Golisano selling the team?

[SDS]

No, Mike Tyson.

 

and here I thought you were just going to whisper a few sweet nothings to me... :cry:

[nfreeman]

a) The value of sports franchise seems to have little to nothing to do with whatever the team reports as profit or loss.

b) Why do you assume TG funded significant operating losses in the first couple of years? As far as I can find out, his only outlay in the team was the additional investment and the $10 million he put up during the lockout. All the other expenses seemed to be funded by operating revenue of both the team and the arena.

c) If you told Warren Buffet he could put $32 million in the bank, contribute $10 million per year for 5 years and cash out at $200 million, and in addition would increase his exposure into a new community that would enhance his ability to influence statewide policy, he may not pursue it himself but he would recommend it to someone who would consider that a good investment.

d) I am not condemning TG for any of this. He came in when we needed him and will leave the team in much better shape then when he arrived.

e) All this being said, this is one of the sports strongest franchises and won't be going anywhere soon.

 

a) I don't think I agree with this. First, teams don't really disclose their P&Ls. They might cherry-pick a few #s here and there, but nobody really opens the books. More to the point, I think a team's financial results have a significant impact on its value, especially where any sale is conditioned on the team not being moved. Can you name a sports franchise that was losing a ton of money and still sold for a large sum WITH the requirement that the team not be moved?

 

b) I could be wrong, but I'm pretty sure I remember reading that he lost (or the Sabres claimed that he lost) somewhere in the $25 million range in the first 2-3 years he owned the team (one of which was the lockout year). Here is an article stating that the Sabres lost $10MM in 2004 alone.

 

c) Respectfully, the hypothetical assumes away the entire issue -- the risk of the investment. Of course Buffet (or anyone else who could afford it) would be happy with a 2.5x return in 5 years if he KNEW the outcome. But the outcome is far from a sure thing. Anything could happen. Worldwide economic meltdown, another lockout, terrorism, war, etc. -- all of these things could upset the applecart.

 

And if it was shaky 5 years ago, it's even less sure now than it was then. The franchise has already appreciated from $90 million (or $75MM, or $85MM, or whatever TG paid for it) to $200MM (or whatever it is). Most of the upside is gone. It ain't going up to $500MM -- the Leafs are the most valuable franchse, and they're only worth $448MM (according to Forbes. So a billionaire evaluating the appreciation-of-the-business aspect as he weighs whether or not to fund substantial operating losses isn't going to just assume he's going to double or triple his money in 5 years.

 

(d) and (e) -- I agree.

[SDS]

a) I don't think I agree with this. First, teams don't really disclose their P&Ls. They might cherry-pick a few #s here and there, but nobody really opens the books. More to the point, I think a team's financial results have a significant impact on its value, especially where any sale is conditioned on the team not being moved. Can you name a sports franchise that was losing a ton of money and still sold for a large sum WITH the requirement that the team not be moved?

 

b) I could be wrong, but I'm pretty sure I remember reading that he lost (or the Sabres claimed that he lost) somewhere in the $25 million range in the first 2-3 years he owned the team (one of which was the lockout year). Here is an article stating that the Sabres lost $10MM in 2004 alone.

 

c) Respectfully, the hypothetical assumes away the entire issue -- the risk of the investment. Of course Buffet (or anyone else who could afford it) would be happy with a 2.5x return in 5 years if he KNEW the outcome. But the outcome is far from a sure thing. Anything could happen. Worldwide economic meltdown, another lockout, terrorism, war, etc. -- all of these things could upset the applecart.

 

And if it was shaky 5 years ago, it's even less sure now than it was then. The franchise has already appreciated from $90 million (or $75MM, or $85MM, or whatever TG paid for it) to $200MM (or whatever it is). Most of the upside is gone. It ain't going up to $500MM -- the Leafs are the most valuable franchse, and they're only worth $448MM (according to Forbes. So a billionaire evaluating the appreciation-of-the-business aspect as he weighs whether or not to fund substantial operating losses isn't going to just assume he's going to double or triple his money in 5 years.

 

(d) and (e) -- I agree.

