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Dipietro plus assets in play by NYI

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06-04-2013, 10:25 PM
  #726
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Originally Posted by ScottScissons View Post
This has never been the case with a sports franchise just give me one example when a bad contract or multiple bad contract devalued a franchise. I will give you a hint it has never happened.
You are just wrong. Any company with a liability on the books will be devalued by the amount of the liability. The money needs to be paid out either by this owner of the next. Sports teams are not a special case.

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06-04-2013, 10:26 PM
  #727
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Originally Posted by ScottScissons View Post
If you are going to compare the sale of a sports franchise to the housing market you have already lost the argument.

Just look back at the whole Texas Rangers bankruptcy fiasco, Arods Contract was viewed as one of the worst in baseball even considering how valuable he was as a player. You basically had ownership groups climbing over each other to buy the Rangers even with Arods stupid contract.

A sports franchise is not run like a normal business and it is not valued as such.
Huh? Maybe in your little dream world but not in the real world.

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06-04-2013, 10:27 PM
  #728
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Correct me if I'm wrong (which is very possible) but doesn't the team that take's DP have to have him on their roster for a year before buying him out? If so why are teams with cap trouble trying to acquire him. I think the most plausible scenario is he's traded to a team with cap space and the financial ability to absorb the 24mil buyout.

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06-04-2013, 10:31 PM
  #729
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Originally Posted by sommervr View Post
You are just wrong. Any company with a liability on the books will be devalued by the amount of the liability. The money needs to be paid out either by this owner of the next. Sports teams are not a special case.
I am not saying it is not owed I am saying it plays almost no part in a teams valuation. Im not really sure what is so hard to understand. You are trying to compare a normal business with a sports franchise. You run into a huge scarcity issue when dealing with franchise sales and a number of other issues play much more of a role in a teams valuation. Liability from player salaries is an after thought.

Just take a look at the SAC Kings sale and tell me what played the biggest factor in its selling price. I will give you a hint no one ever mentioned anyones salary or deferred money.

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06-04-2013, 10:34 PM
  #730
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Originally Posted by ScottScissons View Post
This has never been the case with a sports franchise just give me one example when a bad contract or multiple bad contract devalued a franchise. I will give you a hint it has never happened.
I think you and I have been fairly civil. But it's getting difficult on this one. How is a 24 m expense that doesn't do ANYTHING for the franchise not reduce it's worth? If he was an overpaid player that still performed to some level it would be different.

If you were going to buy a car but you have to drop $1500 to get it out of the impound lot wouldn't that $1500 be represented in your offer? There's no way someone putting an offer on the franchise doesn't adjust their offer to reflect the fact that the player with the largest financial commitment on the team won't play a single game during their ownership.

I can't give you an example of when it's affected a sale price... but has there ever been a case in professional sports at it's highest level where a franchise was about to be sold and the player owed the most money on the team wasn't going to play a single game for the remaining 8 years of their contract? I mean, how many players who are owed the most money of any player on their team are a lock to never play a game for them again? I can't think of any.

It's an unusual and extremely rare situation, and you are asking for precedence when common sense is more than enough.

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06-04-2013, 10:37 PM
  #731
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Originally Posted by ShortSideFlick View Post
I think you and I have been fairly civil. But it's getting difficult on this one. How is a 24 m expense that doesn't do ANYTHING for the franchise not reduce it's worth? If he was an overpaid player that still performed to some level it would be different.

If you were going to buy a car but you have to drop $1500 to get it out of the impound lot wouldn't that $1500 be represented in your offer? There's no way someone putting an offer on the franchise doesn't adjust their offer to reflect the fact that the player with the largest financial commitment on the team won't play a single game during their ownership.

I can't give you an example of when it's affected a sale price... but has there ever been a case in professional sports at it's highest level where a franchise was about to be sold and the player owed the most money on the team wasn't going to play a single game for the remaining 8 years of their contract? I mean, how many players who are owed the most money of any player on their team are a lock to never play a game for them again? I can't think of any.

It's an unusual and extremely rare situation, and you are asking for precedence when common sense is more than enough.

Because once again you are trying to compare apples to oranges the sale of a sports franchise can not be compared to that of a home, car or any other premise you cook up.

