Thank Goodness for Football Season
This weekend we got our first chance to see Johnny Manziel in a Cleveland Browns preseason game and the college football teams are in camp as we speak. So real time football is just a couple of weeks away, and thank goodness from just a pure entertainment standpoint as ‘baseball and golf season’ is a real bore these days. But more importantly for the economy is how much economic stimulus gets pushed through the economy in the US each fall as a result of football season and all that football season represents in this country.
'Knock-On' effects of Football Season
Football is the one major sport which has major add on effects in the economy, everything from supplies for tailgating, to jobs created for massive stadium events every weekend all over the country, to social gatherings set up around the games. One might think yeah but it is just a sport, but when you dig deeper into the actual scale of the boost to the economy each fall it is enormous. Just think in terms of college football and how big these games get every weekend across the country and how much money goes into promoting and entertaining alumni?
Tailgating, Social Events, and Employment
Some of these games have all day events that lead up to the game at night, these are like mini festivals with food, music, games and festivities that are all day affairs from Mississippi, Texas, Florida, Georgia, Alabama, Indiana, California and Ohio to even small programs around the country in mainly college towns. The amount of revenue generation created on Saturdays from college football alone is just staggering in this country. But this is big business and the add on effects start much earlier in the week with ordering supplies, printing flyers, organizing events – it is no small wonder that the University of Texas Football program generates more revenue than many businesses in this country. Furthermore, unlike Amazon & Twitter the University of Texas Football program actually generates a profit!
3rd & 4th Quarter GDP above 3%
This is why Jeffrey Gundlach who is short the housing market and long bonds being his business model who basically needs a bad third quarter GDP number to support his Doom and Gloom Scenario and Buy More Bonds which is good for his bond fund is in for a rude awakening if he thinks the third quarter is going to be bad after we had a 4% second quarter GDP number which may be revised even higher in a couple of weeks.
4th Quarter GDP 4% Plus
Economists aren`t exactly well rounded people, they are basically nerdy bean counters and they fail to realize the effects of sports, and especially the amount of stimulus that occurs in this country each fall due to college and professional football season getting into full swing. I expect a positive 3% plus third quarter GDP number when all revisions are completed and I put football season, back to school spending, good weather, and solid economic activity as positive contributors for the third quarter number.
Moreover, I expect 4th quarter GDP to be the best number of the year when all revisions are completed with a 4% plus GDP number as the fourth quarter GDP number gets the bulk of the football season in October, November and December plus the major Holiday Spending Cycle that stimulates the entire supply chain from the major spending holidays of Halloween, Thanksgiving, Christmas and New Year’s (especially the Retail Sector of the economy).
Football Industrial Complex
The US economy and its supply chain really have become backend loaded, and anybody betting upon dismal 3rd & 4th quarter GDP numbers like the first quarter just doesn`t get the benefits and economic activity that revolves around the Football Industrial Complex in this country. So as you are watching your favorite college or professional football teams over the next couple of months, just think about how many jobs, goods and services, social gatherings, corporate events and revenue is being generated through this game, and its under the radar simulative boost to the overall economy.
Football Season Does More for the Actual ‘Real Economy’ than the Federal Reserve
Give me Football Season over the Federal Reserve any day of the week in terms of actual ‘boots on the ground’ stimulus that generates real economic activity versus ‘paper and electronic’ stimulus in the guise of QE, Low Interest Rates and Asset Purchases that dis-incentivize banksand financial players to put this capital to work in productive areas of the economy that have “Add-On” benefits in the form of Employment, Business Development and additional Cap-Ex Investment in the overall supply chain.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.