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12-17-2012, 05:55 PM
  #968
aqib
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Quote:
Originally Posted by mesamonster View Post
You forgot one very important expense- cost of capital! The money needed to purchase the team costs a lot of money each year. Lets just say that it is junk bond quality so a cost of capital could well be 5-8%. At 5%, the cost of the money is ($170MM purchase price) is 8.5MM per year. The coaches and and a skeleton staff still cost $6MM++ so tell me where is GJ making money without his team playing? Real answer: he isn`t!!!
Well this is equity, so the cost of equity is higher than debt.

Still until we know who the investors are we don't know what their motives and investment objectives are.

BTW Isn't it time to start considering names for thread 67?

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