Golisana bidding alone, will be aggressive

[YardRat]

Breaking news, on local TV

[swiper]

Golisana masturbating alone, will be aggressive
Breaking news, on cable TV



:chuckle:

[Night Train]

http://www.torontosun.com/2014/07/13/tom-golisano-to-bid-for-bills-alone-and-is-in-it-now-to-win-it-source

It's a reaction to this report.

Take it at face value. How true is a whole other story.

[Mace]

Pegula can take him, and Larry Quinn will not be an NFL face.

[DraftBoy]

The more bidders the better for the Wilson family.

[better days]

The more bidders the better for the Wilson family.

And someone called me Captain Obvious.

[trapezeus]

sounds like congel and golisano had a bit of a falling out and are outdueling each other in the press.

[Fletch]

The more bidders the better for the Wilson family.

Who cares about the Wilson family in this scenario?

Did Wilson care about you? Please.

All they wanted was money and that's what they got, even before the sale they all have more than enough.

If it sells for cheap but gets a good owner that keeps the team here and puts a competitive team on the field, that's what most of us care about.

[DraftBoy]

Who cares about the Wilson family in this scenario?

Did Wilson care about you? Please.

All they wanted was money and that's what they got, even before the sale they all have more than enough.

If it sells for cheap but gets a good owner that keeps the team here and puts a competitive team on the field, that's what most of us care about.

Did I say I either cared about the Wilson family or that they care about me?

I want the Bills to increase their value as much as possible.

[Fletch]

sounds like congel and golisano had a bit of a falling out and are outdueling each other in the press.

Doesn't sound like there was much to fall out of according to the piece.

[Fletch]

Did I say I either cared about the Wilson family or that they care about me?

I want the Bills to increase their value as much as possible.

Sounds like the Wilson family is irrelevant then. Why did you mention it?

Also, why do you want the Bills to increase their value as much as possible? Is there something in it for us?

It seems to me that the more "valuable" this franchise becomes, since the value would largely be determined by what is paid for it, the greater the odds of it moving out of the region at some point. The more that someone pays, the more they'll have to make to justify their investment, unless of course it comes down to a philanthropic effort like Golisano mentioned. Even then I don't see how the value of the team benefits us as fans. All I see is prices going up for everything the greater the sale price is. They're definitely not going down if the price tag goes up.

[DraftBoy]

Sounds like the Wilson family is irrelevant then. Why did you mention it?

You seem to operate in extremes only. How did what I say make them irrelevant either? It was simply commentary on the situation.


Also, why do you want the Bills to increase their value as much as possible? Is there something in it for us?

The higher valuation of the team significantly thins the potential owner pool beyond the next owner which I'm as interested in as who the immediate owner will be because I believe its a foregone conclusion the team is staying in Buffalo under the next owner.


It seems to me that the more "valuable" this franchise becomes, since the value would largely be determined by what is paid for it, the greater the odds of it moving out of the region at some point. The more that someone pays, the more they'll have to make to justify their investment, unless of course it comes down to a philanthropic effort like Golisano mentioned. Even then I don't see how the value of the team benefits us as fans. All I see is prices going up for everything the greater the sale price is. They're definitely not going down if the price tag goes up.

I'd disagree with this, the reason we hear some owners and pundits saying the Bills should move is because they can't be as valuable franchise in Buffalo as it could elsewhere. A higher valuation and cost proves that wrong and disincentives the reason for the team to move and for the other owners to approve it. Its pretty clear that nobody out there wants the Bills to move just for the hell of it. They are worried about dollars and a higher sale (along with increased prices for more revenue) means those worries aren't as great as they were previously stated to be.

Yes prices are going to go up and they should. The Bills are going to charge PSL's, they are likely going to have less tailgating with a new stadium, ticket prices are going to increase by a good deal and before all that happens local residents are going to have to come out of their pocket for tax breaks and money to help finance a new stadium. That's today's NFL though. Does it suck for the locals who are used to the prices? Sure but many of the season ticket holders here have expressed no issue with the increased prices so I wouldn't worry about that so much.

[Fletch]

I'd disagree with this, the reason we hear some owners and pundits saying the Bills should move is because they can't be as valuable franchise in Buffalo as it could elsewhere. A higher valuation and cost proves that wrong and disincentives the reason for the team to move and for the other owners to approve it. Its pretty clear that nobody out there wants the Bills to move just for the hell of it. They are worried about dollars and a higher sale (along with increased prices for more revenue) means those worries aren't as great as they were previously stated to be.

