[News] The Athletic - NHL Owner Rankings - Murray Edwards 30th

[PaperBagger'14]

Originally Posted by Jay Random

You can't keep it straight, that's who. I am not GioforPM. He is not me. I did not make the remarks you accuse him of making. (Neither did he, for that matter. I read what he said, and I read your laughable twisting of his words, and they are not the same at all.)

It’s literally right there where Gio used Kadri on Colorado as a comparison, use your eyes chief

[Jason14h]

You don’t know why competitive rich people like to buy sports teams of which there are ~32 in every league

That’s why valuation are extremely high . Other then expansion they are an fixed limit asset that the extremely rich can buy and compete with each other

I’m actually perplexed you couldn’t understand why a sports team is valued differently than a normal business .

[cam_wmh]

Originally Posted by GioforPM

In Ottawa its what I understand to be a big investor group (led by Andlauer) so the cost (just under $1B) is spread pretty widely. That would probably be better for the people here (the more owners there are the less one is pulling the strings).

Yeah, the valuation is a mystery to me. How can you possibly make back $1B with a hockey club that loses money as much as it profits year to year, short of selling to some new sucker? Of course, who knows how those payments are made anyway. The Flames profit last year was $37M before taxes. If they make that every year (which they don't) I have to rake all that in over 32 years to get back my investment.

But this suggests the valuation of sports franchises is done with much different multiples than normal businesses. Why? I dunno.

https://cbvinstitute.com/wp-content/...Franchises.pdf

Agreed, the more the better so they must work together. Instead we've seen Murray consolidate.
- Doc
- Byron
- Riddell
Sure, I'm not familiar with their estates, and family members potentially stepping up.

I think the valuation is as important, if not more, than the annual returns.

[GioforPM]

Originally Posted by PaperBagger'14

It’s literally right there where Gio used Kadri on Colorado as a comparison, use your eyes chief

LOL. You said "you" to Jay Random when referring to something I said.He's not me.

And for the record, this was a comparison of Knies v Kadri and ONE of my points in a lnegthy conversation was that Knies short term point surge has been on a line with top players - Matthews and Nylander, and that the evidence of Kadri in a similar situation was in Colorado, when Mackinnon was out and he was playing with Rantanen and Landeskog (or Burkaovsky and Nichsushkin when Mackinnon was there). You can't compare a guy playing with Farabee and Sharangovich to a guy playing with Matthews and Nylander.

I also mentioned Kadri is a centre, and that his previous three or four years of production were superior. I said Knies was going to be better very shortly but IMO Kadri is still the better player at the moment.

[Strange Brew]

Yeah valuing pro sports franchises is more like how you value a rare painting.

Now owners love to misdirect towards annual cash flow when asking taxpayers to build them a new arena. And it does seem to work every time.

[Jay Random]

Originally Posted by PaperBagger'14

It’s literally right there where Gio used Kadri on Colorado as a comparison, use your eyes chief

You fail reading comprehension.

[GioforPM]

Originally Posted by Jason14h

You don’t know why competitive rich people like to buy sports teams of which there are ~32 in every league

That’s why valuation are extremely high . Other then expansion they are an fixed limit asset that the extremely rich can buy and compete with each other

I’m actually perplexed you couldn’t understand why a sports team is valued differently than a normal business .

You are making a non-business argument (emotion and competitiveness) to explain a business concept (value of a company). That's not valuation. It's emotion at an auction.

It's not so much not understanding than thinking it's foolish to try to "value" a sports team based on different factors than any other industry.

Tell me what parameters you'd use in a business valuation of the Flames. Is it EBITDA times 10 years or something else?

[Jay Random]

Originally Posted by GioforPM

Tell me what parameters you'd use in a business valuation of the Flames. Is it EBITDA times 10 years or something else?

People who know nothing about valuing businesses seem to think sports franchises can be valued by Greater Fool Theory. They assume the price will go up forever because there will always be an even richer and dumber billionaire out there to buy any given team.

I wouldn't bet too heavily on that myself. The absolute top of the billionaires list – Musk and Bezos – are not interested in buying sports teams to play with. They're buying their own private space programs instead.

If the fashion in vanity assets changes, sports team valuations could wind up deflating rather rapidly.

[wpgflamesfan]

Originally Posted by Jay Random

People who know nothing about valuing businesses seem to think sports franchises can be valued by Greater Fool Theory. They assume the price will go up forever because there will always be an even richer and dumber billionaire out there to buy any given team.

I wouldn't bet too heavily on that myself. The absolute top of the billionaires list – Musk and Bezos – are not interested in buying sports teams to play with. They're buying their own private space programs instead.

If the fashion in vanity assets changes, sports team valuations could wind up deflating rather rapidly.

