by Kyle Woodley | February 4, 2013 11:29 am
Another Super Bowl is in the books, and for many, that means sports are solidly in a dead zone until late March, when the NCAA Tournament kicks into gear and NBA/NHL games actually matter.
Of course, if watching incessant way-before-the-draft coverage or spring training games doesn’t sound like a palatable way to get your sports fix, you always could turn your gaze toward that mecca of athletic interest: Wall Street.
OK, OK. Overpaid CEOs probably run laughable 40-yard dashes, and an online brokerage account is hardly a pair of courtside seats. But sports and money go hand-in-hand, so it should come as no surprise that you have a bevy of publicly traded stocks representing various aspects of the sporting universe to pick from. Besides, trading’s a decent rush … and it sure beats watching Sun Belt linemen do the broad jump at the NFL Scouting Combine.
So, here’s a look at the different ways you can mix sporting and investing. We’ll start with some of the more obvious plays, then see just how far down the rabbit hole we can go.
Or at least, a really small part of it.
Here in the States we don’t have too many opportunities to do this, so only a few specific fan bases might feel like taking part.
Madison Square Garden (NASDAQ:MSG[1]) provides a portal to four teams across three states: New York’s Knicks and Liberty in basketball, and the Rangers for hockey; and then the Connecticut Whale, which plays in the American Hockey League. MSG also is in charge of the sports networks that air the games, and the operations of the namesake arena.
Soccer fans actually have a number of options. The easiest for American investors is Manchester United PLC (NYSE:MANU[2]), one of the most decorated clubs in the history of England’s Premier League and the current table-topper.
But if you have access to the European markets, you can own a part in these teams, among others: Tottenham (EPL, LON:TTNM), Olympique Lyonnais (Ligue 1, EPA:OLG), Celtic FC (Scottish Premier League, LON:CCP) and Juventus FC (Serie A, BIT:JUVE).
The NFL’s Green Bay Packers are a publicly held company, and you can own shares — my dad is among the team’s proud shareholders — but it is not publicly traded on any exchange. You’ll just have to wait for the next offering from the team.
Between three companies — Nike (NYSE:NKE[3]), Under Armour (NYSE:UA[4]) and German outfitter Adidas (PINK:ADDYY[5]) — and their numerous brands, you’re touching just about every sport and professional league in the known world.
Here in the U.S., Adidas makes the official clothing for the NBA and Major League Soccer, and its Reebok subsidiary has the NHL apparel deal. Nike outfits the NFL, taking over from Adidas starting in the 2012 season. Meanwhile, Under Armour makes various accessories across several pro sports. All three also provide apparel for numerous college programs, not to mention they also sponsor individual athletes in just about every sport, be it skiing’s Lindsey Vonn (UA), golf’s Tiger Woods (NKE) or track’s Tyson Gay (ADDYY).
But you’ll have to look outside the big three if you’re a fan of baseball jerseys — they’re made by VF Corp. (NYSE:VFC[6]) subsidiary Majestic.
In addition to apparel, Nike and Adidas also make other tools or the sports trade, such as soccer balls and golf club shafts, but a number of smaller companies put the ball in play as well.
Callaway Golf (NYSE:ELY[7]), for instance, makes and sells a variety of golf equipment — clubs, balls and apparel — through its namesake brand, as well as the Ben Hogan, Strata and Top-Flite brands. Or you could dip into Aldila (NASDAQ:ALDA[8]), a tiny $21 million company that manufactures graphite golf club shafts — some it sells under its own name, and some it makes for Taylormade, Ping and … Callaway.
There’s also…
Well, you’ve gotta buy all that stuff somewhere.
Dick’s Sporting Goods (NYSE:DKS[12]) is the biggest name in the game, with nearly 500 stores across the U.S. offering up products for just about every way a person could burn a few calories. That’s clothes, shoes, protective gear, bats, balls and clubs … and even treadmills, weights, tents, poles and guns. DKS also includes the GolfGalaxy brand — roughly 100 stores catering to the golfing crowd.
That said, Dick’s is primarily spread across the eastern U.S. If you have more of a West Coast bent, there’s California-based Big 5 Sporting Goods (NASDAQ:BGFV[13]) and its roughly 400 locations. Not too much different here from Dick’s — BGFV has most of the sporting spectrum covered in its products. (Interestingly enough, both companies’ beginnings are linked to Army/Navy stores — Big 5 started out as a chain of five surplus shops, while Dick’s founder Richard Stack was compelled to start his chain after a row with his boss at an Army surplus store.)
Rounding out the map is Hibbett Sports (NASDAQ:HIBB[14]), whose 800-plus locations cater to smaller markets in the South and parts of the Midwest.
South Dakota has no teams at the highest level of America’s Big Four, and only a handful of minor league teams. It is, however, home to a small-cap company you probably haven’t heard of, but whose products you’ve likely enjoyed at least once in your life.
Brookings-based Daktronics (NASDAQ:DAKT[15]) makes a number of LED displays, including — you guessed it — scoreboards. Its products are found in a host of baseball stadiums, including Boston’s Fenway Park and the Mets’ Citi Field, as well as the Brooklyn Nets’ Barclays Center and the Columbus Blue Jackets’ Nationwide Arena. I also suggest taking a look through the site’s photo gallery here[16] — big or small, Daktronics lists most of its projects, and you might just find your local high school among the company’s proud accomplishments.
Some of the electronics world’s bigger boys play in the scoreboard game, too, including Sony (NYSE:SNE[17]) and Toshiba (PINK:TOSYY[18]).
Baseball card stores might mostly be dead, but there’s still work to be done for Collectors Universe (NASDAQ:CLCT[19]), which authenticates and grades a number of collectables, including tickets, cards, balls and other memorabilia. According to its site, CLCT has authenticated roughly 20 million items worth more than $1 billion since 1998. It does its business via mail-in services, though Collectors Universe also hosts a number of expos across the country.
And believe me, this is an in-depth service[20] — after all, considering the thousands of dollars (and more) that high-end collectibles can fetch, you want to make sure that Babe Ruth-signed bottle of bourbon you just won at auction is authentic.
OK, this sounds a heck of a lot better than it actually is.
For 4 cents a share, investors can dabble in the American Basketball Association (PINK:ABKB[21]). Sadly, though, this isn’t that ABA — the former league of the Indiana Pacers and San Antonio Spurs merged with the NBA in 1976.
No, this is a league that reformed in 1999 and consists of a constantly expanding/contracting, helter-skelter roster of small-town teams. Some of the tinier franchises like Richmond Elite of Highland Springs, Va., or the Lima (Ohio) Explosion even play in high schools. Perhaps the most impressive part of the ABA isn’t its current roster of teams (somewhere around 50-60), but its list of defunct ABA teams[22]. Via Wikipedia:
“The ABA method of handing franchises to anybody who is willing to buy one, with no consideration to whether the person can afford it or not, resulted in over 200 folded franchises as of the beginning of the 2008 season.”
If that’s not enough to scare you away, the stock itself should. This is the true definition of a penny stock, going for 4 cents per share on the unregulated pink sheets with an average daily volume of 300 shares.
You might be better off pooling some money with your buddies and fielding your own team.
Kyle Woodley is the Deputy Managing Editor of InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at@IPKyleWoodley. Kyle is a Cleveland Browns fan, so given Sunday’s result, he’s had enough of sports for a few weeks.
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