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Investing in a professional sports team can be a fun way to participate in the success of your favorite team. Not only can you enjoy the thrill of victory, but your investment may gain in value as well – a real win-win! And with a handful of popular sports franchises that are publicly traded, anyone with a few dollars and a brokerage account can be a part owner of a pro team.
Here’s how to buy into a pro sports teams and a few of the best available teams.
How to buy a stake in a sports team
If you’re looking to invest in a pro sports team, you have a couple ways to do it, that is, if you don’t have a few billion dollars in your couch cushions and can afford to swallow one whole. The good news is that nearly anyone can buy into publicly traded sports franchises using a brokerage account, and those with a bit more money may be able to participate in private equity to buy a stake in a team.
Buy a sports team through a brokerage account
- Select a broker. The best brokers for online stock trading are a great place to begin in your search for a brokerage. Today it’s the norm for brokers to offer commission-free stock and ETF trades, and many brokers such as Fidelity Investments and Charles Schwab also have strong customer support and education — nice advantages for when you’re just starting to invest.
- Open your account. After you’ve decided on a broker, you’ll need to provide some basic personal and financial information about yourself and any one else on the account. You can usually get up and running in less than 15 minutes.
- Fund your account. Before you can trade, you’ll need to deposit money in your account. The fastest way is to connect your brokerage with your bank, and then transfer funds electronically. Once you’ve sent money to your brokerage account, it could take around two or three business days to arrive and be available for trading.
After you’ve set up your account, check out which teams have shares that are available to buy (more below).
Invest in a sports team with a private-equity firm
Rather than buying publicly traded stocks, you can invest through a private-equity firm that specializes in sports team investments. To invest with a private-equity company, you’ll generally need to be an accredited investor, and for an individual, that means having a net worth of more than $1 million, not including your primary home, and an annual income of at least $200,000.
If you can clear that steep hurdle, then you may be able to work with a private-equity firm investing in pro sports teams, including those in the four major U.S. sports leagues (MLB, NBA, NFL, NHL) as well as minor league sports, where the ownership rules are less strict.
Unlike investing in public markets, you may not have a choice in what team you invest in with private equity since each firm may only be working on deals with certain teams. Of course, the flip side is that you could invest in a team that the public will never be able to participate in.
What sports teams can you invest in?
If you’re investing in public markets, you have a handful of teams that you can buy in the U.S. markets. These stocks (and their ticker symbols) include:
- Atlanta Braves Holdings (BATRK)(BATRA)
- This company owns the Atlanta Braves of Major League Baseball and some associated real estate holdings.
- Madison Square Garden Sports Corporation (MSGS)
- This company owns the New York Knicks of the National Basketball Association and the New York Rangers of the National Hockey League.
- Manchester United (MANU)
- This company owns the Manchester United Football Club of the English Premier League as well as broadcasting rights and other related businesses.
If you’re willing and able to buy foreign stocks, you have a number of other options, including the following European teams:
- Juventus (JUVE)
- This storied Italian soccer (football) team plays in the country’s Serie A league.
- Borussia Dortmund (BVB)
- This successful German soccer team plays in the Bundesliga.
Both foreign stocks trade on the pink sheets, a U.S. marketplace, though only in low volumes. But if your broker supports international trading, then you could buy them directly on their home exchange. Investors have other publicly traded European soccer franchises available, too.
Finally, it’s important to note that sometimes novelty investments in sports teams or other firms can arise, where you’re asked to put up cash but have no economic stake in the business. The “investment” here is in your own enjoyment and being able to say you support the team.
While the public can invest in the Green Bay Packers when the company sells shares from time to time, it’s not something you can make money on. Shareholders are not entitled to any of the profits of the company, so buying a share is only a means of showing your support as a fan and financially, though buyers may receive a few non-financial perks for being a shareholder.
Understand the company’s financials
Regardless of what company you’re investing in, you’ll want to carefully vet the business and see what kind of financial shape it’s in. With sports continuing to be a huge part of consumers’ lives and most pro leagues limiting the number of teams, the competitive positioning is good.
But you’ll still want to review the financials of any company, including such factors as:
- Understanding the full scope of the company: Many sports teams have not only the team itself but various associated businesses such as commercial real estate, broadcast rights, merchandising rights and many similar ones. Many of the related businesses can generate significant cash flow, helping produce income that sustains the company.
- Reading the financial statements: It’s important to understand the financial health of the company, because any investment has to be an investment first. Pay attention to the company’s debt, which can be substantial, if it has to pay spiraling player salaries. And be sure to check how much income the company generates, among many other factors.
- Understanding the history of publicly traded sports teams: Publicly traded sports teams don’t usually stay public for long, as a wealthy individual or group of investors like to acquire these trophy assets that can put them at the center of a city’s social life. Understand how sports teams are priced and what they could fetch in an eventual sale.
Above all, remember that a good team doesn’t necessarily make for a good investment. Understand what you’re buying and the investment thesis, that is, how it could and should make money for you.
Investing in a pro sports team can be a fun way to make cheering on your favorite team a little more interesting and maybe even a way to get your children interested in investing. However, understand that a good investment makes money, so don’t get caught up in buying a hometown favorite purely for emotional reasons if it doesn’t have the ability to thrive as a business.