Tuesday, February 14, 2012

From The Packers To The Coyotes: Can Fans Own Teams?

Stew Radawec, who plans to run for Glendale City Council in the Cactus District, wondered if the Phoenix Coyotes could raise money by selling shares to fans. The money raised would help keep the team in Phoenix and cover things like operating expenses.

The thinking was – the Green Bay Packers do it so why can’t the Coyotes do it.

The Packers: Publicly Owned

Indeed the Packers do it. The Packers are the only community-owned franchise in North American professional sports. It sells shares and has over 102,000 shareholders. Founded in 1919, the Packers have been doing this since 1923.

In 2011, the team sold 280,000 shares at $250 a piece to raise $70 million. The money would go to the $143 million expansion of Lambeau Field. The shares could be purchased at packersowner.com.

Before that, the team sold shares in 1923, 1935, 1950 and 1997.

Prior to the 2011 stock sale, there were 112,015 people, representing 4,750,934 shares, who could lay claim to a franchise ownership interest.

Being owned by the community has ensured that the team would not move. The city of Green Bay has a population base a shade over 100,000. Before the NFL secured massive TV deals (in 2014 each NFL team will get about $250 million share in TV money), the Packers could have easily moved to a bigger city.

Packer Stocks: What You Get & Don’t Get

The Packer shares are not like your traditional shares. This is what you get and don’t get:

Stocks Give You:

- call yourself an NFL owner
- attend annual meetings
- meet team executives
- tour of Packers Hall of Fame

Stocks Don’t Give You:

- no dividends
- doesn’t go up in value/no profit
- can only transfer them to immediate family
- can't go to Ryan Grant’s house, cut him and build around James Starks

The shares also give fans something intangible – a real sense of ownership over a team - however illusory that may be.

Ultimately, when it comes down to it, the shares are expensive memorabilia. Still they have their appeal.

Can Other Teams Offer Shares?

Short answer is no (as a lawyer, short answers trouble me because they don’t pay the mortgage). League bylaws, including in the NHL, prohibit the sale of shares as the Packers have done. The NFL bylaws also exclude this practice – although the Pack are the exception.

So that means that the Coyotes can’t sell shares with a view to subsidizing the team.

Why can’t teams do it? That’s an interesting question. First, when you sells shares you have to make your financial statements public. The Packers do (and that’s where we get a lot of clues as to how the NFL is run). Leagues don’t like to share their financials so that by itself is reason enough to prohibit the sale of shares.

There may also be another reason – an emotional reason. Leagues may not be comfortable with fans claiming ownership of teams and demanding things of the team on that basis. Team are likely far more comfortable with owners owning and fans, well, fanning.