Sabres Trade JJ Peterka to Utah for Defenseman Michael Kesselring and Forward Josh Doan

[Drag0nDan]

57 minutes ago, Pimlach said:

Restaurants and bars were heavily hurt for a while, he had the means to ride it out but chose not to.   Probably a good move.  
 

Covid didn’t devastate the NFL Buffalo Bills and its massive TV revenue, and Covid didn’t not adversely affect any natural gas businesses (if he was still involved in them).  

The acquisition of the big boat did seem to change things though.  It seemed odd to hear a family worth ~$6B publicly talking about about “maintaining the family lifestyle” while putting the Sabres into EEE cost cutting.  

 

I'd imagine its cashflow for the Bills stadium more than anything.  They sold ownership stake for cash for overruns too. 

I think the sabres were in the red for a number of years, and he needs them to not be costing millions of dollars in extras until the new stadium is completed.  

[LGR4GM]

1 hour ago, Pimlach said:

Restaurants and bars were heavily hurt for a while, he had the means to ride it out but chose not to.   Probably a good move.  
 

Covid didn’t devastate the NFL Buffalo Bills and its massive TV revenue, and Covid didn’t not adversely affect any natural gas businesses (if he was still involved in them).  

The acquisition of the big boat did seem to change things though.  It seemed odd to hear a family worth ~$6B publicly talking about about “maintaining the family lifestyle” while putting the Sabres into EEE cost cutting.  

 

My theory is that Terry was cash poor at the time and that has continued with the stadium costs. The result is that he has worried less about the Sabres because he doesn't have (in relative terms, I am sure he has 10million but if he can save it, that helps) the liquid assets to deal with the 10million a year or so he loses there. He keeps that as low as possible so it isn't 15million a year or more and that way he has just a smidge more liquid to pay for his yacht maintenance and the stadium. 

Edited 13 hours ago by LGR4GM

[shrader]

29 minutes ago, Drag0nDan said:

I'd imagine its cashflow for the Bills stadium more than anything.  They sold ownership stake for cash for overruns too. 

I think the sabres were in the red for a number of years, and he needs them to not be costing millions of dollars in extras until the new stadium is completed.  

By “a number of years” do you mean “pretty much every year”? I think that’s pretty much how it goes and has gone for a long time now, predating Pegula. 

[jad1]

4 hours ago, LGR4GM said:

My theory is that Terry was cash poor at the time and that has continued with the stadium costs. The result is that he has worried less about the Sabres because he doesn't have (in relative terms, I am sure he has 10million but if he can save it, that helps) the liquid assets to deal with the 10million a year or so he loses there. He keeps that as low as possible so it isn't 15million a year or more and that way he has just a smidge more liquid to pay for his yacht maintenance and the stadium. 

I don't get this theory that Terry is cash poor.  The Sabres are a small part of his portfolio, and they are worth $1.15B. 

So, IF he is experiencing liquidity issues that are crippling the Sabres, he could easily get a loan with extremely favorable terms (years and interest rates) for, say, $50M against the Sabres valuation to cover any shortfalls in cap, scouting, or fired-coach spending. 

I'm not saying that Pegula has loans like this, but rather that the immense worth of his portfolio gives him plenty of opportunities to avoid being cash poor.

The Sabres aren't spending to the cap because they have a GM who has no idea how to spend to the cap, not because they are cash poor.

 

 

 

[LGR4GM]

14 minutes ago, jad1 said:

I don't get this theory that Terry is cash poor.  The Sabres are a small part of his portfolio, and they are worth $1.15B. 

So, IF he is experiencing liquidity issues that are crippling the Sabres, he could easily get a loan with extremely favorable terms (years and interest rates) for, say, $50M against the Sabres valuation to cover any shortfalls in cap, scouting, or fired-coach spending. 

I'm not saying that Pegula has loans like this, but rather that the immense worth of his portfolio gives him plenty of opportunities to avoid being cash poor.

The Sabres aren't spending to the cap because they have a GM who has no idea how to spend to the cap, not because they are cash poor.

