A Financial Analysis of Publicly Traded Professional Sports Teams

Abstract

Throughout history there have been a number of professional sports teams that have been publicly traded. Many fans and followers of sports may jump at these opportunities to own a part of their favorite teams. This paper analyzes stock performance of past and current publicly traded teams to determine whether these stocks constitute a sound financial investment or only derive their value from the sentimental value stockholders place on the ownership. Monthly and yearly stock returns of both American and European companies were compiled, analyzed, and compared to popular stock market indexes. Much of the analysis was done using Microsoft excel regression, correlation, and descriptive statistics functions. Our findings indicate stocks of publicly traded professional sports teams show that they can provide some investment value for investors, although not all of them can be recommended as a sound financial investment. Value is contributed by the way of high returns in some periods and significant portfolio diversification benefits. Since stocks of publicly traded professional sports teams have shown the ability to provide investors with value, future opportunities may merit serious consideration when they become available.