Buying Your Own Sports Team (with Stocks)

In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Tyler Crowe, Matt Frankel, and Lou Whiteman discuss:

• Robinhood’s layoffs: Good move or bad move?
• Fintechs are going on a wild ride due to crypto trading.
• Publicly traded sports franchises.
• Why sports teams make lousy investments.
• Mailbag: What happened to Alexandria Real Estate?

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

This podcast was recorded on June 16, 2026.

Tyler Crowe: Buying sports teams on Motley Fool Hidden Gems Investing.

Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe, and today I'm joined by long-time Fool contributors Lou Whiteman and Matt Frankel. It's been a big week in the world of sports. We had the New York Knicks win the NBA finals. We had the Carolina Hurricanes win the NHL finals. We have a very large football or soccer tournament that has global implications going on, but for trademark reasons, we can't say the name. But all of this just has sports on our mind. We're going to talk about owning sports teams through publicly traded companies. We're also going to hit the mailbag.

But first, we want to start with the news of the day, and what we saw was Robinhood announced that they are going to lay off about 10% of their workforce. Now, Matt, when I first see this, we've seen a lot of layoffs lately, so my question is, was this a layoffs or a good reason, layoffs because they're in trouble, or perhaps just a nothing burger?

Matt Frankel: Well, it depends whether you believe what Robinhood is going to tell you or not. We've seen this with many companies so far. Robinhood is going to frame this as either a move toward efficiency, streamlining operations. The AI tools are making it more efficient to do more with fewer people, etc. We've seen that time and time again, and to be fair, it's true to some degree. Plus, Robinhood's CEO has been very vocal lately about the need to control costs and get margins up to where they should be. But on the other hand, it's worth noting that Robinhood, like many other companies, overhired during the 2021, 2022 period. Even after a couple of layoff rounds in 2022 and 2023, there are still many more people working for Robinhood than there were before the pandemic era. My general take, and this is just generalizing, is that a 10% cut to a workforce rarely happens when everything is going as well as expected. Something is going slower than management expected it to be. We'll dive into what that might be in a little bit, whether it's good or bad to reduce the workforce in response, it depends on what it is.

Lou Whiteman: Robinhood basically said that this is just cutting fat. They said these are middle management positions, and Vlad talked about not being heavily layered as an organization, which, to me, is code for we had too much. I don't know if it always means something's wrong. I mean, it could be in this case, but I think you also see this at times when there is cover, and I think everybody else doing it, and the AI bugaboo, I think that gives cover. Whether or not it means there's something wrong with the business, or whether or not you don't waste an opportunity. We'll see. I don't think, though, whatever we say about AI, that this is about AI. I use a lot of AI tools. I do see the value. I have yet to see that AI can completely take over the functions of a human being. Maybe it's coming, but it's not here yet. This is bloat, and I guess good on them for getting rid of it. We could see a turnaround, guys. If it is the business, Robinhood's U.S. downloads hit their highest total in at least six months on Friday, thanks to the SpaceX IPO.

Tyler Crowe: To the moon. Well, it only took us half of a segment to get to a SpaceX position already. I want to put on my cynical hat for a minute because with a lot of Robinhood's earnings and stuff like that, a lot of it is related to order flow for equities, but also they do tend to charge fees for things like Bitcoin, and that has been one of the more profitable segments for a while. One of the things I was thinking is, is this masking for the fact that Bitcoin has been down, trading in Bitcoin is down, and those fees associated there have not been as good. Since this was, I wouldn't say their bread and butter, but it was pretty close. Is that maybe to that duck and cover thing, is this maybe a sign that the Bitcoin cryptocurrency trading aspect of their business isn't doing so hot?

Matt Frankel: Bitcoin is way down, as you correctly point out. Crypto revenue for Robinhood has been volatile for a while. That's nothing new, whether it's been in the right direction or the wrong direction. It can certainly move in the wrong direction, given where Bitcoin and other cryptocurrencies are at right now. But I have to believe that some of it, there's a lot going on in the business. There's regulatory risk related to that pay-for-order-flow model and options in particular, not IPOs like SpaceX, I said the magic word again. Options, in particular, have been a cash cow for pay-for-order flow. The prediction markets, which you didn't even mention, there's a lot of regulatory risks surrounding those, which, remember, those aren't gambling. I know you guys are soccer fans, and you could buy securities on soccer there, not gamble. This could be factoring into their decision to downsize, as well as just them seeing an elevated level of risk throughout the business, not just in crypto.

