Sports are kind of a big deal. Every day, millions of Americans watch sports in person or on TV, millions more take part in athletic activities, and countless more wear athletic clothing even if they choose to laze around all day.
There’s a lot of money to be made in sports. But unless you suddenly become an elite athlete, most of us won’t make a dime as a pro player. So, how can we cash in on the popularity of sports?
There are many ways that average investors can make some money through sports. Here are Beginner’s Guide to Sports Investments.
Health Club and Fitness Franchises
If you work out at a gym, it’s likely a private business or owned by a franchise. By purchasing a gym franchise, you are buying something that is set up and ready to go, and much of the marketing is handled by the parent company.
The upfront costs to buy a franchise will range from $100,000 to more than a million dollars, depending on the franchise. Larger and more established companies with recognizable brands will have a higher initial investment. You’ll also be on the hook for royalty fees and possible advertising fees of hundreds of dollars per month.
In addition to gyms, you can buy a franchise of a personal training business, such as Gym Guyz, or franchise a trademarked workout such as Zumba or Jazzercise.
We’ve all heard about the guy who got rich because he happened to save the Mickey Mantle rookie card from when he was a kid. it is possible to amass a valuable collection of sports memorabilia that can serve as an investment.
Sports trading cards, autographed balls, game-worn jerseys, and vintage sports artwork all count as collectibles. Even old stadium seats from demolished stadiums have their price. These all qualify as collectibles that will rise in value and can supplement, or even fund, your retirement.
If you’re patient and know where to find memorabilia at a good price, you may be able to build a lucrative collection.
Just be aware that the demand and value of these artifacts can rise and fall just like any investment, and that owning sports memorabilia also involves caring for it, storing it, and insuring it.
There may be easier and more lucrative ways to make money, but perhaps none that offer the same fun factor.
Publicly Traded Sports Companies
The simplest way to get an ownership stake in the world of sports is through buying shares of publicly traded companies in the space. There are public companies involved in making athletic footwear and clothing. There are companies that make sports equipment like helmets, baseballs, and shin guards. It’s also possible to own shares of the companies that broadcast sports.
Top publicly traded sports apparel manufacturers include Nike, Under Armou. You can also invest in major retailers.
It’s even possible to be a part-owner of racetracks, including Daytona International Speedway and Talladega Superspeedway by purchasing shares of International Speedway Corporation.
Before you start dreaming about starting your own sportswear company or buying the Houston Rockets of the NBA, consider buying shares of sports companies that are trading publicly.
The team with the lowest value, according to Forbes, is the NHL’s Phoenix Coyotes, worth $290 million. When former Microsoft CEO Steve Ballmer bought the NBA’s Los Angeles Clippers in 2014, he paid more than $2 billion.
That said, there may be ways for people of more modest means to get in on the sports ownership game.
Minor league teams, especially from small and independent leagues, are plentiful and priced more reasonably than teams from the Big Four.
Listings from The Sports Advisory Group suggest that an investor can get a sizable share of minor league teams for a few hundred thousand dollars. That’s still a fairly high bar for entry, but if you’re passionate about sports, it may be the right investment for you.
One thing to note about sports team ownership: There are a handful of teams that are publicly owned, making it possible to own part of a team in the same way you might own a share of a company.
The Green Bay Packers are the most high-profile example of this. The team has had five stock sales over the years, distributing more than 5 million shares. The last stock sale in 2011 netted the team enough money to renovate the team stadium and install a high-end scoreboard. However, a share of Packers stock is not a tradable stock, giving it no market value.