How to make the NHL profitable again and prevent future lockouts: IPOs
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10-02-2012, 11:10 AM
Join Date: Jan 2005
Originally Posted by
Unfortunately, that IS how a publicly financed team works. The city provides them with a loan which must be paid over a fixed number of years, or it will incur interest. Season or no season, the owners will still be paying off that loan. The loan number that the city allocates IS public.
There are no "publicly financed teams" - only some teams which play in publicly financed arenas.
No publicly financed arena that I know of was done as a loan to the team. Cities typically sold bonds for construction and serviced the debts with a combination of fixed team rent (typically only a fraction of the P&I costs), generated sales tax revenues, dedicated taxes (per ticket surcharges, hotel and car rental taxes), other revenues (casino $$$'s), and general funds in case of shortfalls.
During the Lockout, only the fixed rent payments of their Leases are fixed costs.
Now, those teams which financed their own arenas - *cough* New Jersey *cough* - well, that's a different story.
And where are all the new shares going to come from to provide new options to players a year from now, five years, ten? Either the teams will have to do significant stock buybacks - thus negating your "ending the need to give them actual revenue this year, or any year" argument - or issuing new stock, diluting the value of all existing shareholders.
And I'd love to see the players reactions when a team has operating losses - are you going to make shareholders subject to cash calls and what happens if a team files for Chapter 11, potentially making existing shares worthless.
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