 

nfreeman bringing his "A" game... :thumbsup:

[Claude Balls]

a) I don't think I agree with this. First, teams don't really disclose their P&Ls. They might cherry-pick a few #s here and there, but nobody really opens the books. More to the point, I think a team's financial results have a significant impact on its value, especially where any sale is conditioned on the team not being moved. Can you name a sports franchise that was losing a ton of money and still sold for a large sum WITH the requirement that the team not be moved?

 

b) I could be wrong, but I'm pretty sure I remember reading that he lost (or the Sabres claimed that he lost) somewhere in the $25 million range in the first 2-3 years he owned the team (one of which was the lockout year). Here is an article stating that the Sabres lost $10MM in 2004 alone.

 

c) Respectfully, the hypothetical assumes away the entire issue -- the risk of the investment. Of course Buffet (or anyone else who could afford it) would be happy with a 2.5x return in 5 years if he KNEW the outcome. But the outcome is far from a sure thing. Anything could happen. Worldwide economic meltdown, another lockout, terrorism, war, etc. -- all of these things could upset the applecart.

 

And if it was shaky 5 years ago, it's even less sure now than it was then. The franchise has already appreciated from $90 million (or $75MM, or $85MM, or whatever TG paid for it) to $200MM (or whatever it is). Most of the upside is gone. It ain't going up to $500MM -- the Leafs are the most valuable franchse, and they're only worth $448MM (according to Forbes. So a billionaire evaluating the appreciation-of-the-business aspect as he weighs whether or not to fund substantial operating losses isn't going to just assume he's going to double or triple his money in 5 years.

 

(d) and (e) -- I agree.

Nice post.

 

Although I am not sold on (e). When players openly say they don't want to play in Buffalo, that is a concern. When FAs see how management has treated some of their own in the past, that is a concern. When the team is losing money more often than making reasonable profits, that is a concern. Of the smaller market teams is Buffalo strong, of course. Are they strong enough to stick around forever like a Detroit, Chicago, NY or Boston......no way, and especially with the economy taking a big crap like it is.

[WayneGibbous]

Quinn vehemently shot this story down and I believe him. People always try to sensationalize rumors and once I saw Balsilie's name predictably attached to the story I rolled my eyes.

 

Regardless, however, imagine the freaking lynch-mob that would form in Buffalo if Galisano sold the club to that buffoon and he moved the team TO HAMILTON right under our noses. Wow.

[tom webster]

a) I don't think I agree with this. First, teams don't really disclose their P&Ls. They might cherry-pick a few #s here and there, but nobody really opens the books. More to the point, I think a team's financial results have a significant impact on its value, especially where any sale is conditioned on the team not being moved. Can you name a sports franchise that was losing a ton of money and still sold for a large sum WITH the requirement that the team not be moved?

 

b) I could be wrong, but I'm pretty sure I remember reading that he lost (or the Sabres claimed that he lost) somewhere in the $25 million range in the first 2-3 years he owned the team (one of which was the lockout year). Here is an article stating that the Sabres lost $10MM in 2004 alone.

 

c) Respectfully, the hypothetical assumes away the entire issue -- the risk of the investment. Of course Buffet (or anyone else who could afford it) would be happy with a 2.5x return in 5 years if he KNEW the outcome. But the outcome is far from a sure thing. Anything could happen. Worldwide economic meltdown, another lockout, terrorism, war, etc. -- all of these things could upset the applecart.

 

And if it was shaky 5 years ago, it's even less sure now than it was then. The franchise has already appreciated from $90 million (or $75MM, or $85MM, or whatever TG paid for it) to $200MM (or whatever it is). Most of the upside is gone. It ain't going up to $500MM -- the Leafs are the most valuable franchse, and they're only worth $448MM (according to Forbes. So a billionaire evaluating the appreciation-of-the-business aspect as he weighs whether or not to fund substantial operating losses isn't going to just assume he's going to double or triple his money in 5 years.

 

(d) and (e) -- I agree.

 

a) Almost every baseball team other then Boston, New York and Anaheim report millions of dollare of losses and continue to sell for more then their previous purchase price. And yes, most of them have some sort of penalty for relocating, although some clauses not as strong as others.

b) It is fairly common that every new business reports substantial losses in the first few years due to the large write offs available the first year. I am not going to go into accounting 101, but I assume you know that paper losses and negative cash flow are two entirely different things. To once again paraphrase my favorite doctor ever, profit is merely a theoretical tool used to placate the less informed.

c) Every investment is hypothetical, although obviously some come with more risks then others. How do you know that most of the upside is gone? The gap between the super rich and the rest of us continues to grow. People like Buffet and others are now in the process of cherry picking struglling companies and the result will probably be an even bigger gap resulting in a bunch of multi billionaire with nothing to do but spend cash recklessly driving up the price of high end luxury investments.

d and e) glad we agree and if we don't spar again before the new year, have a happy and healthy holiday.