That's not sound logic at all. First of all "value" has different meanings to different people. In this case it seems that, as reported now, both Golisano and Pegula are both willing to eat a whole bunch just to keep the team around, which we appreciate, but looking at it from the outside in is hardly purely a business decision. If it were, it would be considered a bad one. So there's sentimental value, which doesn't come into play in terms of future valuation of the team insofar as it is a business.

Just because something sells for x amount of dollars now doesn't mean that it retains that value going forward.


Yes prices are going to go up and they should. The Bills are going to charge PSL's, they are likely going to have less tailgating with a new stadium, ticket prices are going to increase by a good deal and before all that happens local residents are going to have to come out of their pocket for tax breaks and money to help finance a new stadium. That's today's NFL though. Does it suck for the locals who are used to the prices? Sure but many of the season ticket holders here have expressed no issue with the increased prices so I wouldn't worry about that so much.

The more they charge the less likely they are to sell those seats. You say that many season ticket holders have expressed no issue with increased prices, but some do and will. We've struggled with sellouts at the current prices, usually about half of our home games, last season five of them. To dismiss this as irrelevant is not wise. Ultimately, if they're no better than they've been since Polian left it's going to become a tougher and tougher sell the higher that ticket prices go.

They're already struggling in numerous home games every season now as it is. It's also been proven, by team statements in the past, that they have difficulty selling premium seats. So while we or you can sit here and talk about higher prices and premium seats, and make the assumption that attendance won't suffer, there's no basis for making such an assumption.

As to the tax "breaks" for funding a new stadium, Cuomo has already more or less said that it isn't going to happen. I realize that these things often change, but let's face it, Erie County, nor any other UNY counties, are in the position to be able to do much in that way, and I really don't see the state pouring in that kind of money, given what it just gave for a renovation of the Ralph, to pick up the financing on the stadium. Besides, it sounds to me like both Pegula and Golisano are fully prepared to pick it up themselves and do this not so much as a business decision, rather than purely for sentimental/phlanthropic reasons despite the likely fact that it will result in losses. I'm not wealthy enough to understand to what extent that these ultra wealthy often don't mind huge losses like that to offset other investment gains, but I know that it can work in their favor.

Anyway, the things that you assume to be true have already been formally expressed by the team as issues, so I don't know why that all of a sudden won't be the case any longer.

I'm also not sure that I see less tailgating. If they want to keep attendance at where it is much more not lose any, then they'd better plan on keeping tailgating alive. I think they'd see a dive in attendance if they discouraged tailgating either via not enough or the right kind of parking to accommodate it, or for any other reasons.

In bigger cities you have a large chunk of wealthy fanbase that just buys tickets and goes to games, but in Buffalo we're a different crowd, you know that. That's what a good chunk of this is all about.

[kishoph]

Who cares about the Wilson family in this scenario?

Did Wilson care about you? Please.

All they wanted was money and that's what they got, even before the sale they all have more than enough.

If it sells for cheap but gets a good owner that keeps the team here and puts a competitive team on the field, that's what most of us care about.

You don't think that the stipulations in the lease that basically guarantee the Bills will be in Buffalo till the very least 2020 is not Ralph Wilson looking out for Buffalo Bills fans ? You're hatred for the Bills blinds you to any thing that is positive about the team. I can't stand people like you that claim to be "fans" of the team and do nothing but bash them.

[stuckincincy]

The higher valuation of the team significantly thins the potential owner pool beyond the next owner which I'm as interested in as who the immediate owner will be because I believe its a foregone conclusion the team is staying in Buffalo under the next owner.

I'd disagree with this, the reason we hear some owners and pundits saying the Bills should move is because they can't be as valuable franchise in Buffalo as it could elsewhere. A higher valuation and cost proves that wrong and disincentives the reason for the team to move and for the other owners to approve it. Its pretty clear that nobody out there wants the Bills to move just for the hell of it. They are worried about dollars and a higher sale (along with increased prices for more revenue) means those worries aren't as great as they were previously stated to be.

Yes prices are going to go up and they should. The Bills are going to charge PSL's, they are likely going to have less tailgating with a new stadium, ticket prices are going to increase by a good deal and before all that happens local residents are going to have to come out of their pocket for tax breaks and money to help finance a new stadium. That's today's NFL though. Does it suck for the locals who are used to the prices? Sure but many of the season ticket holders here have expressed no issue with the increased prices so I wouldn't worry about that so much.

