Imagine you are told you can purchase something for $300 that, at most, might be worth 2.5 cents, and if you are found to violate the rules of owning such a piece you can be fined up to $500,000.
Would you buy it?
Of course not.
Yet, this morning, thousands upon thousands of Green Bay Packers fans rushed to the team website to complete the documents that would make them an “owner” of the team.
It’s the sixth time the Packers have raised money this way, and the first time in a decade, where in 2011, the team sold 185,000 shares in the first 48 hours. If the Packers do a similar amount in the first two days this year, they will raise a minimum of $55.5 million.
It’s genius for the team and, at least financially, asinine for the fans.
Although it is called “stock,” it is not regulated by the Securities and Exchange Commission. And although it costs $300, plus $35 for handling to provide the stock certificate, it can’t be sold.
Well, it can be, if the Packers choose to buy it back for 2.5 cents. But that’s only if a shareholder cannot be located for five years and who knows how they’re going to pay it for a missing person.
That’s not a joke. The five-year missing shareholder stipulation is actually in the subscription documents issued Tuesday morning to any prospective investor.
But wait! How cool is it to have that certificate to display! You mean the ones that look just as good with your custom laser printed name that are sold on eBay for $60?
But wait! In this case we are really helping the team! My contribution will directly help the small town Green Bay Packers afford to keep up with player salaries and stay competitive!
Well, it’s not even that.
In 1997, as part of allowing the Packers to sell stock for the first time in 17 years, then NFL commissioner Paul Tagliabue stipulated that none of the money raised could go towards player salaries and bonuses.
One could argue that the capital improvements to Lambeau Field and the surrounding Packers-owned 'Titletown' area does that indirectly, but it’s not as if there’s any 'thank you' available in the form of any discount anywhere for being a “shareholder” other than going to an annual shareholders meeting and saying “I AM A GREEN BAY PACKERS SHAREHOLDER.”
Then there’s this: According to the rules, you are bound to uphold the conduct principles of other REAL NFL owners and if you don’t, NFL commissioner Roger Goodell has the right to take your shares and fine you up to $500,000.
Again, it’s right in the documents that Packers fans will quickly agree to today.
And after all this, how many do you want to buy?
According to the documents, there were more than five million outstanding shares before today’s sale and the average shareholder owned 14 shares!
Good for the Packers for making money out of thin air by using the idea of the pride associated with local ownership — which was legitimately forged in 1923 when a group of Green Bay businessmen pooled together $5,500 to be able to fund the season — to bait fans into paying for a feeling.
Even though it’s not regulated by the SEC, it’s shocking the SEC even allows such a high-profile business to get away with them calling this puffery a stock.
