In It to Win It:
What if you could own part of your favorite sports franchise?
What are the publicly traded sports companies out there? Technically there is only one that is publicly traded and is the sole business of that company, Manchester United (NYSE: MANU). However a few others include the New York Knicks (NBA), New York Rangers (NHL), and New York Liberty (WNBA) who are all owned by Madison Square Garden (NYSE: MSG). Then we have the Atlanta Braves that are wholly owned by Liberty Media (NASDAQ: LMCA) who also own
several minor league affiliates. Liberty recently announced that they would be publicly offering the Braves under a tracking stock (no voting rights) with the ticker symbols of BATRA, BATRB, and BATRK.
What if you could own part of your favorite sports team? To answer that question we will have to answer a few others first. What are the benefits to a company and to it's shareholders when it becomes publicly traded?
What does the company get when they become publicly traded? #1 They get a boat load of cash. That is really one if not the only benefit received from being a publicly traded company. Companies run the risk of losing majority control of the company, their business practices are much more regulated, and may come into conflicting decision making based off of what's better for the company or what's better for the shareholders.
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| Could you own part of the Braves? |
What if you could own part of your favorite sports team? To answer that question we will have to answer a few others first. What are the benefits to a company and to it's shareholders when it becomes publicly traded?
What does the company get when they become publicly traded? #1 They get a boat load of cash. That is really one if not the only benefit received from being a publicly traded company. Companies run the risk of losing majority control of the company, their business practices are much more regulated, and may come into conflicting decision making based off of what's better for the company or what's better for the shareholders.
What rights do you get when you own a share of a publicly traded company? #1 You get to vote, generally individual shareholders own so little of a company that their votes wouldn't matter. But, in actuality if given the proper motivation and percentage of voters, shareholders could change the businesses decisions. #2 You get to profit or lose money depending on how successful the business is.
Does it make sense for a professional sports team to become publicly traded and does it make sense for you to be a part owner? Lets take a look at the beloved Browns to try and answer this.
The Browns are owned by James Arthur Haslam III (Jimmy Haslam) and have been since he bought them in 2012 for nearly $1 Billion (actually had to sell his stake in the Steelers first). Forbes values the Browns at around $1.5 Billion, presumably that is what the Browns would be able to raise if they had an Initial Public Offering (what makes your company publicly traded). The Browns could use this money to renovate their existing stadium, build a new stadium, hire better management, sign better players, create a marketing campaign, and the list goes on.
Should the Browns become a publicly traded company then? No, they (Jimmy Haslam) could possibly lose their majority interest in the company and have to succumb to the interests of their shareholders (fans). This could possibly put the future of the franchise in the hands of fans that do not know how to run a professional sports team business (sorry it is true). For the Browns I would think the risks greatly outweigh the benefits.
Should you, a perennially disappointed Browns fan, invest in the Browns? Yes, you should if the Browns were ever silly enough to become publicly traded. Despite their annual losing records Jimmy Haslam and the Browns actually run a decent business. The valuation of the Browns has increased almost 50% to $1.5 Billion, revenues have increased almost 52% since 2006 to $313 million, and they had an operating income of almost $35 million in 2015 according to Forbes. All these positives would surely increase the value of it's shares and thus your net worth if you owned shares. You would also then be able to voice your opinions a bit more loudly as a fan base if you actually owned part of the company.
I know you know the Browns suck, and I am sure their management knows too, but how cool would it be to actually own a part of your favorite sports team?! You could even possibly influence their draft picks instead of yelling at your friends about if they should draft another wash out Quarterback. The best thing is even if they do poorly (win loss wise) you could still actually profit off of your team and possibly not end another season in disappointment.
Does it make sense for a professional sports team to become publicly traded and does it make sense for you to be a part owner? Lets take a look at the beloved Browns to try and answer this.
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Should the Browns become a publicly traded company then? No, they (Jimmy Haslam) could possibly lose their majority interest in the company and have to succumb to the interests of their shareholders (fans). This could possibly put the future of the franchise in the hands of fans that do not know how to run a professional sports team business (sorry it is true). For the Browns I would think the risks greatly outweigh the benefits.
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| Washout Quarterback |
I know you know the Browns suck, and I am sure their management knows too, but how cool would it be to actually own a part of your favorite sports team?! You could even possibly influence their draft picks instead of yelling at your friends about if they should draft another wash out Quarterback. The best thing is even if they do poorly (win loss wise) you could still actually profit off of your team and possibly not end another season in disappointment.
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