Lou Whiteman: On the crypto thing, Coinbase just announced a 14% cut, which I think gives some credence to the idea that, yes, it's crypto. But again, Coinbase was a bloated organization, too, so who knows? Look, trading volume is up big in stock so far, but on some crypto exchanges, volume is down as much as 40%, or at least it was in the first quarter, so yeah, that's probably part of what's going on here. I'd push back on the idea that the pay-for-flow model is under heightened regulatory risk right now relative to how it's been. I mean, this isn't a political podcast, but I don't get the impression that the current regulatory state is intensified over a few years ago. We'll see what happens down the line, but I don't think it's a reason to lay off now. The prediction market is mostly done with partnerships right now, so, yes, there is risk there, but they haven't announced a lot of hiring there. I'd be surprised if they're throwing in the towel or if it's really related to predictions. I think, if anything, they are looking to scale that up, at least for now.

Tyler Crowe: Last question before you go, both of you thinking about these capital market companies. We've got the Robinhoods, we've got the Coinbases. You can think of our own brokerage companies. Also got ones that work more in foreign markets like eToro. Like you said, really dependent on trading of crypto because it has been a very profitable endeavor. When you're looking at these stocks as investments, how do you think about crypto trading specifically? Is that just a bonus and you need to underwrite the business without it, or do you just be like, yeah, it's just going to come and go, and I don't know when, but it's going to be beneficial down the road?

Matt Frankel: For me, it depends how much of the business it is. With Robinhood, for example, it's a lot more of the thesis than with a company like say, SoFi, which is just starting crypto trading and it's just getting off the ground. To me, that's a very minor part of the thesis. But for a company like Robinhood, it is something to keep in mind, for a company like Block, to name another one in my portfolio where Bitcoin revenue is the biggest line item on its income statement every quarter, you have to consider that and understand that it will be volatile, no matter what. Even if Bitcoin is doubling year over year, it depends on investor interest and how attractive Bitcoin is at any certain time, and how much it’s in the headlines, and how many people want to buy. It's going to be a volatile revenue stream, and I have to factor that volatility in when I'm forming an investment thesis, for sure.

Lou Whiteman: Generally speaking, I don't like brokerages or exchanges in any form because it is just a volume-weighted business, and there's not really much more to it than that. That said, for that reason, if I am going to lean in, I'm going to lean into diversification. Now, probably I want more diversification than just quick crypto and equities. But to me, the more the merrier. I think everybody needs to have table stakes here. Yes, it creates volatility, but you need to be there. But again, I think just the widest net you can cast here is probably the best companies because all of these things tend to have a flow.

Tyler Crowe: Coming up after the break, we're going to find some ways that we can actually buy a sports team ourselves.

ADVERTISEMENT: Every Tuesday, we talk security on Security Now. Hi, this is Leo Laporte from the TWiT Podcast Network, inviting you to join me and Steve Gibson this week as we talk about two big security flaws we revealed last week and how they're already being exploited. We'll talk about memory in your chatbots. Is it a privacy issue? Then, the end of a fabulous hacker competition, thanks to what else? AI. That's Security Now. You'll find it on our website at twit.tv/sn or wherever you get your podcasts.

Tyler Crowe: One of the things that bums me out as a Boston Celtics fan is that I missed my chance to actually own this company because back in the late ‘80s, all the way up until 2002, it was actually publicly traded as a limited partnership. I wasn't quite around to buying stocks at that time, especially limited partnerships on the market, so, hey, maybe someday down the road, I'll get to own my own fair share of it. But one of the things that's interesting here is, there are actually more opportunities to buy individual sports teams in the market than we would have thought. I know there's the history of the Green Bay Packers and things like that. But the chances are opening up, and it does give me to the question, why don't we see more of this? Why aren't people who own sports teams looking to raise some money by issuing stock or something like that?

Matt Frankel: We'll get to some of the ones that are actually publicly traded in a minute, but sports leagues generally prohibit this, or at least make it very hard for them to take a team public. The NFL bans public ownership entirely. You mentioned the Green Bay Packers, which are grandfathered in because they're structured as a nonprofit. The NBA and MLB, for example, require that there is a single controlling owner with a 30% plus stake. That's a pretty big hurdle for a lot of companies. Plus, most owners don't want to worry about things like earnings calls and activist investors trying to tell them what to do. Historically, most of the return from owning a sports team has come from the eventual sale of the team itself, not from the profits it's making on an annual basis. That necessarily doesn't translate well to the public markets.