 

 

 

He sold a 20% stake in the Bills to get a Billion in cash for stadium over-runs. At some point in the past they had to cut Sabres costs to maintain the family lifestyle, we've literally never recovered from that in 2020. 

[PromoTheRobot]

8 minutes ago, LGR4GM said:

He sold a 20% stake in the Bills to get a Billion in cash for stadium over-runs. At some point in the past they had to cut Sabres costs to maintain the family lifestyle, we've literally never recovered from that in 2020. 

Couldn't Terry sell stakes in the Sabres and pick up a couple hundred mil? There are arena updates on the horizon too.

Edited 8 hours ago by PromoTheRobot

[tom webster]

I haven’t read the while thread but I see the whole not “spending to the cap” stuff is being discussed again. While this obviously has happened the last few years, they are likely to end up within $2M - $3M  this year.

[Taro T]

17 hours ago, LGR4GM said:

He bought the Bills. They got really good. He's building a stadium for the Bills.

That's what changed impo.

His wife also suffered a catastrophic brain injury.  The Bills make money.  Wouldn't be surprised if the current version of the Sabres don't make money.  

Expecting her treatments and care are quite expensive and that he holds out that some really expensive treatment might actually bring her back to close to who she was prior to the apparently heart attack induced stroke.  Can understand why he's ok with not putting money into the Sabres; but boy does it stink being a fan.

[Taro T]

18 minutes ago, tom webster said:

I haven’t read the while thread but I see the whole not “spending to the cap” stuff is being discussed again. While this obviously has happened the last few years, they are likely to end up within $2M - $3M  this year.

Depends extremely heavily on what happens with Byram's contract and whether they then keep him or not.

But yes, they COULD end up $2-3MM below the cap this year.  With going to arbitration, expect it'll be closer to $5MM below the cap because am not expecting a Roslovic type FA add nor a Rust type trade add.  Hope for both; expect neither.

[LGR4GM]

41 minutes ago, PromoTheRobot said:

Couldn't Terry sell stakes in the Sabres and pick up a couple hundred mil? There are arena updates on the horizon too.

NHL teams can sell up to 20% to private equity firms. Figure he could probably say the Sabres are worth 1.5billion on the open market... he could get 300million-ish

[jad1]

25 minutes ago, LGR4GM said:

He sold a 20% stake in the Bills to get a Billion in cash for stadium over-runs. At some point in the past they had to cut Sabres costs to maintain the family lifestyle, we've literally never recovered from that in 2020. 

He "sold" 20% of non-controlling interest of the team because the NFL changed its ownership rules to allow it, and it was a smart business decision.

It's was a 'money-for-nothing' deal.

It creates instant capital in exchange for bringing in  new "owners" who have absolutely no say in the running of the team.  The new "owners" are basically buying a vanity stock.

I can't believe more owners aren't doing this.  I fully expect the NFL to increase the percentage of ownership that can be "sold" so that more owners can  easily and cheaply create capital from their investment in their team. And I wouldn't be surprised to see other leagues like the NHL introduce similar "ownership" opportunities.

The coincidence of the rule change and the new stadium funding makes it look like Pegula needs the ownership sale to fund the stadium, but that assumption is wrong.  Any owner would be foolishness not to take advantage of the rule change.

Beyond that, there is no report or rumor that Pegula is struggling with the cost overruns at the stadium.  The Bills, under competent front office leadership have not suffered in the least from Terry's commitment to the stadium.  And the Pegulas, themselves, have not mentioned the burden of the cost at all.

Pegula's net worth has almost tripled since 2020.  They are not having difficulty funding their lifestyle, despite using that utterly stupid excuse to cold-heartedly lay off workers during covid.  Don't confuse a PR f##k up for their actual financial status.  

 

[LGR4GM]

3 minutes ago, jad1 said:

He "sold" 20% of non-controlling interest of the team because the NFL changed its ownership rules to allow it, and it was a smart business decision.

It's was a 'money-for-nothing' deal.

