[Rumour] Friedman: Devils and Flames have had legit discussions about Markstrom

[Locke]

Originally Posted by Shazam

Not until the gain is realized.

Ah! Incorrect.

Whats your Mortgage like?

When you own a profitable and highly valuable asset you can borrow against it on very favorable terms in order to invest more.

Wealthy people only ever spend somebody else's money.

[GioforPM]

Originally Posted by Locke

Ah! Incorrect.

Whats your Mortgage like?

When you own a profitable and highly valuable asset you can borrow against it on very favorable terms in order to invest more.

Wealthy people only ever spend somebody else's money.

Edwards spends his own money a lot. In fact he lends money a lot.

[Locke]

Originally Posted by GioforPM

Edwards spends his own money a lot. In fact he lends money a lot.

Sure. Although I doubt its his own money.

But at the end of the day look what they bought the Flames for versus what they're worth now.

Either way, most of these guys borrow against high-value assets at rock-bottom interest rates.

[Jay Random]

Originally Posted by Locke

When you own a profitable and highly valuable asset you can borrow against it on very favorable terms in order to invest more.

You can borrow, but the operating cash flow had better be enough to service that debt. What you can't do is borrow against the speculative value of the asset IF it were put on a highly illiquid market.

Which means, given the low and variable operating income of the Flames, the amount the owners can borrow against it is much less than Forbes' WAG about the market value in case of a franchise sale.

[Locke]

Originally Posted by Jay Random

You can borrow, but the operating cash flow had better be enough to service that debt. What you can't do is borrow against the speculative value of the asset IF it were put on a highly illiquid market.

Which means, given the low and variable operating income of the Flames, the amount the owners can borrow against it is much less than Forbes' WAG about the market value in case of a franchise sale.

Sure but in this instance, what does Edwards care? I've seen some of his moves, there is a reason they call CNRL 'the Evil Empire.'

Anyways, we're getting off topic. The ultimate value of Sports Franchises is increasing over-all Value.

[CalgaryFan1988]

Came in for trade speculation, leaving with financial advice.

[Locke]

Originally Posted by CalgaryFan1988

Came in for trade speculation, leaving with financial advice.

You're welcome. Most people have to pay for that!

[DazzlinDino]

Originally Posted by Hackey

Ya I don't buy the narrative that people won't show up. The team is bad with no high end prospects, no superstars, and people are still interested. A lot of people just go to games as something to do. Events and experiences have never been bigger. This is a Canadian market where hockey is huge and really there are limited things to do for a night out in Calgary.

The actual hockey fans would be easy to sell.

And if you have a few lean years then so be it. That's the cost of becoming elite. When you have a few new superstars to cheer for and a team filled with young up and coming talent, the interest in the team will rejuvenate more than ever.

Superstars? From where? What happens if the guys we bring in don't pan out; Didn't the oilers go through something like this? I remember an interview with Conroy where he pretty much said he didn't want to make the same mistake the oilers made. He said you need experienced players on the team and a winning environment. If the Flames go all in they could end up treading wheels and putting too much pressure on a young and in-experienced group. If we were in the bottom of the league right now, then we might get a quality player but where we are now I don't see it. Who is going to give us a 1st that net us a superstar?

I think we need to be a bit more patient and not gut the team too quickly.

[Strange Brew]

It's like owning a highly valuable piece of art. Sports franchises are rare as hell and thus their value.

Sports club owners have my ultimate respect for being able to convince the public and their elected officials of their dire economic circumstances and their need for taxpayer assistance to sustain their business. It's incredible really.

[Locke]

Originally Posted by Strange Brew

It's like owning a highly valuable piece of art. Sports franchises are rare as hell and thus their value.

Sports club owners have my ultimate respect for being able to convince the public and their elected officials of their dire economic circumstances and their need for taxpayer assistance to sustain their business. It's incredible really.

I'd probably go closer to 'clinically insane' but hey...the world is a wacky place.

[GioforPM]

I actually think the league doesn’t allow NHL owners to use shares in their teams as collateral because then the NHL would lose control over who owns the team (if the security is enforced). I suspect the CSEC shareholder agreement is similar.

And conversely even if it was allowed, since the NHL controls who can be an owner, lenders would be very reluctant to take such collateral.

[Hackey]

Originally Posted by DazzlinDino

Superstars? From where? What happens if the guys we bring in don't pan out; Didn't the oilers go through something like this? I remember an interview with Conroy where he pretty much said he didn't want to make the same mistake the oilers made. He said you need experienced players on the team and a winning environment. If the Flames go all in they could end up treading wheels and putting too much pressure on a young and in-experienced group. If we were in the bottom of the league right now, then we might get a quality player but where we are now I don't see it. Who is going to give us a 1st that net us a superstar?

I think we need to be a bit more patient and not gut the team too quickly.