If all we've heard about the lease terms is true, they are going to be here to satisfy that.

I'm not at all sure that public funding for a new stadium is going to happen. I see little in the current economic climate, but it is surely true that folks who pay little or no property taxes, or those masses in big cities who are effectively wards of the government do vote for increases - no skin in the game, so to speak.

At some point, though, the viability of football itself has to be raised. The things swirling around the NCAA - the O'Bannon case, the college player unionization thing, the concussions lawsuit, the NFL rule changes that in the view of some (many?) that are changing the quality of the game for the worse. HOF'r Lem Barney mads a comment a few months ago:

http://www.usatoday.com/story/sports/nfl/2013/06/14/lem-barney-football-will-be-gone-in-20-years/2424499/

He subsequently retracted a bit of that, saying that it was the wrong venue to voice his opinions.

[DraftBoy]

That's not sound logic at all. First of all "value" has different meanings to different people. In this case it seems that, as reported now, both Golisano and Pegula are both willing to eat a whole bunch just to keep the team around, which we appreciate, but looking at it from the outside in is hardly purely a business decision. If it were, it would be considered a bad one. So there's sentimental value, which doesn't come into play in terms of future valuation of the team insofar as it is a business.

Just because something sells for x amount of dollars now doesn't mean that it retains that value going forward.

Yes but what you aren't considering is the business side of the NFL. You're looking at this in terms of an emotional investment. However the NFL TV deal is up in two years I believe and the new numbers are going to unfathomable compared to what they get now. The salary cap is going up and with a new stadium the amount per ticket, hot dog, t-shirt, and hat will go up as well. Not to mention the additional luxury boxes, added fan experiences, and other gizmos/gadgets that will also increase revenue. They may overspend now, but the return isn't that far away.


The more they charge the less likely they are to sell those seats. You say that many season ticket holders have expressed no issue with increased prices, but some do and will.

You have nothing to back that up.


We've struggled with sellouts at the current prices, usually about half of our home games, last season five of them. To dismiss this as irrelevant is not wise. Ultimately, if they're no better than they've been since Polian left it's going to become a tougher and tougher sell the higher that ticket prices go.

I never mentioned sellouts, though both you and I know that's a product of poor performances and not one of economic issues.


They're already struggling in numerous home games every season now as it is. It's also been proven, by team statements in the past, that they have difficulty selling premium seats. So while we or you can sit here and talk about higher prices and premium seats, and make the assumption that attendance won't suffer, there's no basis for making such an assumption.

Do you have a link to the quote about struggling to sell out boxes/premium seating?


As to the tax "breaks" for funding a new stadium, Cuomo has already more or less said that it isn't going to happen. I realize that these things often change, but let's face it, Erie County, nor any other UNY counties, are in the position to be able to do much in that way, and I really don't see the state pouring in that kind of money, given what it just gave for a renovation of the Ralph, to pick up the financing on the stadium. Besides, it sounds to me like both Pegula and Golisano are fully prepared to pick it up themselves and do this not so much as a business decision, rather than purely for sentimental/phlanthropic reasons despite the likely fact that it will result in losses. I'm not wealthy enough to understand to what extent that these ultra wealthy often don't mind huge losses like that to offset other investment gains, but I know that it can work in their favor.

He's a politician they talk a lot. I don't put a ton of stock in that when its a local election year. Again an over assumption on emotional attachment, if the new owner full finances the deal do you know what that means? No lease payments, and all revenue generated goes directly to them. That's a fantastic deal and if it was me bidding I'd demand to do that. Why the hell would I want to pay a lease to Erie County and lose out on additional revenue from things like parking when I can pay for it all up front and profit off it for the next 30-40 years?


Anyway, the things that you assume to be true have already been formally expressed by the team as issues, so I don't know why that all of a sudden won't be the case any longer.

I'm also not sure that I see less tailgating. If they want to keep attendance at where it is much more not lose any, then they'd better plan on keeping tailgating alive. I think they'd see a dive in attendance if they discouraged tailgating either via not enough or the right kind of parking to accommodate it, or for any other reasons.

In bigger cities you have a large chunk of wealthy fanbase that just buys tickets and goes to games, but in Buffalo we're a different crowd, you know that. That's what a good chunk of this is all about.

