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08-15-2012, 02:23 PM
  #373
bozak911
Ignoring Idiots
 
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Join Date: May 2010
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Quote:
Originally Posted by DANOZ28 View Post
man thats confusing, your saying move a non profitable team (like dallas, phx or florida) to to a good market is bad??? is this clear to anybody else?
Yes, actually...

Trying to think of a better analogy... but squidz pretty much explained it as straightforward as I think is possible.

I've gone down the path of urban relocation driving down the property values in the suburbs, or suburb urbanization driving up the values in the urban areas making the property out of reach of "native" residents.

Needless to say, there isn't really an easier to understand analogy.

Basically...

Before the Thrashers moved, league revenue was $100. The owners were forced to pay $57 to the players and were able to keep $43 for themselves (not actually how it works, but meh...) Dallas breaks even at having to pay $57 to the players.

After the Thrashers became the Jets, league revenue jumps to $150. Now, the owners are supposed to pay $85 to the players and able to keep $65 for themselves (again, that doesn't count total expenses, but meh...)

Dallas is still only bringing in $57, but now the owner has to fund the extra $28 out of his $65 resulting in a net loss of revenue for the owner.

See? There is no more easy way to explain it.

Think of it from a commodity perspective... If you can only afford to spend $1 on laundry detergent, and then there is suddenly someone that is added to the mix that can (and will) afford to pay $1.50, the price goes up on the laundry detergent based on the market. Your income didn't go up and you still only have $1 to spend on laundry detergent, but it now costs $1.20... In the end, you start cutting back on the amount of laundry detergent you use. Your whites aren't as white, and your darks aren't as dark...

Bleh.

/facepalm

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