Lots of people dream about owning a sports franchise, but the lucky ones belong to a very exclusive club. For the rest of us, there are opportunities for fractional ownership of sports teams by investing in the corporate parents that own those teams.

While professional sports may appear to be lucrative, because of the huge player contracts that routinely make the news, the reality is that many teams consistently lose money. Last year, 22 of 30 NBA teams were in the red and lost a collective $300 million. That's just one of several reasons why the league was locked out for the first few months of this season while a new contract agreement was negotiated. (For more, read The History Behind Labor Strikes In Pro Sports.)

TUTORIAL: Investing 101

Now that both the NFL and NBA have ended their lockouts, the big business of football and basketball are almost back to normal. If you don't have a bank account the size of Dallas Mavericks owner Mark Cuban, here are some other ways you can literally get into the game.

Corporate Ownerhips and Affiliations
Several major companies have stakes in professional sports teams, or the companies have an affiliation with the owner. Buying shares in these companies won't get you box seats, free tickets or other perks:

  • Miami Heat – The Heat's owner is Mickey Arison, CEO of Carnival Corporation, the world's largest cruise ship operator.
  • Seattle Mariners – The Mariners' owner is Nintendo of America, one of the world's largest videogame manufacturers.
  • Chicago Cubs – The Cubs are owned by a family trust established by TD Ameritrade founder Joe Ricketts.
  • Toronto Blue Jays – The Jays' owner is the Rogers Blue Jays Baseball Partnership, a division of Rogers Communications.
  • New York Knicks & New York Rangers – Both teams are owned by Madison Square Garden, Inc., a spin-off of Cablevision.
  • Atlanta Braves – The Braves are owned by Liberty Capital Group, a division of Liberty Media Corporation.
  • Philadelphia Flyers – The Flyers' owner is Comcast-Spectacor, a Philadelphia-based sports and entertainment firm.

Another well-known corporate owner was the Walt Disney Company, but it sold its stakes in the Anaheim Ducks and Los Angeles Angels. (For other owners, read America's Richest Sports Team Owners.)

Exchange Traded Funds (ETF)
Another option is to invest in ETFs that have small percentage of investments in companies with sports team exposure. Here are a few to consider:

  • EWJ – iShares MSCI Japan Index Fund
  • FXD – First Trust Consumer Discretionary AlphaDEX Fund
  • IAI – iShares Dow Jones U.S. Broker Dealers Index Fund
  • IST – SPDR S&P International Telecommunications Sector ETF
  • PEJ – PowerShares ETF Trust Dynamic Leisure & Entertainment Portfolio
  • PBS – PowerShares ETF Trust Dynamic Media Portfolio

Green Bay Packers
The Packers, named after Curly Lambeau's employer, the Indian Packing Company, is the only professional sports team that actually sells stock directly to the public. When the franchise floundered in the early 1900s, local businessmen nicknamed the "Hungry Five" formed the nonprofit Green Bay Football Corporation and raised $2,500. Before this year, stock sales occurred in 1923, 1935, 1950 and 1997. There are 112,158 shareholders holding a total of 4,750,937 shares of stock, and the articles of incorporation prevent any individual from owning more than 200,000 shares.

On Dec. 6, 2011, the Packers offered an additional 250,000 shares at a price of $250 each, in order to raise $62.5 million to help pay for Lambeau Field renovations. In the first 11 minutes, 1600 shares were claimed by investors for a take of $400,000. There are no dividends and no capital appreciation, so the best you can hope for is to recover your original investment. Moreover, you are subject to the same NFL rules as other team owners regarding ethical conduct and betting on games.

Fans of the team in the nation's smallest market are buying the stock as a show of pride, team support and bragging rights. They also get a few perks, such as special stadium tours and access to rookie practices. If all the stock sells out before Feb. 29, 2012, the team reserves the right to issue more stock and extend the date. (For more on pro sports, check out Who's Cashing In On Pro Sports Revenue?)

Minor Leagues
For those who aren't super-rich, but still want to own part of a team, one way to get a foot in the door is with a minor league team. Venture capitalists and institutional investors have been putting together financing deals for ownership groups that focus on teams in small markets. National Sports Services, a sports consulting firm, reports that well-run independent and minor league teams yield an annual return of 5% to 10%. That level of positive cash flow has pushed up the value of these teams, with selling prices averaging four times the purchase price after at least five years in operation.

