OT: Franchise Valuations

[BUX7PHX]

A part of the growth is due to an upswing in the product and the resulting sales prices and merchandise. That is about to take a hit for the Raptors while it's about to explode for the Leafs. Another part of the evaluation is the new naming rights deal which is a little skewed based on building shared with the Leafs. And lastly there is a better return on your investment with the Leafs if they cost the same, which I don't believe for a second they would. I understand the numbers quite fine.

Upswing in product and resulting sales and merchandise is also reflective of the global value of the sport in question, which is what I was trying to point out in the first place. Even if the Leafs have an upswing of 20% vs one of 10% for the Raptors- what does that mean globally? How many people globally do the Leafs impact? 5 - 10 million? Pretty sure that basketball is far more prevalent and given the wider audience, the Raptors are likely to be in the minds of 3 or 4x that 5 - 10 million number. That's simply the scale of the two sports globally. Hockey may mean more to Toronto and Canada, but on the global scale, it is a drop in the bucket relative to the NBA or other forms of professional basketball.

NBA players have come from 79 different countries. NHL players have come from 43 different countries, but I think that it is well noted that many more NHL players may be born in a foreign country and raised in Canada, whereas an NBA player born in a foreign country could probably have easier access to a basketball program vs having access to a hockey program in that country. I think that the globalization of the two sports are major impacts that you are either choosing to not include in your analysis or are simply forgetting about with regards to a valuation.

 

[AZviaNJ]

I'm going to buy another rental house. I have to choose between two houses in two different markets. One cleared 75k in profit last year, but had higher operating costs to cover. The other one cleared 56k on lower costs.
The first house sold for $1M six-years ago, and the house in another location sold for $400k at the same time and is now worth more. On appraisal, the first house annualized at 7%, including a one-year increase of 27%. The second increased 24% last year, but saw 28% over six-years and has overtaken the first. The growth in the second market is across the board. The first house is an outlier in its market.

Who made the better investment? Which investment am I more likely to make?

MLSE owns both...so they're doubly happy. But to answer your rhetorical question: the 2nd house (Raptors).

 

[Bonsai Tree]

I can explain the high valuations of the NBA franchises with one word. "China."

 

[Matias Maccete]

Conversation like this means one thing: Hockey needs to start soon.

 

[Jakey53]

I can explain the high valuations of the NBA franchises with one word. "China."

Exactly. A few years back I heard or read somewhere that the NHL is closing the gap on the NBA in various areas. I guess that was wrong, as the NBA is reaching NFL standards in team values, player salaries etc. I think I might start a "fund me" campaign to see if I can raise enough $$ to buy into the Coyotes.

 

[Lilhoody]

At least the Coyotes are worth more than the Expos.

Two great logos! I always liked the Expos unis and logo.

 

[johnchayka89]

Two great logos! I always liked the Expos unis and logo.

The expos hat is worn all over Canada still.
For some reason I like it too.

 

[MIGs Dog]

Exactly. A few years back I heard or read somewhere that the NHL is closing the gap on the NBA in various areas. I guess that was wrong, as the NBA is reaching NFL standards in team values, player salaries etc. I think I might start a "fund me" campaign to see if I can raise enough $$ to buy into the Coyotes.

It would be nice if the team could establish Arizona Coyotes Inc. and sell shares.

It's been done before

 

[BUX7PHX]

I can explain the high valuations of the NBA franchises with one word. "China."

 

[Bonsai Tree]

Trump misspoke. He meant to say "Va-China", a place more dear to him than a Trump hotel.

 

[Lilhoody]

It would be nice if the team could establish Arizona Coyotes Inc. and sell shares.

It's been done before

I agree, but for some reason I'm thinking it's no longer allowed. Can anyone confirm?

 

[johnchayka89]

I agree, but for some reason I'm thinking it's no longer allowed. Can anyone confirm?

Yes, no longer allowed.
Those shares cannot be sold either. They are worthless.

 

[MIGs Dog]

They are worthless.

Tell that to a Packers fan.

True, they hold no monetary value and can't be sold, but shareholders have voting rights, and therefore the franchise will likely never move.

Also, when the team has needed cash for stadium improvements they have sold additional shares. The last equity offering raised $64 million, with purchasers coming from all 50 states and Canada.