People who know a lot about valuing businesses can scream until they’re blue in the face that sports franchises shouldn’t be valued by your so called “greater fool theory”. They may technically be correct but that doesn’t change the fact the that’s essentially whats going on.

Strange Brews’ post above pretty much hits the nail on the head.

[Jay Random]

Originally Posted by wpgflamesfan

People who know a lot about valuing businesses can scream until they’re blue in the face that sports franchises shouldn’t be valued by your so called “greater fool theory”. They may technically be correct but that doesn’t change the fact the that’s essentially whats going on.

Whenever an asset is valued by Greater Fool Theory, that's a bubble and it always collapses sooner or later. And it's not ‘so-called’; it's a real term of art in economics.

[wpgflamesfan]

[QUOTE=Jay Random;9578373]

Originally Posted by wpgflamesfan

People who know a lot about valuing businesses can scream until they’re blue in the face that sports franchises shouldn’t be valued by your so called “greater fool theory”. They may technically be correct but that doesn’t change the fact the that’s essentially whats going on./QUOTE]

Whenever an asset is valued by Greater Fool Theory, that's a bubble and it always collapses sooner or later. And it's not ‘so-called’; it's a real term of art in economics.

I’m not arguing with you on the theory. I’m saying that’s what’s happening in practice.

[Jay Random]

Originally Posted by wpgflamesfan

I’m not arguing with you on the theory. I’m saying that’s what’s happening in practice.

Fair enough. And I'm saying that the supply of billionaires is not infinite, and not all billionaires want to own sports teams. If that goes out of style, look out below. The people who are piling up big money now (as opposed to those who already have it) come from generations that are much less likely to be interested in sports in the first place, and I think it's going to show in the kind of side assets they're interested in buying.

[Jason14h]

Originally Posted by Jay Random

Whenever an asset is valued by Greater Fool Theory, that's a bubble and it always collapses sooner or later. And it's not ‘so-called’; it's a real term of art in economics.

There’s 32 teams .

They aren’t making (or making very few ) anymore teams

The value of sports teams has gone up at a crazy rate . And every year the next sale blows away projected sale price.

And they are almost all cash flow positive - sometimes massively , have fixed costs for salaries in a salary cap , cities will pay for arenas to increase your revenue, huge steaming companies in Amazon and Netflix are now getting involved , and you get to compete with other billionaires and stroke your ego

Yeah sports teams are a bubble 🙄

I guess everyone but you and Gio are dumb (like always) ! If only everyone had the foresight to not be a fool you could save them from the billions they will make on team appreciation !

[Jason14h]

Originally Posted by Jay Random

Fair enough. And I'm saying that the supply of billionaires is not infinite, and not all billionaires want to own sports teams. If that goes out of style, look out below. The people who are piling up big money now (as opposed to those who already have it) come from generations that are much less likely to be interested in sports in the first place, and I think it's going to show in the kind of side assets they're interested in buying.

The supply of billionaires is increasing at an exponentially faster rate than the supply of sports teams!

[GioforPM]

None of these new billionaires seem that interested in owning franchises. The tech billionaires (and worse, crypto billionaires) don’t seem keen on it.

[Jay Random]

Originally Posted by Jason14h

The supply of billionaires is increasing at an exponentially faster rate than the supply of sports teams!

So is the supply of other things for billionaires to spend their money on.

[Jay Random]

Originally Posted by Jason14h

There’s 32 teams .

They aren’t making (or making very few ) anymore teams

Not in established leagues – but they haven't stopped setting up new leagues or inventing new sports. MLS came along and provided a bunch of people a brand-new chance to own major-league sports teams. God help us if professional pickleball becomes a thing.

I guess everyone but you and Gio are dumb (like always) ! If only everyone had the foresight to not be a fool you could save them from the billions they will make on team appreciation !

How many teams have actually changed hands at these sky-high valuations? The prices are high largely because very few teams ever come on the market. I can assure you that neither the billionaires nor their banks take these valuations very seriously, because a sports franchise is not a liquid asset and the market is so small that a single transaction can skew the whole apparent value either way. If you have a sports franchise worth $1 billion on paper and try to use it as collateral on a loan – good luck getting more than a small fraction of that.

[cam_wmh]

That reads both funny, and like you're hunting for something that doesn't exist.
There are some young techies whom own franchises, and yet they are still a small proportion (1/6), of all new billionaires.

Funny, as it seems you're searching for reasons why Murray's share, would not be desirable the market.

[Strange Brew]

Originally Posted by GioforPM

None of these new billionaires seem that interested in owning franchises. The tech billionaires (and worse, crypto billionaires) don’t seem keen on it.

Source?

[FanIn80]

It would be interesting to see how many (if any) offers/inquiries come in each year to buy in on the Flames. Any purchase would be moot though without a majority stake (if the goal is to effect any kind of structural change to the organization).