Lou Whiteman: As Matt said, there's a lot more of this in Europe, and the issue is, and I think it probably it doesn't one for one to the U.S., but it's a warning sign for the U.S. The issue is that sports teams are very expensive. It's hard to make real money even in a closed league. As Matt says, the payoff is normally in a sale, and fan-owned teams are less likely to sell because they are mostly owned by fans. If you buy in, you're just begging for capital calls and other expenses, not dividends. Also, just as a practical point, we always talk about trying to take the emotion out of investing. Invest in your favorite sports teams; that's not going to reduce emotion. That is going to add emotion to the investing decision. Most sports fans, myself included, are irrational, maybe borderline delusional. That's a terrible mindset for making investment decisions. Actually, guys, I own a very small part of a small British soccer club. It is 100% a trophy case asset. I think of it as an expense. I paid for the certificate that came with it. It's almost like I just bought art off eBay or something. There are zero expectations for return. I think that's how you got to limit yourself here.

Tyler Crowe: That soccer club isn't like one of those buy the League 4 team and hope to bring it to the Premier League, like Wrexham or Lake Como. [OVERLAPPING].

Lou Whiteman: No, but Elton John is my chairman, so I got that going for me.

Tyler Crowe: Well, Matt, you said something earlier, and I find a very interesting point about this. It seems like professional teams get sold. That's when all the money is made. But at the same time, there's always some snarky piece that says, well, if they just bought the S&P 500 instead of trying to compare returns of these monstrous numbers they get when they sell these teams. But let's face to Lou's point, nobody buys a sports team to maximize the returns. Thinking about it, there are options in places where you can invest in publicly traded sports teams. What are some of the ways that they can do that? Bonus, have any of them actually even done better than the S&P 500?

Matt Frankel: I know this technically is not a team, but Formula One Group is publicly traded. Ticker symbol is FWONK. That's been a standout in recent years. Liberty Media acquired Formula One in 2017 and it's meaningly outperformed the S&P over the past five years or so. Liberty, they've done a great job of expanding that sport's commercial success, especially in the United States. Think of the big Formula 1 event in Vegas that happened a few years ago just to increase its visibility and commercial viability.

Another one Madison Square Garden Sports. Ticker symbol is MSGS. They own the Knicks and the Rangers, and they've been stellar performing lately. I mean, the Knicks just won the NBA finals. It's really, your team's value goes up when you're good. But not so much prior to last fall, if you look at the chart. It was pretty much flat for the four years before that. Atlanta Braves have been public since 2023. I know that's Lou's home team. That's underperformed the market. Manchester United, for the soccer fans, has been a pretty poor investment since it went public in 2012. There are some indirect ways that could be worth a look. Comcast, for example, owns the Philadelphia Flyers. There are some options that might be worth a look, but none of the direct ones.

Lou Whiteman: There's picks and shovels plates, too. Look, if you like Formula 1, you could buy Ferrari. The big media companies that broadcast games are out there, sports data and gambling sites like Sportradar or all of that. Look, there's even apparel brands if you really want to, but the bottom line is, I'm a sports fan. I don't find any of those really attractive as investment opportunities. Most of these ideas that both Matt and I just gave are uninspiring investments. My investing advice here is to separate your life into categories, don't let them overlap, invest in good companies, and enjoy sports you enjoy

Tyler Crowe: Again, looking at some of the price charts for some of these companies that are publicly traded, you're like, maybe they're not as great of investments as originally thought.

Lou Whiteman: Tyler, if you want to, I can put you in touch. There is actually a very small English soccer team that has been pinging me and probably the rest of the world on LinkedIn, trying to find board members, which I believe involves also investment. If you want in, it's there for you, baby.

Tyler Crowe: If I can be on the board, that changes things entirely. Coming up after the break, we're going to dip into the mailbag.

Hi, everyone, just a quick reminder, if you want to get your questions in and have them read on air, email us at podcasts@fool.com. That's podcasts, with an s, @fool.com. The only three requests I make when we try to answer these questions is one, keep it Foolish, two, keep it short enough I can read on air. Three, we can't give investing advice, so try direct investing advice for an individual. Try to keep it generic. Like, what do you think about a company, or what do you think about baskets, or something like that? Let's not get in trouble with the SEC here.