If the fans aren't willing to "sacrifice" getting slammed outside of the stadium for a few hours in order to keep the team then that's their decision. I think its incredibly foolish to think that limiting tailgating (not eliminating it) would actually stop from people from attending. Then again those that would stop are probably the same people who get drunk and then drive home so that's probably a net gain.

[trapezeus]

Doesn't sound like there was much to fall out of according to the piece.

really, the article said that once they realized there was no half-sies in football ownership, they both decided to have full bids and golisano went from passively wanting to keep the team here to be "in it to win it".

may not be a falling out, but sounds like they aren't really partners. the article down plays their initial meetings. but it seems that once their plan didn't seem to jive with the nfl, they both want to beat the other one. golisano more so for his ego, and congle more so to sell his WS land.

even golisano's "i don't know who leaked it." pretty much says, "i know congel's camp leaked it"

that's how i interpretted it. i could very well be wrong.

[Fletch]

You don't think that the stipulations in the lease that basically guarantee the Bills will be in Buffalo till the very least 2020 is not Ralph Wilson looking out for Buffalo Bills fans ? You're hatred for the Bills blinds you to any thing that is positive about the team. I can't stand people like you that claim to be "fans" of the team and do nothing but bash them.

Your personal insults aside, to which I would simply say go screw yourself ...

Wilson could easily have sold the team to Golisano or Pegula for a lot less than they'll probably have to pay now.

We'll see how magnanimous the rest of the Wilson family is and how much they care about you in who wins the bid and for how much. Either way, it means hundreds of millions to the Wilson family even after taxes, and I don't care how many people are in their extended family, it's more than enough for each and every member of it to never have to work again and live comfortably forever, on top of their no doubt already cush existence.

So let's see if they do what's in the fans' best interests and sell for significantly less to a Golisano or Pegula, to increase their chances of keeping the team around so that those guys can use some of the money that they're willing to invest in the team on a new stadium.

As to Wilson himself, he's run the team like it was a hobby for him, which to be honest seems about all it was to him. He never took being competitive seriously otherwise he never would have fired Polian which led to a string of disastrous managerial and coaching changes, a string that has not ended.

But, and to be redundant, we could have avoided all of the guesswork of whether or not this team will stick around if he had sold the team while he was still alive, to an owner like Golisano or Pegula, and without the likely "highest bid" component to it that will now likely kick in. He chose not to.

Any owner that buys the team is going to say the right thing about keeping them here, but 2020 is only 6 more seasons from now, and it won't take much for an owner merely saying the right things to move the team the first opportunity he gets as soon as possible.

I can't stand people that argue based on their emotions with ******ed statements being the result.

No matter how you want to argue this, Wilson could very easily have sold the team to a Golisano or Pegula to avoid this entire fiasco, but he chose not to.

[Fletch]

may not be a falling out, but sounds like they aren't really partners.

We're in agreement.

Sounds like they simply "had lunch," discussed it, found out that there are no "equals," which we already really knew, in NFL ownership, shook each other's hand and sincerely wished each other the best of luck.

If you read the piece, it also sounds like Golisano's not going to be on the cusp of commiting suicide if he doesn't win it. It read to me like he'll do his best to win, but if Pegula were to win he'd be good with it. As the piece stated, these guys first and foremost commitment is to keeping the team in WNY. I almost get the impression that this is the only reason why he's even interested. Clearly it's not likely to be the business opportunity of a lifetime. Also, neither seems to have the ego that typically accompanies most NFL owners.

I don't see them running up the bid between each other, but Wilson's lack of foresight, or self-centeredness, whichever way one wants to look at it, has now introduced a scenario whereby if either of them wants to own the team, they'll likely be bidding against other potential owners that do not share their sentimentality towards keeping the team here.

[Mr. Miyagi]

Bottom line, a winning team sells seats. Green Bay has no PSL or naming rights and they always sell out even in such a small market.

[stuckincincy]

Bottom line, a winning team sells seats. Green Bay has no PSL or naming rights and they always sell out even in such a small market.

GB is owned by the fans. Why would they charge themselves for PSLs? I'm assuming that the fan-stockholders already have season tix.

[better days]

Bottom line, a winning team sells seats. Green Bay has no PSL or naming rights and they always sell out even in such a small market.

Yeah a Favre followed by a Rodgers winning all the time will do that for a team.

I just pray the Pats* have to go a long time after Brady before they get another decent QB.