[SDS]

a) Almost every baseball team other then Boston, New York and Anaheim report millions of dollare of losses and continue to sell for more then their previous purchase price. And yes, most of them have some sort of penalty for relocating, although some clauses not as strong as others.

b) It is fairly common that every new business reports substantial losses in the first few years due to the large write offs available the first year. I am not going to go into accounting 101, but I assume you know that paper losses and negative cash flow are two entirely different things. To once again paraphrase my favorite doctor ever, profit is merely a theoretical tool used to placate the less informed.

c) Every investment is hypothetical, although obviously some come with more risks then others. How do you know that most of the upside is gone? The gap between the super rich and the rest of us continues to grow. People like Buffet and others are now in the process of cherry picking struglling companies and the result will probably be an even bigger gap resulting in a bunch of multi billionaire with nothing to do but spend cash recklessly driving up the price of high end luxury investments.

d and e) glad we agree and if we don't spar again before the new year, have a happy and healthy holiday.

 

 

Marcus Welby?

[tom webster]

Marcus Welby?

 

 

Johnny Fever

[wjag]

Marcus Welby?

Quincy.. Marcus couldn't hold a candle to Quincy..

[nfreeman]

a) Almost every baseball team other then Boston, New York and Anaheim report millions of dollare of losses and continue to sell for more then their previous purchase price. And yes, most of them have some sort of penalty for relocating, although some clauses not as strong as others.

b) It is fairly common that every new business reports substantial losses in the first few years due to the large write offs available the first year. I am not going to go into accounting 101, but I assume you know that paper losses and negative cash flow are two entirely different things. To once again paraphrase my favorite doctor ever, profit is merely a theoretical tool used to placate the less informed.

c) Every investment is hypothetical, although obviously some come with more risks then others. How do you know that most of the upside is gone? The gap between the super rich and the rest of us continues to grow. People like Buffet and others are now in the process of cherry picking struglling companies and the result will probably be an even bigger gap resulting in a bunch of multi billionaire with nothing to do but spend cash recklessly driving up the price of high end luxury investments.

d and e) glad we agree and if we don't spar again before the new year, have a happy and healthy holiday.

a) Well, as you yourself note in (b), reported losses (especially when the books aren't open for review) aren't necessarily the same thang as whether a business is truly profitable.

 

b) I agree that paper losses aren't the same as actual negative cash flow, but attendance was pretty low when TG first bought the team, so I'd guess there was real negative cash flow. Again, the true economic impact, factoring in the benefit of writeoffs, arena lease, etc. can't really be known without seeing the books, which isn't going to happen.

 

c) I guess that my statement that most of the upside is gone is related to my assumptions that (i) there isn't much more cash available to be squeezed out of the WNY market and (ii) the value is inherently related to the cash generated by the business. If I'm wrong about (ii) -- I assume you don't disagree with (i) -- then I could be wrong about most of the upside being gone.

 

And with that, I will thank you for your holiday wishes and wish you and your family (and everyone else on this board) the same!

[K-9]

Quincy.. Marcus couldn't hold a candle to Quincy..

 

Dr. Kildare schooled 'em both.

 

GO BILLS!!!

[nobody]

Jim Kelley defends his position:

 

Kelley: The art of doublespeak

 

 

 

"The talks involving the possible sale of the Sabres are real and verified by impeccable sources. It could still fall through. It could still be a problem for the NHL if the price isn't to its liking (that too was reported and ignored in the response), another prospective bidder could emerge to trump the one now making headway, but none of that takes away from the fact that the franchise is for sale and that a number of people, including well placed people in the National Hockey League know it.

 

All of which is being denied through doublespeak in the hopes that by making enough noise it will be ignored."

