According to ESPN, “There is a growing belief inside league circles that the NFL and NFL Players Association will have an agreement in place that can be ratified during the July 21 league meetings in Atlanta, according to sources familiar with the state of negotiations. As one NFL owner said this weekend, there’s “no reason to believe it won’t get done.”
So how do your play this… even if it doesn’t happen?
That’s easy. As we said in Wealth Daily, June 22, 2011:
If a deal is struck, it’ll be music to the ears of fans, coaches, players, and business partners alike, including the likes of Buffalo Wild Wings (NASDAQ: BWLD), Under Armour (NYSE: UA), and beer giants like Budweiser (NYSE: BUD).
Not only can we profit from speculation of a deal, we can profit from the news, too. But first, let’s take a look at ways we can profit should this lockout end shortly.
For Buffalo Wild Wings, more than 10% of the company’s business is related to NFL game days. But should the dispute end long before NFL season gets under way, the stock could easily break from its coiled spring to the far upside, which it has done quite nicely… so far.
There’s also DirecTV (NASDAQ: DTV). If the 2011 season were canceled or shortened to eight games, DTV could easily stand to lose $600 million in subscription revenue and $100 million in advertising. And CBS, Fox, ABC, and ESPN stand to lose billions in advertising revenue.
Just last year, DTV pulled in between $600 million and $750 million in subscription revenue from its Sunday Ticket service. Advertising revenue added another $100 million. Loss of a season could easily cut into DTV’s profits. Easily.
But an end to the lockout could send DTV flying higher.
Even Electronic Arts (NASDAQ: ERTS) could rocket higher… While the company will reportedly launch Madden NFL 2012 (lockout or not), the company could lose a chunk of projected sales of the game. In fact, gross revenue could fall by as much as $80 million if the football season were canceled.
And according to Peter Moore, president of EA Sports, the “lockout’s impact could be as much as 35%” with a Wedbush Morgan Securities analyst putting a potential drop as high as 50% of Madden NFL sales.
But even if the lockout doesn’t end, these stocks could run even higher going into negotiations… Closure wouldn’t hurt, though.
