Are Packers Fans Rational? What The Green Bay Packers Are Teaching Us About Economics

Rational choice theory teaches us that people make decisions that maximize their best interest. Ideally, this is how we decide to allocate our time, our money, and our energy—based on expectations of utility. With $300 I can buy a Coach purse, treat my mother to a nice dinner, donate to my favorite charity, invest in a share of Spotify stock, or purchase a share of the Green Bay Packers. Which should I choose, and why if I want to maximize my utility? 

Over 360,000 people faced with such a choice have chosen to buy over five million shares in the Green Bay Packers, the NFL’s only non-profit owned sports team. But these shares are not typical. They can’t be sold, they don’t appreciate in value, and the Packers even reserve the right to buy back the shares at two-and- a-half pennies, which would imply a built-in loss of 99.9% of your $300 share. 

So why would they do this? They buy shares because they get utility out of the feeling of collective ownership. They like getting to democratically elect the board of directors, a process made more inclusive by the fact that no individual can control over 200 shares and have a more major influence. And the outcome has been strong— Four Super Bowl wins and 11 NFL Championships over 100 years, and a local culture of collective support unique to the NFL where volunteers even show up to shovel snow off the field. The Packers fans are ultimately acting rationally, because their definition of utility goes beyond financial return to how ownership makes them feel. As Peter Collette, a Wisconsin-born, Packers fan and share-owner noted proudly, “Being a Green Bay Packers Stockholder represents me being a part of the ONLY professional sports organization ‘owned’ and supported by a community of passionate fans throughout the world.”

As a professional investor, my daily job is to help people and institutions decide which securities to buy. But I’m what they call an impact investor focused on companies that try to make money and do good, which means that I am constantly balancing social and environmental factors with financial considerations. I know intimately that the rational choice of how we use our dollars is not simply based on how much financial return, it’s also about multiple utility factors. Do I know where my money spends the night, and do I feel good about it? If I make a dollar for my grandchild through, for instance, a private prison investment that puts someone else’s grandchild behind bars, do I feel ok with that? Or do I assign utility to the idea that I can make money in ways that support my family, without harming someone else’s family?

When we buy into the concept of shareholder primacy—the idea that the sole driving goal of a corporation should be to maximize financial value for shareholders—we often wind up diminishing the total utility of our investment. What if beyond simply focusing on what makes us the highest financial return—we actually focused on what investments make us feel good and our communities thrive? 

We might, like the many Packers owners nationally, want to start to look more at investment opportunities that are re-envisioning the purpose of ownership. Here’s two examples of companies that, like the Packers, are bucking shareholder primacy in the name of maximizing utility for all stakeholders—but unlike the Packers, are actually for-profit corporations. 

Firebrand Bakery

Bread addicts like me know that bakeries provide a massive amount of utility. But they don’t always prioritize social utility through their hiring practices and ownership structures, making Firebrand especially unique. 

Firebrand was founded and is led by a white man, whose management team is otherwise 60% women and 80% people of color. They focus on hiring formerly incarcerated people and people who have experienced homelessness, who are now worker-owners as part of a multi-stakeholder ownership strategy. (It’s worth noting that oddly, the Packers bylaws prohibit people convicted of a felony from buying shares—Firebrand, on the other hand, prioritizes them). 

In 2020, the company converted its majority ownership to a Perpetual Purpose Trust, a trust vehicle. The stated objectives of the trust are the following—very different than the typical corporate bylaws focused on maximizing shareholder return.

1. Preserve Firebrand’s independence and values, and promote the Company’s mission of creating great jobs, shared value, and thriving communities. 

2. Protect employee and community participation in the governance of the trust and board of directors. 

3. Operate the Company for the benefit of the Stakeholders rather than profit maximization and shareholder return, while acknowledging the necessity of financial and competitive security for the long-term viability of the enterprise. 

4. Prioritize hiring people who are formerly incarcerated, homeless, or otherwise have high barriers to entering the workforce.

5. Protect the inclusion of employee and community participation in profit-sharing

A trust stewardship committee made up of the founder, worker-owners and broader community members helps guide decision-making for the company based on the objectives stated above. 

At the time this structure was created, outside investors—including some represented by my firm, Candide Group—also capitalized the company with $2.5 million. Investors will receive 90% of profits until they receive double their original share price. Unlike the Packers, their shares are designed to be appreciated. At the ten-year mark, Firebrand can buy back shares from investors at twice the share price—once again, unlike the Packers, whose shares if bought back would be at fractions of a penny to the dollar. So, while both organizations found ways to make ownership meaningful from a governance perspective, Firebrand has additionally found a way to factor financial reward into its structure as well. 

East Bay Permanent Real Estate Cooperative (EBPREC)

EBPREC was founded to try and maximize community utility within the real estate market. Their stated mission is to “remove land and housing from the speculative market to create permanently affordable, community-controlled homes.” The organization, structured as an LLC, has been acquiring properties in Oakland, California by selling shares in thousand-dollar increments to over x shareholders (including me) so far through their Direct Public Offering. These shares aim to deliver a 1.5% annual dividend and then return capital within 10 years. Share owners also get to vote on changes in the governance of the organization, and are represented on the board of directors. They sit alongside resident owners and community members in making collective decisions about what factors—financial return, community health—should be prioritized in the context of real estate management. 

While traditional real estate funds will acquire property and then sell it later to the highest bidder, regardless of the impact on the local community, EBPREC explicitly prohibits the sale of their properties to unaligned buyers who would jeopardize long-term affordability.  Co-founder Noni Session commented, “Property has long been a tool used to oppress People of Color. The impacts of slavery, redlining and municipal disinvestment reverberate through our legal, political, and economic landscape. ​​We’re bringing hope to our community, with a visible pathway to collective ownership and transformation.”

We Have to Reinvent Our Business Models to Do the Most Good

Challenging shareholder primacy is dangerous to the establishment as it’s essentially pointing out the emperor has no clothes (or in the case of financial barons who benefit from it, too many clothes). The establishment always fights back against change: for instance, the NFL actually created what’s often referred to as the “Packers Rule,” that no additional sports franchises are allowed to be owned by non-profits, essentially protecting the god-given right of sports owners to take in billions in government subsidies while still raking in huge profits.Entrepreneurs lobbied to create the “B Corporation” structure which allows companies to prioritize other factors alongside shareholder value, embraced by companies like AllBirds, Athleta and The Body Shop. The more we create spaces for diverse ownership models, the more we can start to see businesses—from sports teams to bakeries—that are able to satisfy multiple vectors of utility.

Thanks to Starkey Baker for their contributions to this piece. Full disclosures related to my work here. This post does not constitute investment, tax, or legal advice, and the author is not responsible for any actions taken based on the information provided herein. 

Follow me on Twitter or LinkedIn. Check out my website or some of my other work here.