Norway’s massive sovereign wealth fund cut back on sports team holdings in 2020, slashing its stake in Bundesliga headliner Borussia Dortmund to nearly zero and cutting back positions in the New York Knicks and Rangers, Atlanta Braves and Formula One. Meanwhile, the fund added DraftKings to its holdings.
Norway is one of the stock market’s most important investors, owning about 1.5% of all equities in the world through its $1.3 trillion sovereign wealth fund. Norway is unique among sovereign wealth funds in that it details its equity holdings annually. Norges Bank, the state entity managing the wealth fund, recently released its annual year-end holdings, which showed that, as of Dec. 31, 2020, the Scandinavian country owned 9,123 stocks globally, worth $931 billion, with about $30 billion in sports-related companies. The balance of the wealth fund is invested in bonds and real estate.
The biggest cutback came in shares of Borussia Dortmund, one of the German soccer league’s most successful teams and one of the most popular squads in the Bundesliga. The Norway fund slashed its equity holdings from more than 890,000 shares at the end of 2019 to around 11,000 shares a year later, based on an analysis of share prices, market values and ownership percentage disclosed by the fund (Norway doesn’t disclose share counts).
Norway also lightened up its position in the parent of the NBA’s Knicks and NHL’s Rangers, Madison Square Garden Sports, by about 20%. In 2020, Madison Square Garden spun off its live entertainment business to shareholders, providing one share of Madison Square Garden Entertainment for every share of MSG. Norges Bank reduced its holdings in the sports team parent by more than 10% and in the venue operator business by about a third. Norway also slashed its ownership of MSG Networks, an independent regional sports network, from 1.56% of the business to 0.25% in the year, according to the bank’s disclosures.
The Norwegians also lightened up their holdings in Liberty Media’s sports asset tracking stocks, for baseball’s Atlanta Braves and Formula One. They cut their Braves position by about 20%, now owning 1% of Braves shares, and trimmed their F1 equities by about the same amount. Norway now owns about 1.27% of F1, worth about $155 million. The other pro sports team stock owned by Norway, Juventus, saw cutbacks as well, with the sovereign fund owning just over half-a-percent of the Serie A club’s shares entering this year, down from 0.68%. The sovereign wealth fund doesn’t own positions in other well-known publicly traded sports properties, such as Manchester United, A.S. Roma or the handful of other European soccer clubs that have stock market listings.
The reduction in the sovereign wealth fund’s sports team holdings runs contrary to general market wisdom that institutional investors increasingly want to own sports properties for their long-term valuation growth and their tendency to not move in tandem with other investments. Norges Bank declined to comment on its reductions.
The Norwegians weren’t totally bearish on sports, however. The fund added modestly to its position in WWE, though it still owns less than 1% of the pro wrestling stock. The fund also reported a small stake in DraftKings, which went public in 2020 by SPAC. The fund owned 4.7 million shares of the fantasy sports and gaming company, about one-tenth of 1% of shares, worth $290 million. The biggest increase came in Norway’s investment in Scientific Games, which makes technology for sports betting and casinos. The fund hiked its stake in that business to nearly 1.5% of the company, from less than one-half at the end of 2019. While the fund also boosted its shares in Caesars Entertainment and Flutter Entertainment, parent of FanDuel and bookmaker Paddy Power, it wasn’t wholeheartedly bullish on sports betting in 2020. Norway reduced its stakes in William Hill, Pointsbet Holdings and Churchill Downs, which has casino and sports betting exposure in addition to running the Kentucky Derby.
All told, the fund had 33 sports-related businesses in its portfolio according to the Sportico analysis, excluding retailers, sporting goods makers and fitness businesses. The wealth fund was established in 1996 with royalties from North Sea oil and gas production and is managed for the benefit for the Norwegian people.