Source: S&P Datastream. Data rebased to 100.
The biggest riser is Wireless (WLG), formerly UTV. That reflects the recently agreed takeover of the radio group - which owns talkSport, the world's leading sport radio station - by News Corporation. JD Sports (JD.) has also outperformed, while fellow retailers Sports Direct (SPD) and Halfords (HFD) have fared less well. Shares in all three tumbled more than a tenth after the Brexit vote, reflecting fears that consumers would delay buying football boots, tracksuits and bicycles due to uncertainty and the prospect of a recession.
The media sector also stomached a sell-off due to near-term concerns about the advertising market. Shares in ITV (ITV) were among the worst hit: the television broadcaster's shares plunged more than a fifth in two days. It was a similar story at STV (STVG), which owns the broadcasting licence for ITV1 in most of Scotland. Its challenges were compounded by industry regulator Ofcom's announcement that it would be a regulatory nightmare to allow it and other broadcasters to charge retransmission fees for its content to Sky (SKY), Virgin Media and other pay-TV broadcasters. Meanwhile, BT (BT.A) has used top-flight English and European football coverage to boost the subscriber base of its BT Sport channel.
Deals continue to be a major theme in the sport sector. Sport marketing specialist TLA Worldwide (TLA) recently recommended an indirect offer from a group of business magnates including ex-Asos chairman Waheed Alli and former UTV media boss Jonathan Goodwin. Chime (CHW) - a group of sport and entertainment agencies which represent athletes including Sir Chris Hoy and Becky Adlington - was acquired by asset manager Providence and advertising titan WPP (WPP) in October 2015. And WPP has continued to invest heavily in sport marketing; it recently snapped up TSE Consulting, a Swiss consultancy that advises city governments and sport organisers on hosting and running major sporting events.
Investors should consider revisiting the investment cases for companies such as WPP, ITV, STV, BT and JD Sports. Brexit worries may well have created some bargains.
