Being a fan of a sports team can be a way of life in some cities. Supporting a team can go back generations in your family, and is always engrained in local communities. But while you can invest your emotions and time into your favorite teams, can you invest your money? In terms of buying sports team stocks, it isn’t something you can do on any U.S. stock market. There are of course investors in sports franchises. But those investments are usually measured in tens of millions of dollars. For us regular investors, the only way we can invest our money is by buying tickets to a game and paying for overpriced hot dogs and beer.
Can You Buy Stock in a Sports Team?
Companies like Nike (NYSE: NKE) and Anheuser-Busch (NYSE: BUD) move in direct correlation to sales made in relation to professional athletes. Other sponsorships like PepsiCo (NASDAQ: PEP) and Microsoft (NASDAQ: MSFT) get plenty of screen time during broadcasted games.
I’ve also touched on the ancillary markets that are directly related to sports. Industries like sports betting and sports collectibles are red-hot right now. And stocks like DraftKings (NASDAQ: DKNG) and Penn National Gaming (NASDAQ: PENN) have shown incredible growth over the past couple of years.
Companies like Walt Disney (NYSE: DIS) aren’t traditionally seen as sports brands. But remember that Mickey owns ABC, ESPN, and Fox Sports. These are three of the largest broadcasters of NFL and NCAA games
This is something Disney pays billions of dollars every year for. Of all of the companies mentioned above, Disney may somehow have the strongest claim to being a direct investment into professional sports. There are of course exceptions to every rule.
The business of sports is valued in the hundreds of billions of dollars, if not more in the U.S. alone. It would be pretty cool to be able to buy your favorite sports team stocks as if you were building positions in a stock portfolio. What teams would you invest in if you could?
The Green Bay Packers
I mentioned there are always exceptions to the rules. Here’s one of them. The Green Bay Packers. The Packers are one of the most popular franchises in the NFL. Despite Green Bay’s small-town appeal, you can bet there are cheeseheads in every city across the country.
So what makes the ownership structure of the Green Bay Packers so unique? Well, the team is quite proud of being the only publicly owned and not-for-profit sports franchise in the US.
The Packers are owned by shareholders. Although the franchise doesn’t trade on the stock market. Instead, shares are held by over 360,000 different investors; just over 5 million shares.
The Packers have an annual shareholder meeting each year. The executives talk about things like annual revenues and future performance. Did you know no new shares have been offered by the organization since 2012? That makes these shares rather scarce.
So investors aren’t really known for selling their shares in the team. The team has been trading through this shareholder structure since 1923, where shares were sold for $5 per share.
Investors shouldn’t confuse shares of the Packers as normal common shares either. In fact, were you to sell your shares back to the team, you’d only receive a fraction of the value you paid for it. Shareholders also don’t actually own an equity interest in the team. Nor do they receive dividends.
In fact, the only real advantage is that shareholders get to vote at the annual meeting. And you can purchase exclusive shareholder merchandise. Shares don’t even get you any tickets to games. It’s a nice little novelty for fans of the team. But it’s not really representative of being able to own sports team stocks.
Meanwhile over in Europe
Yes, football is a tradition like no other on Sundays in the United States. But across the pond, there’s a different type of football that is a continental religion.
Soccer, as we call it, is more than a way of life in Europe. While it’s never garnered the same amount of fanfare over here, it’s the number one choice for European sports fans.
Even though I know how popular soccer is in Europe, I was shocked when I learned that there are several clubs that trade on the various European stock markets.
So if you’re into foreign markets, you can trade sports team stocks.
That’s right, fans can literally buy shares of their favorite soccer clubs and hold them in their portfolios. Some examples of publicly traded teams include Manchester United (NYSE: MANU), Juventus (BIT: JUV), Borussia Dortmund (DB: BVB), Ajax (AEX: AJAX), and AS Roma (BIT: ASR).
There are numerous other clubs that trade publicly, but these are some of the more well-known ones. It’s interesting to note that Manchester United actually trades on the New York Stock Exchange.
And surprisingly has a market cap of $2.76 billion USD.
Is there any benefit to investing in a sports team? Not really. If we take Manchester United’s stock as an example, shares have returned 21% since they debuted in 2012.
For those keeping track, that isn’t a good return on a stock. But if you’re a diehard Red Devils fan, owning a piece of your favorite team is a pretty cool accomplishment.
Are There Any Sports Stocks?
Since a majority of revenues for sports teams come from various TV deals, investing in Disney seems like a sound idea. But in the U.S. you can also invest in companies like Madison Square Garden (NYSE: MSG). Yes, Madison Square Gardens is widely known as the arena in Downtown Manhattan. It’s also the corporation that owns the New York Rangers and the New York Knicks.
The company itself is worth over $2.4 billion today and is an interesting way to invest in the New York sports scene. So in essence, owning $MSSG allows you to own sports team stocks if you like NY sports.
In Canada, BCE (NYSE: BCE) formerly known as Bell, is a national sports broadcasting and communications company. Why do we care about BCE? Well, other than being a $45 billion company that pays a solid dividend yield of 5.49%. The company owns the two most popular National Hockey League franchises in the Montreal Canadiens and the Toronto Maple Leafs. BCE also owns TSN, the leading sports channel in Canada. An investment in BCE is really an investment in the NHL’s success and popularity.
Other Ways to Invest in Sports Teams
Keep an eye out for new companies that are entering the sports broadcasting space. One mega-cap company that is moving into NFL broadcasting is Amazon (NASDAQ: AMZN). The company has some exclusive streaming rights to Thursday Night Football as of next season. Amazon is currently battling with another mega-cap tech company Alphabet (NASDAQ: GOOGL).
They’re intent on using its YouTube TV platform to stream live sports as well. Both of these companies are pretty good investments as it is, but when you throw sports broadcasting into the mix, they may emerge as the sports streaming leaders of the future.
One last out-of-the-box way to invest in sports may come from the future of Blockchain technology. The NBA has found amazing popularity with its NBA Top Shots NFT market, and the NFL is joining up with the creator of Top Shots to form their own highlight NFT platform. Just as musicians and artists are releasing albums as NFTs, it shouldn’t be long until we see sports teams doing the same. Imagine how cool the paper copy of shares of the Green Bay Packers would be as an NFT instead!
Conclusion on Sports Team Stocks
So, while we can’t buy sports team stocks, we did learn that some are publicly traded. Soccer teams in Europe trade quite frequently on the public markets. Manchester United even trades on the New York Stock Exchange. But unfortunately there just isn’t a way to add the New England Patriots or New York Yankees to your portfolio just yet.
Even if you did buy shares of a European soccer team, the stocks actually don’t perform very well. For the most part, sports team revenues are fairly predictable as most U.S. professional leagues have revenue-sharing systems. In fact, most sports teams operate at a loss and rely on the league to sign lucrative television and merchandise deals. Buying sports team stocks would be a fun way to invest, but it probably would not be the most profitable place to invest your money.