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Dipietro plus assets in play by NYI

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Old
06-05-2013, 10:55 PM
  #976
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Originally Posted by number72 View Post
Friedman on HNIC Hot Stove tonight said that the Islanders would include "assets" in a DiPietro trade.

What assets would NYI need to offer for a team to swallow Dipietro's contract.
And what team has the financial backing to take the contract.
Their #1 pick and a prospect. There's simply not a market though. Heck, it might cost more. Depends how badly they want Luongo

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06-06-2013, 01:31 AM
  #977
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Originally Posted by Darth Milbury View Post
C'mon, there really is no need to get nasty. It has been a while since I posted here, but during the time I was here, VCR fans pretty much acquitted themselves as one of the most knowledgable and nice fanbases out there. Over the years, I've found Nuck fans to be an absolute pleasure to interact with. No need to spoil a very well earned rep as a great bunch of guys.

In any case, for days now, you guys have been staking a whole lot on McKenzie tweeting "it is believed that Isles might have an interest in Luongo." You all have been trying to pass that up as fact. Now that McKenzie has come out and said that VCR ownership is trying to avoid a buyout, suddenly that needs to be discounted.

You may not want to accept it, but there is a good chance that it is VCR that winds up packaging young assets to get rid of a contract. you're too far up against the cap - Luongo basically has to go. If ownership does not want a buyout, and other teams will not suck up that contract (which appears to be the case), getting out from underneath Luongo's contract will likely cost you Jensen or Gauce.
Vancouver fan here. Based on all the info I've read/heard (Botch, 1040, voices in my head) the Nucks owner does not want to spend money on buyouts.

Does this piss me off since he makes 10's of millions a year? Yes very much so.

And yes I am taking into consideration the sell out streak ending (not officially of course ), and the problems selling playoff tickets. Dude is printing money hand over fist.

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06-06-2013, 01:36 AM
  #978
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Maybe not but you guys have really taken the fun out of it by giving it a 0% chance of happening

This

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06-06-2013, 01:54 AM
  #979
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...Friedman predicted something...
In that quote all that can be said is that he's predicting the Isles will "consider" and "try".

That's a pretty low standard to meet.

 
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06-06-2013, 02:06 AM
  #980
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Discount capwise sure, discount payroll wise not so much. Not every team are free spenders(and those are the one that will have less issue with their being a caphit near the end of the deal)
Perhaps, but how often is the opportunity to pick up a top tier goaltender for nothing made available? I would be shocked if some team did not bite the bullet on Lu's contract just to ensure they get him without a bidding war. Teams that come to mind as possibilities?

Edmonton
Washington
Pittsburgh (if Fleury is traded)
Minnesota (If Backstrom signs elsewhere. A few fans even offered a Heatley swap)
Calgary (Because management still thinks they can win)
Philadelphia
Long Island

There is likely another or two, but that would be the short list. Pittsburgh is probably the most intriguing option from their perspective. Ironically, they would indirectly be paid to take Luongo by claiming him off waivers and moving Fleury. And I do not doubt for a second they strongly consider. Lu's contract is less of a big deal to them, especially eight years from now.

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06-06-2013, 02:09 AM
  #981
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Originally Posted by Dado View Post


The guy is s $1.5M buyout. The idea he represents "10% of the value of the organization as a whole" is not grounded in reality.
Step one:
$1 500 000 x 16 years = $24 000 000 owed to Dipietro as a buyout.

Step two:
24 000 000 / 155 000 000 (current value of the franchise) = 0.1548 = 15.48%

Conclusion:
Dipietro, if bought out, is owed an amount equivalent to 15.48% of the franchise's current value (23.23% if he isn't bought out). A commitment to pay out 15.48% or 23.23% of the franchise's current value to someone that won't contribute to the business in any way DOES affect the value of the franchise.

You'd think we're designing space ships here...

