In April, citing an anonymous source, Mike Ozanian of Forbes suggested that Warren Buffett, chairman and CEO of Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B), might buy part of the Chicago Cubs. It turns out, Buffett isn't interested in a sports team.
He fervently denied the rumor on Bloomberg. Later, during the annual Berkshire meeting in Omaha, a shareholder from Chicago asked if there was any chance of Buffett investing in sports, either via a team or equipment manufacturing.
Below are my notes on the shareholder's question, along with responses from Warren and Berkshire Vice Chairman Charlie Munger.
Shareholder: Do you ever have any plans to buy a professional sports team or equipment manufacturing company?
Warren: I own a quarter of a minor-league team, but it's not responsible for my position on the Forbes 400. No, I'm not interested in buying a sports team. If you hear us doing it, it might be time to talk to our successors...
Generally speaking, when you look at the people making baseball gloves, football helmets, it's not been particularly profitable. Certain aspects like owning helmets should be run by someone who hasn't a dime to his name because he's not going to be a target. The idea of owning business that provided guards in airports, owned by this super-rich corporation, that is a perfect target. The guard company at airports should be owned by someone whose net worth is not yet higher than two figures.
You won't find us in the sports arena. Charlie, are you looking at the Clippers?
Charlie: Whenever I hear Warren talk about sports teams, I like him less.
I'm glad that Buffett has denied these rumors. Owning a sports team can be profitable in certain circumstances, but mostly it's just a very expensive hobby for the insanely rich. There's an old joke about owning a sports team. Question: what's the easiest way to become a millionaire? Punchline: start off as a billionaire, then buy a sports team.
Buffett once owed a small interest in a minor league team, but it would be totally out of his frugal character to spend billions to purchase a major sports team like the Cubs.
Brendan Mathews owns shares of Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway. The Motley Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.