joshjull
Registered User
Yes it is. We’ll see over time how it plays out for everyone. All teams will be taking a bath financially.
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TSN: Sabres may have internal cap in low $70M range
- Thread starter Doug Prishpreed
- Start date
Yes it is. We’ll see over time how it plays out for everyone. All teams will be taking a bath financially.
brian_griffin
"Eric Cartman?"
UFAs just got a lot cheaper, and values will be adjusted accordingly.
I’ll grant Pegulas the COVID exception which likely affects all teams, even the Leafs, Bruins, Habs, etc.
Exactly.
good opportunity for a network to negotiate a bargain deal. Even for 1 year.
Eh, can i just say this:
We've also heard "Sabres are going to open up the vault for pieterngelo" as well.
Realistically, Buffalo can't field a competitive team at 71M. Not when we have 25M locked into un-movable contracts (Eichel, Skinner, Okposo)
So, the Pegula's have two choices here
-Try to save some dollars and play to half empty arenas in the winter/spring when we have a vaccine and lose even more and potentially lose Eichel as well.
-Try to build the best team they can and hope they can and hope that when things open back up, the fans are re-engaged and pack the arena and any potential playoff rounds.
We've also heard "Sabres are going to open up the vault for pieterngelo" as well.
Realistically, Buffalo can't field a competitive team at 71M. Not when we have 25M locked into un-movable contracts (Eichel, Skinner, Okposo)
So, the Pegula's have two choices here
-Try to save some dollars and play to half empty arenas in the winter/spring when we have a vaccine and lose even more and potentially lose Eichel as well.
-Try to build the best team they can and hope they can and hope that when things open back up, the fans are re-engaged and pack the arena and any potential playoff rounds.
MarkusKetterer
Shoulda got one game in
The reality is, with COVID, next season most teams will lose about 40 million per team on average, if they don't have full attendance.
Golisano would have set the internal cap at 50 million and not signed anyone new except for veteran minimum AHLers.
A lot of other teams are also planning something similar.
I think people just need to chill out.
Golisano would have set the internal cap at 50 million and not signed anyone new except for veteran minimum AHLers.
A lot of other teams are also planning something similar.
I think people just need to chill out.
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BananaSquad
Registered User
The article even says the Pens want to get to 70m and they are win now mode with Crosby and Malkin.
BananaSquad
Registered User
EichHart
Registered User
I thought the Pegulas had endless money? I was called out about it on here. All the signs were there, it was common sense.
Beerz
Registered User
- Jun 28, 2011
- 35,454
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This speaks nothing to the Pegula's financial situation and everything to the Sabres financial situation... or better yet.. the leagues financial situation.
Husko
Registered User
Maybe the silver lining is the NHL takes a step back and changes its entire strategic approach to be less reliant on gate revenue, leverages the lack of anything to put on network TV for a better TV deal, and repositions itself better in the longrun?
Yeah, I know, what am I smoking? The league folding is probably more likely
- Aug 19, 2005
- 16,137
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Prediction: in 12 months, the Federal Reserve will own nearly half of all NHL franchises. You heard it here first.
I doubt we'll see any sales during this period. Sports franchises are a bit of a ponzi scheme, when you think about it. Most teams lose money. Yet, rich people continue to line up to buy them. Sure, part is the prestige and love of the sport, but mostly, it's fun. However, there is money in it. What money, you ask? Franchise valuations! Tom Dundon just bought a small market team a few years ago for 420M. In 2011, Terry Pegula bought the Sabres for 189M. And in 2003, Golisano bought the Sabres for 92M. Forbes currently has the Sabres listed at a value of 400M. So in 17 years, the Sabres "value" has more than quadrupled. So, Terry Pegula might have lost money every year for 10 seasons now...has he lost 211M worth? Probably not. So, in short, franchise values are a much bigger deal to most owners than year to year losses. Since this is a temporary setback, it'd be...stupid? For an owner to sell while the market is soft. It'd make much more sense to eat the loss and sell when things are better. They'll likely recoup their losses (and them some)
Per Forbes, The Pegula's have a "worth" of 5.1B.
Even if it is inflated and his worth is a "mere" Billion, , the Pegula's could subsidize a 20M a year loss for the next 50 years, if they wanted to. I simply think TP is bored with the Sabres and the losing and is treating them like a boat he doesn't want ot deal with the upkeep on.
What? No. Unless there is a truly broke owner who has already over levegered themselves to keep the team running, doubt we'll see any NHL franchises fold like that.
Buffaloed
webmaster
I used to worry that the Sabres would be sold. Now I worry that it won't be.
[QUOTE="]
Per Forbes, The Pegula's have a "worth" of 5.1B.
Even if it is inflated and his worth is a "mere" Billion, , the Pegula's could subsidize a 20M a year loss for the next 50 years, if they wanted to. I simply think TP is bored with the Sabres and the losing and is treating them like a boat he doesn't want ot deal with the upkeep on. .[/QUOTE]
Net flesh and cash flow are two different things. His main business are sports franchises/hotel-real estate/ and natural gas. None pof those business are spinning cash. The issue for him is being forced to sellnbusiness at 75% on dollar. Pags doesn't want to do.
Per Forbes, The Pegula's have a "worth" of 5.1B.
