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When you think of professional sports, you probably think of trades being made. But you are probably thinking of players swapping teams, not Wall Street swapping stocks. That’s because coming across a publicly traded sports franchise is not very common.[1] There are myriad of reasons for that, but when making this decision it really comes down to what each team sees as the benefits and costs of going public.[2] First, while going public may bring liquidity to the franchise, it also brings an increased regulatory burden.[3] Publicly traded companies are governed by the Securities and Exchange Commission (SEC) and have strict rules on financial reporting and disclosure requirements.[4] This adds cost and makes running the organization more complex. There also may be conflict between what is good for fans and what is good for investors.[5] The main thing that investors care about is profit, not necessarily if the team is competitive on the field, court, or ice.[6] If costs need to be cut to maintain required profit margins, that may have an impact on team performance and fan satisfaction in order to please investors.
All of that being said, it is not unheard of for pro sports teams to be publicly traded.[7] There certainly are a number of high-profile sports teams that are publicly traded, often as part of a larger media group.[8] And surprisingly, or maybe not, publicly traded sports franchises tend to outperform the broader indices.[9] There are arguments to be made that it is a good idea for sports franchises to go public more often, particularly because they seem to be high performers even in times of economic uncertainty.[10] One public ownership model, the community ownership model, is another way to create stability in an organization by limiting their leverage to relocate, such as the Green Bay Packers business model.[11] This allows the team to reap the financial benefits of going public, but not necessarily cede control to any one entity.[12] More teams have chosen to remain private because they believe the juice isn’t worth the squeeze when going public.[13] But with soaring valuations, who knows if we will see that change in the not-too-distant future.
[1] https://www.cnbc.com/2025/04/04/why-so-few-sports-teams-go-public-despite-soaring-valuations-.html
[2] Id.
[3] Id.
[4] https://www.investopedia.com/terms/d/disclosure.asp
[5] See supra note 1.
[6] Id.
[7] https://www.nasdaq.com/articles/equity-listings-are-slam-dunk-sports-teams
[8] Id.
[9] Id.
[10] Id.
[11] https://www.akingump.com/en/insights/alerts/public-investment-in-us-professional-sports-opportunities-and-challenges
[12] Id.
[13] Id.
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