Why do we invest? For most of us, the answer is simple: to take the money we have and turn it into even more money. Few things make an investor happier than to see the money he or she put into a stock, mutual fund, or ETF appreciating handsomely over time. Whatever your investing goal -- whether saving for a home or a college fund, ensuring a comfortable retirement, or just seeking financial security in the here and now -- you want to find the financial instrument that will best maximize your returns.
Usually, that means not getting sentimental over your investment picks. You may dislike Apple products, but if you'd been able to put your feelings aside and invested in the company around the time the first iPod came out, you'd have more than a 3,500% return on your money today. On the flipside, you may decide to buy into a company because you're a believer in, and loyal user of, its products -- but a good company doesn't always make a good stock.
Sometimes, though, the sentiment may be what you're most interested in. Witness all the online services that will sell you a single framed stock certificate of the company of your choice. You'll probably never get rich off that sole share, but at least you can proudly say you own a small piece of your favorite company.
That's pretty much what it's like to be an owner of the reigning Super Bowl champion.
I liked it so much, I bought the company
Your humble Fool contributor has something in common with Jerry Jones and Dan Snyder: I own an NFL team. (I hope that's the only thing I have in common with them.) I'm one of 112,158 people who own at least one share of Green Bay Packers Inc., the nonprofit corporation behind the football team from northern Wisconsin.
Yes, that's right, I said nonprofit. Not only do the Packers lack a single, all-powerful owner, but all the team's profits go either back into the organization or to the charitable Green Bay Packers Foundation.
That doesn't sound so great for us shareholders, does it? We never collect any dividends, the stock price doesn't appreciate in value, and the redemption value is minimal. Compared with shareholders of most publicly traded companies, we Packers shareholders don't have a lot to show for our support of the team.
But you know what else we don't have? We don't have anybody threatening to pick up the team and move it to another city unless the local residents pay for a new stadium. In fact, since the team's bylaws state that no one can hold more than 200,000 shares (out of about 4.75 million shares outstanding), no single person can ever take control of the team. If for some reason the Packers couldn't carry on in Green Bay, the team would probably go out of business rather than relocate.
And we also don't have a micromanager breathing down our general manager's neck. Nowhere else in the NFL would a GM have had the latitude to show a star player of Brett Favre's magnitude the door. Had the Unretiring Gunslinger come back, Aaron Rodgers probably would have grown tired of waiting for his chance to play and may well have asked for a trade -- and the Packers most likely wouldn't have won Super Bowl XLV. That is the power of the Packers' ownership structure in action.
What we do have is one of the most consistently successful teams in the NFL, with a league-leading 13 NFL championships ... while Los Angeles, the nation's second largest market, has no team at all.
The cheese stands alone
The city of Green Bay has absolutely no business having a professional football team, let alone one that's on equal footing with the teams in New York and Chicago. Green Bay isn't just a small market; it's downright microscopic. Boise, Idaho, has more than twice the population of Green Bay. The number of people who attended this year's Super Bowl (whether you count the folks who were displaced in Jerry Jones' overflow seats or not) exceeded Green Bay's entire population by almost 2,000 people.
Once upon a time, the Packers weren't such an anomaly. In the early days, the NFL was filled with teams in tiny markets such as Akron, Ohio, Muncie, Ind., and Pottsville, Pa. The Packers were the only one to survive, while all the others either moved to bigger cities or folded. The difference? The community came to the Packers' rescue. With the team on the brink of extinction in 1923, a nonprofit corporation was formed, and the citizens of Green Bay bought 1,000 shares of the new entity at $5 apiece.
The Packers have put their stock on sale on three other occasions since then. I got in during the 1997 sale, following a 1,000-to-1 split on the shares issued in a 1950 sale. That means my $200 share carries significantly less voting weight than the shares from previous sales do, but I do still get a vote. Shareholders -- who these days hail from every state in the union -- convene at Lambeau Field every summer to get the latest inside scoop on the team, ask questions of management, and vote for the board of directors -- who, in turn, vote for the executive committee that essentially oversees the team's day-to-day operations. Everyone on the board and the committee sits gratis, except for the president, who represents the team at league meetings.
It's true that the continued existence and success of the Green Bay Packers today owes a lot to the NFL's revenue-sharing agreement and salary cap. But if it ever needs to, the Packers organization can tap into its fanbase to ask for help -- and that's something no other team can do. The NFL now stipulates that all of its franchises must be run for profit, limits the number of owners, and requires a minimum ownership percentage that far exceeds what the Packers' bylaws allow. Green Bay's ownership structure was grandfathered in when the NFL changed its rules.
So you watched the Packers bring the Vince Lombardi Trophy back home to Green Bay, and you're ready to put a wedge of foam cheese on your head and call yourself a fan. Welcome aboard! There's always room for more.
Unfortunately, there are no more openings for owners.
The stock isn't transferable, except to family members, so a public offering is the only opportunity to purchase shares. The Packers haven't put their stock on sale since their 1997 offering, and there's been no talk of another sale. The primary purpose of the last sale was to pay for upgrades to Lambeau Field, so don't expect another offering until the Packers need to fund some more infrastructure improvements.
Becoming a shareholder in a major North American sports franchise is no easy task. Baseball's Cleveland Indians, the NHL's Florida Panthers, and the NBA's Boston Celtics all offered stock for a while, but they've since gone private. Sure, you can buy stock in Liberty Media (Nasdaq: LCAPA)(Nasdaq: LCAPB), which owns the Atlanta Braves; Comcast (Nasdaq: CMCSA)(Nasdaq: CMCSK), which owns two-thirds stakes in the Philadelphia Flyers and 76ers; or Rogers Communications (NYSE: RCI), which owns the Toronto Blue Jays. But you're only buying stock in someone else's company, which has a lot of holdings in addition to the respective sports teams. Your ownership stake, alas, would be indirect and minimal.
At the same time, remember that if Packers shares ever do go on sale again, you won't reap any financial rewards. You will, though, have the satisfaction of knowing that you helped out the team, and that you can now go and party once a year at Lambeau Field with all your fellow owners.
Besides, I figure I got the best return on my investment I could ever ask for: My team just won the Super Bowl.