Today's question comes from Mike Hoffman, and it's about Alexandria Real Estate, which is a real estate investment trust. It trades under the ticker ARE. Here's this question. I've been a long-term shareholder, and I loved that it is a key supplier of office and lab space to the pharmaceutical and biotech industries. Unfortunately, it's been a terrible investment. Is there any hope here? We would love to know if the analysts consider it a buy, sell, or hold. You should mention I originally bought it at a recommendation on a Foolish service based on Real Estate and Dividend Investment Services. Matt, you did have the final say. I think you were in the room when they were making some of the decisions on a company like Alexandria Real Estate. Why don’t you give us the bull thesis, why you guys were really excited about it, and maybe why things didn’t quite work out here, or what you’re thinking about it today?

Matt Frankel: I was an analyst on the real estate services that are mentioned, and Alexandria was actually one of our Original 10. I think I picked five, and our other analysts picked five, and that was one of his. But at the time it was recommended, which was in 2019-ish, Alexandria was not only benefiting from a low-rate environment that was lifting all real estate investment trusts, essentially at that point, but also a surge in demand for medical office and lab space. That was especially true shortly after we invested during the 2020 and 2021 biotech boom, not just because they were developing COVID shots; there was a lot of investment going on in that space. In the years since, interest rates have risen dramatically. Biotech funding has essentially fallen off a cliff, and most of Alexandria's tenant base has become generally weaker.

Plus, the company operates in some very expensive markets. It's concentrated in Boston, San Francisco, San Diego, which right now have excess supply and vacancy problems, which are causing Alexandria to offer concessions to keep tenants in place if it can. Lab space is a more capital-intensive type of real estate than, say, an industrial property like a warehouse. More frequent vacancies require a lot more capital to get it ready for the next tenant. When you have that at a time when costs of capital are elevated, like they are right now, it's a bad combo.

There are some legitimate reasons to take a look at these levels. It does trade at a pretty rock-bottom valuation, compared to its history. Its portfolio quality, meaning the properties themselves are legitimately the best in breed when it comes to medical research space. It has a high dividend yield right now, if you're willing to wait and just collect income. If I already owned the stock, I'd probably hold at this point. But my honest opinion is that the red flags right now outweigh the bull case, and I probably wouldn't buy new shares.

Lou Whiteman: I think my question is, what were you trying to accomplish with this investment? This is a question I have a lot about REITs. If you are looking to exposure to medical research, let's just say, it's a very cumbersome, lousy way to do that. If you want exposure to real estate, you're really putting yourself at the mercy of some pretty complex business cycles by focusing on something so niche. For me, real estate deserves to be part of a diversified portfolio, but a small part. There are easier sectors to invest in that constantly beat the market. Matt mentions the dividend yield. Great. You're getting a risky 6.5%. I'm targeting the S&P is 7-10% a year, so even with that, you're not necessarily buying a winner.

If you do buy REITs, I'd advise pay very close attention to the cycles the businesses are tied in and they go for either mega trends or diversified holdings. Many of these REITs look fantastic in certain moments, but are underwhelming most of the business cycle. You're largely buying, I guess, Black Swan Insurance. I just think yes, there's a place for REITs, but so often the not, they are the cumbersome, complex way to attack a trend when there are easier ways to do it.

Tyler Crowe: It does seem, and this isn't just to Alexandria Real Estate, specifically, we could broaden this out to the real estate general and publicly traded REITs thing. They had an incredible run from, I want to say the early 2000, all the way to 2022, right around when we saw interest rates started to go up again, and that's the whole point is we saw this very long. You could probably even go back further than the time I was saying is you had a very long period of gradually declining interest rates. I mean, you could even pin it back to the ‘80s. That entire declining interest rate environment brought up the price of real estate relatively quickly because the valuation of those will go up with lower interest rates. Now that we're starting to see that trend of interest rates either not necessarily raise much higher, but staying at elevated rates, and we're talking about interest rate hikes instead of cuts, it is something to consider that long-term tailwind is not as much as in place as it used to that would benefit a company like Alexandria Real Estate.

As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against. Don't buy or sell stocks based solely on what you here. All personal finance content follows Motley Fool editorial standards, and it's not approved by advertisers. Advertisements are sponsored content provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. Thanks to our producer, Dan Boyd, and the rest of The Motley Fool team. For Lou, Matt, and myself, thanks for listening, and we'll chat again soon.

Lou Whiteman has no position in any of the stocks mentioned. Matt Frankel, CFP® has positions in SoFi Technologies. Tyler Crowe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alexandria Real Estate Equities and Atlanta Braves Holdings. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.