Phoenix LXXII: Send in the Clowns
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02-16-2013, 02:16 PM
bettman's a Weasel
Join Date: May 2009
Originally Posted by
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.
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.
Yes it does add up to $200M when you consider the time value of money, and the fact that the debt compounds every year. Cohen bought the panthers in 2001 from Huizenga for $100M, then gave them away in 2009. That's 8 years. If you plug the numbers into a compound interest calculator, assuming 6% interest per year, with an end sum of $200M, you get $19 million. In other words, $19M of losses per year, for 8 years, compounded at 6% per year, equals $200 million. You say the losses were more like $10M per year, but I've seen multiple reports that suggest $20M per year. Since we're dealing with a moribund franchise that has to tarp off sections in the upper bowl to make the rink look fuller, a franchise whose local TV ratings are a paltry 3000 viewers per game, less than late night infomercials, I would say the reports of $20M losses per year are probably more accurate than $10M, which makes my $19M number plausible. It's entirely reasonable to assume that Cohen lost $19M per year for his 8 years, which accounts for the $200M accumulated debt.
You can't separate this $200M from the team, and declare a '$200M transfer value'. That's patently ridiculous, a shallow, transparent attempt to assign a monetary value to a franchise that is indeed worthless.
Look at it another way. Cohen bought the team for $100M. He left with nothing. The so called $200M 'transfer value', is counter balanced by the $200M accumulated debt. Cohen lost his $100M 'investment'. He has $0 to show for that initial $100M. Ask him if the florida panthers are worth anything. At least he was smart enough to know when to cut his losses. As for the other 2 owners who assumed control, it's well known that they don't have much money. It's somewhat surprising that they've managed to keep this franchise going for the last 4 years given the continuing compounding of the annual losses, but their time will come.
So, to summarize, my initial assertion that Cohen 'threw the keys on the table' is indeed true, and the florida panthers franchise is literally worthless. If bettman wants to try to mislead by separating the debt and declaring a $200M 'transfer value', then good for him. I would expect nothing less from that conniving, lying, arrogant little weasel.
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