Quote:
Originally Posted by Jay Random
Examples, please? The only case I know of that even vaguely resembles what you suggest was Bruce McNall. And McNall didn't use a shell company; he was just a crook.
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We will have to agree to disagree.
Most teams are run under a umbrella corporation. The owners use the law to shield themselves form taking too much of a hit. Its the way almost every corporation in America is run. Nothing unusual about it.
It isn't people like you and me that are buying these teams. That is what you fail to understand. The corporation gets a loan to buy the team, these are not cash deals. No one is walking away from 125 million dollars when the team goes bankrupt. They are walking away from $100+ in dept that the bankruptcy courts can go after. These are people that smash $1 million cars and think its funny. Their real money is safe (alot more than it costs to buy an NHL team). That is why no one bought Phoenix, they would only buy it with Glendale's money.
Regarding markets: The floor and ceiling are known. These folks did not get into a position of being able to buy a team by not knowing how to read a balance sheet.
When they go out and commit $100 million to a player or two in this low revenue markets like Minn or NJ they know there is zero chance of that investment becoming profitable.
So why would they do it? Most owners are not even local. It is not civic pride, its a bit of low risk fun and glory. Then they walk away if it doesn't work, or less likely sell for a profit if it does.
For most of these folks a team is a little diversion. A toy to play with.
Making them ante up more cash as part of the purchase would make it harder to buy/sell teams and would keep the less committed buyers out. The bond would act like a damage deposit, behave and pay the bills and you get your cash back. Most banks won't give a loan for this kind of deposit, not even to billionaires - because they would have no way of reclaiming it.
All this constant doom and gloom in the business of hockey should be a warning to Flames fans that moan about this team's owners. If Flames owners changed it's way more likely thing would get worse.