BTW If you think DPs contract is so bad that it is a magical snowflake you need to do some research. Look up Mike Hampton he only really performed for 1 year out of his monster 111 Million contract the rest of the time he was DP like in his injuries and awful play.

Edit Also every player who was ever on the knicks roster in the early to mid 2000s says hello.


Last edited by Scott Scissons: 06-04-2013 at 10:42 PM.
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06-04-2013, 10:41 PM
  #732
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The only team with cap space (DP would have to be on the books for a year) and the money to do this is Toronto.
Terry Pegula in Buffalo says 'hi'.

Still feels weird saying that...

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06-04-2013, 10:42 PM
  #733
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Because once again you are trying to compare apples to oranges the sale of a sports franchise can not be compared to that of a home, car or any other premise you cook up.
Right - that's why the Ontario Pension Plan purchased MLSE?

You have absolutely no idea what you're talking about.

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06-04-2013, 10:42 PM
  #734
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Originally Posted by ScottScissons View Post
I am not saying it is not owed I am saying it plays almost no part in a teams valuation. Im not really sure what is so hard to understand. You are trying to compare a normal business with a sports franchise. You run into a huge scarcity issue when dealing with franchise sales and a number of other issues play much more of a role in a teams valuation. Liability from player salaries is an after thought.
Plays almost no part? Liabilities play the same part on any company. They sit there on the balance sheet and lower the value of the company.

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06-04-2013, 10:45 PM
  #735
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Originally Posted by ScottScissons View Post
Because once again you are trying to compare apples to oranges the sale of a sports franchise can not be compared to that of a home, car or any other premise you cook up.
It's called economics. The sale of anything can be compared. Property, car or in your example fruit.

I assure you the sale of apples and oranges in stores is compared by grocers, the sale of farms that produce apples and oranges is compared by people looking to buy fruit producing farms, and the sale of sports franchises with and without $24m (or $36m) commitments to players that won't play are compared.

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06-04-2013, 10:47 PM
  #736
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Originally Posted by sommervr View Post
Plays almost no part? Liabilities play the same part on any company. They sit there on the balance sheet and lower the value of the company.
This is a sports franchise its valued at whatever someone is willing to pay for it. Listen I understand the point you are trying to make and you are correct about the balance sheet. I am sure if the NY Islanders needed a loan the bank would bring up all these points and more. But when dealing with a franchise sale you can throw that out the window.

A sports team is worth whatever someone is willing to buy it for. This is business 101.

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06-04-2013, 11:36 PM
  #737
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Originally Posted by ScottScissons View Post
This is a sports franchise its valued at whatever someone is willing to pay for it. Listen I understand the point you are trying to make and you are correct about the balance sheet. I am sure if the NY Islanders needed a loan the bank would bring up all these points and more. But when dealing with a franchise sale you can throw that out the window.

A sports team is worth whatever someone is willing to buy it for. This is business 101.
... and they'll be willing to pay more for a team with a better cash flow.

Everything is worth what someone will pay for it. It only makes sense that someone will pay more for a team that makes 1.5m more per season, or loses 1.5m less.

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06-04-2013, 11:40 PM
  #738
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... and they'll be willing to pay more for a team with a better cash flow.

Everything is worth what someone will pay for it. It only makes sense that someone will pay more for a team that makes 1.5m more per season, or loses 1.5m less.

Sure just give me one single example of a players contract impacting the sale or valuation of a single team in any major sport. Just one.

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06-04-2013, 11:48 PM
  #739
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Originally Posted by ScottScissons View Post
This is a sports franchise its valued at whatever someone is willing to pay for it. Listen I understand the point you are trying to make and you are correct about the balance sheet. I am sure if the NY Islanders needed a loan the bank would bring up all these points and more. But when dealing with a franchise sale you can throw that out the window.

A sports team is worth whatever someone is willing to buy it for. This is business 101.
The Islanders franchise is currently valued at 155 milion. The amount owed on Dipietro's contract is 23.2% of the franchise's total value and the buyout of his contract is equivalent to 15.48% of the franchise's total value. In what world does Dipietro's contract not affect the franchise's value? I mean really, give your head a shake.

