Yahoo Finance 6 Ways to Invest in Football
If you want to own an NFL team, it's about more than writing a billion-dollar check.
"The world of investing in professional sports franchises and in large sports agencies is a very exclusive club," says Mark Doman, CEO of The Doman Group, an investment advisory group in New York. "And it's entirely dependent on access."
That's a sentiment echoed by other industry experts. It's about having more than a billion dollars in liquid net worth, understanding collective bargaining, national and local contracts and so much more.
Talk to anyone on the inside, NFL owners, the front office, players or the exclusive club of financial experts who work with them and you'll hear the same thing: it's about gaining access to the inner circle, coupled with a whole lot of cash.
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"You have to know people who are getting involved in those deals," says Andrew Kline founder and managing director of Park Lane, a Los Angeles-based sports focused investment bank.
The politics of acquiring a franchise isn't as easy as it might look from the outside. Even though money can buy a lot, there's only 32 teams.
"There are plenty of billionaires who have tried to buy NFL teams and the NFL has said, 'No, thank you,'" Kline says. It's one of the most exclusive clubs by far."
Before billionaire business tycoon Shahid Khan became the owner of the Jacksonville Jaguars, he originally bid on majority control of the St. Louis Rams -- long before they moved to Los Angeles. After losing out on the deal to Stan Kroenke, who had the right of first refusal to purchase the Rams, Khan became the Jaguars owner in January 2012, after the NFL owners unanimously voted him in a month earlier.
"The problem with football is there is nothing available," says Lynn Lashbrook, president and founder of Sports Management Worldwide, an online sports business education company in Portland, Oregon, who predicts a team will eventually be relocated to London."
Kline, a former offensive lineman who was drafted by the St. Louis Rams in 2000 who jokes he's now part banker, part lobbyist, points to a billionaire he says has been calling monthly for the past decade.
"There's only one team he wants in the world and another billionaire owns it and he's not selling it," Kline says.
In another situation, Kline says he was able to broker a relationship with an NFL buyer who was initially turned away, was then partnered with an NFL player who introduced him to the owners. After being initially told the NFC team wasn't for sale, he was able to invest after about 10 meetings over a two-year period, Kline says.
"If you want to own one of these teams, you've got to have big bucks and invest the time, energy and money to do the process of buying, and that's not cheap," Kline says.
For the non-accredited investor, there are other avenues to invest on a smaller level within sports.
Consumer goods companies. Companies such as Under Armour (UA) or Yeti, which makes high-end coolers that college football fans can emblaze with their school logos, Kline says. Find the consumer product that attaches itself to a player and then uses the league to promote itself, he says.
Private equity investments. Pay attention to 32 Equity, the entity that oversees the NFL's private equity efforts. There's also On Location Experiences, a VIP fan-focused travel and hospitality company owned by RedBird Capital Partners, Bruin Sports Capital, Jon Bon Jovi and the NFL via 32 Equity.
Watch the NFL owners. "There are handfuls teams with really active and prolific investors, Robert Kraft [New England Patriots], Jerry Jones [Dallas Cowboys] and Jed York [San Francisco 49ers]," Kline says. "They are sophisticated investors. Look at the deals they are investing in."
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Green Bay Packers stock. All NFL teams are privately held, for-profit companies except for the nonprofit Green Bay Packers. Stock in the fan-owned team isn't available to purchase outside of an offering period -- the last release was held in 2011-2012. Although the stock includes voting rights, it can't be resold, it won't gain in value because the stock cannot appreciate in value and no dividends are ever paid.
Consider the subsidiaries. Look at media, technology and entertainment companies that are using media content in conjunction with the NFL, such as YouTube, which was acquired by Alphabet (GOOG, GOOGL).
Investors can also consider technology that helps athletes perform at a higher level and sports supplements, such as DoorStat, a company that collects and analyzes customer demographic data within inside a stadium, or Whistle Sports, a sports media company, Kline says.
"It's endless," he says. "When you start thinking about it, there's so much stuff out there."
Another avenue is looking at real estate near or surrounding a stadium.
"Just look at what Jerry Jones is doing in Dallas," says Kline about the Cowboys move to The Ford Center at The Star in Frisco, Texas. "Study the real estate plays he is making."
Fantasy football. There's been a much larger debate about the legality of daily fantasy football with sites like FanDuel and DraftKings, which have been blocked in some states for violating gambling laws.
It surrounds a larger discussion of whether this is a game of chance or a game of skill, says Rodney Paul, a professor of sports management at Syracuse University. "The questions is pretty straight forward," he says.
"If you're looking at it from an investment standpoint it's certainly not illegal, Kline says.
He says some investors will gravitate toward the "gray area" because it will keep other investors away as speculation continues and could potentially turn into an incredibly valuable asset.
[Read: Investing as a Game: Is it Big Business?]
"It's an area if you are willing to take a bit of risk it could yield some serious reward," Kline says. "It's not a recommendation, but it is a strategy."
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