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06-06-2013, 02:32 AM
  #982
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Originally Posted by ShortSideFlick View Post
Step one:
$1 500 000 x 16 years = $24 000 000 owed to Dipietro as a buyout.

Step two:
24 000 000 / 155 000 000 (current value of the franchise) = 0.1548 = 15.48%

Conclusion:
Dipietro, if bought out, is owed an amount equivalent to 15.48% of the franchise's current value (23.23% if he isn't bought out). A commitment to pay out 15.48% or 23.23% of the franchise's current value to someone that won't contribute to the business in any way DOES affect the value of the franchise.

You'd think we're designing space ships here...
1. 24M now doesn't equal 24M spread over 16 years. You are looking at a current value of 24M not the deferred value which is probably closer to 17M

2. When the Islanders move to Brooklyn good chance the value of the franchise increases because it has a much better arena deal. It's expected the new arena could potentially bring 30-35M of new revenue to the team

3. If the Islanders buyout Dipeitro without amnesty they will use that to get over the cap min. So assuming Wang doesn't sell the franchise till they move to Brooklyn(when the teams value increases) that's no money out of his pocket because the Islanders will get to the cap min one way or another(and if that means signing a 1M dollar UFA + paying out DP's buyout instead of a 2.5M so be it). That will be 2-4 years of the buyout off the books by them

Given how the Islanders operate I wouldn't be surprised if they keep Dipietro on the books 1 more year and try trade him next summer when the buyout goes down to 21M

Quote:
Originally Posted by Bourne Endeavor View Post
Perhaps, but how often is the opportunity to pick up a top tier goaltender for nothing made available? I would be shocked if some team did not bite the bullet on Lu's contract just to ensure they get him without a bidding war. Teams that come to mind as possibilities?
The way Loungo's contract is structured doesn't really fit the typical contract the Islanders like. Now if Loungo was getting a caphit of 6.7M and an actual salary of 5.3M, the Islanders would be all over trying to get that contract


Last edited by boredmale: 06-06-2013 at 02:42 AM.
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06-06-2013, 02:40 AM
  #983
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Originally Posted by ShortSideFlick View Post
Step one:
$1 500 000 x 16 years = $24 000 000 owed to Dipietro as a buyout.

Step two:
24 000 000 / 155 000 000 (current value of the franchise) = 0.1548 = 15.48%
You're taking one piece of cash flow spread out over 16 years (not even NPVed, lol) and dividing it into a "value" number and think this means anything?

This can't possibly be serious. It's like dividing the distance between NY and Boston by the gallons of water in Lake Michigan and saying that's the length of time to travel to Mars and back.

Quote:
You'd think we're designing space ships here...
Sometimes I wonder...

The first step is to explain how exactly a business with negative-20-million-$ (or so) in operating income has a value north of $150M. Yes, it comes from Forbes...but how did Forbes calculate that number for a business that does nothing but lose money?


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Old
06-06-2013, 05:17 AM
  #984
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Originally Posted by Dado View Post
You're taking one piece of cash flow spread out over 16 years (not even NPVed, lol) and dividing it into a "value" number and think this means anything?

This can't possibly be serious. It's like dividing the distance between NY and Boston by the gallons of water in Lake Michigan and saying that's the length of time to travel to Mars and back.



Sometimes I wonder...

The first step is to explain how exactly a business with negative-20-million-$ (or so) in operating income has a value north of $150M. Yes, it comes from Forbes...but how did Forbes calculate that number for a business that does nothing but lose money?
Because you could potentially move it to Markham.

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06-06-2013, 05:32 AM
  #985
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Originally Posted by Dado View Post
You're taking one piece of cash flow spread out over 16 years (not even NPVed, lol) and dividing it into a "value" number and think this means anything?