The franchise is worth what someone is willing to pay, and whoever buys it will be willing to pay more if 15%-23% of the franchises value isn't being spent on a player that doesn't play. This is common sense 101.

Take a step back and look at what you are typing man. You aren't in a position to throw business 101 at anyone since it's abundantly clear you've never taken an introductory course in business.

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06-04-2013, 11:54 PM
  #740
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Quote:
Originally Posted by ScottScissons View Post
This is a sports franchise its valued at whatever someone is willing to pay for it. Listen I understand the point you are trying to make and you are correct about the balance sheet. I am sure if the NY Islanders needed a loan the bank would bring up all these points and more. But when dealing with a franchise sale you can throw that out the window.

A sports team is worth whatever someone is willing to buy it for. This is business 101.
Business 101 is weighing assets versus liabilities.

This is literally the single most important thing to analyze when considering a potential purchase of a business.

If you are inheriting any outstanding liabilities of a company, you want to be absolutely certain that it is accurately reflected in the price of purchase.

A sports team sells their product like any other company.

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06-05-2013, 12:06 AM
  #741
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Sure just give me one single example of a players contract impacting the sale or valuation of a single team in any major sport. Just one.
Every one. Every single one.

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06-05-2013, 12:18 AM
  #742
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Every one. Every single one.
nope

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06-05-2013, 12:34 AM
  #743
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Sure just give me one single example of a players contract impacting the sale or valuation of a single team in any major sport. Just one.
While the Wang ownership may have the funds available to front a buyout for Depietro for themselves, one must take in account that these are business men where they must value profit / loss margins.

Where Wang is possibly cornered is that the NYI franchise is losing money overall and is not profitable. One can make the case in that this may or may not be the case in the near future due to the new arena and tv contract that they obtained, however it is doubtful that they will be above the profit line for a couple years at the least.

There are few reasons of why I see value in NYI and Luongo:
1) NYI has a deep and great prospect pool alongside a young offensive core group, while Vancouver is deep in roster depth and NHL veterans and thin on the prospect pool
2) Luongo is a highly marketable asset, still top 5 in the league, and is a great character, leader and person for any locker room.
3) There is a good hockey trade to be had here alongside the long contract swap.

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06-05-2013, 12:40 AM
  #744
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There's Gonna be a bidding war for dipietro lol!! I think the leafs will get it done in the end for the 15th pick and a b level prospect. Anyone who thinks a team is gonna get more, is gonna be dissiponted.

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06-05-2013, 02:46 AM
  #745
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Has DiPietro even been declared healthy because doesn't the NHL still have a rule that says injured players can not be bought out?

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06-05-2013, 03:34 AM
  #746
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Has DiPietro even been declared healthy because doesn't the NHL still have a rule that says injured players can not be bought out?
in theory you can neither trade nor buy out an injured player

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06-05-2013, 04:04 AM
  #747
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nope
Alright, I'll try. Lets use apples.

Say I have an apple farm and you stop by. I'm selling 1 apple for a dollar each. I offer you an apple that has a bruise that takes up 25% of the apple and say give me 1 dollar. Would you buy that apple at full price? No. If you could eat 75% of the apple around the bruise, you may offer me 75% of it's price.

Let's consider for this argument that Dipietro is the bruise here. Would you pay full asking price or the perceive value of a franchise with a contract that you will get no value out of? Same as the bruise on the apple, you will not pay for something you will get no use out of. Dipietro's contract for sure hurts the value of the franchise because it's a "bruise on the apple".

Say you ask for 175M and he has 25M on the contract and you're getting nothing out of him, no smart business man is going to offer you 175M. They will offer you a lower amount to cover for the 25M they will make nothing back on the money they spent. That 25M will definitely factor into the final selling price.

No business man will pay full value for a product with a "bruise". You will not find one.

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06-05-2013, 04:26 AM
  #748
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Originally Posted by goblix View Post
While the Wang ownership may have the funds available to front a buyout for Depietro for themselves, one must take in account that these are business men where they must value profit / loss margins.

