THE BOOK--Playing The Percentages In Baseball

While it may be true it does not have artistic or financial value, that does not entail that it is value-less.  I’d wager that in Green Bay, it has social value (being able to claim that one is a shareholder might signal a deeper commitment to the team).  It might also have heirloom value of sorts, that is, that people can point to it as one of their possessions that give them pride of ownership.  (Maybe this is what you mean by your remark on ownership?  I wasn’t quite sure what point you wanted to make there, as you could also have been pointing to scarcity.)

Everybody involved understands that this is basically a donation drive to pay for stadium renovations.  There’s lots of Packer fans that feel fine giving back a little bit of the surplus value they get from the team.

its not a stock. it’s merchandise. might as well be a limited edition commemorative plate from the franklin mint. i guess because the packers say you can only sell it back to them that it can’t technically appreciate in value, but i don’t know how they could possibly enforce that. i’d bet you could buy a “share” right now on craigslist.

and i could be wrong but i think all the profits go to a charity. used to be the local amercan legion post but now it’s just the Packers Foundation or something.

Two things: 
1.  As you obviously know, these stock certificates have more of a symbolic significance to the buyers than an economic one - (also it’s pretty cool to attend the annual stockholder’s meeting I’d bet).

2.  This is a very neat and fair way for a team to raise money for renovations/stadium-changes/whatever.  Most teams do so by convincing cities to pay the bill (through bonds).  That puts some of the burden for the renovations on people who have no interest in the team. 

Here, only those who are actually interested in the team pay for the renovations.  While there are still essentially “free riders,” the financial burden is not put at all on anyone who gets no benefit from the renovations.

Merchandise.  Excellent word.  This is exactly what it is.

And, yes, great characterization that this is a donation drive, limited to those who want to participate.

I don’t know the specifics of the GB stock, but:

1. It is not that uncommon for stock to pay no dividends. Microsoft famously paid no dividends for many years. Instead, the company saves profits and pours them back into the company. The shareholder sees appreciation in the value of his stock increase since he is a percentage owner of a company with more cash than an otherwise identical one that just gave cash away through a dividend.

2. The shareholder would presumably have some rights if the company decided to liquidate.

3. A prohibition on transfers is absolutely enforceable in most circumstances. You may not be able to stop me from giving cash to a selling shareholder or from hanging the stock certificate in my house, but you can stop me from voting or receiving any other benefits. A company can sell stock subject to a right of first refusal, and ordinarily the value of the stock would never rise above the option price (because the company would then buy the stock at that price).

Shareholders also get to go to the annual “owners’ meeting,” which involves a free tour of the field, a discussion with the President and the GM, and some other fun activities annually.  Sure, fans understand that, other than those perks, it’s valueless.  But we (I’m a Packers fan, too, born and raised in Wisconsin) have a pretty special relationship with the team that allows people who never even go to games to want to help pay for field renovations.  I think other teams would do it, too, but I don’t know that every team has a devoted enough fanbase to basically donate money with no hope of return.  But that’s what Packers fans are like!

Hiz: it’s not just the no-dividends.  The question is: “where does the money go”. 

If dividends are reinvested, shareholders are rewarded with a higher stock price.

What happens if Larry Ellison wanted to buy the Packers?  Who gets the money?

#6 - the packers stock isn’t a real stock. it could never be listed on any trading board. it’s just a piece of paper, which i guess can also serve as an entry pass to “shareholder” meetings. maybe they are strict about keeping a database to bar non-original shareholders from entry into those meetings, but considering the participants have no voting rights or any rights period, i don’t see why they would spend much time policing it.

i think the ‘no-resale’ clause is just an incentive to get people to pay for the thing now, and drum up demand by convincing people this is their only chance to get their hands on a future family heirloom. my guess is, however, that as long as people are willing to pay hundreds of dollars for fake stocks, the packers will keep issuing them at acceptable intervals.

a donation drive is probably the best analogy. like if PBS called their tote bags stock certificates. same thing.

as far as i can tell, any excess profits or remaining equity following a hypothetical sale goes to this: http://www.packers.com/community/community-involvement/green-bay-packers-foundation.html

i guess all other revenue is plowed back into salaries, facilities and other operating expenses. but if anyone knows differently please let correct me.

We talked about these certificates in my sports business class in business school (before the current promotion).  The professor asked if anyone had one or could get it so one of the students purchased it on eBay.  I think they sell for around $10-20.

