The baseball season is once again underway and that got me thinking about the business of sports. Once upon a time, there were a number of public companies that owned sports teams, especially baseball clubs. Presently, given that Sam Zell has taken the Tribune Company private, there remains only one baseball team with public company ownership and that's the Toronto Blue Jays, part of the Rogers Communications media empire. This doesn't leave the average Joe with much choice. There has to be a better way, and there is.

Buying sports franchises has always been attractive to the wealthy. Who wouldn't want to be a sports baron? However, if you're looking to make money you best look elsewhere. For those lacking a billion dollars or more to be a part of the fraternity that is sports ownership, here are three sports-related companies that you can invest in that will make you money long-term without the steep price of admission.

Adams Golf (Nasdaq:ADGF)
It's not a big company, but it's an important one. Founder Barney Adams created the Tight Lies fairway wood in 1999, revolutionizing the golf business. Since then the company has created many innovative products, most notably the Idea hybrid club, which combines the best attributes of both woods and irons, making it much easier to hit the ball, according to Adams Golf anyway. Legions of duffers may disagree.

As a company, Adams has experienced its own share of difficulties. However, today it's in the best shape it's ever been both financially and operationally in its 21-year history. Sales in 2007 were $94.6 million with an operating profit of $4.1 million, in comparison to sales of $76 million and an operating profit of $3.4 million in the previous year. Return on equity in 2007 was 17.6%, the second highest rate of return to shareholders in company history. On a valuation basis, Adam's Golf is a bargain trading at 0.55 times sales and 0.97 times book value. Swing away. (To learn how to make all these numbers and ratios work for you, check out our Fundamental Analysis Tutorial.)

International Speedway (Nasdaq:ISCA)
If you haven't heard of the Daytona Speedway, you're probably not a sports fan. Daytona is the crown jewel in a star-studded line-up of 13 racetracks coast-to-coast owned by the Florida-based company International Speedway. Bill France, Sr. built the business from the ground up, including co-founding NASCAR in 1948 and building the 2.5-mile super speedway at Daytona in 1959. Since then, the company has gone on to build or acquire venues in California, Michigan and Virginia, among others.

As an investment, it's been a bumpy ride. International Speedway stock sits at low prices not seen since August 2003 and nowhere near $66, its all-time high reached in November 1999. In the last 10 years, EBIT margins have shrunk to 21.5% from 34.7%. It's no wonder the stock's annual return in the last 10 years is 6%, barely better than the S&P 500's 4%. You'd think with NASCAR's popularity, the stock would have done better.

Lifetime Fitness (NYSE:LTM)
Arguably, America's best and largest fitness operation, the Minneapolis-based Lifetime Fitness has 71 facilities in 16 states. Since going public in June 2004, its stock is up almost $13 from its IPO pricing of $18.50. Solid performance until you consider that six months ago, the stock was trading around $65. It seems that the market is worried that the party is over for Lifetime. This is likely an overreaction. Operating margins in each of the last five years were 20% or higher, with revenue increasing every year from $257 million in 2003 (pre-IPO) to $656 million in 2007. That's hardly a weakening business model. (For reading on measuring company efficiency, check out The Bottom Line On Margins.)

Critics point to a slowing membership growth rate, as seen in the fourth quarter of 2007 (12.5% increase year-over-year) this is down from a 15.1% year-over-year growth in the third quarter of 2007. The company says it was due to a combination of increased fees at some clubs to reduce overcrowding plus an economic slowdown. At 50% off, it could be worth taking the risk that the naysayers are wrong.

Bottom Line
Next time you're on the golf course, watching a stock car race or working out at the gym, remember there's the potential to make money from your leisure activities. You don't have to be a business tycoon like George Steinbrenner to profit from the wide world of sports. If you want to become a successful partial owner, just look for home run stocks.

Related Articles
  1. Stock Analysis

    5 Cheap Dividend Stocks for a Bear Market

    Here are five stocks that pay safe dividends and should be at least somewhat resilient to a bear market.
  2. Investing

    How to Win More by Losing Less in Today’s Markets

    The further you fall, the harder it is to climb back up. It’s a universal truth that is painfully apparent in the investing world.
  3. Fundamental Analysis

    Use Options Data To Predict Stock Market Direction

    Options market trading data can provide important insights about the direction of stocks and the overall market. Here’s how to track it.
  4. Stock Analysis

    2 Oil Stocks to Buy Right Now (PSX,TSO)

    Can these two oil stocks buck the trend?
  5. Investing News

    What Alcoa’s (AA) Breakup Means for Investors

    Alcoa plans to split into two companies. Is this a bullish catalyst for investors?
  6. Stock Analysis

    Top 3 Stocks for the Coming Holiday Season

    If you want to buck the bear market trend by going long on consumer stocks, these three might be your best bets.
  7. Investing News

    Could a Rate Hike Send Stocks Higher?

    A rate hike would certainly alter the investment scene, but would it be for the better or worse?
  8. Investing News

    Corporate Bonds or Stocks: Which is Better Now?

    With market volatility high, you may think it is time to run for corporate bonds instead of stocks. Before you do take a deeper look into which is better.
  9. Mutual Funds & ETFs

    Using Short ETFs to Battle a Down Market

    Instead of selling your stocks to get gains, consider a short selling strategy, specifically one that uses short ETFs that help manage the risk.
  10. Investing Basics

    How to Diversify with International Stocks

    Diversifying with international stocks can benefit most portfolios, but beware of country risk.
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!