This can't possibly be serious. It's like dividing the distance between NY and Boston by the gallons of water in Lake Michigan and saying that's the length of time to travel to Mars and back.
Are you actually being serious right now? How do you think they come up with car lease payments and things like that? (it's the same process but in reverse)

If someone is considering buying the NYI they will certainly consider the team's assets and liabilities. Being that DiPietro is an uninsured useless player who is owed a lot of money, he certainly would be a detriment against the total value of the franchise.

The franchise's estimated value by Forbes may or may not be representative but it is almost certain that DiPietro's contract represents a significant portion of the franchise's value.

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06-06-2013, 06:55 AM
  #986
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Originally Posted by Dado View Post
You're taking one piece of cash flow spread out over 16 years (not even NPVed, lol) and dividing it into a "value" number and think this means anything?

This can't possibly be serious. It's like dividing the distance between NY and Boston by the gallons of water in Lake Michigan and saying that's the length of time to travel to Mars and back.



Sometimes I wonder...

The first step is to explain how exactly a business with negative-20-million-$ (or so) in operating income has a value north of $150M. Yes, it comes from Forbes...but how did Forbes calculate that number for a business that does nothing but lose money?

Lol, I'm not multiplying distance by volume to come up with space travel... although I did find that mildly amusing.

Net Present Value is used to predict future earnings, compare them to the up front purchase cost of enabling those earnings, and establish whether something is worth investing in.

Net Present Value is relevant to evaluating the potential sale price of the franchise as a whole. The "one piece of cash flow spread out over 16 years (not even NPVed, lol)" can't be "NPVed"; there is no projected income from the buyout (except to dipietro, and it doesn't need to be calculated for him, his projected income is $24m with no costs to be weighed against it.), and in no way does the buyout contribute to the on ice product that does bring in income.

Net Present Value really has absolutely nothing to do with I'm talking about. Way to use google to find a term you have no understanding of, use it as an acronym in an attempt to disguise it like no one knows what it means just because you don't, and implement it in a context that that doesn't work (and is meant to make the OTHER person look stupid of all things ).

Net Present Value is the answer to the question at the end of your post. I should be thanking you though, I got to start my day with a laugh.

This thread has gone so far beyond ridiculous, I think I'm done with it.


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06-06-2013, 07:32 AM
  #987
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The first step is to explain how exactly a business with negative-20-million-$ (or so) in operating income has a value north of $150M. Yes, it comes from Forbes...but how did Forbes calculate that number for a business that does nothing but lose money?
Actually that's the second step. The first step is to determine how Forbes seems to have the outsized degree of credibility it seems to have. The reason for them to put out their silly lists is to sell magazines, not to provide high-level advice for the people who may buy sports franchises.

This whole thing is, I think, a trial balloon. The NYI throw crap at the wall to see if they can get a contract with value back for a valueless contract + value. Luongo is, essentially, the only situation where this could even possibly work. Luongo/his agent are looking for any way out of their situation. Vancouver's situation is uncomfortable, but not nearly as desperate as NYI's with DiPietro or Luongo's.

But that's why it's not going to happen. Because Vancouver has options, they are going to exhaust every one before they even consider a worst-case scenario. And so if they *were* to consider it, the value they would require back would be so high that NYI would never pay. They would want contributing young players under contract so that the savings will nearly offset DiPietro's salary. And, obviously, that doesn't help NYI in the slightest.

Considering that there's no chance that NYI is sold before 2016 (i.e. after they perform a year in Brooklyn), I fail to see how franchise valuation is relevant to this discussion at all. So many things can change by then.

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06-06-2013, 09:19 AM
  #988
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Can't believe people pay for degrees in business, all they had to do was follow this thread to learn all about calculated and future values of multi million dollar franchises!!

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06-06-2013, 09:22 AM
  #989
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Originally Posted by DJOpus View Post
Are you actually being serious right now? How do you think they come up with car lease payments and things like that? (it's the same process but in reverse)

If someone is considering buying the NYI they will certainly consider the team's assets and liabilities. Being that DiPietro is an uninsured useless player who is owed a lot of money, he certainly would be a detriment against the total value of the franchise.

