With the season almost over, NBA players and owners seem unwilling to budge on contract negotiations for 2011-2012.
That spells trouble for sportswear companies like Footlocker and Nike, according to UBS’s Michael Binetti:
An examination of the last NBA lock-out in 1998-99 shows that during the 6-month period from when the lock-out was announced up to the point where an agreement was reached, FL shares declined -64% and NKE shares declined -16%.
One thing is certain: lock-outs always end. While a lock-out could negatively impact FL and NKE share prices, we would likely view a lock-out related sell-off as a potential buying opportunity for the stocks.