[Mr. Miyagi]

GB is owned by the fans. Why would they charge themselves for PSLs? I'm assuming that the fan-stockholders already have season tix.
The fans do not literally own the team and have zero voting rights. They sell pieces of paper they call "stocks" when they are worth nothing.

[Mr. Miyagi]

Yeah a Favre followed by a Rodgers winning all the time will do that for a team.

I just pray the Pats* have to go a long time after Brady before they get another decent QB.
The Pats have sold their souls to the devil for success in the last decade. This will be repaid by burning in hell for the next 100 years.

[Ginger Vitis]

As to Wilson himself, he's run the team like it was a hobby for him, which to be honest seems about all it was to him.





That is the most inaccurate statement you have made to date... Wilson definitely treated the Bills like they were a business..

[stuckincincy]

The fans do not literally own the team and have zero voting rights. They sell pieces of paper they call "stocks" when they are worth nothing.

Thanks - I didn't know that. Why do you think they have no PSLs?

[trapezeus]

That is the most inaccurate statement you have made to date... Wilson definitely treated the Bills like they were a business..

yeah, the bills were his best performing company. he didn't have larger business interests with as much control as he did with the bills.

wilson's issue was that he believed in the wrong people for too long and run the good ones out of town. and it will always seem like ego and desire to be known as a football guy. but anytime he got involved in day to day operations, he made mistakes. when he put money down to get people to make those decisions and stayed out, he did ok.

in some ways i think of ralph like sonny corleone. loved to jump into it at the exact wrong moment.

[swiper]

The Pats have sold their souls to the devil for success in the last decade. This will be repaid by burning in hell for the next 100 years.

Yeah. The Bills are 15 years into their 100 years of misery. What I want to know is, where is their ten years of winning anything?

[Mr. Miyagi]

Thanks - I didn't know that. Why do you think they have no PSLs?
No idea.

[Typ0]

This whole thread has gone off the hook on the valuation issue. Business value is not determined by what someone is willing to pay it's determined by what the projected future cash flows are. The person is willing to pay based on those cash flows.


Sounds like the Wilson family is irrelevant then. Why did you mention it?

Also, why do you want the Bills to increase their value as much as possible? Is there something in it for us?

It seems to me that the more "valuable" this franchise becomes, [B]since the value would largely be determined by what is paid for it[\B], the greater the odds of it moving out of the region at some point. The more that someone pays, the more they'll have to make to justify their investment, unless of course it comes down to a philanthropic effort like Golisano mentioned. Even then I don't see how the value of the team benefits us as fans. All I see is prices going up for everything the greater the sale price is. They're definitely not going down if the price tag goes up.

[Fletch]

That is the most inaccurate statement you have made to date... Wilson definitely treated the Bills like they were a business..

Then he was stupid.

I don't believe that he was stupid.

[Fletch]

This whole thread has gone off the hook on the valuation issue. Business value is not determined by what someone is willing to pay it's determined by what the projected future cash flows are. The person is willing to pay based on those cash flows.

That's correct, exactly. Tell it to the person that brought up valuations.

What you did not include was what I pointed out, simply because someone overpays for something today, does not inherently increase its value based on that sales price, which was what Draftboy stated. I pointed out the opposite, although perhaps not phrased very well, that the worth is not driven by its sales price, at least not for future valuation. Rather, that I only see someone overpaying for this team for one of two reasons, first, that like Golisano and Pegula, they have sentimental interest in their decisions, and assuming that they're being completely honest. Second, that the new owner has full intentions of moving the team asap despite any statements to the contrary.

Golisano could pay $2B for it, but that wouldn't mean that he'd then easily be able to get $2B out of it, or even $1.5B or something less perhaps even.

As you said, one must look at the likely future cash flows. That's what's at the heart of any discussions regarding new ownership. Clearly more revenues can be had elsewhere, any number of elsewheres. Toronto for example. I have no doubt whatsoever that if the team moved to Toronto and became theirs that it would far much better financially.

You also couldn't convince me that at least an equal number of fans wouldn't go from here to there to see games on Sundays, especially if they were good. I wouldn't, but no doubt some would.

Anyway, if Golisano pays $1.5B for the Bills, good luck to him in making a profit with the venture over the years. If he has to pay entirely for his own stadium then it will never happen. Not saying he won't do it, he may, but he seems to be driven by other motives than the bottom line, for which it's actually refreshing and heartwarming to see someone potentially doing that for the fans of WNY contrasted with Wilson's crocodile tears coupled with his deceit in managing the team that left us all hungry after an expensive night out dining.

