All things Pegula 1

[Buffaloed]

Yes, he is a billionaire. But most of his assets are tied up in Bills (Worth 2+ Billion) Sabres (500 million). He also holds lots of debt, I think he is struggling on the liquid portion of things. That is why he laid off 30+ people. It saves him millions over the course of the next year or so while COVID gets figured out.

What debt?

 

[EichHart]

What debt?

All his real estate/land holdings. He's definitely struggling with liquidity. Go watch his interview, it was blatantly clear.

 

[Buffaloed]

All his real estate/land holdings. He's definitely struggling with liquidity. Go watch his interview, it was blatantly clear.

Struggling with liquidity isn't the same as debt. Pegula pays cash for everything.

 

[SackTastic]

Broke is a relative term. Everything they own is not spitting out cash from sports/entertainment to real estate/hospitality to natural gas. When cash flow gets bad enough, you have to sell assets at impaired price. That's what people are waiting for now. The issues with any business are liquidity.

Yup.

Those yachts don't operate themselves!

 

[SackTastic]

Struggling with liquidity isn't the same as debt. Pegula pays cash for everything.

Exactly.

I'm sure they have plenty of cash to continue to mostly MAINTAIN their current lifestyle for a while.


@EichHart :
The comments that imply liquidity (which I think are being accurately interpreted) don't mean "we are broke" , they mean mean "There are other things I WANT to do, but I would have to sell an asset to do that , and I don't want to do that."

This is the same idea of you and I saving for retirement. We put money into that account for the purposes of growing it. The goal is to have enough when we retire so that we can live off the income generated by that pile of assets, and never have to touch the assets themselves. They are just doing it with a lot more 0's that we are.

 

[brian_griffin]

Oil and gas will be a thing of the pass in 20-30 years. (Hopefully) That is unless the rich corrupt leaders of that industry have their way through manipulating politicians.

There is no way USA will not be majority fossil fuel dependent in 20-30 years. It would take a sea-change in political and regulatory will by the American public to convert to nuclear that quickly, even with France as proof of possibility. Any other energy sources will still remain minority ones.

China too.

Whether evil or benevolent, industry leaders and politicians won’t change that.

 

[SackTastic]

There is no way USA will not be majority fossil fuel dependent in 20-30 years. It would take a sea-change in political and regulatory will by the American public to convert to nuclear that quickly, even with France as proof of possibility. Any other energy sources will still remain minority ones.

China too.

Whether evil or benevolent, industry leaders and politicians won’t change that.

Agreed. The US has been around 80% fossil fuel for about 120 years, +/- a few percentage points, and that likely isn't going to change substantively for a long time.

Coal usage has been mostly chopped by expansion in NG, since fracking has made it abundant and cheap compared to coal. The rest of the decline can be attributed to renewables. But there also was an increase in overall energy usage the last couple years, although after this pandemic, who knows.

I honestly still don't see nuclear taking off ever again like it once did. Owners of existing plants are shutting them down instead of relicensing ; they are mostly deciding that implementing newer safety regulations isn't economical. This doesn't mean that nuclear ISN'T profitable with newer safety rules, it just means that there is more capital spend up front, so it takes even longer for a plant to pay that back and get into profit land. Too much long term financial risk for energy companies, and we live in a "short term or bust" stock market world.

 

[Buffaloed]

Broke is a relative term. Everything they own is not spitting out cash from sports/entertainment to real estate/hospitality to natural gas. When cash flow gets bad enough, you have to sell assets at impaired price. That's what people are waiting for now. The issues with any business are liquidity.

These aren't your friends we're talking about. The Pegulas don't have to sell anything. They could easily obtain $1+ billion in financing to meet their cash flow needs. If they're true patriots, they'll make minimum payments even when the cash starts flowing and they'll include a massive balloon payment at the end that they'll renegotiate every year.

 

[slip]

These aren't your friends we're talking about. The Pegulas don't have to sell anything. They could easily obtain $1+ billion in financing to meet their cash flow needs. If they're true patriots, they'll make minimum payments even when the cash starts flowing and they'll include a massive balloon payment at the end that they'll renegotiate every year.

I would be shocked if the Pegula's aren't north of 1 billion in debt already. That's how the yachting class rolls.

 

[TehDoak]

All his real estate/land holdings. He's definitely struggling with liquidity. Go watch his interview, it was blatantly clear.

I would be shocked if the Pegula's aren't north of 1 billion in debt already. That's how the yachting class rolls.

I won't disagree that billionaires like paying for things with debt/"other people's money"

But, let's put that aside for a second.

He paid for, in cash, 1.4B for the Bills, which he got by selling his stake in his energy company (for 4.5B)

The Bills are now worth 1.9B. That's 500M in equity.

If he he somehow managed to piss through the other 3B, all his private homes and estates are burned to the ground, he would have zero issues borrowing against the equity in the bills

The idea that the guy is in massive debt or is over leveraged when he was sitting on 3B cash.

If anything, it looks like he's just as bored with the Sabres as we as fans are. It's become a money bleeding business and the city who once loved him hates him now because of it.

