What sports fan hasn’t dreamed of owning their own team?
Outside of fantasy sports, it’s largely a fantasy for most, including athletes and team and league employees, who may be prohibited from investing directly into the franchises they work for. But Morgan Stanley came up with a way to make it possible for some of its wealth management clients to find other ways to support their favorite teams.
The financial services company recently rolled out the Parametric Custom Core Sports Leagues Strategy, a portfolio of holdings made up of publicly traded companies that sponsor specific sports properties, according to Sandra Richards, head of Morgan Stanley’s global sports and entertainment division.
Richards said the company is aiming to target sports-centric clients and potentially bring in new ones, all while raising Morgan Stanley’s profile in the sports space.
Owner’s box: The idea for the sports sponsor portfolio came about when a Morgan Stanley client who works for a league asked if the company could put together a custom portfolio of sponsors of the league for him to invest in, Richards said.
The Morgan Stanley team viewed the opportunity as a way to allow athletes and team and league employees to financially support the properties they’re affiliated with without investing directly, she said. That’s due to some restrictions in the space: While the NBA’s most recent collective-bargaining agreement allows the players’ association to invest in NBA teams on behalf of all NBA players (through select private investment funds) and players to invest in WNBA teams, some leagues, like the NFL and NHL, prohibit active players from investing in franchises.
Plus, the sports portfolio also allows non-athlete investors to get involved beyond just fandom, Richards said.
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“If you think about someone who’s a fan of the game, you want to do more than just wear the jersey,” she said. “You want to do more than just go to the game or watch on TV.”
That being said, the offering isn’t for every investor. Clients of Morgan Stanley financial advisors must meet an investment minimum of $250,000 in order to be eligible, according to Richards.
Suite deal: Investors can choose from portfolios of sponsors of the NBA, WNBA, NFL, NWSL, MLS, MLB, LPGA, PGA, NHL, US Open Tennis, F1, Nascar, and college basketball, according to Morgan Stanley.
Clients can further customize their investments from there, Richards said, and can home in on any of those leagues or even add new leagues of their own as sports like pickleball and volleyball gain traction.
Long ball: For Morgan Stanley, the new strategy also lets the company engage more deeply in sports as team valuations, salaries, and athletes’ own brands continue to grow, Richards said.
Morgan Stanley already has a presence in sports like tennis, and the Parametric Custom Core Sports Leagues Strategy gives advisors and execs another point “to add to our portfolio of conversation” when speaking with clients and at conferences when the topic inevitably comes up, Richards said.
“Sports is a huge focus, and it’s going to continue to be a huge focus,” she said. “We’re not in the space where we’re out there investing in the team, [but] there’s ways for us to contribute to the sports space in a meaningful way.”