Would You Rather Own an NFL Team or the S&P 500?

Dear Reader,

The NFL season kicked off last night.

And while I'm not a big sports fan until the playoffs, the sale of the Seattle Seahawks — which closed last week for $9.6 billion — is a perfect excuse to keep talking about something we've been covering all week.

Durable competitive advantages.

Specifically, unique assets.

The Scarcest Asset in American Business

We talked about Republic Services and its landfills earlier this week.

There are roughly 1,200 landfills in the United States.

That's scarce.

But NFL teams?

There are only 32 of them.

In fact, across all professional sports in America — football, basketball, baseball, soccer, hockey — there are only 124 teams total.

Sports franchises are ten times more scarce than landfills.

And scarcity, as we've discussed, is the foundation of a durable competitive advantage.

Why Sports Teams Have Gotten More Valuable

Here's something worth understanding about why sports franchise values have exploded over the past decade.

Advertisers have a problem.

Streaming has destroyed conventional media.

You watch Netflix, HBO Max, Disney Plus — no ads.

You DVR a show — you fast-forward the ads.

But nobody fast-forwards a live game.

Nobody pauses the Super Bowl to skip a commercial.

Live sports is one of the last places advertisers can reach a mass audience in real time and actually have their ads watched.

As conventional media has been demolished, sports franchises have become one of the most valuable advertising vehicles on earth.

And there are only 32 NFL teams.

You cannot make more.

The Seahawks Numbers

Paul Allen bought the Seattle Seahawks in 1997 for $194 million.

The Allen family sold it last week for $9.6 billion.

That's a 14% compounded annual growth rate over 29 years.

The S&P 500 compounded at roughly 9.9% over the same period.

The Seahawks beat the market.

A genuinely excellent investment by any measure.

The Lakers Lesson

But it doesn't always work out that way.

And I want to share a number that surprised even me.

Jerry Buss bought the Los Angeles Lakers in 1979 for $67.5 million.

The Buss family sold it a couple of years ago for roughly $10 billion.

Sounds incredible, right?

Here's the thing.

If you had taken that same $67.5 million in 1979 and put it into the S&P 500, you'd have roughly $12.5 billion today.

Twenty-five percent more than the Lakers sale produced.

The most glamorous sports franchise in America — with ten championships, Magic Johnson, Shaquille O'Neal, Kobe Bryant — underperformed a simple index fund over the same period.

Now, as a buddy of mine pointed out very cleverly when I showed him this math:

You would not have had nearly as much fun as Jerry Buss did owning the Lakers.

Fair point.

The Real Takeaway

Here's what this teaches us about unique assets as a moat.

Scarcity alone isn't enough.

You need scarcity plus pricing power plus demand that grows over time.

The Seahawks had all three — especially the streaming era tailwind that made live sports more valuable by the year.

The Lakers had scarcity and glamour, but the numbers suggest the market may have been pricing all of that in for decades.

When you're evaluating a unique asset, the question isn't just "is this scarce?"

It's "is the demand for this scarce thing growing faster than the market's ability to price it?"

That's where the real money is made.

And when I think of the most in demand scarce asset, I think gold.

There is only so much of it in the ground.

And central banks are in a gold buying frenzy.

If you want to find the best way to capitalize on this gold rush -

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Have a wonderful day.

I'll see you tomorrow.

“The Buck Stops Here,”