First thing on Tuesday morning, a bizarre and rare event kicked off.
For the first time since 2011, and only the sixth time in history, one of the hottest stocks (at least in one part of the USA) went on sale.
The thing is, it’ll never make you money. You can’t sell the shares and they pay no dividends. You can only transfer shares to family members.
They’ll just sit there, doing nothing. The only proof that you own them comes from a relic of the past in the investment world — a stock certificate.
Enough beating around the bush?
The Green Bay Packers are selling stock.
As mentioned, these aren’t normal shares of a company. Plus no other team uses this strange publicly owned structure.
It all dates back to the NFL’s — more specifically its predecessor, the American Professional Football Association — early days. Small teams, sometimes semi-pro, started to coalesce into the modern league system we know today. It is the last team in the league that can claim this kind of lineage.
In spite of its small market and a lack of billionaire bank-rollers the Packers franchise has the most league championships, split among leagues over the years; has a long list of legendary players; and is valued at nearly $3.5 billion.
But all teams need to raise money from time to time. Sure, the Packers get plenty from merchandise, ticket sales, broadcast rights and whatnot, but stadiums aren’t cheap.
The NFL restricts funds raised this kind of way to stadium projects that benefit fans, and that’s what Green Bay needs.
In all, 300,000 shares will be sold at $300 a pop plus fees. So far they seem to be going fast. 33,000 were sold in the first three hours.
There’s one thing that is just bonkers about this as far as I’m concerned… You can get that stock certificate by buying one share. Yet somehow about 361,000 people hold about five million shares.
That’s an average of nearly 14 shares per shareholder of a nonprofit company that offers virtually nothing tangible in return.
In spite of its strange and pointless role as a “stock” you can buy, I have to admit it’s a pretty cool way to support a team and get a unique bit of fan memorabilia.
That and to say that they are your team in a partial and literal sense.
As far as investing directly into sports, there really aren’t a lot of options out there, which is kind of a shame for us as investors since so much money swirls around major league sports.
You can invest in some soccer teams around the world. Juventus FC and Manchester United are probably the most recognizable.
There is virtually nothing in North America that isn’t part of some much larger conglomerate. The Toronto Blue Jays are owned by Rogers Communications. The New York Knicks and Rangers are rolled into Madison Square Garden Entertainment, along with the venue and Radio City Music Hall, plus some smaller, lower-league teams and MSG eSports business.
The owners of the Boston Red Sox and Liverpool FC tried to get a deal in place with a special purpose acquisition company founded by Billy Beane of “Moneyball” fame, but that fell apart.
The Braves and some real estate around their stadium were spun-off in 2015 to raise capital and trade under The Liberty Braves Group (NASDAQ: BATRK).
As you can imagine, shares rallied some after the World Series win, but really it’s a stinker of a stock. It’s only up half as much as the S&P 500 since the spin-off.
There is so much money locked up in private holding companies and in the billionaire cartels that dominate the major sports leagues.
Yet they don’t have a stranglehold on all of the profits people are making that are related to their teams. Just in the last several years a whole new kind of sports investing opened up to an estimated $516 billion market.
Sports betting has always been a big business, but its newfound legality opens it up to technology a bit fancier than the notebook in the back pocket of a guy who hangs around the deli.
The growth the industry will see is phenomenal as companies roll out apps and online platforms to capture double-digit growth for years to come.
Sure, owning stock in companies that are quickly dominating this emerging market isn’t the same as owning stock in the Packers, but one of them will pay off in a real way, and there is nothing stopping anyone from buying both.
A parting tip though — maybe only buy one share in the Packers, if you are so inclined, and use the rest of your money elsewhere.
