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Could injuries affect Bauer post-IPO? Add to ...

With all the hoopla swirling around hockey's dangers, further propagated by Zdeno Chara's hit on Max Pacioretty of the Montreal Canadiens on Tuesday, equipment manufacturers may wonder if the frenzy of media stories will ultimately hurt their performance.

Of the three biggest brands, Bauer, Reebok and Easton, Bauer may be the most concerned, considering that its newly listed stock just started trading on Thursday morning following an initial public offering. (The other two are private companies.)

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Bauer Performance Sports Ltd. may have the most to lose if people are turned away from the sport because it is the market share leader in every major piece of equipment except for sticks, where it is number two.

In case any investors haven't taken the effects of this media storm into consideration, the company's prospectus clearly outlines all of Bauer's risks. "...Negative publicity resulting from severe injuries or death occurring in the sports in which our products are used could negatively affect our reputation," the document states, which is pretty typical cautionary language for a legal document.

As for any potential lawsuits, Bauer has insurance coverage worth $50-million in case anyone believes the equipment fails to protect them as expected. That contract expires on June 1, and depending on how the insurers feel about all the media attention, they might demand higher premiums.

Of course, some people may think this is ludicrous because there's no way that hockey equipment can protect someone from having their head smashed into the boards at the end of the bench, but when it comes to Americans and law suits, don't rule anything out.

 

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