lets all feel sorry for CRL (sigh)

Discussion in 'Fugu's Business of Hockey Forum' started by Brent Burns Beard, Sep 30, 2004.

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  1. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    lets all feel sorry for CRL .. one of the poster boys for "cost certainty"

    source: http://www.forbes.com/forbes/2003/1208/nhl_26.html

    - The Carolina Hurricanes are owned by Peter Karmanos Jr, who bought them in 1994 for $48 mil.
    - Current Value $109 mil
    - The team controls the lease to a new arena and sold the arena's naming rights to RBC Centura for $80 million

    So, lets see, in 10 years his team has grown in value by a good 60m and 1 single contract netted the team 80m. Keep in mind, there is ZERO cost to the team to fulfill the obligations to RBC, other than to have a sign on the building.

    Yup, those owners are hard done by, unless of course you dont believe Forbes. Forbes reputation surely carries as much weight as Levitts, no ?

    Only a a few teams (can count on one hand) hasnt seen expontential franchise value growth.

    DR
     
  2. mr gib

    mr gib Registered User

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    love it
     
  3. Seachd

    Seachd Registered User

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    The link you gave says it all: 70% of Carolina's revenues go to the players.
     
  4. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    yup, the owners choice. he could have chosen to pay players less, but then maybe his franchise value wouldnt have grown by 100%.

    dr
     
  5. PecaFan

    PecaFan Registered User

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    A nice deceptive post. That's 80 million over 20 years, a paltry 4 million a year. Which simply means instead of losing 17 million in 2003, they "only" lost 13 million. And likely lost even more this year. But you don't mention the losses at all, do you?

    As for the increase in value, it's all on paper. They can value it at anything they want (and that number is before debt), but until they sell, it's unknown what the actual sale price would be. Ask Anaheim how easy it is to get someone to fork over that 100+ million the team is worth on paper.

    But even then, let's assume they get it. So they gain 60 million over 10 years. Too bad the losses over that 10 years are over 60 million.

    There are *two* sides to finances. Looking at revenue and assets only is inane.
     
  6. mr gib

    mr gib Registered User

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    bull
     
  7. Seachd

    Seachd Registered User

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    Well thought-out, rational post. Maybe you could mention the part you disagree with?
     
  8. mr gib

    mr gib Registered User

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    two sides with different views - the nature of the problem in the first place -
     
  9. cws

    cws ...in the drink

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    Those valuations are a bit deceptive. Take the sale of the Thrashers about 6 months ago.

    The new owners (Atlanta Spirit LLC) bought the Hawks, Thrashers and the operating rights to Philips Arena for $250M. At the time of the sale, the Hawks were quoted as being worth $204M and the Thrashers worth $134M (no real change in those numbers over the last six months). Don't know what money value could be put on the operating rights to Philips, but it is a decent sum.

    So either these valuations are way off, or AOL/TW made a bad deal. They needed to off-load the teams to relieve some of their debt, but I somehow doubt they would have made such a terrible deal if those valuations were accurate. They weren't that desperate. And they had another buyer (David McDavid) but blew him off at the last minute. Makes it a little scarier if the deal they made with Atlanta Spirit was a step up from what McDavid was offering.

    I agree, the valuations don't mean much until you try to sell the team.
     
  10. mr gib

    mr gib Registered User

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    good quote - which is exactly what ted turner did - the thrasher apple cart with it -
     
  11. cws

    cws ...in the drink

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    Even one of the zen koans might be more understandable and more relevant than that reply.

    But we each go about it in our own different ways.
     
    Last edited: Sep 30, 2004
  12. me2

    me2 Calling out the crap

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    Remains to be seen when actual sales take place. Canes lost $17m in value last year, many of the teams are on downward slopes over the last year or so of those valuations. Are the 2003 starting to show a major market correction? It'll be interesting to see what the 2004 valuations bring. Also that high valuation was just after a Stanley Cups finals appearance, they've sucked since then. No wonder they are dropping in value.

