England's loss against Wales in the Rugby World Cup leaves the team in peril of crashing out in the group stages of the tournament. That's a heartbreaking prospect for fans, but an early exit also has implications for the retailers, broadcasters, pubs and bookmakers that were betting on a strong showing from the host team.
Waning interest in the tournament could lead punters to place fewer wagers on matches, to the detriment of gambling companies such as Sportingbet-owner GVC (GVC) and 888 (888). Crowds in pubs could also be smaller, hurting owners such as Young's (YNGA). The group's management expected the competition to be "good for trade and to bring a feelgood factor to South West London", benefiting its many pubs "within easy reach of Twickenham" which are "famous rugby venues in their own right". Similarly, pub owner and brewer Fuller, Smith & Turner (FTSA) looked "well placed" to profit from the many matches being held in its "West London heartland". Elsewhere, downhearted shoppers might refrain from splurging on jerseys, scrum caps and team merchandise at retailers such as JD Sports (JD.) and Sports Direct (SPD).
ITV (ITV) could be one of the worst affected. Management had hoped that exclusive live broadcasting rights to the tournament would reverse a 4 per cent first-half decline in the audience share of the group's main channels. It also predicted a 15 per cent jump in net advertising revenues in September - fuelling third-quarter growth of about 8 per cent - which could prove optimistic.
In contrast, electricals retailer Darty (DRTY) stands to benefit if the French team - which has won its first two games - continues to perform. Management reported strong television sales leading up to the tournament, and cashed in on buoyant demand for premium and large-screen TV sets before and during the Fifa World Cup in 2014.
Investors in sport-related companies will be aware of the cyclical and unpredictable nature of the industry, where a match result or a shock exit can have direct impact on their fortunes. In this week's sector focus, we consider a broad range of businesses that offer exposure to this exciting and often lucrative space and pick out the likely winners and losers. Worried England fans could probably use the distraction.
