How to make the NHL profitable again and prevent future lockouts: IPOs
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10-01-2012, 07:30 PM
Join Date: Dec 2009
Location: New York, NY
Originally Posted by
The revenue growth wasn't from ticket sales or any attempt to modify the supply and demand curve. That was my definition of 'fixed'. The growth also happens on a fixed level, it's a fixed gain, and it doesn't deviate from the line. The growth from 2.1 to 3.4 was all according to the curve and did not deviate from it for even a single second.
If they don't agree to it, you throw them out of the NHL. I already said that. Anyone who owns stock knows that stock shares are NOT cash. Go to your local department store and try to buy something and tell them you have shares and they'll laugh at your ridiculous idea, as they should. Cash is cash and options are options.
When a CEO is signed to a company in the US, it's normal for his salary to be fixed at $20-30 million, but he/she will get hundreds of millions in stock options.
It makes plenty of sense to those of us with degrees. If you don't understand, please have a friend (with a degree) help you out. Or consider attending a business school.
The entire point is that a team like Columbus, who doesn't have the cash to sign superstar players, could potentially sign a ton of them using stock options. If teams like you mentioned (Rangers) chose not to sell shares in their team - Columbus could send front-loaded stock option offer sheets to all of their players - and essentially leverage out half their guys.
Who wouldn't want to see an underdog team walk away with some/most/all the superstars of a bigger team? The market would be opened. You can only offer players so much money - stake in a team is a separate deal.
Ok.. Are the shares liquid (and if it's a public company then it will be liquid, to some extent)? If so then they're basically cash because they can be sold for cash.
I did go to business school, and I've worked on wall street. Stocks, if they're liquid, are essentially cash because you can sell your stake for cash at any time. If you own a substantial amount (like a 5%+ stake in a company), then it's less liquid because it's hard to sell that much without driving down the price. For players, an individual player would own a small % of the team, which would be easy to sell.
Options, also have a value. Are you familiar with Black Scholes? There's newer and better models for determining option values now, but bottom line is, there's a way to determine the value of an option, and options can also be sold or hedged. (Of course, there's usually restrictions on exercising and selling those options, but regardless, there's a way to determine the value). Not to mention, large amount of options are typically given to employees who have a substantial amount of control over how the company will perform (eg. CEO, CFO). Individual players have almost no control over where the franchise goes. Whether one guy scores +/- 10 goals in a season has little impact on franchise value.
I doubt you went to business school, because what you're proposing is not only unrealistic, it doesn't sound like it's a good deal for the owners, and you don't seem to have a grasp on how stock/option based compensation typically works. Companies have IPOs to benefit the owners. The owners are pretty happy with the ownership model they have now.
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