyone that remembers that famous piece of writing knows that sometimes by getting your way there is a trickle down effect that may have unwanted consequences that you were never prepared for.
After the latest round of anthem-kneeling this weekend, the NFL was already feeling the wrath of its fans. Now, it’s beginning to feel the wrath of Wall Street.
According to Bloomberg, major investment bank JPMorgan Chase just gave a brutal outlook to the NFL and the networks that are carrying its games, singling out the anthem protests as one of the reasons the entities could be in serious trouble.
According to Bloomberg, analyst Shawn Quigg said investors should bet against CBS stock ahead of this week’s NFL matchups, arguing that more controversy could tank the stock.
“The bank recommends buying an option that gives you the right to sell the shares at $57.50 on the likelihood that the stock will fall below that price after the company discloses ratings for the games,” Quigg said in a note to investors. “CBS closed at $58 on Tuesday.”
“NFL-related revenue is not trivial to CBS, and any decline in NFL viewership related to the national anthem debate may negatively affect future results,” he added. “We view this weekend’s viewership results as a cleaner proxy in determining whether the anthem debate may be a larger issue for the NFL, and CBS, or not.”
Quigg also pointed to the increase in Pittsburgh Steeler Alejandro Villanueva jersey sales in the wake of this past weekend. Villanueva was the only Steeler to leave the locker room and stand for the national anthem before the Steelers game on Sunday.
“If one uses player jersey sales as a proxy, fans appear to favor an on-field standing presence during the anthem,” Quigg noted, adding that another week of controversy and bad ratings could possibly “mobilize investors to take the potential impact more seriously.”
According to Bloomberg, NFL-related ad dollars represent 10 percent of CBS’ total revenue. While ratings were slightly up this past weekend compared to last year, ratings from the first two weeks of the season have been down significantly. As USA Today points out, last year’s Monday night game in the third week of the season conflicted with one of the presidential debates, meaning it would be difficult to read too much into any ratings gain from this week.