Professional Sports Teams Need A Better Ownership Model

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Owners of professional sports teams aren’t exactly making us proud these days.

Terry Pegula is buying the Buffalo Bills, New York’s NFL football team, a move that is is disheartening as Pegula’s fortune comes from the highly controversial natural gas extraction process called fracking.

The Atlanta Hawks NBA franchise reacted to racially charged emails and remarks made by co-owner Bruce Levenson and others as far back as 2012.

As a result the NBA has stripped Levenson of his ownership interest in the franchise, just as it did to Donald Sterling whose secretly recorded racist rant against black people led to the L.A. Clippers’ recent sale to former Microsoft CEO Steve Ballmer.

Dallas Cowboys owner Jerry Jones has been sued for sexual harassment by an exotic dancer, though it may be too early for the NFL to make any decisions on Jones’ ownership stake in the Cowboys franchise.

Not to mention the Baltimore Ravens’ decision to keep Ray Rice on the team after it was clear he was involved in a domestic violence incident, and was cut only after alleged video of the knockout punch itself was published by TMZ.

All of these news stories surrounding professional sports teams’ owners relate directly to forms of community wealth defined as non-financial assets that the public (particularly communities in the metropolitan areas where these teams play), hold most dear.

A sports team really can provide community assets, which can include racial harmony, environmental stewardship or the social connectedness that binds people through the love of a home team. It is that team that over generations has become part and parcel of a city or region’s cultural identity.

However, despite the national outrage against owners’ controversial words or deeds, the forced sale of teams from one rich person to another is no antidote to these persistent problems.

Structural challenges must be met with structural solutions.

It is time to encourage professional sports leagues to allow for their member teams to be collectively-owned, as an expression of the principles of democracy.

As these racial debacles erupt in different cities with different teams, there is a model to emulate in Wisconsin. The Green Bay Packers are the only major sports team that is owned by its fans. Technically, it’s owned by anyone wishing to buy shares of stock.

Granted, team shares are not like stock purchased on the New York Stock Exchange. While they are sold to the public, they are not sold on any stock exchange, nor are shares transferable (to non-family members), and they do not provide dividends to their owners –at least not financial dividends.

But the social return on their investment in the Packers is no less valuable to their deeply loyal owners. More than 300,000 people from all walks of life are owners.

Certainly, Wisconsin is not the most ethnically diverse state, but one that boasts a progressive history. It is home to the second oldest NFL franchise, and the only one that is a nonprofit, community-owned corporation.

The Green Bay Packers are consistently ranked highly for its large and loyal fan base despite the fact that they play in the smallest media market of any professional team in the country.

When the Packers decided to enlarge and renovate Lambeau Field multiple times over the years, they raised capital from their thousands of owners – not from any one rich individual or Green Bay’s taxpayers.

Collective ownership is in stark contrast to the current NFL rule (the Packers are the sole exempted franchise) that demands at least a 10 percent stake in a team from its largest owner.

There is no social return on investment for the loyal Bills fans of Western New York. That’s because they can only hope that the Pegulas will stay true to their commitment to keep their football team in Buffalo – something that celebrity bidders, Donald Trump or Jon Bon Jovi, did not promise.

The people of Wisconsin don’t have to worry about their team skipping town. Simply put, the Packers’ ownership model all but ensures the team will never leave Green Bay. That’s because the ownership of this storied team is both transparent and collective.

And the collective ownership of their team produces a social return on investment that validates the quote from famous American architect and “father of skyscrapers” Louis Henry Sullivan who said, “Form ever follows function.”

Collective ownership increases accountability and the feeling of social inclusion, knowing that shareholders have a real voice in the future of their franchise. They see their stake in the Packers as a public good more so than a privately held asset controlled by affluent individuals (or families or small consortia of investors).

Collective ownership models illustrate the power of what economist, professor, and co-founder of The Democracy Collaborative, Dr. Jessica Gordon Nembhard, calls honor and engage stakeholders who are reflective of the communities from which they come can produce shared prosperity beyond dollars and cents.

This way, the fate of teams and their fans would not fall victim to the whims and antiquated beliefs of bigots with deep pockets. Instead, professional sports teams owned collectively would ensure that people directly and indirectly contributing to the teams’ revenues actually own a part of the team.

Naturally, this includes their fans even the ones who never step foot into an arena or stadium.

In our nation we often decry ideas of collective ownership. But in fact, we do collectively own some things. “We the people” are already responsible for the wealth created by sports teams, and not simply because of ticket sales.

For more than 50 years, the greatest financial wealth created for the owners of professional football franchises and other major sports teams in professional leagues has been created through the public infrastructure managed by the independent government agency known as the Federal Communications Commission on behalf of the American people.

Certainly there will be more sports teams owned by wealthy individuals who make bad decisions. But haven’t we had enough?

It’s time to give the American people more than an opportunity to buy tickets to the games or team merchandise.

We deserve a chance to own a real stake in the teams we love.

Chris Rabb is the social impact fellow at the Innovation and Entrepreneurship Institute at Temple University Fox School of Business. He is the author of “Invisible Capital: How Unseen Forces Shape Entrepreneurial Opportunity,” and recently presented at TEDx Philadelphia. He is part of The Op/Ed Project Greenhouse with The Center for Global Policy Solutions.

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