The franchise's estimated value by Forbes may or may not be representative but it is almost certain that DiPietro's contract represents a significant portion of the franchise's value.
Barclays execs doubled the Nets franchise value, in 2 yrs.


Why do you think Wang has turned over the business side of running his team, to execs from another organization, from another sport?

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06-06-2013, 09:31 AM
  #990
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Originally Posted by Dado View Post
The first step is to explain how exactly a business with negative-20-million-$ (or so) in operating income has a value north of $150M. Yes, it comes from Forbes...but how did Forbes calculate that number for a business that does nothing but lose money?
Not all operating losses are equal. For example, if I buyout DP with $24 million now I don't expense that number in one year. In following years there is a loss from an income statement standpoint but not a cash flow one. The cash was spent in year one (assuming I didn't finance the buyout with the same terms). Yashin's cap hit shows as a loss this year but no cash changes hands.

Which brings the answer to your question. In a number of industries CASH FLOW is how the company is valued, not profit/loss.

In the early years of Cable TV there were enormous upfront costs in installing cable lines, etc. That upfront costs are financed and every year a large non-cash depreciation charge is taken against revenue. So the cable companies showed operating losses for many years while the value of their franchise rose due to the increasing cash flow to the business.

In the past sports teams had their own way of accounting for long-term contracts - I believe it was that they could depreciate a long-term contract based on the 'expected life span of an athlete'. So if a 6-year contract were signed and the average life span was 4 years of an athlete they could write off the contract in 4 years, not 6. This lowered their profitability and taxable income. Then if the player were cut before the contract ran out the owner received the accelerated tax benefit without having to reverse any of the write-off.

Forbes, and any other business valuer (and believe me, Forbes just publishes the results; they don't fully calculate it themselves - they have outside valuers do it for them) looks at a discounted FUTURE cash flow model and sees a number of things:
  • The move to Brooklyn and it's increase in expected revenues
  • The locked in cable contract that is the envy of most other franchises
  • Adjusts for the expected operating profits or losses (far more likely to be profits in Brooklyn)
  • The historical franchise valuation performance of similar franchises (other NHL team's selling prices in the past ten years for example)
  • Etc.

I would posit that the $155 million is likely to go up pretty significantly when the move to Brooklyn is complete. It might seem high to someone who only looks at the P&L but experienced investors, venture capitalists and competent money managers look far deeper than that to calculate a valuation. If I were a billionaire and could buy the Isles today at $155 million I have one reaction - sign me up today.

As for the posters that seem to insist that DP's $24 million buyout is a high percentage of the value of the team, you are not looking at this from the standpoint of a potential buyer. That $24 million, from a profit and loss standpoint will fall $1.5 million each year if bought out, and $4,500,000 per year if not. IT DOES NOT MATTER to the buyer which one is which if they are buying the franchise for the long term. Because you buy a franchise today for basically one reason - to win championships. If you make money, great. But owners made their money before they ever bought a team. This is for them all about ego, and comparing themselves against their peers in a VERY SMALL CLUB.

Charles Wang, according to that same Forbes Magazine, was worth $890 million in 2011. With the stock market and the value of real estate rising substantially since then there is a likelihood he is now again a billionaire, even taking into account the CASH OPERATING LOSSES (not the stated P&L) of the last few years. I also remember another Forbes article where his 2011 losses were only $4 million, not the huge losses you see published). This is not about money, it's about Wang wanting to see the fruits of his labor in bringing the Isles back to Cup contention.

And please posters, stop trying to point out the scouting staff cuts, etc. That was a philosophical decision, not a financial one. it's obvious that with Snow having an MBA, and Wang's own CEO/Entrepreneurial background that the organization bought into the Moneyball philosophy and instituted it. And with the contracts they signed and the stocking of the prospect pool and the performance this year, IT IS WORKING.

