More than 105 million Americans gathered in front of their televisions on February 28, 1983, to watch the series finale of "M*A*S*H," the popular television drama about the Korean War.  While it might have been unusual for that many people to devote themselves to a single episode, the event was more unusual in that it represents the only entry on the 20 most-watched U.S. television broadcasts of all time that's not a Super Bowl. 
About 90 percent of all Americans watch sporting events, either live or on television.  The people most likely to be sports fans earn more than $75,000 annually.  The three most popular sports in America - pro football, baseball and college football - are all team sports. 
And yet, these are not the best of times for the sporting goods industry. City Sports, a privately held Boston retailer with 26 stores on the East Coast, went bankrupt in October 2015.  A decade ago, the Sports Authority was the biggest sporting goods retailer in the U.S.  The company abruptly declared bankruptcy in March, then announced it would close all its stores.  Vestis Retail Group, the owner of the privately held Eastern Mountain Sports chain, filed for bankruptcy in April and closed all of its Sports Chalet stores. 
It's a paradox: The sports industry continues to grow, becoming an economic behemoth worth more than $60.5 billion.  Yet sporting goods stores aren't shaping up as a champion in any investor's portfolio.
Last Retailers Standing
When Sports Authority shuttered its stores over the summer, it was assumed that Dick's Sporting Goods (NYSE:DKS), the Pennsylvania-based owner of more 600 U.S. stores, had won the war.  Dick's, founded in Binghamton, New York, in 1948 (with the help of $300 from Dick Stack's grandmother's savings account), reported $7.3 billion in net sales during 2015. 
Yet several competitors remain in the general sporting goods sector. They include the privately held Modell's, which has more than 140 retail stores and annual revenues estimated at $765 million.  Dick's is currently suing Modell's, claiming the company's chief executive impersonated a top Dick's official to get confidential company information. 
Other players in the space include Champs Sports, a subsidiary of Foot Locker Retail (NYSE:FL) that has 547 stores; Academy, a Katy, Texas-based retailer owned by private equity firm Kohlberg Kravis Roberts & Co.; and Big 5 Sporting Goods Corp. (NASDAQ:BGFV), a chain that operates 432 stores in 11 western states and reported $1 billion in sales in 2015 sales.   
One of the chief advantages of retail sporting goods stores was their ability to sell supplies for equipment-intensive team sports, such as baseball, football or hockey. Yet while Americans love to watch team sports, participation has become a separate issue. The number of children playing in an organized football league fell 5.4 percent between 2008 and 2012; the percentage playing league basketball dropped 8.3 percent over the same period. 
Meanwhile, "fitness" sports, such as running and swimming, have climbed to a six-year high, according to the Physical Activity Council.  About 17 million runners finished a race in 2015.  Millennials also are fueling the growth of studios for cycling, CrossFit, ballet barre and boot camps; services such as ClassPass allow members to attend different fitness classes in 39 cities for a monthly fee.  
The emphasis on individual sports may be a major reason why Americans spend more on sporting-related shoes and clothing, rather than equipment. Slightly more than one-third of people surveyed by the Physical Activity Council spent money on sports equipment in 2015, but more than 40 percent spent money on clothing or shoes for sports. 
This is good long-term news for clothing manufacturers like Nike (NYSE:NKE), V.F. Corp. (NYSE:VFC), Under Armour (NYSE:UAA) and Lululemon Athletica (NASDAQ:LULU). While Nike stock, for example, has taken a beating lately from analysts for weak wholesale orders, its direct-to-consumer sales are growing and are now responsible for about a quarter of the Beaverton, Oregon-based company's sales. 
V.F. Corp. also is taking advantage of the trends. The company, whose brands include North Face, Timberland, Wrangler, Vans, Lee and Nautica, has increased its quarterly dividend rate every year for the last 43 years.  Under Armour, the No. 2 sports apparel company in the U.S., also has been moving into the casual athletic wear market, as well as high-end clothing. 
While many of the people who buy so-called "athleisure wear" may not ever enter a race or even step into a gym, investing in the sporting look may pay dividends for investors. Americans spent about $44 billion on "active wear" in 2015; Morgan Stanley predicts that number could almost double to $83 billion by 2020.  
 Peralta, Eyder. “Super Bowl XLIX Was Most Watched Show In TV History,” NPR, February 2, 2015.
 Nielsen. “Super Bowl 50 Draws 111.9 Million TV Viewers, 16.9 Million Tweets,” February 8, 2016.
 CBS News. “60 Minutes/Vanity Fair Poll: Sports,” January 2014.
 Jones, Jeffrey. “As Industry Grows, Percentage of U.S. Sports Fans Steady,” Gallup, June 17, 2015.
 Shannon-Missal, Larry. “Pro Football is Still America’s Favorite Sport,” The Harris Poll, January 26, 2016.
 Gleason, Stephanie. “Athletic Retailer City Sports Files for Bankruptcy,” Wall Street Journal, October 5, 2015.
 Isidore, Chris. “Sports Authority to close all remaining stores,” CNNMoney, May 18, 2016.
 Brickley, Peg. “Sports Authority Accelerates Store Closings Amid Bankruptcy,” Wall Street Journal, July 19, 2016.
 McCarty, Dawn, and Churh, Steven. “Eastern Mountain in Bankruptcy as Shopping Habits Change,” Bloomberg, April 18, 2016.
 Heitner, Darren. “Sports Industry To Reach $73.5 Billion By 2019,” Forbes, October 19, 2015.
 Dick’s Sporting Goods, “About Dick’s Sporting Goods,” retrieved December 24, 2016.
 Dick’s Sporting Goods, “2015 Annual Report,” June 10, 2016.
 Lieber, Chavie. “The Death of the Great American Sporting Goods Store,” Racked, May 18, 2016.
 Farnham, Alan. “Dick’s Sporting Goods Accuses Rival Modell’s of Spying,” ABC News, March 4, 2014.
 Foot Locker Inc. “Our Brands: Champs Sports,” retrieved December 26, 2016.
 Academy Sports & Outdoors. “Company Information,” retrieved December 26, 2016.
 Big 5 Sporting Goods. “2015 Annual Report,” March 2, 2016.
 Wallerson, Ryan. “Youth Participation Weakens in Basketball, Football, Baseball, Soccer,” Wall Street Journal, January 31, 2014.
 Physical Activity Council. “2016 Participation Report,” retrieved December 26, 2016.
 Running USA. “Statistics and Research,” retrieved December 26, 2016.
 Bachman, Rachel. “How Millennials Ended the Running Boom,” Wall Street Journal, May 5 ,2016.
 ClassPass. “FAQs,” retrieved December 26, 2016.
 Physical Activity Council, op cit.
 Gustafson, Krystina. “Nike’s future sales growth may not be as bad as it looks,” CNBC, September 28, 2016.
 Pan, Jing. “VFC Stock: 3 Reasons Income Investors Will Like VF Corp.,” Income Investors, September 9, 2016.
 Smith, Ray, and Germano, Sara. “Under Armour Bets on High-End Clothing Line,” Wall Street Journal, September 13, 2016.
 Teichner, Martha. “Dressing down: The rise of athleisure,” CBS News, May 22, 2016.
 Bain, Marc. “You know what’s a great investment opportunity? Activewear, says Morgan Stanley,” Quartz, October 15, 2015.