J. P. Morgan Bets Against CBS Ahead of NFL Broadcast

J.P. Morgan, the world’s second largest private bank, is looking to bank off of the recent drama at the NFL.

While there are some supporters of the players taking the knee during the National Anthem, you’d have to be living in a bubble to think that most Americans view the protest favorably. Wherever you look, you’ll find that most Americans disapprove of the practice. That’s whether you look at the polls showing that 72 percent disapprove of the protests, the “#BoycottNFL” hashtag on Twitter (where posts are overwhelmingly anti-NFL), or at the games themselves, where players protesting the National Anthem are booed into oblivion by their own fans.

If one is going to profit from the drama, it’s obvious that it’s going to require betting against the NFL. And while the NFL isn’t a publicly traded company, CBS (which is publicly traded) is among the primary networks that broadcasts the League’s games. While they’re a diversified media company, the NFL does account for a decent chunk of viewership, and one that’s declining.

Football viewership has already been on the decline, and was further pushed down by Colin Kaepernick’s protests. This year’s knee protests are only further contributing to the decline, and as we reported earlier today, they’ve thus far resulted in an 18 percent decline in ticket sales.

And because of that, there’s an opportunity to profit. According to Bloomberg News, “JPMorgan Chase & Co.’s Shawn Quigg is encouraging investors to bet against CBS Corp. stock ahead of this weekend’s NFL broadcasts.”

In particular, he’s advising speculators to bet against the stock by purchasing a put contract (an insurance contract that increases in value if the stock its written against declines in value) with a strike price of $57.5 (while the stock currently trades at 57.70). The payoff for someone who made Quigg’s bet would be equal to the put contract’s strike price, minus the company’s closing price. For example, if CBS stock declined to $50, the contract would be worth $7.5 (though technically $750 – because options contracts represent 100 shares).

If you needed that explanation, however, we wouldn’t recommend that you try making this gamble yourself. The main takeaway here is that the League is causing pain for a $23 billion media company, meaning that things have to be even worse for the League itself.

“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,” Quigg said. He also also pointed to a surge in jersey sales for Pittsburgh Steeler Alejandro Villanueva (who was the only one on his team to stand during their game) as backup for his claim.

Heck, things are getting so bad that they’re even getting roasted by a candy bar….