Is it foolish and unrealistic for NHL owners believing their club is worth $650M?

Hoser

Registered User
Aug 7, 2005
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Yes, all expansion fees are generally foolish and unrealistic. Always have been.

Take for example how the Gund brothers sold the North Stars to Howard Baldwin and Morris Belzberg for $31.5 million in May of 1990 (and Norm Green bought the team from them shortly thereafter for the same).

The Senators and Lightning expansion, awarded only seven months later, was $50 million apiece.

In 2011 Mark Chipman and David Thomson bought the Thrashers for $170 million ($110 million + $60 million "relocation fee"). In 2013 Josh Harris bought the Devils for $320 million. In 2016 Bill Foley paid a $500 million expansion fee for Las Vegas. Two years later David Bonderman and Jerry Bruckheimer pay $650 million for Seattle...?
 

USAUSA1

Registered User
Dec 1, 2016
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It always about the buyer and what they think the team worth. Owning a sports franchise is still in high demand, so you will over pay.
 

alko

Registered User
Oct 20, 2004
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www.slovakhockey.sk
With economy growing (with some short bad times), there is still room for improvement. Also i would be surprised, that in 10 years, or maybe in 5 years, the price for new team would be 1 000 000 000 USD. Just look, how fast the rised the team value. Rangers is now at 1,55 billion.

And when the China crazy rich people will arive....
 

GuelphStormer

Registered User
Mar 20, 2012
3,808
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Guelph, ON
yes.
But that is the forbes average
sure, but it is also reflected in the official entry fee to Seattle as stated by the NHL. meh, this has been going on for years and the league further solidified its stupid and unrealistic view of franchise valuation when it allowed the Coyotes to be insanely valuated at $305M while playing those dubious accounting tricks a couple years ago.
 

Melrose Munch

Registered User
Mar 18, 2007
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sure, but it is also reflected in the official entry fee to Seattle as stated by the NHL. meh, this has been going on for years and the league further solidified its stupid and unrealistic view of franchise valuation when it allowed the Coyotes to be insanely valuated at $305M while playing those dubious accounting tricks a couple years ago.
Agreed.
 

Gnashville

HFBoards Hall of Famer
Jan 7, 2003
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It’s worth what someone is willing to pay for it. The Clippers were worth no where near 2 billion but someone was willing to pay that much and all others were inflated fro that point on. The NBA found someone dumb enough to save the egg on their face after the owner said stupid things.
 
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StreetHawk

Registered User
Sep 30, 2017
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It’s worth what someone is willing to pay for it. The Clippers were worth no where near 2 billion but someone was willing to pay that much and all others were inflated fro that point on. The NBA found someone dumb enough to save the egg on their face after the owner said stupid things.
Value is dependent on each market.

Vancouver and Buffalo came into the league together. But they have different franchise values.

Same as Minnesota and Columbus and Nashville. All paid $80 million but Minnesota has the highest value.

No different than a house. Same house 10 minutes in another direction can be worth 7 figures more or less.
 

BattleBorn

50% to winning as many division titles as Toronto
Feb 6, 2015
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Bellevue, WA
To give a little insight into the mindset of some of these guys, Bill Foley said last year prior to the playoffs, that he thought he had a billion dollar franchise in Las Vegas. I don't think he could sell it for a billion back then, and I don't think he could sell it for a billion now, but it's just a matter of time and Forbes (such as it is) says he's already seen a 15% appreciation from his initial $500MM investment.

The way it's going, every hockey team is worth a billion dollars if things continue. It's just a matter of how long you want to wait to sell and if you've got the money to take a few years of potentially losing money on operations to make it that far.
 

Jumptheshark

Rebooting myself
Oct 12, 2003
99,856
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Somewhere on Uranus
One thing needs to be mentioned

My understanding is for their first 4 years (it might have changed) but the Knights get to keep ALL their merchandising and not split it with the other teams. I imagine Seattle will be the same--the numbers for merchandising from Vegas has been wild
 

BattleBorn

50% to winning as many division titles as Toronto
Feb 6, 2015
12,069
6,017
Bellevue, WA
One thing needs to be mentioned

My understanding is for their first 4 years (it might have changed) but the Knights get to keep ALL their merchandising and not split it with the other teams. I imagine Seattle will be the same--the numbers for merchandising from Vegas has been wild
Your post is the first time I've ever seen this arrangement mentioned. I'd really love to see something saying this is the case.
 

