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02-15-2013, 11:15 PM
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Originally Posted by HamiltonFan View Post
Your $200M assumption is correct, as it is generally accepted that little or no money changed hands during the 'transaction'. In your opinion, where did the $200M debt come from? Why was Cohen $200M in debt to begin with?
I guess we can gander over to the that recent thread on the Panthers' and arena operations. That indicated that money was being made. Cohen, iirc, claimed about $10 MM in losses per annum. That doesn't come out to $200 MM since he didn't operate the team long enough to accrue that level of debt on just the team if that figure is accurate.

Originally Posted by Dado View Post
Right. I'm just suggesting that there is often a very large practical difference between taking on someone else's existing debt, and convincing someone to give you the same size pile of money and create new debt, even if it just replaces old debt.

IMO in the vast majority of cases it is extremely misleading to say something sold for "$X" when all that really happened is the old owner mailed in the keys and the new owner opened the envelope.
I understand your point, D, but at the same time the people assuming the operation and its debt will consider what it costs to service that debt. Opening that envelope may mean you need $80 MM in revenue to pay down the debt (and hopefully not incur more). As soon as you do that, you have to have some valuation (for a variety of reasons). Also noting that they got about 165 acres of land around the arena and arena rights. Main thing is we don't really have all the bits needed to really piece this together.

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