Investing in professional sports teams

Lots of people can only dream about owning a sports team or franchise. For the people who don’t bath in money there are options for fractional ownership of sports teams by investing in the corporate parents of those teams or buying shares for those few professional teams, that actually are owned by their fanbase.

One of the biggest sports team in the world FC Barcelona is owned by the fans of the team. It recorded the biggest revenue ever by any team in the 2015–2016 season. The revenue was €679 million. So if FC Barcelona is so successful why aren’t there more big teams excluding Green Bay Packers from NFL and Germany’s Bundesliga. Mostly the reason is that the more successful teams in recent years have been owned by a billionare who doesn’t care if the team loses some millions every year if they stay competitive. That doesn’t really encourage people to invest in them.

However, things are a lot better in the old continent than they are in North America. There aren’t quality competition for the four major leagues in North America so the players and owners are always arguing ower the compensation rules in the league. It has resulted in lockout seasons and delayed starts of the season. This has some serious  consequences   because last time there was a delayed start to the season because  the negotiations   in 2011. In the 2010–2011 season 22 of 30 teams were losing money   $300 million collectively. In those 4 major leagues in North America Green Bay Packers from NFL are the only fanbase owned team.

Things are pretty different in Germany’s largest sportsleague Bundesliga which is a football league.  There you must have at least seven owners and no-one can own more than 50 %+1 % share. It is also the league with the highest percent of filling the stadium of its maximum capacity in the footballworld.

Investing in the companies that owns the teams can also be pretty tricky because you would always want to own shares from the company that owns your favorite team, but that can be ill adviced depending on the company. In the same note no-one would like to invest in the rival of their team, but sometimes it is simply the best solution.  So  I have three advices to use in investing in those.

Use your head: Do research on the companies

Timing: Just before the playoffs or during offseason is the best time to start this

Diversify: Like any investment you should’t go big on just one share, but instead select a few that  you are confident on.

Sourcematerials

http://www.bankrate.com/finance/investing/sports-investments.aspx

http://www.investopedia.com/financial-edge/1211/investing-in-sports-teams-and-groups.aspx

http://www.wallstreetsurvivor.com/find-stocks/interest/sport-stocks

http://www.forbes.com/sites/kurtbadenhausen/2016/07/26/fc-barcelona-posts-record-revenue-of-750-million/#775f4fd57103

https://en.wikipedia.org/wiki/List_of_fan-owned_sports_teams#England

Kanerva ym.: Jalkapallon pikkujättiläinen, WSOY, 2003.

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One Response to Investing in professional sports teams

  1. blogwizard1 says:

    Very interesting topic and I learned new things from your post. Advices in the end were very good!

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