Todd Henderson Contributes to Wall Street Journal Op-ed on NFL Team Ownership Structure

Green Bay Packers Stockholders Have Only a Rooting Stake

The Green Bay Packers aren’t the only 8-2 team in the National Football League, but their unique ownership structure gives them an advantage over the competition. Green Bay Packers Inc. is organized as a publicly held nonprofit corporation owned by the public, and this week it announced its sixth “stock offering” in the franchise’s history. For a league that prides itself on leveling the playing field through salary caps and reverse-order drafts, the NFL made a glaring error when it adopted a rule allowing only one team to raise capital this way.

This mechanism of funding has a long history. The first Packers stock sale occurred in 1923; the most recent, in 2011, helped finance development of a shopping and restaurant complex called Titletown adjacent to Lambeau Field.

The Supreme Court held in SEC v. Howey (1946) that a necessary element of the definition of “security” is a reasonable expectation of profit. Packers stock doesn’t qualify. It doesn’t include an equity interest, pays no dividend and can’t be traded, except for transfers to close relatives. Shares can only be sold back to the team, at a significant discount to the original purchase price.

The team acknowledges all this in a prominent disclaimer on the website for its offering: “Common stock does not constitute an investment in ’stock’ in the common sense of the term. Purchasers should not purchase common stock with the purpose of making a profit.” The share value is fixed at $300, and most fans buy a single share to be able to say they’re officially “owners.”

Read more at The Wall Street Journal