December 13, 2011
One More Thought -- Does Anyone Own the Packers?
Professor Bainbridge reasonably asked what I actually thought about whether the Green Bay Packers stock is a security. I said it's not under federal securities law, but that I think it should be. Then I had one other thought -- who really "owns" the Packers? Professor Bainbridge noted in his post Owning the Green Bay Packers, that his first weekend went well. Of course, as he has said, he really is the "proud owner of 1 share of stock in Green Bay Packers, Inc." By his own standards, anyway, the good professor is not actually an owner of the Packers.
Back in March of 2010, Professor Bainbridge let me know: Once more with feeling: Shareholders Don't Own the Corporation. As he explained:
There is no entity or thing capable of being owned. Granted, because the shareholders hold the residual claim on the corporation's assets, their deal with the corporation has certain ownership-like rights. But they have only those rights specified by their contract, as that contract is embodied in state corporate law and the firm's organic documents.
So, to recap, the Packers sale of stock provides neither a security nor ownership of the Packers. So what is it? The stock grants the right to attend an annual meeting and vote on a few things, but provides very few "ownership-like rights." Is it really just an expensive piece of paper? It must be a little more than that, because even though people feel good about a donation to Goodwill and other such groups, they don't frame the receipt. (Maybe some people do, I guess, but I'm assuming not.)
Ultimately, then, it is this simple: Packers "stock" is a contract that provides the right to vote for the members of the Board of Directors, amendments to the Article of Incorporation, certain mergers or sales, and dissolution, at a price of $250 per vote.
With that settled, on to the next issue: With the Delaware Chancery Court having filled Chancellor Chandler's seat, when does Professor Bainbridge join the Packers board, as permitted under the bylaws? Assuming he'd accept such a nomination, consider that campaign launched. Their quarterback is a West Coast guy. Why not add a similarly situated director?
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