In our last article we discussed how to prepare to buy a sports team. In this article, we will discuss strategies on how to keep costs low while buying a sports franchise.
Chances are, it’s going to cost you a good chunk of money to buy into a professional sports team, especially if you become a majority owner. The initial costs to do so are high and you make the investment with the hope that the franchise will increase in value and your original investment will end up being worth much more down the line. There are obviously no guarantees of that, so before you make the move to buy a sports team, it is recommended that you do a good amount of homework on your investment.
However, another thing to look at is what your costs may be once you buy into the franchise. Will there be additional costs required in the short-term? How much more money will be required to get the franchise relevant?
These are some of the things you should be looking at before buying into a sports team but will also help you to keep costs low after.
Here are some other important things to be looking for:
Status of Stadium or Arena
To keep costs low, the best thing is to enter an environment where the building your team plays in is not on its last legs. We all know that stadiums and arenas don’t last forever, but finding one that has a good amount of life left is ideal. Hopefully it’s in a good geographic location and has shown the ability to be a place the fan base enjoys coming to.
Solid Fan Base
It would be ideal to find a team that has a solid, built-in fan base. This shouldn’t be too hard to research. There are some teams that don’t see much of a change in attendance and interest whether they are having an up year or a down year. This happens mostly in locations without a lot of different options. Cities with multiple professional teams have a tendency to sometimes follow the team with the hot hand.
Sometimes, teams are just not very competitive because they don’t have enough good players. Acquiring great players can mean big dollars for owners. Without great players and a good fan base, the team and its revenues can struggle. So if you have to start spending big right away, that’s not the best way to keep your costs low.
Some teams just have a great brand and are widely recognized. The New York Yankees, Dallas Cowboys, Boston Celtics and Manchester United are a few examples of iconic franchises. This allows the team to have a universal brand that is not only good for attendance but can also sell team merchandise on a much wider scale. Getting in on a team with a great brand name could trim your advertising costs much lower than if you needed a lot of marketing for a lesser known one.
Buy a Team Now!
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Join us on your professional sports team ownership journey.