The Women’s National Basketball Association (WNBA) has been steadily gaining popularity since 2021. But this year, the league has seen an even stronger-than-expected surge in popularity. League superstars like Caitlin Clark and Angel Reese are drawing new fans to the sport. This certainly bodes well for companies that have entered WNBA partnerships.
According to the WNBA’s website, many companies have signed on as “official partners” of the league for the 2024 season. These companies run the gamut from industries you would expect to sponsor a professional sports league. They include sporting goods stores to companies in unexpected industries.
Many of these sponsors are privately-held, yet quite a few are publicly traded. Let’s take a look at three of these high profile companies that have signed WNBA partnerships. Only time will tell, yet their respective partnership deals could in effect be a marketing slam dunk.
Dick’s Sporting Goods (DKS)
Back in May, just before the start of the 2024 WNBA season, the league made an announcement. Partnering with Dick’s Sporting Goods (NYSE:DKS), it was launching a line of WNBA-branded girl’s apparel, as part of its efforts to promote female sports.
While this deal itself may not be a needle-mover for Dick’s Sporting Goods, it may represent another example of the power of brand partnerships. Such deals have become important to the retailer’s financial and stock price performance. DKS stock has been on a tear this year, rising by nearly 54% year-to-date (YTD). This turbo-charged rally has been driven by the company’s reporting of “beat and raise” fiscal results. In large part, thanks to its focus on forming brand partnerships with professional sports leagues and teams.
Going forward, if Dick’s Sporting Goods continue with this strategy, including further collaboration and partnerships with the WNBA, steady growth may persist. Forecasts call for annualized earnings growth in the high single-digits over the next three fiscal years. In turn, DKS could keep steadily rising. Also, the company may decide to use these increased earnings to implement additional double-digit dividend increases.
Carmax (KMX)
Carmax (NYSE:KMX) is another of the handful of companies that have entered WNBA partnerships this season. The used car retailer sponsored the league’s Tip-Off Test Drive promotion. This promotion offers fans a free preview of the league’s direct-to-consumer game streaming service, WNBA League Pass.
Alongside this, Carmax launched an ad campaign featuring past and present WNBA stars. Again, with the unexpected jump in popularity of the WNBA, Carmax may be getting good value for money when it comes to this sponsorship deal. Said deal could provide a further boost to the company’s efforts to ride out the current rough patch in the used car space. In the preceding quarter, the company reported a 33% drop in earnings.
Still, earnings did come in ahead of expectations. KMX stock is currently trading sideways. But if the “auto superstore” can ride out this downturn, then capitalize on increased brand awareness when used car demand bounces back, a strong recovery for shares could take shape. It trades for around $73.33 per share today. Yet at the height of the post-pandemic used car boom, KMX was changing hands for prices north of $150 per share.
UWM Holdings (UWMC)
UWM Holdings (NYSE:UWMC) is a wholesaler of residential mortgage loans. As you might know full well, this isn’t exactly the best of times for the housing sector. While home prices have remained at record highs, high interest rates have sapped home buying demand. In turn, leading to a continued slump in both new and existing house sales.
WNBA partnerships may not solve this issue, yet they certainly don’t add to the bear case for UWMC stock. As announced at the start of the 2024 WNBA season, UWM has become the official mortgage partner of both the NBA as well as the WNBA. I wouldn’t underestimate the upside potential from a mortgage lender partnering with professional basketball.
In fact, Mat Ishbia, UWM’s Chief Executive Officer (CEO), may be utilizing the same playbook used by his crosstown rival, Dan Gilbert. Gilbert, who owns a majority of mortgage lender Rocket Companies (NYSE:RKT), as well as the Cleveland Cavaliers NBA team, has been successful creating market synergies between his two key holdings. Ishbia could do the same, both through UWM’s WNBA partnership, as well as via Ishbia’s ownership of the Phoenix Suns NBA team and Phoenix Mercury WNBA team.
On the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
