March 31, 2021

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Today is the last day of our $500 Airbnb gift card giveaway, but at least tomorrow is the first day of the baseball. 😎

Tonal Raises $250M, Teases Upcoming IPO

Tonal/Design: Alex Brooks

At-home fitness startup Tonal raised $250 million in a new round of funding, giving the company a $1.6 billion valuation.

The wall-mounted system, which launched in 2015, uses advanced technology to replicate equipment, exercises, and weights found at brick-and-mortar gyms. 

The funding round was led by VC firms Dragoneer, Cobalt Capital, and Sapphire Ventures and also included former NFL quarterback Drew Brees, Wimbledon champion Maria Sharapova, WNBA champion Sue Bird, and boxing legend Mike Tyson. Amazon’s Alexa Fund and three-time NBA champ Steph Curry are long-time investors as well.

“We’re pouring a lot more capital into marketing and brand awareness, and we’re pouring a lot more capital into scaling our supply chain to get ready for the next phase,” CEO and founder Aly Orady told TechCrunch. 

The San Francisco-based company experienced a drastic increase in demand due to the at-home fitness boom during the pandemic. Tonal system sales increased 800% between Dec. 2019 and Dec. 2020. 

Tonal is now considering when to go public. “We’re going to IPO at a time when it’s best for the business because being a public company can be incredibly distracting,” said Orady. 

Lululemon, which acquired Tonal competitor Mirror for $500 million last summer, said that its connected fitness setup brought in $170 million in 2020. The company expects Mirror revenue to reach up to $275 million in 2021.

“Guests were seeking more convenient at-home options before COVID-19, and they will continue to seek these options post the pandemic,” said Lululemon CEO Calvin McDonald.

Sabrina Ionescu the Face of New Nike Line

NY Liberty, Nike/Design: Alex Brooks

Sabrina Ionescu was the first Division I basketball player to record 2,000 points, 1,000 assists, and 1,000 rebounds over the course of her college career, and the former Oregon Duck has added another first to her résumé. 

The No. 1 draft pick will headline Nike’s new Greater Than franchise, a collection of high-performance basketball sneakers. Ionescu signed a multiyear deal with Nike last April.

The first shoe Ionescu will promote is called the GT Cut. Nike crafted the shoe with insights from a range of hoopers, including Ionescu and her Oregon teammates.

When the 23-year-old WNBA star was a senior, the Oregon Duck store and Nike released a unisex replica Ionescu jersey for $75. It sold out in less than 24 hours. She hopes to one day receive her own signature shoe.

“It’d be awesome for me to do it, or for any other player to have that platform, and have little girls showing up to basketball practice wearing a women’s shoe for once,” she said.

A report last year indicated basketball shoe sales are down for the fourth year in a row and represent less than 5% of the athletic shoe market, compared to 13% in 2014. Nike basketball’s revenue hit $1.5 billion in 2020.

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Supreme Court Hears Arguments in NCAA v. Alston

Design: Alex Brooks

On Wednesday, the Supreme Court heard arguments in the landmark college athlete compensation case, NCAA v. Alston.

If the NCAA wins, it may gain the ability to dismiss all future lawsuits that challenge its principles of amateurism. 

NCAA v. Alston specifically asks whether the Ninth Circuit Court correctly found that the NCAA violated antitrust law by limiting how many “non-cash education-related benefits” FBS football and basketball players could get.

Seth Waxman, arguing for the NCAA, began by trumpeting a decades-old legal argument the NCAA frequently touts: The NCAA’s product is competitive against professional sports because athletes are amateurs.

But to that defense, justices asked several questions, including: 

  • What exactly is the NCAA’s definition of amateurism? 
  • Do consumers really watch NCAA sports over pro leagues because they’re not paid? 
  • Why shouldn’t courts scrutinize the NCAA for not paying their laborers — the athletes?

“Antitrust law should not be a cover for exploitation of the student-athletes,” Justice Brett Kavanaugh said.

Shawne Alston’s lawyer, Jeffrey Kessler, argued that the NCAA faced the correct amount of scrutiny under antitrust law. He said the claim that the NCAA’s product would be unpopular if athletes were paid has been “repeatedly debunked.” The Acting U.S. Solicitor General also argued on the side of the athletes.

Justices pushed both on the question: Will a favorable ruling “open the floodgates” to dismantle the NCAA’s college sports model? The decision will likely be released by the end of June.

For more details, read this week’s edition of FOS College.

Conversation Starters

Conversation Starters

  • AC Milan signed a multiyear partnership with BMW. As part of the deal, the German automobile maker will supply AC Milan players with a BMW of their choice. 
  • Manticore Gaming raised $100 million in new funding. The Roblox-like startup launched in 2016 had raised $45 million prior to the latest round.
  • Goldin Auctions will now accept cryptocurrency as payment following demand from consumers. Goldin first used blockchain-based technology earlier this year in an auction for PokĂ©mon cards by YouTube star Logan Paul.
  • March Subscriber Giveaway: We’re giving away a $500 Airbnb gift card this month for you to use whenever you’re ready to travel again. For every friend or colleague who subscribes to FOS with your custom referral link by the end of March, you get one entry into our giveaway. If you don’t win the $500 gift card, five runners-up will also win an FOS VIP care package.
    • Share in one tap (Email // Twitter // Facebook) or copy-and-paste your custom referral link: [RH_REFLINK]

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Market Movers

Market Movers

U.S. stocks experienced record gains across all three major indexes as technology shares recovered from Tuesday’s losses. Here’s a look at how sports-related stocks performed:

Up:

Rush Street Interactive, Inc. (NYSE: RSI) gained 7.79%

Peloton Interactive, Inc. (NASDAQ: PTON) gained 4.92%

Vista Outdoor Inc. (NYSE: VSTO) gained 4.40%

Down:

Lululemon Athletica Inc. (NASDAQ: LULU) dropped 3.27%

ViacomCBS Inc. (NASDAQ: VIAC) dropped 3.24%

World Wrestling Entertainment, Inc. (NYSE: WWE) dropped 3.04%

(Note: All as of market close on 3/31/21)

What to Watch

What to Watch

The Los Angeles Lakers (30-17) host the Milwaukee Bucks (29-17) tonight. The teams last met in January when Los Angeles defeated Milwaukee 113-106. It will be Andre Drummond’s first game with the Lakers.

How to Watch:

10 p.m. ET on ESPN

Betting Odds:

Bucks -8.5 || ML -370 || O/U 221.5

Pick: The Bucks enter Staples Center as a heavy favorite against a Lakers team that is 2-4 in their last six games. However, the Lakers are coming off back-to-back wins and the Bucks are 1-6 against the spread in their last seven games. Take Los Angeles to cover and lean under.

Who ya got? Reply to this newsletter with your prediction for the Bucks-Lakers winner, final score, and high scorer. Nail it, and you get a mention in Thursday’s FOS PM. Don’t forget to include your Twitter handle.

Shoutout: On Tuesday, we asked FOS readers to pick the winner, final score, and high scorer of the 76ers-Nuggets tilt. The Nuggets defeated the 76ers 104-95 and Jamal Murray was the high scorer with 30 points. FOS reader Arturo Pardavila (@Arturo3) was nearly spot on picking Denver to win 105-98 while FOS reader Bradley Okamoto (@b_okamoto) was one point shy of correctly guessing Murray’s total.

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