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11-21-2004, 09:50 AM
  #14
Orange
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Quote:
Originally Posted by NYR469
the pens and sabres filed for bankruptcy and then were sold for far less than they were actually worth...that doesn't make the original value wrong, that just means that circumstances caused the team to sell for less...
Quote:
Originally Posted by go kim johnsson
Whoa. Just because teams were sold for less than Forbes says they're worth, automatically makes their value that much less? Wrong.
There is no such thing as "original value". It's impossible to calculate. The only value that matters is the market value. This value is determined by the price people are willing to pay to acquire a franchise. (think stock market)

The value listed by Forbes is a projected market value. An estimation of want they think a buyer would be willing to shell out for a particular franchise. And just like any prediction made by any economist I've ever known, Forbes' predictions are far from the mark.

Now, the financial situation of a company counts against it's value. You can't say a buyer got a bargain because a franchise filed for bankruptcy. That counts against it's current market value. To summarize, a team didn't "sell for less" because of bankruptcy. A team's value was lessened because of bankruptcy, inevitably lessening it's selling price on the market.

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