DCU Stock?

[jbutta10]

Okay I've been thinking about this for awhile, :) but I was reminded when I read a posters comments regarding the Packers Publicly owned stock on the Stadium/DCU thread. I think it would be a great idea if this was an option with DCU. Think about it, we could all buy into the team we know and love, and thus have a hand in what goes on. We definitely would be the first MLS team and that goes along with our groundbreaking traditions of the past. Try this: If DCU got 15K fans to commit to this idea of a "Introductory Buy-In" whatever they want to call it deal" @ $500 bucks initial. That is a total of $7.5 mil invested from the fans/minority owners. This amount could represent 33% ownership by the fans and the future owner would have to pay the rest of the ownership fee, or whatever they have, and have 67% of DCU. Okay, I know I'm dreaming :o , but tell me how far off am I on this. I know people that aren't that interested in DCU that would jump at that, just to be into something that has some promise. :cool:

[chayes]

Okay I've been thinking about this for awhile, :) but I was reminded when I read a posters comments regarding the Packers Publicly owned stock on the Stadium/DCU thread. I think it would be a great idea if this was an option with DCU. Think about it, we could all buy into the team we know and love, and thus have a hand in what goes on. We definitely would be the first MLS team and that goes along with our groundbreaking traditions of the past. Try this: If DCU got 15K fans to commit to this idea of a "Introductory Buy-In" whatever they want to call it deal" @ $500 bucks initial. That is a total of $7.5 mil invested from the fans/minority owners. This amount could represent 33% ownership by the fans and the future owner would have to pay the rest of the ownership fee, or whatever they have, and have 67% of DCU. Okay, I know I'm dreaming :o , but tell me how far off am I on this. I know people that aren't that interested in DCU that would jump at that, just to be into something that has some promise. :cool:

Would Garber deliver a bill at the end of the year asking each shareholding to pony up for the losses?

[griffin1108]

While what you propose is a nice idea in theory, please be advised that we couldn't find 300 DCU fans in Virginia to pony up $10 a person to get DCU affinity license plates printed. I really like the idea of publicly held sports teams; however, in the U.S., the Packers are such an aberration -- publicly held, located in town of about 100,000 people in northern Wisconsin -- they are probably the exception that proves the rule. Also, remember that after the buy in, who comes up with the cash to cover the losses DCU will incur until it has its own stadium?

[Colonial717]

The problem would be getting 15K. However, if you let people buy more than that it might have a chance in hell of working, as some people would put anywhere from 1000, which we would only need 7.5K to 10,000 (really no limit) in as they are able and think it a good investment. The problem is that somebody would consolidate this if it were fewer people and not an actual community thing where they wanted their little peice of United and were willing to shell out 500 bucks to get it.

[beltwayrob]

I know I have suggested this more than a few times here and in other places, its actually not a bad idea, and in a town like DC where people are always looking for a good investment this wouldn't be a bad one. Hell I'd pony up a couple grand! But in reality I doubt it would ever happen, unless Garber thinks its the saving grace of MLS!

[Lanky134]

As stockholders, wouldn't we all have to vote on certain decisions that would affect the club?

People, we can't even vote on a friggin' tagline.

[beltwayrob]

As stockholders, wouldn't we all have to vote on certain decisions that would affect the club?

People, we can't even vote on a friggin' tagline.

Hey that's not our fault, talk to the Mods!

And yes technically we would be entitled to a vote however, in publicly traded companies the Chairman/woman of the Board votes as a proxy for "common shareholders."

[Lanky134]

And yes technically we would be entitled to a vote however, in publicly traded companies the Chairman/woman of the Board votes as a proxy for "common shareholders."

Only if you allow your vote to be a proxy, right?. You think anyone here is going to give up their vote? :D

[Super White Boy]

I'd love to do it if it would ever friggin' happen. The problem is I don't think that you could find enough people willing to put up that kind of money, let alone that a buyer for the team wouldn't want to deal with a bunch of stock holders who would have no real say but would be an annoyance because they "own" the team too.

Nice dream though!

[CHICO13]

Bill "The Beer Man" is my.....uh....financial advisor. He votes no ;)

[JoeSoccerFan]

Bill "The Beer Man" is my.....uh....financial advisor. He votes no ;)

Is he recommending a more "liquid" portfolio?

[CHICO13]

Is he recommending a more "liquid" portfolio?
He's either trying to.....


A) Get mom a new wheelchair

B) Retire to the Caymans


either way, he's covered.....

[revelation]

The major issue with a "public offering" for DC United is that they need operating capital and not investment capital. Basically, they don't have a single outlay of cash that once built will provide return on investment (unless of course they offer stock in a new stadium), rather they need a steady stream of money coming in from a secure source (which now is AEG). A one-off stock offering would provide a nice tidy sum to sock away but given the nature of the league ownership would just get pissed away by money losing franchises such as everyone but Cowlumbus and perhaps the Lalagals. So, for MLS they gain very little except that they have to open their books to investors (which means they cannot overemphasize losses to save on tax burdens and other money maneuvers the AEGs of the world do...) and have a bunch of people they have to provide a return on investment to...