If i had to guess, he's getting the books in order to sell off the Sabres post pandemic and wants to spend as little on it as possible until then.

 

[SackTastic]

He paid for, in cash, 1.4B for the Bills, which he got by selling his stake in his energy company (for 4.5B)

The Bills are now worth 1.9B. That's 500M in equity.

He sold the majority of East Resources' assets to Royal Dutch Shell in 2010 for $4.7B. He sold the rest in 2014 for $1.75B, and that was the cash he used to purchase the Bills.

That tells you right there that the had already re-invested the majority of what he made off the first sale into other assets he did not want to divest from.

 

[SackTastic]

PSE fired Chuck LaMattina today. He was EVP of finance for PSE, but had worked for the Sabres since 1997. All in finance roles.

I guess if you don't like the numbers, fire the messenger that brings you the numbers?

 

[Buffaloed]

PSE fired Chuck LaMattina today. He was EVP of finance for PSE, but had worked for the Sabres since 1997. All in finance roles.

I guess if you don't like the numbers, fire the messenger that brings you the numbers?

Buffalo Bills: How Well Do You Know the Front Office?
With Terry and Kim Pegula essentially owning the Buffalo Bills, Sabres, Bandits and Rochester Americans, keeping track of everything was going to be difficult for the two. Not to mention the other investments they’ve made in this city, like the Harbor Center and 716 (restaurant).
Luckily, Kim Pegula stepped up and came out with the perfect plan. To simplify the business aspect to owning all of these properties, Kim assembled a group of 5 people and named them executives of Pegula Sports & Entertainment (PSE) — described as the “management company that streamlines key business areas across all Pegula family ownedsports and entertainment properties.”
The idea is for each of the properties to maintain its own books, but do so using similar systems, so that PSE can view them in a consolidated fashion. They’re also putting all the properties on the same payroll and accounting systems, hoping to find efficiencies there.
It was a great plan that settled the need to tie the management of all the properties together without completely merging the staff. With this idea, Pegula Sports & Entertainment was born and the thought of #OneBuffalo came to full fruition.
These 5 people that Kim assembled as executives are the reason these teams are able to be run so smoothly, from a financial, business and marketing standpoint. With Kim’s help, the Buffalo Bills continue to grow in market and hold one of the most entertaining experiences on Sunday in the whole league.
Let’s take a look at the 5 guys working behind the scenes making it all possible:
Chuck LaMattina



Kim hasn't learned a damn thing in 3 years.

 

[Beerz]

Yes, he is a billionaire. But most of his assets are tied up in Bills (Worth 2+ Billion) Sabres (500 million). He also holds lots of debt, I think he is struggling on the liquid portion of things. That is why he laid off 30+ people. It saves him millions over the course of the next year or so while COVID gets figured out.

Most billionaires never have much liquidity on hand. It doesn't make sense to have your cash sitting around.. it's usually all tied up in something.

 

[Beerz]

Agreed. The US has been around 80% fossil fuel for about 120 years, +/- a few percentage points, and that likely isn't going to change substantively for a long time.

Coal usage has been mostly chopped by expansion in NG, since fracking has made it abundant and cheap compared to coal. The rest of the decline can be attributed to renewables. But there also was an increase in overall energy usage the last couple years, although after this pandemic, who knows.

I honestly still don't see nuclear taking off ever again like it once did. Owners of existing plants are shutting them down instead of relicensing ; they are mostly deciding that implementing newer safety regulations isn't economical. This doesn't mean that nuclear ISN'T profitable with newer safety rules, it just means that there is more capital spend up front, so it takes even longer for a plant to pay that back and get into profit land. Too much long term financial risk for energy companies, and we live in a "short term or bust" stock market world.

Elon Musk is making huge strides with his batteries. I believe he will have a break thru at some point that makes solar energy a realistic possibility in the near future

 

[BloFan4Life]

PSE fired Chuck LaMattina today. He was EVP of finance for PSE, but had worked for the Sabres since 1997. All in finance roles.

I guess if you don't like the numbers, fire the messenger that brings you the numbers?

An EVP of Finance should be doing much more than a messenger of numbers. That's more like a CAO jobs. As an EVP of Finance, you should be directly responsible for making sure the company is solvent, ROIs make sense, projects are under budget and on time, along with making sure the finance department has a culture that will promote productivity. Being an EVP of Finance is a very high stress, difficult job that requires lots of effort and constant proof of work.

There are clearly issues with PSE, yet people just think it is ok for high paid leaders to not be held responsible. Don't understand it. I think a lot of people have this false sense of the corporate world. Let me tell you, the Pegula's have given their employees much more resources and time that other organizations wouldn't have given. It's makes me cringe to see these people the Pegula's hired just take advantage of all the resources they were given. Reminds me of a spoiled trust fund baby refusing to do anything with their life because why should they. There will always be the fund to bail them out....until it's not there anymore.

I'm not too sure how many people follow Gold Rush, but business books should be written about Parker Schnabel. The kid constantly would get torn apart about being too harsh and no one wanted to work him. Somehow, "miraculously" the kid sets new records every year. He knows what it takes and will find the right person, even though it may take 5 people. The productive people don't leave him because they make a crap ton of money. He constantly looks for cheaper ways to do things. This clip from this past season should be what the Pegula's and other business owners should play every morning:

 

[slip]

Most billionaires never have much liquidity on hand. It doesn't make sense to have your cash sitting around.. it's usually all tied up in something.

