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12-05-2012, 09:29 PM
  #794
SJeasy
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Quote:
Originally Posted by Riptide View Post
Then where should it go?

So a guy buys a "franchise" for 150m (Columbus and Nashville paid 80m each - but inflation is a ***** ). Say the league pays out 60% of that to it's members (90m), and puts the other 60m into an account for buddy to draw on at a later date. The new club draws on it over a 6 year period (say 10m a year) to help offset their losses. Now they've bought into the NHL for 150m, received 60m back in gifts from the NHL for a total purchase price of 90m. That seems like a pretty cheap entry fee into the NHL when Forbes (yes I know) says the average team value is 280m. Even if a more realistic sale price is in the 150-200 range, buddy is getting a heck of an investment.

I'm not saying it should all just get paid out to the NHL members, but neither do I think it should go into some sort of fund that goes directly back to the club for development purposes. If that's the case, why not just lower the fee and make it cheaper to join?
After 20 years or so, the teams existent at the time get their share of the leftovers. Escrow closes.

I am sort of in line with Fugu about growing the game although ultimately I don't agree about contraction. The ROI hasn't been that great and it might be downright awful so far. Minny is the exception, going for $250mil. Most of the expansion teams are under $200mil as are a bunch of teams from the first expansion era. And a lot of teams have had a string of cash calls. There are outliers at the top that inflate the average . . . a lot. I also don't consider buying for $200mil and selling for $200mil a wash if there were cash calls in the interim.

I am not entirely opposed to your idea of a mix of immediate return plus escrow. Nice bit of middle ground.

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