There will be a strike

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Fred
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Re: There will be a strike

Post by Fred »

The best figure is the $81 mill although isn't that before deductions. If you remove the operating costs ( their payroll alone was $60 million ) for an investment of $1.32 billion that's not a great return. As to the sale if they sold it for $1.32 billion how much did they pay for it and how long did they hold it for. Nothing to radical. The buyers of course are looking to get the broadcast rights ( just like MSG ) and that's worth a bundle. They get the leaves, Raptors and TFC. Forbes can say what ever it likes about the valuation of sports clubs but the old addage is first make the sale :D the rest is just speculation.
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Re: There will be a strike

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Fred wrote:The best figure is the $81 mill although isn't that before deductions. If you remove the operating costs ( their payroll alone was $60 million ) for an investment of $1.32 billion that's not a great return. As to the sale if they sold it for $1.32 billion how much did they pay for it and how long did they hold it for. Nothing to radical. The buyers of course are looking to get the broadcast rights ( just like MSG ) and that's worth a bundle. They get the leaves, Raptors and TFC. Forbes can say what ever it likes about the valuation of sports clubs but the old addage is first make the sale :D the rest is just speculation.
Add to that how much the ACC (200-something Million) and surrounding real estate MLSE holds... The leaves franchise might be worth $500M, but the Raptors are $300+M, and Toronto FC is one of the richer MLS clubs.
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Re: There will be a strike

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Island Nucklehead wrote:Add to that how much the ACC (200-something Million) and surrounding real estate MLSE holds... The leaves franchise might be worth $500M, but the Raptors are $300+M, and Toronto FC is one of the richer MLS clubs.
Never considered that, I wonder how much the real estate holding have risen in dwon town TO since they purched MLSE. Likely the increase in Real EstateValue ( assuming that is the case )a good porition
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Re: There will be a strike

Post by Potatoe1 »

Fred wrote:The best figure is the $81 mill although isn't that before deductions. If you remove the operating costs ( their payroll alone was $60 million ) for an investment of $1.32 billion that's not a great return.
The 81 mill is their operating income, which is earnings before interest and tax.

81 mill on an asset worth 550 mill is a great return.

Now imagine if they made the playoffs :)
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Re: There will be a strike

Post by Fred »

Thanks, it prompted me to look it up
Definition of 'Operating Income'
The amount of profit realized from a business's operations after taking out operating expenses - such as cost of goods sold (COGS) or wages - and depreciation. Operating income takes the gross income (revenue minus COGS) and subtracts other operating expenses and then removes depreciation. These operating expenses are costs which are incurred from operating activities and include things such as office supplies and heat and power. Operating Income is typically a synonym for earnings before interest and taxes (EBIT) and is also commonly referred to as "operating profit" or "recurring profit."
But isn't the $81 million annualy income compared with the investment that was made ? (approx $1.3 billion ) and is the $81 million operating income for MLSE rather than the leaves...just asking
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Re: There will be a strike

Post by ukcanuck »

Fred wrote:
Island Nucklehead wrote:Add to that how much the ACC (200-something Million) and surrounding real estate MLSE holds... The leaves franchise might be worth $500M, but the Raptors are $300+M, and Toronto FC is one of the richer MLS clubs.
Never considered that, I wonder how much the real estate holding have risen in dwon town TO since they purched MLSE. Likely the increase in Real EstateValue ( assuming that is the case )a good porition
Aren't you missing the point though, no one with any brains throws good money after bad, and Rogers paid roughly three times its worth (Forbes is not the National Enquirer.) And whichever way you want to account for it the teachers union got a bigger return by selling than keeping it because the value is going up, way up obviously ...
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Re: There will be a strike

Post by Fred »

ukcanuck wrote:
Fred wrote:
Island Nucklehead wrote:Add to that how much the ACC (200-something Million) and surrounding real estate MLSE holds... The leaves franchise might be worth $500M, but the Raptors are $300+M, and Toronto FC is one of the richer MLS clubs.
Never considered that, I wonder how much the real estate holding have risen in dwon town TO since they purched MLSE. Likely the increase in Real EstateValue ( assuming that is the case )a good porition
Aren't you missing the point though, no one with any brains throws good money after bad, and Rogers paid roughly three times its worth (Forbes is not the National Enquirer.) And whichever way you want to account for it the teachers union got a bigger return by selling than keeping it because the value is going up, way up obviously ...