Seems like bad business to me...

[Nick_78]

Keep in mind that even in Green Bay it is not really "real". Sure you really own part of the team, but in 1997 the sold 1 million shares. My uncle owns one, as do 999,999 other people. Sure it rased money, but its not like the FO is really concearned about my uncle's opinion, even though he does own stock in the team.

My point is this, I think this is a great idea as a fundraiser, a way to make a buck or two for the team. As an investment it sucks, even once they have a stadium and are profitable, people aren't going to buy into a soccer team as an investment. Now you want to sell off some shares that represent a mere fraction of the ownership of the franchise for 10 bucks a pop so that Mr. or Mrs. DCU Fan can hang it on the wall and brag to their friends about how they "own the team", I think that's brilliant.*



*yes I know there are craploads of laws dealing with how exactly this works, I was trying to keep my point basic to avoid a seven page post.

[swedcrip34]

Would Garber deliver a bill at the end of the year asking each shareholding to pony up for the losses?

this point can't be emphasized enough. there's no way I can see it working as the team is set lose money for at least several years to come. someone's gotta answer the cash calls and I'd rather it not be a loan. You might as well sign the team over to a bank.

[Nick_78]

this point can't be emphasized enough. there's no way I can see it working as the team is set lose money for at least several years to come. someone's gotta answer the cash calls and I'd rather it not be a loan. You might as well sign the team over to a bank.

Green Bay Packers, Inc., has been a publicly-owned, non-profit corporation since Aug. 18, 1923, when original articles of incorporation were filed with Wisconsin's secretary of state.

A total of 4,748,910 shares is owned by 111,507 stockholders - none of whom receives any dividend on the initial investment.

The corporation is governed by a board of directors and a seven-member executive committee.

This is where my point comes in, there is no money exchanged. Stockholders in GB don't get a dividend and likewise wouldn't be expected to pay the water bill. Basically its a way to generate money for the team. I don't know how much those 1 million stocks they sold in '97 went for, but just for the sake of argument, if they went for 50 bucks a pop, thats 50 million dollars for the team (ok a little less we can't forget Uncle Sam). Obviously DCU would never sell a million shares, but hey, its still a cool idea.

[tallguy]

Would Garber deliver a bill at the end of the year asking each shareholding to pony up for the losses?

Reality speaketh. It's a nice daydream though -- I would have to image that the annual shareholders meetings would be pretty entertaining.

[ignatz]

It certainly is possible, but seems very unlikely that MLS/AEG would make DC United shares available to the public. Whether fan shareholders would get a vote would depend on the kind of shares offered. Some companies -- I think the Washington Post may be one, but I'm not sure -- offer different classes of stock, such as "A" and "B." One gets to vote and the other doesn't. The non-voiting shares are the ones sold to the public.

From AEG and MLS's point of view, a major downside likely would be that sales of shares to the public bring federal securities laws into the picture -- with their requirements for audits and public reports. If they put shares up for sale to the public, the first one in line to buy some would be the players' union for just that reason.

Finally, if I understand the league structure correctly, and I'm not sure I do, there are no such things as DC United shares -- only MLS shares, with operating rights to particular franchises made available to the shareholders on terms that are not disclosed in any detail. To make DC United a separate corporation, like the Packers, would require a major restructuring of MLS.

[TEConnor]

ignatz is correct, in my opinion.

I could see one day where MLS, the league, could float a stock, if it reorganized. But individual franchises of a larger conglomerate would not float their own, unless league structure was radically reorganized. After all, it is Major League Soccer, L.L.C., not D.C. United, L.L.C. Essentially, my best guess at the technical structure is that DC United is a sort of subsidiary of MLS. One further point, most LLC's carry an expiration date. I presume that MLS has one, and that they intend to reorganize at that time. But what structure they take then is any body's guess.

As little as I understand of corporate governance, an LLC can have many "owners" but there are problems for what we are all hoping for. An LLC passes through losses to the "owners." Hence, if they offered public holdings, these holdings would carry liabilities that could be nearly limitless. This was the case for some Lloyd's of London holdings that buried a lot of people in the late 90's. Furthermore, an LLC has to approve any transfer of ownership. Hence, buying and selling of the holdings would be subject to approval by the ownership group.

This is just my novice understanding, I'm sure someone will be along to set me straight soon.

Tim

[Jegao Paraiba]

ignatz (you too TEConnor) weighs in with the best post in this thread.
Publicly traded sports franchises are a reality.
The Boston Celtics and Manchester United are examples.
But MLS's single-entity means that single teams aren't different companies.
I'd buy MLS shares in a heartbeat, though.
And when/if the single-entity arrangement is done away with, it will signify that the vast majority of teams are on a secure financial footing. Then I would probably be interested in DC United shares.

Rember to read your prospectus carefully before investing.