Sporting events have been around for thousands of years. For the vast majority of that time, they were largely spectator events, and, outside of gambling, only the organizers and the most talented contestants were able to make money from the games.
Today, it's possible to be an investor in a select number of publicly traded sports companies. Sports are more popular than ever, and new monetization opportunities are emerging and expanding rapidly. It could be a good time to take a swing at a sports-related investment.
Investing in sports stocks
By some estimates, the global sports industry takes in more than half a trillion dollars annually. The largest portion of that massive amount of entertainment spending is in sporting goods retail, so stocks of companies that make and sell sports equipment and apparel are a great place to invest in sports.
Most sports leagues and teams are privately owned. For a more focused bet on specific sporting events, leagues, and teams, here are seven companies worth a look right now:
Vail Resorts
NYSE: MTN
Key Data Points
Vail is a leader in mountain and winter sports. The company's namesake property in Colorado is a world-class destination for skiing, snowboarding, and other outdoor recreation, but Vail Resorts is actually a collection of 42 locations, mostly in the U.S. -- including the namesake Vail Resort in Colorado, Park City in Utah, and Northstar in California. It also owns Whistler Blackcomb in British Columbia and a handful of Australian resorts.
Besides selling tickets to its ski lifts, Vail also offers ski lessons, sells and rents winter sports equipment, operates as a resort, and makes money from dining and lodging. The COVID-19 pandemic deeply affected its business, but Vail has returned to posting consistent profitability and record revenue now that travel and recreation activity has bounced back.
2. Churchill Downs
NASDAQ: CHDN
Key Data Points
Six years after the U.S. Supreme Court deemed sports betting legal, more than half of all states now allow for sporting event wagers. Churchill Downs stock is a unique way to play this movement in tandem with the world-famous event it organizes every year, combining a horse-racing venue with gaming and casino operations.
Although Churchill Downs is best known for the annual Kentucky Derby, it has several facilities with hotels, gaming, and gambling in Kentucky. It also owns TwinSpires, one of the largest online horse-racing wagering and sportsbook platforms. For a top bet on a premier sporting event, as well as on the growth of the burgeoning sports wagering industry, look no further than Churchill Downs.
3. TKO Group Holdings
TKO Group Holding was created through a merger of UFC (Ultimate Fighting Championship) and WWE (World Wrestling Entertainment) in 2023. The combination of these category-leading entertainment specialists created a giant in spectator sports, and it looks like the business has a long runway for continued growth.
UFC is the clear leader in mixed martial arts (MMA) events and broadcasts, and its popularity has continued to surge. Annual revenue for the MMA frontrunner's live events, media licensing, and promotional deals saw substantial growth in 2023, with live events sales looking particularly strong and climbing 34% year over year.
And while some sports fans may not take professional wrestling seriously, WWE fans -- and investors -- would take exception. The league has an army of global viewers, and the business has been on an impressive upswing. Media entertainment is the name of the game here, and WWE has a history of nurturing personalities who gain pop culture-level success (Dwayne "The Rock" Johnson is one example).
The company churns out weekly spectator events and has steadily increased the value of its content via pay-per-view and network licensing fees for its pro wrestling competitions. WWE has also entered the TV streaming era and made NBCUniversal's Peacock service -- owned by Comcast (CMCSA -0.41%) -- its home for the WWE Network.
4. Madison Square Garden Sports
Manchester United's stock is an even more focused individual professional sports team play than MSG Sports. It's the parent of the U.K.'s most decorated team in the Premier League (soccer, which is better known as football everywhere else in the world except the U.S.). Manchester United is a huge franchise, boasting some 1.1 billion fans and followers worldwide.
Since making its 2012 public debut in the U.S., Manchester United stock has struggled to gain traction. Shares are up just over 33% (when you include reinvested dividends) since the stock started trading following its IPO, but shares could be quite cheaply valued on the heels of that underperformance. It may not be a rags-to-riches Wrexham story, but you, too, can start your own football empire like Ryan Reynolds and Rob McElhenney with some shares in Man United.
6. Rogers Communications
The Atlanta Braves baseball team is owned and operated by Braves Holdings LLC, which is a wholly owned subsidiary of Braves Holdings. The stock began trading on the New York Stock Exchange in July 2023 after Liberty Media spun off its stake in the Braves as a publicly traded company.
In addition to the Braves MLB team, the Braves Holdings LLC also includes the Battery Atlanta business -- which is a mixed-use commercial complex that includes hotels, retail outlets, residential real estate, office buildings, and entertainment businesses. The Battery Atlanta is located surrounding the Truist Park stadium that hosts Atlanta Braves games.
Pros and cons of investing in sports stocks
- Investing in sports stocks offers investors a way to gain exposure to sports and teams with high levels of engagement among viewers and attendees.
- Sports can generate high levels of revenue through events, broadcasts, and other monetization channels.
- Investors should understand that sports-related businesses can come with a high degree of complexity.
- Sports stocks won't necessarily perform well just because the popularity or revenue generated from a given sport or team is increasing.
How to invest in sports stocks
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Related investing topics
Long live sports investing
Investing directly in sports leagues and teams is one way to get a financial interest in this large and growing industry. The digitization of sports is opening up new options for monetizing athletic endeavors. Sporting goods, digital media, and esports are other promising ways to invest, and they could be a far more profitable endeavor over the long term. If a focused play on leagues and teams is what you're after, these seven sports stocks are a good place to get started.
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