Of course it does. Precisely at these moments, when every piece of your business empire stops kicking off any income.

Of course, rainy day funds for the rich and large corporations aren't necessary anymore given that central banks and governments routinely bail out these morons when they really need to be made extinct through their own dumb risk taking. But I clearly digress....

 

[Buffaloed]

Most billionaires never have much liquidity on hand. It doesn't make sense to have your cash sitting around.. it's usually all tied up in something.

The Pegulas aren't good at business. They pay cash for everything and they overpay. Rich people stay rich by using other people's money. It doesn't matter if they can afford to pay cash, they finance it anyway because they know they can renegotiate if times get tough. When you spend cash, it's gone forever.

Terry Pegula: No financial pressure on the Bills - ProFootballTalk
“There is no financial situation,” Pegula said, via Syracuse.com. “I don’t know where that rumor started. If you look at every oil and gas company, which is our core business outside sports, they’re all — you might use the word — hurting. But we don’t have any debt on our oil and gas business. . . . Talking about the Bills, there’s no financial pressure, negative, on the franchise.”

He'd actually be better off if he had less cash expenditure and it was financed up the wazoo. He could get out for pennies on the dollar. Default on the loans and let the bank have it.

 

[BloFan4Life]

The Pegulas aren't good at business. They pay cash for everything and they overpay. Rich people stay rich by using other people's money. It doesn't matter if they can afford to pay cash, they finance it anyway because they know they can renegotiate if times get tough. When you spend cash, it's gone forever.

Terry Pegula: No financial pressure on the Bills - ProFootballTalk
“There is no financial situation,” Pegula said, via Syracuse.com. “I don’t know where that rumor started. If you look at every oil and gas company, which is our core business outside sports, they’re all — you might use the word — hurting. But we don’t have any debt on our oil and gas business. . . . Talking about the Bills, there’s no financial pressure, negative, on the franchise.”

He'd actually be better off if he had less cash expenditure and it was financed up the wazoo. He could get out for pennies on the dollar. Default on the loans and let the bank have it.

Trust me on this, this is not how it happens. I'm actually laughing at it. If you have any cash anywhere, the bankruptcy court is getting it. Trust me.

 

[brian_griffin]

The Pegulas aren't good at business. They pay cash for everything and they overpay. Rich people stay rich by using other people's money. It doesn't matter if they can afford to pay cash, they finance it anyway because they know they can renegotiate if times get tough. When you spend cash, it's gone forever.

Terry Pegula: No financial pressure on the Bills - ProFootballTalk
“There is no financial situation,” Pegula said, via Syracuse.com. “I don’t know where that rumor started. If you look at every oil and gas company, which is our core business outside sports, they’re all — you might use the word — hurting. But we don’t have any debt on our oil and gas business. . . . Talking about the Bills, there’s no financial pressure, negative, on the franchise.”

He'd actually be better off if he had less cash expenditure and it was financed up the wazoo. He could get out for pennies on the dollar. Default on the loans and let the bank have it.

By leveraging public dollars either through matching funds, incentives, deferred taxes, all of the above, etc.

Trust me on this, this is not how it happens. I'm actually laughing at it. If you have any cash anywhere, the bankruptcy court is getting it. Trust me.

I believe you two are agreeing. One method is how you pay for assets. The other method is how you cash flow your lifestyle.

Anyone know if PSE or any of the PSE assets are held in an irrevocable trust?

 

[BloFan4Life]

By leveraging public dollars either through matching funds, incentives, deferred taxes, all of the above, etc.

I believe you two are agreeing. One method is how you pay for assets. The other method is how you cash flow your lifestyle.

Anyone know if PSE or any of the PSE assets are held in an irrevocable trust?

He is talking about settling for penny's on dollar for debt based on defaulting. The calculation for settlement purposes is based on the assets. If you have the cash, but decided to finance it instead, during bankruptcy they are just going to make you pay the lenders with your cash you didn't use in beginning.

 

[brian_griffin]

He is talking about settling for penny's on dollar for debt based on defaulting. The calculation for settlement purposes is based on the assets. If you have the cash, but decided to finance it instead, during bankruptcy they are just going to make you pay the lenders with your cash you didn't use in beginning.

Wholly agree, but you can move the cash (or assets) before a bankruptcy declaration to an irrevocable trust which pays on a schedule to the beneficiaries, correct?

 

[Buffaloed]

Trust me on this, this is not how it happens. I'm actually laughing at it. If you have any cash anywhere, the bankruptcy court is getting it. Trust me.

Donald Trump would like to have a word with you.

 

[SackTastic]

Donald Trump would like to have a word with you.

Exactly.

It's exceptionally trivial to setup a corporate structure such that the maximum amount of assets are creditor protected during a bankruptcy. It's the basis for the entire hedge fund industry.

 

[CrazyPsycho]

Hahahahahahahhaha