A Beginner's Guide to Basketball Stocks
November 9, 2022 (Investorideas.com Newswire) Basketball has a committed US audience and is becoming increasingly popular the world over, with big-name players and games broadcast internationally. So, it makes sense for investors to want to get involved by buying stock in basketball teams and franchises.
But if you want to move beyond basketball inplay betting to actually own a piece of the action, how easy is it for a beginner to buy stock in National Basketball League (NBA) franchises?
Can individual investors buy stock in basketball teams?
Unfortunately, most sports franchises, including those in the NBA, are not publicly traded. In fact, the NBA operates under the umbrella of a non-profit organization, despite the fact NBA revenue in the 2021/22 season reached $10 billion.
There are a few publicly traded sports teams, but these are mainly outside basketball. Notably, Manchester United trades as MANU on the New York Stock Exchange (NYSE) and Italian soccer team Juventus FC trades as JUVE on the Borsa Italiana stock exchange. Even where sports franchises are publicly owned, it does not mean they are always publicly traded. An example is the National Football League's Green Bay Packers.
However, sports teams and franchises are often owned by a corporate entity which is publicly traded, meaning anyone who wishes to do so can buy stock. For example, the Atlanta Braves Major League Baseball franchise is owned by Liberty Media, trading on the Nasdaq exchange under the ticker LSXMA. The company also has an ownership stake in Formula One, among many other things.
An example in the NBA is the New York Knicks. The franchise is owned by Madison Square Garden Sports Corp., which trades on the NYSE under the ticker MSGS. The corporation also owns the New York Rangers National Hockey League franchise.
It's worth noting that a recent attempt to offer an NBA-related investment opportunity backfired when a partnership between the Dallas Mavericks and the team's owner Mark Cuban and Voyager Digital ended with the cryptocurrency exchange declaring Chapter 11 bankruptcy. Fans of the team had been encouraged to deposit money with the platform.
Other ways to invest in basketball
If you want to own a piece of an NBA team, one way to invest is through an Exchange Traded Fund (ETF). These funds track a specific index and allow investors to spread their risk across a bundle of assets. Several ETFs include investments in companies with exposure to sports teams. For example, holdings within the iShares Russell Mid-Cap ETF include Madison Square Garden Sports Corp.
Going beyond buying stocks in companies that own sports teams, there are other ways for investors to get involved in basketball. Options include buying stock in companies that are related to basketball, such as official clothing supplier Nike (NKE on NYSE).
Alternatively, a growing trend is to invest in esports. Companies that feature basketball games include Take-Two Interactive (TTWO on Nasdaq), which is behind the NBA 2K series. There are also ETFs with holdings in esports, including Global X Video Games & Esports ETF, which holds Take-Two Interactive.
While it might not be possible to buy stock in a basketball franchise, there are a few opportunities for beginners to invest in corporate owners and sport-related ventures that offer the chance to buy a direct or indirect stake in a franchise's fortunes, on and off the court.
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