Professional sports is an serious business in terms of economics. Sports teams are expensive, but nearly all of them are either in private hands or shared among a very limited number of devotees/investors. However, that doesn't necessarily mean that the arena is closed to small players. A few sports-related stocks actively trade on various exchanges.
Not a Slam Dunk
The most notable publicly traded sports entity that came to market in the recent past is the Boston Celtics. In 1986, the owners of the then-successful team decided to take a minority stake of their asset public as a limited partnership. After listing at an initial public offering price of $18.50 apiece, though, the partnership's units eventually slid to $11.35. The majority stake was sold in 2002, and the new owners bought out the remainder of the partnership soon thereafter.
Clearly not discouraged by that underperformance, several other teams also flirted with public ownership. Hockey's Florida Panthers, at the time controlled by Waste Management (WM) and AutoNation (AN) founder H. Wayne Huizenga, listed on the Nasdaq in 1996. As with the Celtics, the Panthers' publicly traded era only lasted until the bulk of the team was sold in 2001.
Baseball's Cleveland Indians had a stock market tenure shorter than an overmatched rookie's call-up to the majors. After its IPO on the Nasdaq during the 1998 season, the team's stock traded for slightly over a year before the Indians were bought out by a new owner, and the stock was sent to delisting heaven. In their brief life, the shares grossly underperformed the Nasdaq Composite Index.
Second Shot on Goal
Arguably the most popular soccer club on the planet, Manchester United (MANU) has been a publicly traded stock twice.
The first time was 1991, when it had an IPO on the London Stock Exchange. Years later, American businessman Malcolm Glazer began snapping up those shares in a successful bid to gain control of the team. After accumulating a majority stake in 2005, he delisted the stock.
Glazer relaunched the team on the market in 2012, this time on the New York Stock Exchange. This issue saw class A shares hit the market at $14 apiece, significantly downfield from the anticipated $16 to $20 range.
Since then, the stock has peaked at just over $19. That performance doesn't come close to the actual team's many triumphs on the pitch, so Manchester United stock is probably better as a souvenir than as an investment vehicle with serious upside potential.
Perhaps a better bet on the sports market is Madison Square Garden (MSG). Named for the iconic Manhattan venue (which it owns), the company basically functions as a basket of professional teams (including the NBA's New York Knicks and the NHL's New York Rangers) and associated properties.
%VIRTUAL-article-sponsoredlinks%The company's grew both its top and bottom lines on an annual basis over the past few years, but lately its stock price has taken a hit due to downgrades in some analyst projections for its earnings. Still, for sports nuts (especially those who go crazy for New York teams), it's a convenient way to own a piece of the franchises.
Occasionally, Madison Square Garden hosts a big event from World Wrestling Entertainment (WWE). It's debatable whether the company's scripted "sports entertainment" truly belongs in the realm of pure athletics. Nevertheless, WWE is the only publicly traded pro wrestling purveyor on the market, and is far and away the leading company in its field.
Like MSG, though, its shares have gone through a rough patch lately, influenced in no small part by the company's most recent, loss-making quarter.
As far as ownership is concerned, professional sports is a wealthy person's game. It has to be, given the stratospheric salaries of the talent and the high costs of simply operating a team (or roster of wrestlers, in WWE's case). But at least dedicated fans can own small pieces of certain athletic enterprises -- as long as they're not expecting huge returns from those assets.
(And, in case you're wondering why we didn't mention the ever-popular stock offerings of the Green Bay Packers, calling those shares an investment would be stretching the meaning of the word too far. There's a reason the Wall Street Journal posed the question, "Are the Green Bay Packers the Worst Stock in America?")
Motley Fool contributor Eric Volkman owns shares of World Wrestling Entertainment. The Motley Fool recommends Waste Management, and owns shares of Madison Square Garden and Waste Management.
14 Money Mistakes to Avoid in 2014
For Sports Fans, Investing in Teams Is a Hit or Miss Affair
Interest rates are low, but that's no excuse to accept 0.01 percent interest rates on your savings. Just a little shopping can find you many FDIC-insured savings accounts paying as much as 1 percent in interest, usually with no fees and easy availability to your money through electronic funds transfers. Compared to the near-zero rates that uninsured money-market mutual funds and other alternatives pay, high-interest savings accounts are a much safer way to save.
Banks still try to get customers to pay more for less, with one recent threat to charge fees for basic deposit accounts if the Federal Reserve cuts interest rates further. But many online banks not only offer fee-free options on their checking and savings accounts but also pay interest, and many have extensive fee-free ATM networks or reimbursement arrangements. If your bank follows through on threats to raise fees, taking your business elsewhere is your best move.
