Q: What’s an industry that doesn’t perform well when publicly owned?
A: Pro-Sports.
Professional sports teams make a lot of money. But despite their profitability, they aren’t often purchased by public corporations—rather the majority of their ownership is private individuals.
Individuals have the liberty to spend money however they wish without any responsibility to investors.
Publicly traded companies, on the other hand, live and die by quarterly earning reports. Their shareholders are more fickle than the most fairweather fans.
In the 1990’s, after its wild success with the fictional Mighty Ducks movie, Disney founded an actual NHL team by the same name. The team’s record was somewhere between decent and good for the next several years, but in 1997 The Mighty Ducks accounted for 4x more merchandise sales than all the other teams… combined!
While that’s remarkable, Disney still found themselves in a lose-lose situation: maximize profit and upset fans, or spend money to win at all costs and upset shareholders.
Actionable Question: What successes am I overlooking because I had identified a different goal?
-Andrew Nemeth
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