SportsETFs is an issuer of equity ETFs that have exposure to the sports industry. The company's first ETF, the ProSports Sponsors ETF (FANZ), holds companies that are official partners of the NFL, NBA, MLB and /or NHL. Nick Fullerton, the firm's co-founder and president, has run a registered investment advisor for a number of years, and is passionate about sports and investing. ETF.com caught up with him to discuss this new niche in the ETF industry.
ETF.com: Let's start by talking about your company, SportsETFs, and the ETF you just launched, the ProSports Sponsors (FANZ). What’s the motivation behind FANZ, and are all your products going to be based on sports?
Nick Fullerton: My partner Jim Kozimor and I, our kids go to school together, and we were having coffee one day, and we were trying to figure out who's making money on pro sports.
He’d been showing me some stats about how much the leagues' current revenues are, what their growth rate's been, and what they're projecting in the future. The NFL's saying they want to have $25 billion in revenue by 2025, up from $12.5 million this year. So they want to double revenues.
We took a step back and said, who's making money from these sports leagues? And it was: owners, the leagues, and some of the players.
Half the U.S. really enjoys watching sports on the weekends and every night, but they have no way to participate in that through investing. Yes, they can buy Nike stock, yes, they can buy Under Armor, but when it comes to watching these games and teams and players that they follow with a passion, there was no way for them to invest in that.
We decided to look at the broader sports industry and see who else was making money from these. We went through a whole big process of sponsors: Do we look at eyeballs, do we look at game attendance? How are we going to capture this growth?
We felt all these companies that get into a financial relationship with the leagues were poised to benefit from that growth they're shooting for.
And yes, potential future products would also have a sports theme.