A top Wall Street firm urged investors this week to bet against CBS, one of the NFL’s key television partners, amid ongoing clashes between the league and President Trump over national anthem protests.
JPMorgan Chase analyst Shawn Quigg suggested in a research note that investors buy stock puts on CBS, which would allow the sale of CBS shares at $57.50 if the company’s stock price sinks due to declining NFL television ratings. NFL viewership is down 11% overall this season compared to last year, according to Nielsen.
“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. We view this weekend’s viewership results as likely a cleaner proxy in determining whether the Anthem debate may be a larger issue for the NFL, and CBS, or not,” Quigg wrote.
The recommendation comes amid a war of words between the NFL and President Trump, who publicly ripped the league for allowing players to kneel during the national anthem. Trump claimed on Twitter that the NFL’s ratings are “way down” because of the protests and warned that the league’s business “is gonna go to hell” if they continue.
Quigg notes that booming sales of Pittsburgh Steelers offensive lineman Alejandro Villanueva’s jersey –after the former Army Ranger was the lone member of his team to exit the locker room for the national anthem last Sunday – could provide an indication of the public’s views on the debate. He
“If one uses player jersey sales as a proxy, fans appear to favor an on-field standing presence during the Anthem,” Quigg wrote.
Trump’s calls for an NFL boycott have had little effect on CBS’s stock. Shares have remained roughly flat at $58 this week in the days after the league-wide anthem protests. The network’s NFL pregame shows and game broadcasts saw an increase in viewership, despite the overall decline so far this season.
“All I know is our ratings were up 4% this weekend for the NFL,” CBS Corp. CEO Les Moonves told TMZ this week. “We’re happy about that, we had great games. The NFL is still the best thing on television.”