Do the shareholder meetings include free food?  If they include a lunch worth $10, that’s a 4% annual return (plus inflation!).

The Pack also have that unique property of being publicly owned, and as far as I understand, owned by a wide swath of the Green Bay population and fans.
So they’re sort of buying “stock” from themselves here.

In comparison, I don’t think this would fly for the Pats since no one would feel particularly good about send money to Bob Kraft.

i’ve just noticed that a lot of the things describing the packers ownership call them “community owned” which to me is a lot more accurate then calling them “publicly owned”. they aren’t publicly owned the way any corporation whose stocks are traded on a recognized exchange is. in fact, the packers specifically prohibit trading of shares. a publicly traded sports team would be like Man U before the glazer’s bought them out. the packers are nothing like that. they’re a franchise controlled by a non-profit (and the NFL). i’ve read that the non-profit elects their board and directors through shareholder votes, but since no one is allowed to accumulate more than 200 shares (out of 5 million or so), i’m curious as to the actual mechanics of this.

so to me, calling those certificates “stocks” and the team “publicly owned” is pretty misleading.

that said, i think its great that the packers can and do these kinds of things. as someone earlier pointed out, if this options for stadium funding are this or municipal bonds, tax breaks etc, the “stocks” plan seems a lot more desirable.

200,000 shares I think was the limit.  About 5%.

i saw the 200,000 on packers.com but then in their FAQ about the certificates and it’s says 200 including the any from the previous 1997 issuance.

http://packersowner.com/faq

you know what these shares are like? those bricks they sell when they construct or renovate buildings. they usually come with a certificate too. only here, you don’t get a brick with your name on it. in fact, they aren’t even tax deductible.

they had a 1000:1 split at some point, so, 200 shares doesn’t make sense.

where did you read it had a split? just curious.

at least it seems clear that with this new issuance they are limiting people to 200 shares, no?

I don’t remember where I read it.  Google packers stock history maybe.

As for limiting it this time, I don’t know, I didn’t read for it.  But, 250x200 = 50,000, so maybe it’s to prevent people from thinking they own something, and it’s clear it’s some donation.

#7

No other teams can do this because none have a similar ownership structure.  NFL passed some bylaw in the 50’s maybe (not sure the date) and the Packer franchise was grandfathered in.

http://prod.static.packers.clubs.nfl.com/assets/docs/2011shareholder-history.pdf

as far as i can figure the ownership story:

1923 - 1st stock issuance - then bankruptcy

1935 - 2nd issuance - receivership to 300 shares owned by local businesses mostly

1950 - 3rd issuance - now about 1,940 people own ~4,600 shares of stock (exact number never given).

1997 - 1000:1 stock split. less than two thousand people own ~4,630,000 shares.

1997/98 - 120,010 share issued to 105,989 new shareholders.

2011 - 4,750,940 shares owned by 112,205 holders.

so the original 1,940 owners multiplied (thru inheritances i’m guessing) into 6,216 owners who control ~97.5% of the packers. the 2011/12 issuance is capped at 880,000 new shares. so at most the original 1950’s group will see their share diluted to 82% ownership. there will be at least 4,000 new owners (due to the 200/person on ‘98 and ‘12 issuances cap).

but still, its the leftovers from the 50’s that control the elections of the directors and the executive board. the new certificates are just something nice to frame. not that that means theres no real value in that. hanging a packers stock in their living room may be worth well more than $300 to some fans.

Back in the early ‘90s the Boston Celtics were a publicly traded company, listed on the NYSE under symbol BOS. I think the company had some other assets as well, but eventually it was taken private also.

I’m told that the Packers are a non-profit corporation, which is something that people aren’t used to hearing about.

As you’re a Canadian by birth, tango, I’m surprised you haven’t mentioned the Sasketchewan Roughriders, which have a similar arrangement.

Zac: I didn’t realize it.  When I followed the CFL, I never really cared about the business aspects of it.

I’ll check it out now…

Interesting:

http://www.riderville.com/article/overview_and_goals

so pretty similar to the packers’ set up. except it’s a rolling issuance rather than specific fundraising efforts.

the question is who’s got controlling shares and where does the excess money goes. not suggesting anything nefarious going on, just curious.

still nothing traded on the open market, though the ownership structure of all the major north american sports leagues may pretty much preclude such an arrangement.