Famous athletes already earn more money than movie stars, but some of them complement high pay with investing. Here are some of the several pop culture stars who have invested in sports teams.
Economics of Sports Investing
How popular is sports compared with other iconic and fun industries like movies and music? In America the Super Bowl is exponentially more popular than the Oscars or the Grammys. The top shows in TV ratings year after year are regularly NFL games. So on the surface sports investing seems like it’s a slam dunk easy way to make big profits.
Looking deeper into it, however, uncovers the fact that not all sports teams are profitable. In 2018 only 8 of the 30 NBA teams turned a profit while the rest lost $300 million collectively. This irony is a wake up call for investors – not to run the other way – but to do research before jumping into any kind of investment. There are still plenty of opportunities to profit off pro teams, you simply have to pick the right ones.
One way to invest in a team is to buy shares in the company, just like buying stock. There are also index funds that include sports owners. The Green Bay Packers football team is the only pro team that sells shares directly to the public. Due to its structure, the nonprofit team allows shareholders to own a maximum of 200,000 shares.
Famous People Who’ve Invested in Sports
There are multiple ways individuals can invest in sports from sports betting to collectables to taking an ownership stake in a professional team. Basketball legend Michael Jordan, the highest paid athlete of all time, is the primary owner of the NBA team the Charlotte Hornets. He also holds a minority share of the MLB’s Miami Marlins baseball team.
Jordan’s net worth is estimated at near $2 billion. During his NBA days with the Chicago Bulls he earned $90 million with most of it coming from his last two seasons. He went on to do TV commmercials for Nike, which has paid him $100 million per year in royalties.
Actor/singer Gene Autry, who popularized the Christmas hit “Rudolph the Red-Nosed Reindeer” in the 1940s, was one of the most famous celebrity sports owners in history. He owned the Anaheim Angels until 1997, a year before his death. The U.S. has had a few Presidents who were team owners as well. George W. Bush owned the Texas Rangers baseball team in the 1990s. In the 1980s Donald Trump owned the widely forgotten New Jersey Generals of the USFL, a football league that failed to compete with the NFL. He also owns several golf courses and was a promoter of boxing and wrestling.
Other well-known sports team stakeholders have been pop stars Jennifer Lopez, Marc Anthony, Jimmy Buffett, Gloria Estefan and Fergie, as investors in the Miami Dolphins. Rapper Nelly owns a minority interest in the Charlotte Bobcats. Country singer Tim McGraw, whose father Tug McGraw played pro baseball, owned a minority stake in the defunct football team the Nashville Kats. Comedian Bill Maher owns a minority piece of the New York Mets.
Rise of eSports
One of the escalating trends in pop culture the past decade has been electronic sports, known as eSports, which is based on video games. The growth of live streaming has contributed to this emerging industry. Some of the leading games in this field have been League of Legends, Counter-Strike, Overwatch and StarCraft. Basketball star Shaquille O’Neal currently co-owns NRG, an eSports organization. Another NBA superstar, Magic Johnson, has also entered eSports with the firm aXiomatic.
These online global tournaments, which are a mix of one-on-one and team competitions, appeal primarily to young people in the 18 to 34 age group. The total audience has surpassed 443 million worldwide. Prize pools are in the millions of dollars as the global eSports industry generated over $1 billion in 2019. This form of online betting was originally illegal in the United States, which lifted the ban in 2018. This industry earns its revenue through brand advertising, merchandise and ticket sales.
Sports are a major pastime throughout the world but can also take the form of various investments or betting schemes that earn money. Whether you put money into actual sports or online video games, it’s possible to come away with impressive nice profits. The key, as in all investing, is to practice risk management and never risk more money than you’re willing to lose.