The point is Rogers/Bell could get a far better return than the OTPF by holding the broadcast rights. Their valuation was better than the OTPF, it was worth more to them. I'm also assuming that the Fund Managers had plans for the $1.3 billion that were better or safer than MLSE otherwise they wouldn't do it. These boys don't intentionally mess around. If they can find better returns else where so to can others. I'm betting there are few if any Fund managers who hold interests in NHL teams. This is far more indicative than a journalist writing articles for Forbes (well respected as it might be ) I was always taught a deal's not done until money changes hands. Remember when they tied to raise Bonds for the PHX organisation...NO TAKERS speaks volumes...... there are no assetts. As we speak they can't ( PHX ) find any one to cover a relatively paltry $20 million to make the deal fly in PHX
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Re: There will be a strike

Post by Topper »

Potatoe1 wrote:
Fred wrote:The best figure is the $81 mill although isn't that before deductions. If you remove the operating costs ( their payroll alone was $60 million ) for an investment of $1.32 billion that's not a great return.
The 81 mill is their operating income, which is earnings before interest and tax.

81 mill on an asset worth 550 mill is a great return.

Now imagine if they made the playoffs :)
just a hair under a 15% return on asset, which is what they should strive for with all their assets.
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Re: There will be a strike

Post by Potatoe1 »

Fred wrote:
But isn't the $81 million annualy income compared with the investment that was made ? (approx $1.3 billion ) and is the $81 million operating income for MLSE rather than the leaves...just asking
No.

The investment was in MLSE i.e. the leaves, Raptors, Toronto FC, and numerous other properties.

In the quote you posted they said the value of just the hockey team was 550 mill and the operating Income was 81 mill. That is leaves only.

If you want to asses the over all ROI of the whole deal you need to also look at the P&L's of the other properties.

Not sure how that's relevant in the context of this discussion though.

Bottom line is that the leaves are a fantastic investment, they are however an anomaly.

The vast majority of NHL franchises generate very little profit (most actually lose money), and thus the league as a whole is not very profitable.

Even worse is the fact that one team makes almost 1/3rd of the total income. If you look at the whole league with out the leaves, it's a pretty bleak financial picture which is why the owners will most likely hammer the players again in this CBA.
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Re: There will be a strike

Post by Potatoe1 »

Topper wrote: just a hair under a 15% return on asset, which is what they should strive for with all their assets.
Sure, but the NHL is showing almost 10% revenue growth year over year. That growth + the 15% makes the leaves a total slam dunk as an investment.

Imagine if they actually started winning...
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Re: There will be a strike

Post by ukcanuck »

Potatoe1 wrote:
Fred wrote:
But isn't the $81 million annualy income compared with the investment that was made ? (approx $1.3 billion ) and is the $81 million operating income for MLSE rather than the leaves...just asking
No.

The investment was in MLSE i.e. the leaves, Raptors, Toronto FC, and numerous other properties.

In the quote you posted they said the value of just the hockey team was 550 mill and the operating Income was 81 mill. That is leaves only.

If you want to asses the over all ROI of the whole deal you need to also look at the P&L's of the other properties.

Not sure how that's relevant in the context of this discussion though.

Bottom line is that the leaves are a fantastic investment, they are however an anomaly.

The vast majority of NHL franchises generate very little profit (most actually lose money), and thus the league as a whole is not very profitable.

Even worse is the fact that one team makes almost 1/3rd of the total income. If you look at the whole league with out the leaves, it's a pretty bleak financial picture which is why the owners will most likely hammer the players again in this CBA.
http://www.forbes.com/nhl-valuations/#p_2_s_a0_

Here are the valuations and operating incomes and losses for the entire league, I don't have the time to look at it closely, but a quick skim shows Topper as about right that if it were just straight up free enterprise only ten teams are clearly in the black...

However if you look at Phoenix with an operating loss equal to the annual subsidy in (Virtually perpetuity) the only people losing money in the desert are the poor ass tax payers...which is most likely why (FRED) that nobody in their right mind wants to touch that hornets nest. To me that says its nothing to do with the economic viability of NHL franchises that the players need to take a roll back or limitation on their money to resolve.

At the end of the day it really seems about profits after expenses over all. Throughout the league the owners figure they can squeeze more profit in every market by grinding down the players share of the pie. Therefore, in every CBA negotiation from the last two till the end of time, they are going to use the hammer of a lockout to extract more and more, unless the players can stand up and say a big fuck you and change the focus from players salaries to owners profits and their refusal to entertain real (REAL) profit sharing.

