Want to Feel Like A Billionaire? Buy a Sports Team
Ash is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
If you’re a sports fanatic you will have likely spent some time looking at potential ways to own your own sports teams. You don’t have to be a multi-billionaire to do so, there are many teams hidden in the stock market. If you want to become part owner of the New York Knicks and New York Rangers then you could invest in Madison Square Garden (NASDAQ: MSG). Perhaps you’re a fan of baseball? If so, Liberty Media (NASDAQ: STRZA) will give you a stake in the Atlanta Braves or you could pick up shares of Rogers Communications (NYSE: RCI), the owner of the Toronto Blue Jays.
Madison Square Garden? That’s an Arena
Madison Square Garden is a great stock if you want to become the owner of a sports team. They own two basketball teams the NBA’s New York Knicks and WNBA’s New York Liberty, as well as owning NHL’s New York Rangers and their AHL hockey counterpart Connecticut Whale. The teams aren’t the only thing that you’ll be investing in though, you’ll also be buying into the MSG sports networks, the music channel Fuse TV, and the many arenas that MSG owns.
So, how’s the business? Well, it’s doing quite well. The company was a spinoff from Cablevision in 2010 and it has returned in excess of 125% since then. Year to date the company has seen an incredible 56% increase and its graph appears to be a nice upward slope. The company has a little long term debt on its books, but it is nothing to worry about since they continue to turn a profit on their collection of teams and arenas. A red flag does arise with their price-to-earnings ratio, as it is currently above 30. This P/E clearly shows that investors are looking for growth from the company.
Outstanding Media Conglomerate, Sports Team Free
With Liberty Media you can essentially call the Atlanta Braves a free incentive. This company is massive and they seem to be consistently on the path to acquiring more. Currently they have stakes, or full control, in the Atlanta Braves, Viacom, Sirius, Sprint, Starz, Barnes and Noble, Time Warner, Live Nation, and many more.
If you’re looking for a great media play then I would recommend LMCA. They are well diversified in the media field and they are trading at a price-to-earnings multiple of 7.5. Liberty Media is a great long-term buy in my eyes.
Want to get a little bit of your portfolio out of the U.S.? Look no further than Rogers Communications. The company is one of the largest communications and media companies in Canada. They provide cable television, cell phone service, internet connections and more to Canadians all while owning a lot of the channels that the Canadians watch. To further help their case they also own the Toronto Blue Jays baseball team, Canada’s equivalent to ESPN, Sportsnet, and The Score Television Network (pending approval from the CTRC).
I think that the company is priced fairly on the U.S. stock exchanges. This is the only company in the article that pays a dividend too! A thing to be wary of with Rogers is their high level of debt. They should be more than capable of handling it though with their continuous sales and net income growth.
Manchester United (NYSE: MANU)! Didn’t think I’d let them slip by did you? This is the largest sports team in the world and they are publically traded on the New York Stock Exchange. This is strictly the sports team and there is nothing else to back this up in the event of a few losses. What you’re going to get with this stock is a whole lot of debt and earnings fluctuations that will make you feel like you’re riding on Space Mountain.
I personally would not touch this stock; it has too much bad news written all over it. You may see a quick gain if they are able to collect the prize money for a few competitions in the UK and Europe, but for a long term, sane investor this should be a no go.
Ash1402 has no positions in the stocks mentioned above. The Motley Fool owns shares of Madison Square Garden. Motley Fool newsletter services recommend Rogers Communications (USA). 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!