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06-06-2013, 10:02 AM
  #991
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Originally Posted by Bourne Endeavor View Post
Perhaps, but how often is the opportunity to pick up a top tier goaltender for nothing made available? I would be shocked if some team did not bite the bullet on Lu's contract just to ensure they get him without a bidding war. Teams that come to mind as possibilities?

Edmonton
Washington
Pittsburgh (if Fleury is traded)
Minnesota (If Backstrom signs elsewhere. A few fans even offered a Heatley swap)
Calgary (Because management still thinks they can win)
Philadelphia
Long Island

There is likely another or two, but that would be the short list. Pittsburgh is probably the most intriguing option from their perspective. Ironically, they would indirectly be paid to take Luongo by claiming him off waivers and moving Fleury. And I do not doubt for a second they strongly consider. Lu's contract is less of a big deal to them, especially eight years from now.
Huh? The last thing Washington needs is to add any amount of salary, especially in net where they have two solid RFAs already under contract and a third in Hershey.

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06-06-2013, 10:09 AM
  #992
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Originally Posted by leeroggy View Post
Not all operating losses are equal. For example, if I buyout DP with $24 million now I don't expense that number in one year. In following years there is a loss from an income statement standpoint but not a cash flow one. The cash was spent in year one (assuming I didn't finance the buyout with the same terms). Yashin's cap hit shows as a loss this year but no cash changes hands.

Which brings the answer to your question. In a number of industries CASH FLOW is how the company is valued, not profit/loss.

In the early years of Cable TV there were enormous upfront costs in installing cable lines, etc. That upfront costs are financed and every year a large non-cash depreciation charge is taken against revenue. So the cable companies showed operating losses for many years while the value of their franchise rose due to the increasing cash flow to the business.

In the past sports teams had their own way of accounting for long-term contracts - I believe it was that they could depreciate a long-term contract based on the 'expected life span of an athlete'. So if a 6-year contract were signed and the average life span was 4 years of an athlete they could write off the contract in 4 years, not 6. This lowered their profitability and taxable income. Then if the player were cut before the contract ran out the owner received the accelerated tax benefit without having to reverse any of the write-off.

Forbes, and any other business valuer (and believe me, Forbes just publishes the results; they don't fully calculate it themselves - they have outside valuers do it for them) looks at a discounted FUTURE cash flow model and sees a number of things:
  • The move to Brooklyn and it's increase in expected revenues
  • The locked in cable contract that is the envy of most other franchises
  • Adjusts for the expected operating profits or losses (far more likely to be profits in Brooklyn)
  • The historical franchise valuation performance of similar franchises (other NHL team's selling prices in the past ten years for example)
  • Etc.

I would posit that the $155 million is likely to go up pretty significantly when the move to Brooklyn is complete. It might seem high to someone who only looks at the P&L but experienced investors, venture capitalists and competent money managers look far deeper than that to calculate a valuation. If I were a billionaire and could buy the Isles today at $155 million I have one reaction - sign me up today.

As for the posters that seem to insist that DP's $24 million buyout is a high percentage of the value of the team, you are not looking at this from the standpoint of a potential buyer. That $24 million, from a profit and loss standpoint will fall $1.5 million each year if bought out, and $4,500,000 per year if not. IT DOES NOT MATTER to the buyer which one is which if they are buying the franchise for the long term. Because you buy a franchise today for basically one reason - to win championships. If you make money, great. But owners made their money before they ever bought a team. This is for them all about ego, and comparing themselves against their peers in a VERY SMALL CLUB.

Charles Wang, according to that same Forbes Magazine, was worth $890 million in 2011. With the stock market and the value of real estate rising substantially since then there is a likelihood he is now again a billionaire, even taking into account the CASH OPERATING LOSSES (not the stated P&L) of the last few years. I also remember another Forbes article where his 2011 losses were only $4 million, not the huge losses you see published). This is not about money, it's about Wang wanting to see the fruits of his labor in bringing the Isles back to Cup contention.