LeHab

Registered User
Aug 31, 2005
15,956
6,259
Yes, all expansion fees are generally foolish and unrealistic. Always have been.

If there is no shortage of suitors willing to pay then it is not foolish or unrealistic. League is also not even trying to maximize expansion franchise price as there are others factors which limit the pool of potential buyers namely have an arena, thriving market and the "right type" of owner.
 

Hoser

Registered User
Aug 7, 2005
1,846
403
If there is no shortage of suitors willing to pay then it is not foolish or unrealistic.

Oh, don't get me wrong, I'm not saying it's foolish to ask for $650,000,000. The fool is the one who pays it.

Again, Tampa and Ottawa as examples: both sets of owners who paid the expansion fees went belly-up. They never should have paid $50,000,000, wasn't worth it. Original Nashville ownership ended up selling, refusing to absorb any more losses. Devils/Rockies/Scouts owners went TU multiple times. The Islanders' expansion fees ($6 million to the NHL and $5 million to the Rangers) were a boat anchor around their necks for years and years; original managing partner Roy Boe bailed in '78. Expansion cousins the Flames didn't last much longer, with Tom Cousins dumping his distressed asset in 1980. (might have ended up breaking even given he sold to the Calgary group for $16 million)
 

BKIslandersFan

F*** off
Sep 29, 2017
11,443
5,056
Brooklyn
Yes, all expansion fees are generally foolish and unrealistic. Always have been.

Take for example how the Gund brothers sold the North Stars to Howard Baldwin and Morris Belzberg for $31.5 million in May of 1990 (and Norm Green bought the team from them shortly thereafter for the same).

The Senators and Lightning expansion, awarded only seven months later, was $50 million apiece.

In 2011 Mark Chipman and David Thomson bought the Thrashers for $170 million ($110 million + $60 million "relocation fee"). In 2013 Josh Harris bought the Devils for $320 million. In 2016 Bill Foley paid a $500 million expansion fee for Las Vegas. Two years later David Bonderman and Jerry Bruckheimer pay $650 million for Seattle...?

Your examples literally shows people willing to pay expansion fees and they are somehow unrealistic?
 

LeafShark

Registered User
Feb 2, 2010
1,724
294
Economy growing is a meme. It's been stagnant and in need of a MAJOR correction. Professional sports in an era where TV is going the way of the dinosaur is as fantasy as Santa Claus himself.
 

Hoser

Registered User
Aug 7, 2005
1,846
403
When about half the guys who have paid expansion fees had to bail out within a few years, yeah, generally I'd say they were pretty foolish. The guys who step in and buy the distressed asset tend to be the ones making out like bandits.
 

BattleBorn

50% to winning as many division titles as Toronto
Feb 6, 2015
12,069
6,017
Bellevue, WA
Economy growing is a meme. It's been stagnant and in need of a MAJOR correction. Professional sports in an era where TV is going the way of the dinosaur is as fantasy as Santa Claus himself.
Good lord, that's like two hot takes with no evidence all wrapped up into a solid three sentences.

Care to expand?
 

BattleBorn

50% to winning as many division titles as Toronto
Feb 6, 2015
12,069
6,017
Bellevue, WA
When about half the guys who have paid expansion fees had to bail out within a few years, yeah, generally I'd say they were pretty foolish. The guys who step in and buy the distressed asset tend to be the ones making out like bandits.
That tends to be the way it goes. The new money sees the opportunity, the old money comes in and takes over when the new money loses their wealth playing the old money's game.

However, I think we're to the point where the losses overcome the appreciation quick enough for the old/real money to have interest. Or we're to the point where the new money has enough new money to ride it out, which is a fairly recent development.
 

BattleBorn

50% to winning as many division titles as Toronto
Feb 6, 2015
12,069
6,017
Bellevue, WA
I'll explain in two words. ****ing. Millenials.
They seem to like entertainment on demand, which kills TV shows since you can watch them whenever you want. However, since everyone's on twitter all the time, you need to watch sports live to not get it spoiled. That's a huge part of the reason sports broadcast rights are going up in value like they are. Can't skip commercials when you're watching live.
 

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