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12-07-2012, 06:38 PM
  #281
bobbyb2009
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Quote:
Originally Posted by opendoor View Post
And that's fine, but there's also the counter argument that standard investment rules kind of go out the window for pro sports because of other factors like I mentioned above. The ROI that is going to keep a Tim Horton's franchise viable is going to be a lot different than a sports team that is effectively a hobby for a billionaire.

Look at it in real estate terms. The required return from a local commercial or residential investment property in order to make it worthwhile is going to be a lot higher than a vacation property that you might occasionally rent out. The vacation property is more for fun and most people would be fine if they could just break even. That's what NHL teams are like. They're basically hobbies that give the owner prestige and some fun. Obviously it can't be a money pit or it won't sustain itself, but when the incentive isn't primarily ROI (which for many teams I'd argue it isn't) then you can't just apply the rules of normal investments and expected returns to it.
Your argument is fine. It actually supports mine.

If I choose to buy a vacation property and then decide to rent it out or not. I am in complete control. The only loose parallel to your argument I can come up with would be for you to tell me that I must rent it to you and for a certain price. I argue that this is below value and you tell me, "well- you didn't buy your vacation property expecting to make money did you? If you wanted to make money, you should have bought a commercial property instead."

In both cases, I CHOOSE to spend money on what I choose to spend it on. A renter, client, customer, fan, employee, player, coach, etc. does not get to force me to sign an agreement that does not allow for a return.

This is the problem I have. The players and so many fans expect it and believe the players are entitled to a certain share. If there is a dispute over how much that should be and the owners are able to back up the fact that 15 franchises (or whatever number it is) are losing money, I am good with that share only being at a level that first ensures that these franchises show a ROI in line with what any investment would be. If the owners say- "That's ok, we will pay you more, because this is our toy and we don't mind not making or losing money- we can afford it," then I am happy- happier actually, if it sustainable. But nobody, fans, players, etc., can tell me that I don't have a right to expect an ROI on investment.

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