People love sports partly because they provide a sense of pride. Whether it’s in one’s home city, team of choice or favorite player, sports create a sense of community.
Sports also have the power to bring people together by providing an excuse to gather and bond with family, friends, and fellow sports fans at games, tailgates, and watch parties.
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They are pure entertainment and can easily make one forget about a stressful workday or simply cure boredom.
The sports industry has become one of the most lucrative businesses worldwide due to the commitment of its massive fanbases to following and supporting their favorite sports. These loyal fans’ contributions have allowed sports leagues to develop stadiums, create bigger and better sporting events, and land higher-budget contracts and deals.
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The NFL alone is estimated to be worth around $163 billion, with the NBA sitting on a valuation of approximately $120 billion as of 2023.
Although the support that fans give to their favorite teams is already incredibly helpful, some want to go beyond buying a ticket to a game or heading to a bar to watch an away game while sipping on a cold beer.
Dodger fans celebrate as the Dodgers beat the Yankees 4-2 in Game 2 of the World Series.
Allen J. Schaben/Getty Images
Investing in sports is more difficult than one might think
In the last few years, the NBA, NFL, MLS, and MLB have all changed their ownership rules to allow private equity firms to own stakes in their teams. However, the approval process is extremely strict and only allows ultra-wealthy and well-connected sports fans to invest in their favorite teams.
Although most fans can’t directly invest in sports leagues or teams, they can purchase stock in companies that support the sports industry. However, finding out which companies make strong investments in this industry takes time and requires more due diligence than many can afford to give.
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Morgan Stanley (MS) saw this unfulfilled market as a new business opportunity and devised a solution.
“We see the demand from our clients that are asking about ways to invest in sports, and it’s going to continue,” said Morgan Stanley’s Head of Global Sports and Entertainment, Sandra Richards.
Morgan Stanley launches product to facilitate investing in sports
On Thursday, Morgan Stanley announced that it would launch its “Parametric Custom Core Sports League” strategy, an index that allows sports fans to get more involved in their favorite sports beyond just attending sporting events and keeping up with team stats by investing in companies that support major sports leagues.
The portfolio’s holdings will consist of 250 to 400 securities from companies that have sponsorship, media, advertising deals, and other associations with the biggest sports leagues, including the NBA, WNBA, NFL, NWSL, MLS, MLB, LPGA, PGA, NHL, US Open Tennis, F1, Nascar, and college basketball.
This portfolio will also mirror similar risk characteristics as the S&P 500,.
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However, only high-spending sports fans can invest in their favorite sports leagues since a minimum investment of $250,000 is required.
Morgan Stanley will use Nielsen’s data to inform its index. Nielsen Sports gathers data through sponsorship analytics and fan intelligence to live-track companies’ activity, spending, and visibility.
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