And please posters, stop trying to point out the scouting staff cuts, etc. That was a philosophical decision, not a financial one. it's obvious that with Snow having an MBA, and Wang's own CEO/Entrepreneurial background that the organization bought into the Moneyball philosophy and instituted it. And with the contracts they signed and the stocking of the prospect pool and the performance this year, IT IS WORKING.
That is a lovely little narrative. It certainly sounds like you have yourself convinced.

How does Wang shopping prospects for cash fit into your narrative?

You contend this is a billionaires ego project and money doesn't matter. So why isn't he buying out DP himself?

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06-06-2013, 10:20 AM
  #993
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Originally Posted by sommervr View Post
That is a lovely little narrative. It certainly sounds like you have yourself convinced.

How does Wang shopping prospects for cash fit into your narrative?

You contend this is a billionaires ego project and money doesn't matter. So why isn't he buying out DP himself?
Still think the isles beatwriter was lying in early May 2013, when he said he expected Wang to buyout DiPietro?


After the published reports about other potential buyouts, why wouldn't Snow do his due diligence, see if he can trade DiPietro + an asset for another player, headed for an amnesty buyout?

http://www.newsday.com/sports/hockey...qr=1&qr=1&qr=1
Transcript: Isles season wrap-up chat
2:04
Comment From Dan
Which pending free agents will be gone next season?

2:06
Staple:
Dan -- At this point, I don't see Streit returning. .




2:14
Comment From numberbradleyf
Does DP get bought out? And can they tholl Thomas's contract still?

2:15
Staple:
After saying "no way" for so long, I've finally changed my mind -- yes, I think DiPietro is bought out when the window opens in June. There's no reason for him to be playing in Bridgeport when there's not a chance he'll return. And Thomas' contract will not be tolled, so he'll be a UFA on July 5 -- and I've heard no indications the Isles are interested in him.

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06-06-2013, 10:31 AM
  #994
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Originally Posted by sommervr View Post
That is a lovely little narrative. It certainly sounds like you have yourself convinced.

How does Wang shopping prospects for cash fit into your narrative?

You contend this is a billionaires ego project and money doesn't matter. So why isn't he buying out DP himself?
If he does will you come back and do a mea culpa? It is well known among us Isles fans how close a personal relationship DP and Wang have. That is why DP is still in the organization and why it took so long for the team to demote him. If DP is not bought out it is for one reason only: Wang giving him a chance to regain his game in the minors.

Convincing myself? I am a professional money manager. I am one of those that make's these decisions daily for my clients. If you'd like to keep taking these silly little shots, go ahead.

Name one professional league owner in any major sport over the past twenty years who bought the franchise solely to make money. You will not find one. If you were offered the ability to buy your favorite NHL team and had the money to do so wouldn't you do it right away? Of course, because you believe you could win a Cup. Most of us on these forums believes the same thing - if only I had that much money I could do better than ______ (fill in the blank).

At this level of net worth it's about comparing yourself against your peers. One more mansion or Lear Jet does not matter.

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06-06-2013, 10:40 AM
  #995
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Barclays execs doubled the Nets franchise value, in 2 yrs.


Why do you think Wang has turned over the business side of running his team, to execs from another organization, from another sport?
Crew - reports have all NBA teams having significant increases in value after their CBA was resolved last year. I think it's disengenious to give the Barclays guys 100% credit for a change that impacted the league as a whole. And I also think that while moving the Nets from NJ to Brooklyn significantly changed the revenue streams, haven't you already taken that into account with the $35M that has been thrown around, or do the Barclays guys get credit for that too?

Outside of the revenue streams we've discussed (luxury boxes and not getting screwed in the lease agreement like the Isle have been at NVMC) how do you expect the Barclays guys to increase the value of the franchise? Seems like improving the product on the ice is a key component to that, and not sure how involving the Barclays guys make that happen.

