So how do you give your portfolio a sporting chance?

Investing in sports leagues might sound like a slam dunk, but it’s not easy for everyday investors to get in on the action. You usually can’t grab a piece of your favorite team unless you’re sitting on billions of dollars – most teams are privately owned, not publicly traded like company stocks.

Still, there are a handful of publicly traded sports teams out there, like:

• Manchester United (MANU) (US-listed)

• Atlanta Braves (BATRK)

• Rangers International Football Club (RFC) (London-listed)

• Juventus Football Club (JUVE) (Milan-listed)

• Madison Square Garden Sports (MSGS), which includes the New York Knicks and Rangers

• Liberty Media (FWONK), which owns stakes in Formula 1 and the Atlanta Braves

But for the most part, if you want a pro athlete’s edge, you’re going to have to look for sport-adjacent plays. Here are three big ones:

1. Broadcast and media companies

You don’t need to own a team to invest in sports. A lot of major media companies have enormous exclusive deals with sports leagues. Heavyweights like Amazon, ESPN (part of Disney), Fox, CBS (part of ViacomCBS), and NBC (part of Comcast) keep signing bigger deals each year, highlighting the growing profitability of sports broadcasting. 🏟

The latest buzz has been about the NFL and its potential tie-up with Disney through a stake in ESPN. If that happens, Disney could challenge Netflix for streaming supremacy.

2. Fantasy sports and betting

It’s no secret that sports betting and fantasy sports are booming. Companies operating in these spaces provide a way to invest in the entire sports ecosystem.

• Sports betting was legalized in the US in 2018, fueling rapid growth. Projections say it could see an annual growth rate of over 13%, reaching about $15.75 billion by 2028.

• The top dogs in this arena are FanDuel (owned by Flutter Entertainment) and DraftKings, with market shares of about 45.1% and 32% respectively in 2023. Other key players include Penn Entertainment, Caesars Entertainment, and MGM Resorts (BetMGM).

3. Sponsorship and advertising

Companies pay big to sponsor teams, leagues, and events to get their brands in front of those massive fan bases. This includes stadium naming rights, team sponsorships, and event partnerships. Official sponsors of the NFL or NBA often see a boost in sales from all that marketing exposure.

Some MVP examples:

• Nike sponsors the NBA

• PepsiCo sponsors the NFL

• Rolex sponsors Formula 1

• Adidas sponsors the NHL

• T-Mobile sponsors MLB

Outside the arenas, there are profitable licensing agreements for merchandise, video games, and products with leagues’ and teams’ logos. Electronic Arts holds licensing for Madden NFL, NHL, and F1. Take-Two Interactive produces the NBA 2K series. 🎮

So what’s the big post-game takeaway here?

It’s still early innings for investing in sports, especially for retail investors. But as the game progresses, more doors are bound to open. In the meantime, you can look at adjacent plays – but keep in mind they might not offer direct exposure to the game itself since their sales often come from other sources too. So before you invest, do your due diligence on that front. 🏅

Good luck – and may your portfolio knock it out of the park!