It creates instant capital in exchange for bringing in  new "owners" who have absolutely no say in the running of the team.  The new "owners" are basically buying a vanity stock.

I can't believe more owners aren't doing this.  I fully expect the NFL to increase the percentage of ownership that can be "sold" so that more owners can  easily and cheaply create capital from their investment in their team. And I wouldn't be surprised to see other leagues like the NHL introduce similar "ownership" opportunities.

The coincidence of the rule change and the new stadium funding makes it look like Pegula needs the ownership sale to fund the stadium, but that assumption is wrong.  Any owner would be foolishness not to take advantage of the rule change.

Beyond that, there is no report or rumor that Pegula is struggling with the cost overruns at the stadium.  The Bills, under competent front office leadership have not suffered in the least from Terry's commitment to the stadium.  And the Pegulas, themselves, have not mentioned the burden of the cost at all.

Pegula's net worth has almost tripled since 2020.  They are not having difficulty funding their lifestyle, despite using that utterly stupid excuse to cold-heartedly lay off workers during covid.  Don't confuse a PR f##k up for their actual financial status.  

 

All the owner stuff you added. I am perfectly aware that 20% isn't controlling interest... because 20% is about 31% away from that. 

You give me another reason why Terry has spent under the cap every single year for half a decade, sometimes by almost 10mil. I think it is to balance the books because the Sabres aren't making him money. Wouldn't that be good business? Lots of businesses run that way, they cut costs and degrade their products and then liquidate what's left and move on. 

[jad1]

17 minutes ago, LGR4GM said:

All the owner stuff you added. I am perfectly aware that 20% isn't controlling interest... because 20% is about 31% away from that. 

You give me another reason why Terry has spent under the cap every single year for half a decade, sometimes by almost 10mil. I think it is to balance the books because the Sabres aren't making him money. Wouldn't that be good business? Lots of businesses run that way, they cut costs and degrade their products and then liquidate what's left and move on. 

Sure it would be good business if you never plan to win again.  Outside the Sabres, Terry is a decent businessman who believes that investment drives revenue, so it's hard to believe that he thinks cost cutting will bring him playoff profits.

And I find the argument that Terry believes the NHL is a losing proposition in general to be unbelievable, as league revenues continue to increase, as evidenced by the rising salary cap, and the fact that his $189M investment in the Sabres is now valued at $1.15B.

And non-controlling doesn't mean percentage.  Even minority owners or shareholders have voting rights in a company.  These "owners" have no voting or decision making rights for the franchise.  That's what makes them "non-controlling."

One more point to degrading and liquidating a product.  Pegula doesn't have to do that with the Sabres, since they are worth almost 10x more than what he paid for them, especially since the team can be bought and moved.

Edited 7 hours ago by jad1

[LGR4GM]

15 minutes ago, jad1 said:

Sure it would be good business if you never plan to win again.  Outside the Sabres, Terry is a decent businessman who believes that investment drives revenue, so it's hard to believe that he thinks cost cutting will bring him playoff profits.

And I find the argument that Terry believes the NHL is a losing proposition in general to be unbelievable, as league revenues continue to increase, as evidenced by the rising salary cap, and the fact that his $189M investment in the Sabres is now valued at $1.15B.

And non-controlling doesn't mean percentage.  Even minority owners or shareholders have voting rights in a company.  These "owners" have no voting or decision making rights for the franchise.  That's what makes them "non-controlling."

One more point to degrading and liquidating a product.  Pegula doesn't have to do that with the Sabres, since they are worth almost 10x more than what he paid for them, especially since the team can be bought and moved.

They are worth about 5x what he paid for them, because he has degraded the product. You're right though, he hasn't liquidated the Sabres assets like Harbor Center or the other things attached to the team he controls.

To the bold, you are arguing about the total value of the team which is less than if it were a model franchise competing for cups. I think terry believes his investment is rising and that he doesn't have to go more in the red for that to continue. On top of that I think he prefers not to spend to the cap because it eases financial things around his empire. 10million buys a lot of Yacht fuel. 