It might be that the best way for the players to do this in my opinion is to pool their money , build a war chest to pay out as strike pay and find alternative employment for at minimum two years, long enough for the owners to start panicking about losing market share in an ultra competitive industry.


I guess for us that might mean something like an industry deregulation where clubs throughout the world compete for the best players and buy championships (a la FIFA)
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Re: There will be a strike

Post by Tciso »

Potatoe1 wrote: It isn't surprising that they walked away from negotiations, there isn't anywhere for them to go.

Fehr is doing the right thing. There is no point in changing his position on September 1'st, as there is no reason to do so. He should sit tight until the players actually have to give something up (their pay checks) and gauge the players to see how much stomach they have to hold out.
But, if there isn't anywhere for them to go, and it is a reasonable deal, then why walk away at all? Tell the league to bump it to 10 years, and sign it. I am sure Fehr has a counter offer in mind, but unless the players are truly against the new numbers, and unless the players have a proposal that really adressess revenue sharing in a meaningful way, then they are just costing themselves money.


Personal note. I don't see why there is a CBA at all. If I was the owners, I'd simply turn the NHL into a giant corporation, with 30 shares owned by 30 different people, and dividends paid according to performance. Since it is one company, there is no collusion, and the company makes it's own fucking rules to handle employees. Bam!!! problems regarding player salaries is solved.
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Re: There will be a strike

Post by ukcanuck »

Tciso wrote:

Personal note. I don't see why there is a CBA at all. If I was the owners, I'd simply turn the NHL into a giant corporation, with 30 shares owned by 30 different people, and dividends paid according to performance. Since it is one company, there is no collusion, and the company makes it's own fucking rules to handle employees. Bam!!! problems regarding player salaries is solved.
Jebus look up collusion in a dictionary for god's sake, you've just described it
While you're at it, check out the meaning of anti trust and the laws written to protect against monopolies...
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Re: There will be a strike

Post by Potatoe1 »

ukcanuck wrote:
However if you look at Phoenix with an operating loss equal to the annual subsidy in (Virtually perpetuity) the only people losing money in the desert are the poor ass tax payers...which is most likely why (FRED) that nobody in their right mind wants to touch that hornets nest. To me that says its nothing to do with the economic viability of NHL franchises that the players need to take a roll back or limitation on their money to resolve.
The players aren't being asked to take less because Phoenix is losing money, they are being asked to take less because most teams are losing money and the cumulative league earnings are not very good.


At the end of the day it really seems about profits after expenses over all. Throughout the league the owners figure they can squeeze more profit in every market by grinding down the players share of the pie. Therefore, in every CBA negotiation from the last two till the end of time, they are going to use the hammer of a lockout to extract more and more, unless the players can stand up and say a big fuck you and change the focus from players salaries to owners profits and their refusal to entertain real (REAL) profit sharing.
Increasing revenue sharing is difficult to do with out the massive TV contracts that the other sports have.

Further and perhaps more importantly, there really isn't enough league wide profit to share. As noted the ROE (return on equity) for the entire league is quite low (about 4% vs around 10% for average S&P returns) when compared to other industries and things seem to be trending down in that regard under the current CBA.

Right now the model isn't working that well, it isn't a train wreck like it was before the last lock out but there are big problems with both revenue disparity and over all profitability.

And it's actually getting worse on both fronts.



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It might be that the best way for the players to do this in my opinion is to pool their money , build a war chest to pay out as strike pay and find alternative employment for at minimum two years, long enough for the owners to start panicking about losing market share in an ultra competitive industry. 
Unfortunately the money the players would lose while missing 2-years of their careers would never be made up by even the most favorable CBA.

If the league were very healthy and the owners were making money hand over fist the players would have some leverage. But in an environment where profits are low the owners don't have all that much to lose by sitting out.
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Re: There will be a strike

Post by Potatoe1 »

Tciso wrote:But, if there isn't anywhere for them to go, and it is a reasonable deal, then why walk away at all? Tell the league to bump it to 10 years, and sign it. I am sure Fehr has a counter offer in mind, but unless the players are truly against the new numbers, and unless the players have a proposal that really adressess revenue sharing in a meaningful way, then they are just costing themselves money.
The players position is that they will only take less if escrow is removed.

They do not believe they should give up something unless they get something in return.

The league isn't offering them anything in return for taking less so why would they agree on Sept 4th?

The second the players start negotiating a lower percentage of HRR with out getting something major in return, they have lost.

Waving the white flag before the players have even lost a paycheck is just plain stupid. Fehr is not a stupid person.
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