What happens if the guys don't pan out? Then they don't pan out. You realize no matter what path you take, there is a chance it doesn't pan out? This is the reality of trying to achieve anything. This is not a reason to not do something. You create a plan/strategy, and you try to execute to the best of your ability. If you can't build a team with high picks and a surplus of picks, you're not going to build a team with later picks and fewer picks.

[CSharp]

Originally Posted by Rick M.

I’ve heard he’s responsible for global warming.

Is this why Jyoti Gondek called a Climate Emergency on her first day of office?

[Locke]

Originally Posted by Rick M.

I’ve heard he’s responsible for global warming.

I've heard that he's responsible for COVID. Apparently Edwards single-handedly kept Pangolins alive and subsidized that Wuhan Wet Market so local people could buy Pangolins and Bats at a discount...

But only if they purchased them together.

Then he offered them discounted airfare...

[CSharp]

Originally Posted by Locke

I've heard that he's responsible for COVID. Apparently Edwards single-handedly kept Pangolins alive and subsidized that Wuhan Wet Market so local people could buy Pangolins and Bats at a discount...

But only if they purchased them together.

Then he offered them discounted airfare...

Bat Soup Kenney Conspiracy!

[Strange Brew]

Originally Posted by GioforPM

I actually think the league doesn’t allow NHL owners to use shares in their teams as collateral because then the NHL would lose control over who owns the team (if the security is enforced). I suspect the CSEC shareholder agreement is similar.

And conversely even if it was allowed, since the NHL controls who can be an owner, lenders would be very reluctant to take such collateral.

The NFL explicitly allows this.

https://www.forbes.com/sites/mikeoza...h=344a4c0f5014

https://theathletic.com/1299155/2019...nchises/?amp=1

I’d be surprised if nhl teams didn’t have some debt on their balance sheets as owners would be interested in getting some liquidity out of their investment.

But it’s kind of a technical argument that has nothing to with net worth and little to do with the economics of owning a team which are stunningly great.

You just can’t ignore the shocking increase in franchise value when evaluating these businesses.

[PeteMoss]

The reason you trade Markstrom now (or in the off-season) is since he's been here he's basically rotated between good and bad seasons. Even if he is the reason the team is competitive this year, he was the reason they didn't make the playoffs last year (and imploded against the Oilers in the playoffs the year before that).

In 12 months time - he could easily be a guy you have to attach a sweetener to move or have to buy out after the season. If you can cash in on the guy - you have to do it when you can.

[GioforPM]

Originally Posted by Strange Brew

The NFL explicitly allows this.

https://www.forbes.com/sites/mikeoza...h=344a4c0f5014

https://theathletic.com/1299155/2019...nchises/?amp=1

I’d be surprised if nhl teams didn’t have some debt on their balance sheets as owners would be interested in getting some liquidity out of their investment.

But it’s kind of a technical argument that has nothing to with net worth and little to do with the economics of owning a team which are stunningly great.

You just can’t ignore the shocking increase in franchise value when evaluating these businesses.

I still think lenders would not like the collateral. And that CSEC limits share pledges via the terms of their USA. CSEC itself may have debt, but it would pledge its other assets rather than franchise licence.

Anyway, Edwards has better collateral if he wants to borrow.

[PeteMoss]

Do we really have to discuss if Edwards is in any way strained by having to retain salary or in need of two games of playoff revenue?

He's the owner and can do whatever he wants - but the team and the owners can easily bypass 2 or 3 games of playoff revenue and/or retain salary without impacting themselves at all.

[Textcritic]

Originally Posted by Hackey

Ya I don't buy the narrative that people won't show up. The team is bad with no high end prospects, no superstars, and people are still interested. A lot of people just go to games as something to do. Events and experiences have never been bigger. This is a Canadian market where hockey is huge and really there are limited things to do for a night out in Calgary.

The actual hockey fans would be easy to sell.

And if you have a few lean years then so be it. That's the cost of becoming elite. When you have a few new superstars to cheer for and a team filled with young up and coming talent, the interest in the team will rejuvenate more than ever.

Well, this strikes me as a very naive, Pollyanna view of things moving forward. When you talk about "actual hockey fans" you are not talking about most of the people who actually go to the games. A lot of the people who buy tickets just want to see the team win, and if the team is not winning it doesn't matter that they have iced a few high end prospects with potential. When the team struggles to win, the building is not as full, and tickets are much easier to come by. Revenues go down.

It's easy for you to just conclude that this is what the team should do, but I suspect it is a far more difficult proposition, for those with actual stakes, in the short term. Thankfully, its one that seems ownership has no choice but to see through whether they like it or not, since the deal for the new building includes a guarantee that the Flames will be staying in Calgary for the next 30 years.

But, I would caution those who can't strip the team down to the studs fast enough, and to collect picks and prospects: when the time comes, it will be long, painful, and through long stretches quite depressing. Rebuilding is necessary, it is not often fun. People need to brace themselves for what's coming. Yeah, it's super exciting in the early days, but there are seasons upon seasons of dark times ahead.