Basically, Terry Pegula looks at the Sabres as an asset that will continue to increase in value even if he underfunds them some. It's a win win for an investor. Why put in more money when the product is increasing its value anyways? But again, I also fully believe Terry is so focused on the Bills that that is where he is spending at the expense of the Sabres. 

[jad1]

1 minute ago, LGR4GM said:

They are worth about 5x what he paid for them, because he has degraded the product. You're right though, he hasn't liquidated the Sabres assets like Harbor Center or the other things attached to the team he controls.

To the bold, you are arguing about the total value of the team which is less than if it were a model franchise competing for cups. I think terry believes his investment is rising and that he doesn't have to go more in the red for that to continue. On top of that I think he prefers not to spend to the cap because it eases financial things around his empire. 10million buys a lot of Yacht fuel. 

Yeah, I just think that's the wrong reading on the situation. 

$10m isn't moving a needle for Pegula's lifestyle or portfolio.

Pegula's net worth is $7B.  $10M is .001% of his net worth.  To add perspective, for a guy making 35,000 a year, .001% of his income is $35.   It's pocket change.

It would take a malicious idiot to deny success for his business, customers, and employees based on the perceived benefits of saving so little money when compared to the overall value of his business and portfolio. 

For all Terry's faults, I don't believe he's a malicious idiot. 

So why aren't the Sabres spending to the cap if they aren't pinching pennies?  It's because they are run by a guy who doesn't believe he has to spend to the cap to win.

Adams had made the case several times that he doesn't believe that success comes from spending to the cap.  He's stated several times that there are NO constraints from Terry on spending.  He's also claimed he knows how to win the Stanley Cup.

Terry's problem isn't he's cash poor, his problem is his indefensible loyalty to Kevyn Adams and his incompetence in hiring a legitimate GM for the Sabres.

[JohnC]

1 hour ago, Taro T said:

Depends extremely heavily on what happens with Byram's contract and whether they then keep him or not.

But yes, they COULD end up $2-3MM below the cap this year.  With going to arbitration, expect it'll be closer to $5MM below the cap because am not expecting a Roslovic type FA add nor a Rust type trade add.  Hope for both; expect neither.

TP hired a GM who was unqualified. That same GM imprudently gave out costly long term contracts to players who didn’t deserve such contracts. A more qualified GM would have been smarter in handling player contracts and would have saved money for the parsimonious owner. 

[dudacek]

2 hours ago, tom webster said:

I haven’t read the while thread but I see the whole not “spending to the cap” stuff is being discussed again. While this obviously has happened the last few years, they are likely to end up within $2M - $3M  this year.

For me, it’s all about the spend after Byram.

Realistically, they are going to have enough money to acquire a player after he’s signed, and probably enough to acquire a good player. It’s going to be closer to $5 or $6M than $2 or $3M.

I’m skeptical they are going to use that money. I think they will say the market dried up or the prices were too high, when the fact of the matter is they let the market dry up and they decided the prices were too high.

Once again, unrealized opportunity.

I hope I’m wrong.

Edited 5 hours ago by dudacek

[Taro T]

Just now, dudacek said:

For me, it’s all about the spend after Byram.

Realistically, they are going to have enough money to acquire a player after he’s signed, and probably enough to acquire a good player. It’s going to be closer to $5 or $6M than $2 or $3M.

I’m skeptical they are going to use that money. I think they will say the market dried up or the prices were too high, when the fact of the matter is they let the market dry up and they decided the prices were too high.

Once again, unrealized opportunity.

Your scenario is from this perspective sadly the most likely one.

[shrader]

2 hours ago, Taro T said:

Depends extremely heavily on what happens with Byram's contract and whether they then keep him or not.

But yes, they COULD end up $2-3MM below the cap this year.  With going to arbitration, expect it'll be closer to $5MM below the cap because am not expecting a Roslovic type FA add nor a Rust type trade add.  Hope for both; expect neither.

The two arbitration cases and Levi… are there any other RFAs left? Levi definitely isn’t driving up the cap number at all. 