The independent teams aren't burdened by the rules and obligations of league affiliations. Many of them have upgraded their facilities to better compete with the big leagues. The lowest entry prices are available for struggling hockey teams as attendance falls off and their debt mounts. While there is significant risk in such investments, many teams have been turned around and become very profitable.

The Bottom Line
The pitfalls of professional sports ownership are all too obvious in the continuing saga of the Los Angeles Dodgers. The original Boys of Summer from Brooklyn, the Dodgers became a pivotal asset in the divorce battle between owners Frank and Jamie McCourt. One of the most valuable franchises in all of sports quickly found itself unable to meet payroll, as the team teetered on the verge of bankruptcy.

With Albert Pujols slated to receive over a quarter million dollars over the next 10 years from the Angels, deep pockets are clearly needed to sign the best of the best. For those who can't afford to write a check that big, you can always buy a share in the Packers and pretend your living room is the owner's box. (For some other large contracts, read Top 7 Pro Athlete Contracts.)

Related Articles
  1. Investing News

    Learn from These Big CEO Blunders

    A ceo can seem to have it all: power, influence and gravitas. But it can all erode — along with a company’s share price — in the wake of a scandal.
  2. Personal Finance

    Who Is Next in the Athleisure Trend?

    Which companies are jumping on the growing athleisure wear trend and how can investors start getting in on this?
  3. Personal Finance

    Top 10 Most Valuable Sports Teams in 2015

    Cleats, pads and profits: we take a look at the top 10 most valuable sports teams in the world.
  4. Fundamental Analysis

    The Economics of FanDuel

    Part of fantasy sports’ success lies in one-day and week-long contests serving as an alternative to season-long games. FanDuel, a leader in this space, has recently surpassed a $1 billion valuation.
  5. Personal Finance

    The Future Outlook of the Golf Industry

    The popularity of golf peaked in 2003. To regain popularity and survive, the industry is adapting to appeal to a younger generation of players.
  6. Stock Analysis

    How Nike (NKE) Continues to 'Do It'

    Other than style, do sneakers from any maker really differ that much? That's debatable. But this is certain: Nike sets the standard for selling an image.
  7. Entrepreneurship

    Nike and the NBA, a Perfect Duo?

    What does Nike's recent eight-year contract partnership with the NBA entail for its largest competitor Under Armor?
  8. Personal Finance

    How The NBA Makes Money

    The National Basketball Association has moved past Major League Baseball to represent the second most popular sport in the United States. How does the NBA make money?
  9. Economics

    The NBA’s Business Model

    Drawing interest domestically and abroad, the NBA has seen its popularity and revenue streams rapidly increase over the past few years.
  10. Personal Finance

    Is ESPN a Sport Monopoly?

    With such a dominant presence in sports as demonstrated through substantial ratings and a firm online presence, some may consider ESPN a sports monopoly.
  1. Why is Manchester United (MANU) carrying so much debt?

    The takeover of Manchester United by the Glazer family beginning in 2005 saddled the historic club with substantial amounts ... Read Full Answer >>
  2. What are Manchester United's (MANU) largest revenue sources?

    Manchester United is one of the most popular U.K. soccer teams. Its principal stadium is Old Trafford, located in the heart ... Read Full Answer >>
  3. Does Manchester United (MANU) own Old Trafford stadium?

    Old Trafford Stadium was built for and is currently still owned by Manchester United Football Club (Man Utd.). This means ... Read Full Answer >>
  4. What's the biggest sports endorsement deal ever signed?

    According to Forbes, basketball player Derrick Rose holds the largest endorsement deal as of 2014; the deal is for more than ... Read Full Answer >>
  5. What are the biggest stadium naming rights deals of all time?

    The top three stadium naming rights deals of all time were all for stadiums hosting New York City teams. The largest was ... Read Full Answer >>
  6. What is the difference between a mutual fund and money market fund?

    The Herfindahl-Hirschman index can be used to determine competitive balance in sports. Competitive balance is desired in ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  2. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  5. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  6. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
Trading Center