Where Wang is possibly cornered is that the NYI franchise is losing money overall and is not profitable. One can make the case in that this may or may not be the case in the near future due to the new arena and tv contract that they obtained, however it is doubtful that they will be above the profit line for a couple years at the least.

There are few reasons of why I see value in NYI and Luongo:
1) NYI has a deep and great prospect pool alongside a young offensive core group, while Vancouver is deep in roster depth and NHL veterans and thin on the prospect pool
2) Luongo is a highly marketable asset, still top 5 in the league, and is a great character, leader and person for any locker room.
3) There is a good hockey trade to be had here alongside the long contract swap.
I realize it's a long thread, but read thru the thread and take note of key points...
1.Wang is getting an extra $35m per season when he gets to Barclays with luxury suites.They move in 1-2 seasons.
2.This is the first yr Wang gets revenue sharing.
3.Wang's Neulion company signed a big deal with Barclays to stream events live.
4. Isles announced before the playoffs, signing 1000 new, full season tix packages.
5.Luongo is 34, not 24. With 8-9 yrs on his deal. Isles have been burned with Yashin+ DiPietro longterm deals. Like Luongo, both are nice guys.

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06-05-2013, 04:32 AM
  #749
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Originally Posted by tp71 View Post
Alright, I'll try. Lets use apples.

Say I have an apple farm and you stop by. I'm selling 1 apple for a dollar each. I offer you an apple that has a bruise that takes up 25% of the apple and say give me 1 dollar. Would you buy that apple at full price? No. If you could eat 75% of the apple around the bruise, you may offer me 75% of it's price.

Let's consider for this argument that Dipietro is the bruise here. Would you pay full asking price or the perceive value of a franchise with a contract that you will get no value out of? Same as the bruise on the apple, you will not pay for something you will get no use out of. Dipietro's contract for sure hurts the value of the franchise because it's a "bruise on the apple".

Say you ask for 175M and he has 25M on the contract and you're getting nothing out of him, no smart business man is going to offer you 175M. They will offer you a lower amount to cover for the 25M they will make nothing back on the money they spent. That 25M will definitely factor into the final selling price.

No business man will pay full value for a product with a "bruise". You will not find one.
Wang is not asking for $175m for his team, he's asking for $300m. They are valued at $155m.

In an effort to get someone to pay $300m, he's turned the business of running the team over to Barclays execs. The same execs who doubled the franchise value of the Nets.

Opposing fans keep focusing on DiPietro's $24m buyout, as if it is the biggest concern on Wang's plate. It isn't. Icing a SC winner or serious SC contender is. That will greatly increase the team's value, helping Wang get that $300m or close to it.

Trading away bluechip talent, moves Wang further away from that SC winner or serious SC contender, not closer.

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06-05-2013, 05:54 AM
  #750
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Originally Posted by tp71 View Post
Alright, I'll try. Lets use apples.

Say I have an apple farm and you stop by. I'm selling 1 apple for a dollar each. I offer you an apple that has a bruise that takes up 25% of the apple and say give me 1 dollar. Would you buy that apple at full price? No. If you could eat 75% of the apple around the bruise, you may offer me 75% of it's price.

Let's consider for this argument that Dipietro is the bruise here. Would you pay full asking price or the perceive value of a franchise with a contract that you will get no value out of? Same as the bruise on the apple, you will not pay for something you will get no use out of. Dipietro's contract for sure hurts the value of the franchise because it's a "bruise on the apple".

Say you ask for 175M and he has 25M on the contract and you're getting nothing out of him, no smart business man is going to offer you 175M. They will offer you a lower amount to cover for the 25M they will make nothing back on the money they spent. That 25M will definitely factor into the final selling price.

No business man will pay full value for a product with a "bruise". You will not find one.
Here's the difference: there are millions of apples for sale at any given time. New York sports franchises rarely are put up for sale.

Take a look at the Mets. Terrible organization, terrible attendance and losing money. Yet when small parts of the team were put up for sale, people were chomping at the bit to get them. Oh, and they're STILL paying Bobby Bonilla. That didn't seem to affect there value.

If the Isles are in Brooklyn, and playing and drawing well they will command a premium price in a sale. Buyouts and all.

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