    As for the naming rights I'd bet it hasn't contract it hasn't netted Canes anything like $80m. It might by the time its finished in another 15 or so years but remaining years are all pie in the sky till their paid. They can't exactly pay the players today out of money they'll get in 15 years. If they relocation they deal is probably invalidated, if they fold its probably invalidated etc.

    No Forbes doesn't carry the same weight unless they went through the books with the same detail as Levitt.
     
    Last edited: Sep 30, 2004
  13. GKJ

    GKJ Global Moderator

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    1-Yr Value
    Change -14%

    Operating
    Income(4) -$13 mil




    I hope he has more tricks like that up his sleeve, or he sells the team right now because within not too long he's gonna be right back where he started.


    Poor gate revenues didn't help.
     
  14. Russian Fan

    Russian Fan Registered User

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    Damn CBA (ironic) :joker:
     
  15. Bob Clarke Fan Club

    Bob Clarke Fan Club Registered User

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    Thanks...knew I wasn't the only person here who wanted to say that.
     
  16. Bruwinz37

    Bruwinz37 Registered User

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    Wow, who could argue with this? Its posts like this that make HF a worthwile place to discuss differences in opinions.

    :shakehead
     
  17. Guest

    Guest Registered User

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    Doesn't matter how much money the team is worth or how much money the team makes if they have to spend more than that to be competitive in the league. Here's the thing that people don't think about, what if the teams who are losing money didn't spend that extra money on the players and chose to instead break even? Many of these teams would have lost overall quality of their teams and that quality would have gone to the teams who are making the most money and have profits to spend. There would be quite a few players that would then be making the most lucrative teams even better than they are by setting the market. It would come closer and closer to having 4-6 teams that should even be in the playoffs and 24-26 teams who are their developmental league. If that's what you want, petition the NHL to set up a 6 team league based on the teams that spend the money, and let the other 24 teams compete in a minor league by comparison.

    Better yet, split the teams who want a cap and the teams who want to spend. I've proposed this times before too. Split the two sides up, one with no cap and a salary floor, the other with a cap. Keep them as seperate leagues for the most part and let the finalists play for the Cup at the end. It could work, and it'd keep most of the competition among teams of equal value.
     
  18. hockeytown9321

    hockeytown9321 Registered User

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    Maybe he shouldn't have offered Sergei Fedorov $28 million for four months of work in 1998 out of spite.
     
  19. mr gib

    mr gib Registered User

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    wow - what a reaction - the plea's for the owner's i just don't get - on and on and on you go - i'm in the entertainment buisness - capping salaries is nuts - i love brian burke - just don't pony up - let em walk - yashin - now wang is pouring cash into the building in long island - who's going broke here -

    ps - i really don't mean to offend anyone
     
  20. BM67

    BM67 Registered User

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    You missed the (1) after the value that says without deduction for debt. The debt load is at 55%, so your $109 mil is worth $49.05 mil after a deduction for debt.

    You trust Forbes numbers? They say that 18 of the franchises lost value in the last year, and that's before debt. While 20 lost money, for a total of $123.7 mil in losses. These are 2003 numbers but I doubt much changed for the better in the last year.
     
  21. mr gib

    mr gib Registered User

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    you can see the confusion - players vs owners
     
  22. cws

    cws ...in the drink

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    I don't get the plea for the owners or the players. Doesn't make sense to me from a business/financial standpoint that people could almost completely believe one side above the other. Whether they believe it or not, both sides had a hand in causing this mess.

    But the blame-game seems to be one of the few ways to keep the discussions going, sad as that may be.
     
  23. bleedgreen

    bleedgreen Registered User

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    this article on the canes missed something, unless im blind. they had to pay a penalty fee of 20 million dollars to hartford for leaving before they were allowed to. i dont see that 20 million anywhere in here.
     
  24. mr gib

    mr gib Registered User

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    how can the players agree to a cap - a share of the total revenues - if the owners don't show them the - real - books - ?
     
  25. me2

    me2 Calling out the crap

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    Perhaps if the players put forward a list of items they consider as revenue and the % of that revenue they will settle for then NHL might listen and both sides might get a deal done before Christmas 2058.
     
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