[Taro T]

3 minutes ago, shrader said:

The two arbitration cases and Levi… are there any other RFAs left? Levi definitely isn’t driving up the cap number at all. 

Nope; not from the Sabres at least.

[PromoTheRobot]

2 hours ago, LGR4GM said:

They are worth about 5x what he paid for them, because he has degraded the product. You're right though, he hasn't liquidated the Sabres assets like Harbor Center or the other things attached to the team he controls.

To the bold, you are arguing about the total value of the team which is less than if it were a model franchise competing for cups. I think terry believes his investment is rising and that he doesn't have to go more in the red for that to continue. On top of that I think he prefers not to spend to the cap because it eases financial things around his empire. 10million buys a lot of Yacht fuel. 

Basically, Terry Pegula looks at the Sabres as an asset that will continue to increase in value even if he underfunds them some. It's a win win for an investor. Why put in more money when the product is increasing its value anyways? But again, I also fully believe Terry is so focused on the Bills that that is where he is spending at the expense of the Sabres. 

The Sabres could win 5 Stanley Cups in a row and their value wouldn't be affected by that. The Sabres are worth what they are worth because of market size. They will always be the #29-31 team in the NHL. But NHL franchise values keep rising. So win or lose, the Sabres are worth $1.15B according to Forbes. Probably more next year. 

But that's kind of bad news because the value of the franchise is beyond what anyone else would pay to keep the team here. You have groups that wouldn't think twice of paying a billion plus for the Sabres and another billion to the league to relocate them.

[Taro T]

4 minutes ago, PromoTheRobot said:

The Sabres could win 5 Stanley Cups in a row and their value wouldn't be affected by that. The Sabres are worth what they are worth because of market size. They will always be the #29-31 team in the NHL. But NHL franchise values keep rising. So win or lose, the Sabres are worth $1.15B according to Forbes. Probably more next year. 

But that's kind of bad news because the value of the franchise is beyond what anyone else would pay to keep the team here. You have groups that wouldn't think twice of paying a billion plus for the Sabres and another billion to the league to relocate them.

Not entirely true.  Yes, even if they are perennial champions, they aren't going to be worth more than the Broadway Blue Shirts.  

But their value would go up significantly if they were successful on the ice.  They'd have perennial sellouts and the broadcast rights would go up in value as more people in the area would be watching on TV so the ad rates would rise.  Throw in merchandise sales and the like, and winning would likely increase the team's value quite a bit.

Especially if Pegula or the guy he hired to run his teams could figure out how to get Sabres games broadcast on the NP, the value of the team could go up a lot by putting a winning roster on the ice.

[JohnC]

4 hours ago, tom webster said:

I haven’t read the while thread but I see the whole not “spending to the cap” stuff is being discussed again. While this obviously has happened the last few years, they are likely to end up within $2M - $3M  this year.

I hope that is the case. Very often the issue isn't necessarily how much you spend as it is how you spend it. 

[Second Line Center]

11 hours ago, JohnC said:

It seems that the COVID onslaught financially caused a financial drain. At the time he was heavily invested in the hospitality business, hotels and restaurants. The Covid plague was financially devastating for all of his businesses.
 

It seems that after that financial stressful period he tightened his wallet. Just maybe, he might be loosening up there. The problem is what has hurt him the most is his own hockey decisions, especially relating to staffing. What’s to be learned? The obvious: when you shoot yourself you wound yourself.

 

I just don’t think it’s Terry’s unwillingness to spend.  
 

I continue to believe the hatred these guys have of taxes across all 4 major sports is grossly underestimated.   
 

KA wasn’t wrong.  You just can’t say it out loud.  
 

You need to prop up why you want to spend the next 7-8 years of your life in Buffalo.  
 

Starting with the fans.  There will be no better city in America to win a major championship right now than Buffalo.  Not one.  

[Ducky]

4 hours ago, tom webster said:

...they are likely to end up within $2M - $3M  this year.

That's a good plan in case you want to upgrade for a playoff push.

Peterka's O will be missed but Kesselring will really help on the back end.