The Green Bay Packers, like any NFL team, is a business. But when the team decided it wanted to raise money for stadium improvements, it exercised an option unique to the Packers but more common in other businesses: It sold stock.
The Packers are a corporation owned by the public in a very unique ownership arrangement for a large and successful sports franchise.
The $62.5 million sale that began this week is just the fifth public offering since 1923. Shares cost $250 each, but each shareholder is limited to only 200 shares so that no one person can buy control of the team.
Despite having attracted over 112,000 shareholders so far, the real return on each share of stock is simply a warm and fuzzy feeling for the owner. The share values never increase, and they don’t pay dividends. Despite the corporation’s nonprofit status, stockholders do not receive a tax deduction for their purchase. Shares can never be sold, only transferred to immediately family members by gift or in the event of death. They also don’t convey any benefits in terms of tickets or other special status.
Even if the team is sold, any profit would go to the Packers’ charitable foundation. Their redemption value is only 3 cents per share, so you can’t even get your money back from the company.
Excited yet? Get your shares here!
Even though it’s essentially a donation to your team, I love this arrangement. It reduces the need for public funds and lives in perpetuity. Perhaps most beneficial, with the team owned by fans, it can’t be moved by an owner seeking a more profitable home. This is probably why Green Bay still has a team. With just 104,000 residents at the 2010 census, Green Bay is actually smaller than Allentown. Can you imagine Allentown having an NFL team?
Most sports franchises are owned by wealthy individuals who purchased the team (Baltimore Ravens owner Steve Bisciotti) or by families that started the initial franchises long ago (93-year-old Buffalo Bills patriarch Ralph Wilson).
The Packers aren’t the only team with unique ownership. The holding company that owns the Toronto Maple Leafs NHL team is majority-owned by the Ontario Teachers’ Pension Plan. You have to wonder how aggressive that makes their ownership. Mario Lemieux bought an interest in the Pittsburgh Penguins in 1999, not because he really wanted to operate the team, but because the team went bankrupt while owing him $30 million in deferred compensation.
For the Packers, their arrangement might just be perfect, as well as popular. They sold $400,000 worth of stock in the first 11 minutes of the sale, which runs through February.
Bill Sayer is a financial analyst in the insurance industry and holds a degree in economics. A native of Upstate New York, Bill enjoys watching college football, the NFL, NHL and Premier League soccer from his home in Palmyra. Have a suggestion, link or question?