Bankrate reports that the average credit card charges around 16 percent in interest. That's a guaranteed money-maker for the banks that issue cards, but a big loser for those who carry balances on their cards. With many cards offering promotional interest rates as low as 0 percent, using them to get rid of high-interest cards is a no-brainer move and can help you pay your debt down faster.
Mistakes on your credit history can keep you from getting a loan that you want to buy your next home or car, but they can also have consequences you'd never imagine. Increasingly, insurance companies, apartment rental agents, and even prospective employers order copies of your credit report to see if you're financially responsible. Be sure to take advantage of your free credit check at the government's annualcreditreport.com website to make sure the three big credit-rating agencies have everything right before mistakes come back to bite you.
Payday loans have gotten more tightly regulated recently, but banks and other financial institutions still offer ways to let you get quicker access at your cash -- for a hefty fee. Resorting to short-term money fixes can land you in even more problematic situations down the road, because those solutions often create debt spirals from which it's hard to emerge unscathed. Set up an emergency fund instead and be prepared in advance for the money woes that life throws your way.
Interest rates have risen during the last half of 2013, with a typical 30-year mortgage carrying a 4.5 percent interest rate. But many homeowners still carry higher-interest mortgages from before the financial crisis. Now that home prices have risen, you might be able to refinance for the first time, and many homeowners have used lower rates to cut hundreds from their mortgage payment or shift to a shorter-term 15-year mortgage to pay off their debt faster.
Too many people never update their insurance coverage to deal with changes in their coverage needs, whether it comes from changes in family status for life insurance, health conditions for health-care or long-term care insurance, or even what types of property you own for homeowners' insurance. Don't wait for disaster to strike; check with your insurer or agent to see if your current coverage meets your needs.
In the past, investors had to pay hundreds or even thousands of dollars just to make a simple stock purchase. Now, though, the rise of discount brokers, low-fee index funds and exchange-traded funds, and freely available investment news and advice have made it silly to spend large amounts to get access to the financial markets. If you're still paying your broker too much to invest, look into alternatives that can help you avoid cutting serious money out of your retirement nest egg.
Everyone likes a tax break, and one of the best ones for you to use involves making contributions to a tax-favored retirement account. By putting money in an IRA or 401(k), you can reduce your current taxable income and save on your taxes while also preparing for the future. With 401(k)s, your employer might even chip in a bit on your behalf. Even when times are tough, finding even small amounts to save can put time on your side and make a big difference down the road.
Many investors found out the hard way this year that bonds aren't as safe as they thought, with some major bond funds posting double-digit percentage losses in 2013. Despite those losses, bonds still carry substantial risk in 2014, with many calling for imminent interest-rate hikes that would erode their value further. Even now, bond rates are so low that they don't compensate you much for their risk.
In contrast to bonds, stocks have soared in 2013. That has some investors finally piling into the market for the first time since 2008 and 2009, while others remain shell-shocked from the massive losses they incurred back then during the financial crisis. Even with the Dow Jones Industrials (^DJI) and other major market benchmarks near all-time record highs, it makes sense to have some stock exposure in your portfolio. Just don't go overboard in the false belief that gains of 20 percent and 30 percent will happen every year.
If you pay full price for just about anything these days, you're paying too much. The rise of deep-discount stores has led to falling prices at stores and shopping malls. Moreover, online tools like coupon sites, daily-deal offers, discounted gift cards, and cash-back credit-card deals can cut your costs as well. With all these tools, you won't find many situations in which you have no chance of getting a bargain on the items you want.
In the past, many young adults focused on getting into as strong a college as they could, figuring that their degree would pay them enough to make up for the costs they incurred. With college graduates facing a more challenging job environment than ever, smart students are thinking about college costs before they make a decision on a school. By maximizing financial aid and looking at lower-tuition schools with nearly as strong educational quality, you can avoid creating a big debt hole that you'll struggle with for years into the future.
If you don't have a will, a power of attorney for financial and health-care matters, and an advance directive to tell medical professionals whether you want certain life-preserving measures taken if something happens to you, then you're putting your family at risk. Many people don't have even these basic estate-planning documents, but getting them in place is easier and less expensive than most believe. Get your affairs taken care of in 2014 and save your loved ones some big future hassles.
Resolving to be more financially astute and to avoid common mistakes will help you get your finances in order more quickly. These tips should give you more money to help you meet all your financial goals.