MLS Stocks?
- Thread starter CP_Scouse
- Start date
You won't find publicly traded stocks for CFG because it's fully owned by a combination of ADUG, CITIC and CMC.
I suspect that you'll find that all of the MLS teams are also wholly-owned and therefore not eligible for the stock market.
I would expect that MLS would not allow a public fund to invest in the MLS corporate entity as a new franchise owner. Their public reporting requirements would shed significant light on the internal mechanisms and rules that the league prefers to keep obscure.
I would also expect that any owner that would like to IPO their MLS franchise would rapidly find themselves voted into a forced sale of their ownership stake by the rest of the MLS ownership. Having the internal workings of a closed and salary capped sports leagues exposed to the public is not a good idea. First because it gives players a significant negotiating advantage with the public team, and the league as a whole. And secondly because there might be certain league structures that, while legal, if exposed to wider scrutiny may negatively impact MLS's ability to operate as a single entity league.
I would also expect that any owner that would like to IPO their MLS franchise would rapidly find themselves voted into a forced sale of their ownership stake by the rest of the MLS ownership. Having the internal workings of a closed and salary capped sports leagues exposed to the public is not a good idea. First because it gives players a significant negotiating advantage with the public team, and the league as a whole. And secondly because there might be certain league structures that, while legal, if exposed to wider scrutiny may negatively impact MLS's ability to operate as a single entity league.
You certainly would not want to support a club which is forced to release detailed quarterly financial reports and is responsible to constant shareholder demands to cut costs and increase revenue. Every player signing would be under scrutiny making it harder to make quick moves for players, which would cost us possible signings.
Really no benefit to this, seeing as how billionaires love to own sports teams, it's no challenge to offload some of your equity, usually at a much higher price than a traditional stock-market valuation would justify.
SUM did sell a portion of itself to a private-equity firm a couple of years ago. So if anything an entity like SUM could go public, but again there is no real reason for them to do so.
You only go public when you either need to raise capital or when the investors want to divest some of it's interests. Most clubs have owners who have the needed capital, and most clubs can easily find investors to offload some shares if they want to divest. Clubs who need capital and can't find it elsewhere are likely in serious trouble and would be a disaster on the market.
Really no benefit to this, seeing as how billionaires love to own sports teams, it's no challenge to offload some of your equity, usually at a much higher price than a traditional stock-market valuation would justify.
SUM did sell a portion of itself to a private-equity firm a couple of years ago. So if anything an entity like SUM could go public, but again there is no real reason for them to do so.
You only go public when you either need to raise capital or when the investors want to divest some of it's interests. Most clubs have owners who have the needed capital, and most clubs can easily find investors to offload some shares if they want to divest. Clubs who need capital and can't find it elsewhere are likely in serious trouble and would be a disaster on the market.
I think, since MLS is an LLC, all teams are wholly owned by the league. When you buy a franchise, you're really only buying shares in MLS with operating rights to a particular club. If that understanding is accurate (and I believe it is), then MLS as a league would have to go public.
If one club wanted to sell a portion of their ownership stake, they would just sell shares of the entity that holds their MLS stake - same as if you were a share holder of ADUG or any of the other ownership entities.
Not that anyone is asking, but the LLC is a very popular corporate entity type for private companies in the US because of its flexibility (e.g., profits and voting power don't have to be tied directly to ownership %).
In fairness, in the vast majority of publicly-listed football teams, the shareholders demand MORE spending, not less. Football teams' shares soar with success and plummet when the team is playing badly, plus the composition of the investment base tends far more towards people who own shares for the brand association rather than the potential profit.
Most leagues don't allow it for various good reasons.
They also tend to be bad investments, at least here in the US. A few teams have done it, and I believe they all have abandoned it after a few years. The Cleveland Indians did it in the late 90s. The IPO was a dud. It sold out, but the stock immediately lost value after opening. The shares were structured such that the public owners had no control and limited rights to assets and profits (if any). The structure also allowed for accounting shenanigans. After only 2-3 years the club's real owners sold to a new owner who bought out all the shares and the club went private again.
And it's kind of a quirky set-up, not really a traditional publicly traded company.
Makes me wonder whether they are subject to the reporting requirements of U.S. public companies, and if not, how they managed around it. *
* - (I am a securities lawyer)
The Green Bay situation is basically a pretend ownership. The team is owned by a non-profit corp. They sometimes sell shares in the corp but it is basically an expensive fan club with stock certificates. Because it's a non-profit, there is no right to profits. All proceeds go to a charitable trust. If they sold the team to an outside buyer those proceeds would go to the charitable trust and the "investors" would not even get their share price back, much less a profit.
I'm a Green Bay native and a shareholder, and this is correct. But the shareholders *do* have voting rights, so it's not 100% illusory.
I'm currently reading The Real Madrid Way (terrific book btw) and RMCF has a similar setup/ownership structure, as do a couple of other Spanish clubs (most notably FC Barcelona and Athletic Club). At one time nearly all Spanish clubs were structured this way until 1990 when the government got involved because a lot of clubs were being mismanaged financially to an extreme. Essentially only clubs that were not in the red were permitted to continue under this ownership structure and it was just a handful of clubs.
The one thing I really dislike about membership structures like those in Spain is that, when they hold their election campaigns for the President position, the various candidates will trade their reputation on the players they want to sign - especially with Real and Barca. Thing is, none of these players are theirs to go on about.
There's something very sleazy about someone who can come to office by basically proclaiming the taking of another club's players as a fait accompli and by telling his electorate that only by voting for him can they benefit from this. It would be a bit like politicians basing their campaigns on the basis of listing the countries they intend to conquer and colonise/destroy and treating the whole thing like the countries being named have no right to be offended at their intentions to wipe them out (and no, that's not supposed to be an allegory of the recent Presidential elections, though if you really want to read something extra in it then knock yourself out I guess).
