Only A Game?

Should major league sports be exempt from anti-trust rules?

Source: ESPN

Football is a game. A rough, tough, violent game. A game where two teams pummel each other while millions of fans look on. At the end of each contest, one team wins, and one team loses. It seems silly to exempt them from anti-competitive rules. After all, competition is what the game is all about.

Only, not always. The league is not a game. It’s an organizing body that coordinates schedules, playoffs, and league rules. Each of its 32 teams is a separate business—paying taxes, managing employees. Through legislative legerdemain, some leagues are nonprofit trade associations (NFL, NHL, PGA) while others aren’t (MLB, NBA)—go figure.

It’s been possible to invest in a few publicly-traded sports franchises, like Manchester United in the UK, or Madison Square Garden, which owns the New York Knicks, Rangers, and Liberty (WNBA). But that has been a hit-or-miss affair over the years, as investors in the Boston Celtics or Cleveland Indians learned a few years ago when their teams’ stock sagged.

In the end, major-league sports are in the entertainment business. And it’s a rough, tough, business. Their leagues may need to coordinate schedules, but they should compete on the field and most everywhere else.

Douglas R. Tengdin, CFA
Chief Investment Officer
Phone: 603-224-1350
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