Minority Stake in Pro Team? What does that get you?

The Game Room
1

Word on the street is that The Dallas Mavericks in-the-news-right-now-owner is only the majority owner, and that minority shares are held by the two previous owners (perhaps 5% each).

What is the purpose of keeping 5% of the ‘ownership’? I presume it is stock. I would imagine the previous owners had to take less of a buying price in order to keep that 5%, which in turn gives them no chance of running the Franchise as they will be outvoted.

Free tickets?

2

I assume they think that there’s a chance that the Dallas Mavericks may spike up in value in the future and they’d like to have a piece of that potential profit.

3

Profits?

The answer to just about any question that starts with ‘Why do they…’ is money.

4

Ego.

The money is only secondary. They like to be able to say they own the team.

5

Moved to the Game Room.

Colibri
General Questions Moderator

6

This is really the answer. You get to say you own part of the team, sit in the owners box, get a ring when you win championships. Sure you don’t control but neither do most smart owners you hire people to run the business and then write checks

7

This. George W. Bush purchased a 2% share in the Texas Rangers for $606,000 in 1989. When the Rangers were sold in 1998, he received nearly $15 million on that initial investment.

8

Pretty sweet deal that one. Bush was the “managing general partner” of the Rangers even though he had a comparatively tiny share compared to the other folks you’ve never heard of. Name trumps skin in the game in that case.

9

Probably depends a lot on the majority partner. As one of the Yankees limited partners once said:

10

For the owner’s box? My daughter-in-law was the private secretary of a Microsoft VP who was also a minority owner of the Mariners. We all (my wife, son, DIL, and me) watched a game from his owner’s box one day–free.

11

Perhaps they’re hoping to be the next Spirits of St. Louis.

12

As a (very) minority owner of the Green Bay Packers, I get:

  • A printed certificate of my one share of stock
  • An annual proxy vote ballot for the team’s Board of Directors
  • The right to attend the annual shareholders’ meeting (held at Lambeau; I’ve never attended, as I live out of state)
  • Access to purchasing “Team Owner” merchandise from the Packer Pro Shop

I consider it to be my $250 souvenir, and the right to yell at the TV when my employees are under-performing. :smiley:

13

Lets say you bought a 5% stake in Mavs for $5 million when they were valued at $100,000,000.

I would imagine that when its time for Mark Cuban to sell in about 15-20 years, the team will be worth $2 billion.

$1.9 billion x 5%=$95 million on a $5 million investment. Plus the free tickets and merchandise.

Thats what a minority stake in the right team gets you, and its pretty nice even with the discount factor.