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06-06-2013, 11:07 AM
  #996
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Originally Posted by Beukeboom Fan View Post
Outside of the revenue streams we've discussed (luxury boxes and not getting screwed in the lease agreement like the Isle have been at NVMC) how do you expect the Barclays guys to increase the value of the franchise? Seems like improving the product on the ice is a key component to that, and not sure how involving the Barclays guys make that happen.
That is even more absurd than DP hurting the franchise value. A $35 MILLION ANNUAL INCREASE in revenues on a team valued at $155 million isn't BY ITSELF a huge increase in franchise value?? Please think through this a little more next time. This one is pretty simple.

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06-06-2013, 11:22 AM
  #997
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Crew - reports have all NBA teams having significant increases in value after their CBA was resolved last year. I think it's disengenious to give the Barclays guys 100% credit for a change that impacted the league as a whole. And I also think that while moving the Nets from NJ to Brooklyn significantly changed the revenue streams, haven't you already taken that into account with the $35M that has been thrown around, or do the Barclays guys get credit for that too?
How is it disingenuous to say Wang has a team, valued at $155m, which he wants to sell for $300m and that he's letting the Barclays execs try to increase the team's
value?
I think $155m, is extremely low franchise value for a team in the NY metro area.
Especially, a team with roughly $425m left on it's local cable deal




http://www.forbes.com/sites/kurtbade...aluable-teams/
Knicks-$1.1 billion
Brooklyn Nets-$530m

http://www.forbes.com/mlb-valuations/list/
NY Yankees-$2.3 billion
NY Mets-$811 million

http://www.forbes.com/pictures/mlm45...maple-leafs-2/
NY Rangers-$750m
NJ Devils-$205m
NY Islanders-$155m

http://www.forbes.com/nfl-valuations/
NY Giants- $1.4 billion
NY Jets-$1.2 billion

Quote:
Outside of the revenue streams we've discussed (luxury boxes and not getting screwed in the lease agreement like the Isle have been at NVMC) how do you expect the Barclays guys to increase the value of the franchise? Seems like improving the product on the ice is a key component to that, and not sure how involving the Barclays guys make that happen
I can only look at what the execs used for the Nets: Sponsorships, merchandising, increasing the payroll to put an exciting product on the court.


The press is telling us, Yormark has had focus groups sitting with NYI fans, sounding them out about changing the NYI name and jerseys.

http://www.crainsnewyork.com/article...MENT/308059985
million.
Buoyed by the basketball team's move to Brooklyn from New Jersey, the duo have turned the Nets from a laughingstock that played to empty arenas and hemorrhaged cash into a franchise expected to sell out nightly and increase revenue by more than $50 million this season. Sponsorships are soaring, merchandise is flying off the shelves and the once-shunned Nets have become a desired destination for NBA stars.

Mr. Prokhorov's free spending—he committed about $340 million to player salaries last month alone—and his move to tap Jay-Z's star power have made the Nets the talk of the league.

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Old
06-06-2013, 11:24 AM
  #998
Scott Scissons
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Quote:
Originally Posted by leeroggy View Post
That is even more absurd than DP hurting the franchise value. A $35 MILLION ANNUAL INCREASE in revenues on a team valued at $155 million isn't BY ITSELF a huge increase in franchise value?? Please think through this a little more next time. This one is pretty simple.
You can not argue with these people by their rational Nashville trading Weber for his worth in assets be it 5+ 1st round picks++ would increase the value of the team because his contract is 65% of the teams valuation.

They are still trying to compare the sale of a sports franchise to tangible products. They do not comprehend that other factors play more of a role in a teams value more than payroll.

Under a normal business model 2/3rds of the league would not even exist but the fact is sports franchises are treated differently.

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06-06-2013, 11:27 AM
  #999
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