Stock Options in Sports: Take me out to the Ballgame!

The next line in that famous baseball song goes “Buy me some peanuts and cracker jack.” These days investing in baseball are even more popular than peanuts, if certainly not more profitable. Baseball is big business and there are some big league company names investing and partnering with Major League Baseball (MLB) to increase their bottom lines.

PepsiCo (PEP)
Peanuts and Cracker Jacks have become big business in the 21st Century. Consider the deal Pepsico and Major League Baseball entered into. A five-year sponsorship renewal signed between the two, made the beverage company the “Official Soft Drink of Major League Baseball” through 2010. Pepsico division Frito-Lay (makers of Cracker Jacks and many other snack foods) was made the “Official Snack Chip of Major League Baseball.” With the stock market misbehaving lately, and investment in a company can be hedged with a covered call investing stock options position. Covered calls give investors the potential to generate monthly income and also hedge their positions in case the price of their stock declines. A covered calls investing stock options position is currently available for Pepsico for October stock options expiration with a potential return of 1.9% — and in only 30 days.

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Bank of America (BAC)
Major League Baseball and Bank of America entered into an agreement, which made the banking giant the “Official Bank of Baseball.” In addition, Bank of America’s association with MLB includes national agreements with Major League Baseball Properties, Minor League Baseball and Little League Baseball.

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Under the agreement with MLB, Bank of America will receive exclusive rights as the official bank of baseball. This includes the licensing of intellectual property rights, extensive broadcast and onsite branding opportunities. In addition, Bank of America signed a four-year national sponsorship agreement with Little League Baseball to become the exclusive “Official Banking Partner of Little League.” A covered call investing position for Bank of America is available for October stock options expiration with a very appealing potential return of 8.5%.

General Motors (GM)
Baseball is an American pastime and most fans prefer to drive American made cars. General Motors knows this and partnered with Major League Baseball (MLB) in a three-year sponsorship agreement making Chevrolet the “Official Vehicle of Major League Baseball.” The world’s largest vehicle manufacturer even rolled out The Major League Baseball Silverado 1500 Crew Cab.” This baseball themed vehicle features a paint scheme incorporating all major league baseball team logos. General Motors also has corporate sponsorships with a variety of MLB Clubs. General Motors stock has been on the decline for several months and investors can hedge a position in General Motors with a covered call investing stock options position. A covered calls stock option position is currently available for General Motors for October stock options expiration with a very nice potential return of 11.1% and downside protection of 17.5%. Even if the price of GM’s stock does not decline more than 17.5% at stock options expiration in 30 days, the position will remain profitable, this is an example of how a covered call investing position can act as a hedge.

MasterCard International (MA)
MasterCard has been an official sponsor of Major League Baseball since 1997 and is the preferred card of Major League Baseball. MasterCard also maintains sponsorship alliances with 17 MLB teams. The partnership began with MasterCard’s launch of its Priceless’ campaign, which featured the relationship between a father and son attending a baseball game together. Tapping into the sentiment of a baseball fan’s passion for the game and rooting for their favorite teams, MasterCard is looking toward these same fans turning to them to make their financial dreams come true. Currently, there is a covered call investing position for Master Card for October stock option expiration with a potential return of 6.3% and downside protection of 8.4%.

XM Satellite Radio (SIRI)
Major League Baseball has also partnered with XM Satellite Radio for an 11-Year, $650 Million Broadcast and Marketing Agreement. The partnership began in 2005, and enables XM to broadcast games of every Major League Baseball team nationwide. With over 2.5 million subscribers nationwide, XM is now the official satellite radio network of MLB. XM’s stock is really in the dumper right now, but for investors thinking it could recover, a married put stock options position can provide limit a loss and also allow the investor to be in position to realize a profit if XM’s stock price recovers.

With a show lineup featuring former Cincinnati Reds pitcher and World Series winner Rob Dibble and Arizona Diamondbacks’ star outfielder Eric Byrnes, XM is yet another major corporation investing in the American pastime of Major League Baseball.

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