Sportico’s JohnWallStreet Sports Stock Index surged more than 20% in November, as an ebullient overall market met exceptional enthusiasm for sports-related shares boosted in part by voters approving the expansion of sports betting across the nation.
“There were multiple factors contributing to the rise of stock prices among companies that offer sports betting services,” said Chris Altruda, a sports betting analyst at Pennbets.com. “Some of them include mergers, which included Caesars acquiring William Hill for $3.7 billion earlier this month. A second factor has been the sheer volume of sporting events available for wagering over the past two months.” Despite cancellations and postponements, the continuation of football season and news of COVID-19 vaccines have buoyed investor spirits.
Overall, the JohnWallStreet Sports Stock Index gained 20.24%, nearly lapping the 10.76% gain the S&P 500 Index posted in the same timeframe. The Sportico index is a basket of 40 sports-related stocks reflecting the broad performance of the sports industry. The index finished November at a value of 1,316.18, up 221.53 points from October. It was reconstituted in August at a value of 1,000 with all 40 components equally weighted. The index had posted a 5.4% decrease in October, after rising 3% in September and more than 12% in August.
In a show of the broad strength sports had this month, all but one component of the JohnWallStreet Sports Stock Index posted gains, and more than half of the stocks rose by double-digit percentage points for the month. Score Media & Gaming was the best performer, surging 136% as the Canada-based digital media company rocketed on the introduction of legislation that would permit single-event sports betting in the country of 38 million people. Canadians spend about $7.7 billion on illegal sports betting annually. Shares finished the month at $1.2965.
Among U.S.-based sports firms, DraftKings was the best performer, posting a 48% advance, or $16.96 a share. The Boston-based fantasy sports company remains a market favorite, having more than tripled since it went public through a SPAC in April. DraftKings increased its revenue expectations for 2020 during the month, to as much as $560 million. Sinclair Broadcasting came in as the second-best performer, adding almost 48% thanks in part to news of a branding deal with Bally’s for its regional sports networks.
The third-best performer was Collectors Universe, helped by Monday’s announcement that it is going private in a deal worth $700 million. New York Mets owner Steve Cohen, Charlotte Hornets minority owner Dan Sundheim and sports card collector Nat Turner are paying $75.25 per share in cash to take the firm off the public markets. The company, which owns card grader PSA, has been thriving during the pandemic as sports-starved fans turned to collectibles. In November alone, Collectors Universe gained 41%, including more than 6% Monday on news of the buyout.
The lone decliner in the month is Hall of Fame Resort & Entertainment, which runs a football-themed development in Canton, Ohio. Shares of the company, which went public by SPAC earlier this year, have easily been the worst performers in the month, surrendering almost 24% to finish at $1.46 a share. Remarkably, Hall of Fame Resort also had the best one-day performance of any sports stock in November—gaining more than 80% on news of a deal to produce a Hard Knocks-type TV show.