Tag Archives: Sports

AMC + UFC = Jackpot

AMC Entertainment Holdings, Inc. just made a bold move to capture a huge new audience:

The value proposition here is obvious: why pay $70 when you can pay $25? But the implications for AMC are even bigger than they may appear.

UFC is growing at an incredible rate, dwarfing growth in any other major sport. 2020 was a banner year for the league:

“For us personally, it’s the best year we’ve ever had. Crazy to say that, but we broke just about every record we have, except for live gate, obviously,” White told TSN. “It was a very challenging year for us, to pull all this stuff off. It was without a doubt the hardest year of my career.

Viewers grew 30% on ESPN and the UFC’s YouTube and Instagram accounts are second only to the NBA in followers.

UFC not only brings an enormous new audience to AMC, it counters one of the biggest problems movie theaters have: strong seasonality in their business. The most anticipated movies are usually released in the summer, and the crowds swell. But in the colder months, major releases are fewer and attendance drops off.

Unlike the movie business or most professional sports, UFC is not seasonal. Major tournaments happen regularly throughout the year, and there is no off season.

Picture normally empty theaters packed with cheering fight fans in January, and then imagine the money printing machine in AMC’s headquarters spitting out hundreds. While the stock’s price is a little high for my taste at the moment, I have to applaud CEO Adam Aron’s leadership.

More on AMC:

AMC ON THE THRESHOLD LIST: STRONG EVIDENCE OF NAKED SHORT SELLING

AMC’S S-3 WITHDRAWAL: WHAT DOES IT MEAN?

HEDGE FUND TORCHED BY AMC

Photo: “File:Chuck Liddell vs. Rich Franklin UFC 115.jpg” by Bad intentionz is licensed under CC BY 3.0

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Fundrise

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Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

DraftKings and Robinhood Are Both Growing Like Crazy. Here’s Why.

As Tom Brady bagged his seventh Super Bowl, I got to thinking about an interesting trend I was seeing. I was hearing more ads for DraftKings every day. At the same time, Robinhood is exploding in popularity and its army of small traders is moving markets. Were these two related?

DraftKings, an online sports betting app, is exploding in popularity. It’s revenue doubled in the last year, and its stock is on a tear:

The stock-trading app Robinhood is also growing at an incredible rate. It doubled its payment for order flow revenue, its main revenue source, in just a few months in 2020 as the lockdowns hit.

Robinhood gamifies investing in a way that can mimic online gambling, and much of the trading on the platform, including in stocks like Gamestop and AMC, seems to be speculative.

I think both trends come from a big increase in personal income due to stimulus and extra unemployment payments. Put that extra money into the hands of someone who is bored and has fewer other ways to spend, and you see big increases in gambling…err, “investing”.

With another large stimulus planned, I expect to see more of this in the future. I also wonder where else this extra cash will show up.

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Photo: “File:Tom Brady 2017.JPG” by Jeffrey Beall is licensed under CC BY 4.0