Lockout Discussion Thread 3.0
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12-05-2012, 03:49 PM
Join Date: May 2011
Location: Canberra, Australia
Originally Posted by
The rising or falling value of a business doesn't necessarily mean it is profitable Shares of Apple have fallen 22% from their peak but they are still profitable. You, me or Forbes can put any price we want on a franchise but until it sells, we are only speculating what is value is.
We also don't know if Dallas would become unprofitable if four economically weak teams were removed. There are too many factors to consider.
And both sides must shudder at the idea of contraction. Losing jobs for 100 NHL players would be a black mark on Fehr's resume as well as Bettman's.
The rising or falling of value makes it profitable for the owner when he sells. Most billionaires will be perfectly happy to spend 200 million on a team, even if it only makes 3 million a year (low profit margin), if they can sell it for 300 million a few years down the line.
If you're an Apple shareholder, you care foremost about the value of the stock, not short-term profit values. You only care about the latter if they effect the former, or if you can extract some dividends, but even that is a secondary concern.
I strongly suspect Dallas would become unprofitable if 4 teams were contracted. I suspect this because the average revenue per team would go up, therefore costs would go up, therefore Dallas as a borderline team might become unprofitable.
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