[dante23x]

Jim Kelley defends his position:

 

Kelley: The art of doublespeak

"The talks involving the possible sale of the Sabres are real and verified by impeccable sources. It could still fall through. It could still be a problem for the NHL if the price isn't to its liking (that too was reported and ignored in the response), another prospective bidder could emerge to trump the one now making headway, but none of that takes away from the fact that the franchise is for sale and that a number of people, including well placed people in the National Hockey League know it.

 

All of which is being denied through doublespeak in the hopes that by making enough noise it will be ignored."

 

That is an interesting article. The bit about the Bruins GM talking to Schoenfield was funny. Well, I guess all we can do is wait and see what happens. I can't imagine that any Sabre home games will be played in Hamilton. That makes no sense for the Sabres unless they are planning on charging double the price in Hamilton.

[That Aud Smell]

also noteworthy is kelley's insistence to this effect (especially the bolded portion): "here are the facts that no one can deny: Sabres owner B. Thomas Golisano has been approached by an as yet unnamed person who has an interest in buying the team and his front man, Quinn, is reaching out to find someone who might both trump that offer and allow him to remain as managing partner."

 

if the LQ's on his way out, he ain't goin' down without a fight.

[stenbaro]

Off subject kinda but I wish Ralph Wilson had as much interest in dumping the Bills as it seems Galisano has in selling the Sabres

[PASabreFan]

Dr. Kildare schooled 'em both.

 

GO BILLS!!!

 

House breaks a rectal thermometer off in all three of them!

[PASabreFan]

Jim Kelley defends his position:

 

Kelley: The art of doublespeak

 

 

 

"The talks involving the possible sale of the Sabres are real and verified by impeccable sources. It could still fall through. It could still be a problem for the NHL if the price isn't to its liking (that too was reported and ignored in the response), another prospective bidder could emerge to trump the one now making headway, but none of that takes away from the fact that the franchise is for sale and that a number of people, including well placed people in the National Hockey League know it.

 

All of which is being denied through doublespeak in the hopes that by making enough noise it will be ignored."

 

So, nobody, when were you going to tell us? Don't you think the people on this board deserved to know?

[spndnchz]

per GR:

Gary Bettman told NHL.com Tuesday that "There is no Buffalo situation. That is one of those unfounded reports. Tom Golisano is not selling the Sabres."

 

I'd buy into the "expanded market" theory but not selling.

[JohnRobertEichel]

I wonder why Jeremy Jacobs has never been interested in dumping the Bruins and buying the Sabres. He is, after all, a native Buffalonian who loves hockey and the NHL. Everyone rips on the guy for being such a terrible owner in Beantown, but he would seem to offer the Sabres long-term market stability in Buffalo, i.e. no shared games in Hamilton B.S. Plus look at his team recently...19-4-4 and tops in the Eastern Conference. Not bad.

[Claude Balls]

I wonder why Jeremy Jacobs has never been interested in dumping the Bruins and buying the Sabres. He is, after all, a native Buffalonian who loves hockey and the NHL. Everyone rips on the guy for being such a terrible owner in Beantown, but he would seem to offer the Sabres long-term market stability in Buffalo, i.e. no shared games in Hamilton B.S. Plus look at his team recently...19-4-4 and tops in the Eastern Conference. Not bad.

He can make a lot more money in Boston and the team is worth a hell of a lot more than the Sabres.

[shrader]

The Bruins are such a cash cow for Jacobs. Not only is there the money the team brings in, but he owns the arena too, so he's drawing rent from the Celtics and all the other events that go on there. Tie that in with the concessions and he'd be completely crazy to ever dump that team.

 

But hey, at least someone took my suggestion and created the username "Foligno's Nose". :thumbsup:

[K-9]

House breaks a rectal thermometer off in all three of them!

 

House couldn't lubricate Dr. Gillespie's thermometer, let alone Kildare's.

[PASabreFan]

So, nobody, when were you going to tell us? Don't you think the people on this board deserved to know?

 

OK, this was a good gag, but nobody won't play along.

 

"I have approached nobody,? Quinn replied Monday in a phone interview from the National Hockey League?s Board of Governors meeting in Florida.

[inkman]

OK, this was a good gag, but nobody won't play along.

 

"I have approached nobody,? Quinn replied Monday in a phone interview from the National Hockey League?s Board of Governors meeting in Florida.

Nobody? :lol:

[PASabreFan]

Nobody? :lol:

 

Well, he is a mystery man. Very shady.