Even if it is inflated and his worth is a "mere" Billion, , the Pegula's could subsidize a 20M a year loss for the next 50 years, if they wanted to. I simply think TP is bored with the Sabres and the losing and is treating them like a boat he doesn't want ot deal with the upkeep on. .[/QUOTE]
Net flesh and cash flow are two different things. His main business are sports franchises/hotel-real estate/ and natural gas. None pof those business are spinning cash. The issue for him is being forced to sellnbusiness at 75% on dollar. Pags doesn't want to do.
sabremike
Friend To All Giraffes And Lindy Ruff
Buffaloed
webmaster
Something that hasn't been mentioned is the Pegulas are losing a bundle on Harborcenter and Buffalo HarborCenter Marriott. The hotel has stayed open. Even though they've reduced staff, there's significant fixed operating expenses.
sabremike
Friend To All Giraffes And Lindy Ruff
Baccus
Garage League filled with Mickey Mouse teams
- Feb 18, 2014
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If Terry was unaware that the Sabres would not be a money making franchise when he bought the team, he's not very bright, or did absolutely no due diligence at all. The Sabres will always be a money losing franchise until the NHL's TV/rights deals pays teams more than the cap, and even then they will still make less money than larger markets just from pricing.
NHL teams cutting back because of COVID is pretty obvious, but this framing & narrative that they'll be more efficient/effective and could be better/smarter if they spend less, is some major league horseshit.
Either you have a good process for team building/drafting/developing/spending your resources (money) or you don't, if you do, having more resources allows you to be even better. Everything else is framing excuses so you can placate the gullible for when they continue to suck while spending less money.
Currently the Sabres don't appear to have good process for pretty much anything, and they'll be spending a considerable amount less.
Also that giraffe should have kicked that dipshit in the head.
NHL teams cutting back because of COVID is pretty obvious, but this framing & narrative that they'll be more efficient/effective and could be better/smarter if they spend less, is some major league horseshit.
Either you have a good process for team building/drafting/developing/spending your resources (money) or you don't, if you do, having more resources allows you to be even better. Everything else is framing excuses so you can placate the gullible for when they continue to suck while spending less money.
Currently the Sabres don't appear to have good process for pretty much anything, and they'll be spending a considerable amount less.
Also that giraffe should have kicked that dipshit in the head.
thewookie1
Registered User
- Jan 21, 2015
- 1,395
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Huh? Unless the Pegulas is carrying around a literal mountain of debt (and considering he bought the bills in cash, I doubt that is the case), he would be able to take out loans against his equity in the Sabres that he has gained since he bought the team. The idea that guy couldn't get cash flow with his assets is really assuming he had deep financial issues, which, we've seen nothing to suggest he does. The recent changes to the Sabres suggest they are trying to make the Sabres self sufficient, which, without winning, is going to be a fools errand.
SackTastic
Registered User
- Mar 25, 2011
- 7,829
- 1,915
First bolded :
I'm sure he can (and has) gotten loans against his assets without much issue. The cash flow issue becomes SERVICING those loans.
The majority of their holdings in PSE are irregular cash flow entities. The hospitality side is closer to 'regular' cash flow, but that industry does have a cyclical nature to it.
In the current state of affairs :
- They cannot generate any cash from the gas business because the NG price is still depressed.
- They are barely generating any cash from the hospitality businesses because of COVID.
- They are generating none of the normal cash flows from the sports franchises because they cannot have fans, can't really sell season tickets, and aren't getting their piece of the concessions.
It's accurate that COVID-19 could not have been predicted. What they COULD and SHOULD have done is slowed down on investing buckets of cash in certain investments ( like the land out west for JKLM ) , to make sure they had plenty of buffer to carry all the irregular cash flow organizations.
They didn't, and they got bit hard. They are just trying to ride things out at this point until gas recovers. (Which it is starting to looking at the futures contracts, but still not much above the profitability line. )
Let's ignore most of PSE's holdings. Because in the "scheme" of things, the Bills are probably about 80% of its value, The Sabres are probably 15%, and the other properties might add up to 5%. They Pegula's bought the bills for 1.4B in cash.
Pegula Sports and Entertainment - Wikipedia.
The Bills now have a "value" of 2.05B.
Buffalo Bills on the Forbes NFL Team Valuations List
As previously discussed, he purchased the Sabres for 189M...and are now worth 400M (also per forbes)
So, overall, he's "gained" 800M of potential equity that he can tap into. Also should note that each NFL team makes around 255M from the TV Deal, which dwarfs the gate totals the Bills receive (around 55M a year per Forbes).
So, the "big ticket" PSE item (the Bills) is likely a break even proposition this season. Maybe a bit of a paper loss, but they can use that to lower tax bill on future years.
The Sabres, on the other hand, are big losers in the COVID era. Gate Revenue represents a big part of their revenue. They will still get 20M in TV deals and they also have 20M coming from the Seattle expansion, though I imagine, that was already planned for and probably spent, so its probably not a figure you can use to offset 2020 losses for the team. But, a cap team could easily lose 50-70M this year if gate revenues drop to 0.
And let's assume all his PSE properties lose maybe 20M total. That's a 90-110M net loss on the year for PSE. However, that's.....not a lot in the scope of the teams value. Now, you are right, the Pegula's have cash tied up else where, but, it's doubtful 100M is going to move the needle a ton for them. While it's a massive on paper loss, they can use the losses to reduce tax burdens at a later time, which will return reduce the net losses. Unless the Pegula's have severely over leveraged themselves, which, I don't think they have, this loss will hurt, but in the large scheme of things, it's something they will be able to move past, especially once revenue begins to flow again.