But according to Draftboy, and unless I misunderstood him, he seems to think that the greater the selling price the greater the value of the team. I took issue with that as did you. That would only benefit the Wilson family and no one else, which seems to have been the theme of the modern era of ownership by Wilson.

The selling price may be completely unhinged from the actual value of the team, which it is starting to sound as if it may be the case, especially if Pegula and Golisano find themselves in a bidding war (if that's how it goes as contrasted with a secret bid) with an interest(s) that may want to move the team. I say "may" because only a fool would state a desire to move the team if they are trying to buy it now.

[Fletch]

By the way, there's always the possibility that someone with designs on moving the team down the road would also overpay just as I suggested after Wilson died despite the objections. It's not just people that want to keep the team here that might overpay for it. I mean if Golisano and Pegula are both willing to make what would very likely be a bad business decision, including having to purchase a new stadium all but on their own, then why is it so beyond the possible to suggest that someone that simply wants an NFL team but with a desire to move it might not overpay as well? Especially if he can move it to somewhere that's willing to finance the stadium more than this region and state can or will. Any such new owner would definitely have some leverage.

[better days]

By the way, there's always the possibility that someone with designs on moving the team down the road would also overpay just as I suggested after Wilson died despite the objections. It's not just people that want to keep the team here that might overpay for it. I mean if Golisano and Pegula are both willing to make what would very likely be a bad business decision, including having to purchase a new stadium all but on their own, then why is it so beyond the possible to suggest that someone that simply wants an NFL team but with a desire to move it might not overpay as well? Especially if he can move it to somewhere that's willing to finance the stadium more than this region and state can or will. Any such new owner would definitely have some leverage.

That is entirely possible. But would California or Ontario pay more for a Stadium than NY State would?

And it is quite possible there is something in Ralph's last will about moving the team as well.

[Mike]

Valuations & Sell Price are based on a number of factors which include:

1) Projected Cashflow/NOI: Discounted Cashflow analysis could give you value of asset in today's dollars.

2) Management: From a businesses standpoint Bills have excellent management. Put it this way, they have been able to sell a mediocre product for 15 years now!

3) Competitive Advantage: Bills & NFL are the closest thing to a monopoly. Your investment is safe from the competition.

4) Market: How many qualified bidders and what are they willing to pay. Ultimately, markets are bi-polar, going to high & too low. With qualified investors you might now expect this, but emotions and desire to own Bills as a toy might prevail.


*** BEWARE *** WARNING****
Extreme Pricing: If Bills sell for an extremely high price (well above discounted cash flow, etc) this could only mean one of two things:

1) Pure Emotion: They were bought as an expensive toy for a billionaire who want to keep team in Buffalo.

2) Pure Logic: They were bought as a sound business investment with the intent to move the team in 2020 to a market like LA, which would more than DOUBLE+ their market cap & CF/NOI overnight.

[Fletch]

Valuations & Sell Price are based on a number of factors which include:

1) Projected Cashflow/NOI: Discounted Cashflow analysis could give you value of asset in today's dollars.

2) Management: From a businesses standpoint Bills have excellent management. Put it this way, they have been able to sell a mediocre product for 15 years now!

3) Competitive Advantage: Bills & NFL are the closest thing to a monopoly. Your investment is safe from the competition.

4) Market: How many qualified bidders and what are they willing to pay. Ultimately, markets are bi-polar, going to high & too low. With qualified investors you might now expect this, but emotions and desire to own Bills as a toy might prevail.


*** BEWARE *** WARNING****
Extreme Pricing: If Bills sell for an extremely high price (well above discounted cash flow, etc) this could only mean one of two things:

1) Pure Emotion: They were bought as an expensive toy for a billionaire who want to keep team in Buffalo.

2) Pure Logic: They were bought as a sound business investment with the intent to move the team in 2020 to a market like LA, which would more than DOUBLE+ their market cap & CF/NOI overnight.

Agree with the basis of that for the most part, but it's easy to see that emotion is playing a huge role in this now.

As well, fans have finally begun to become frustrated to the extent that they don't go to as many games, some to none now, as a result of #2 in your first list. We can label them, call them names, etc., but that's the fact.

In this case there's a great likelihood that an owner desirous of keeping them here overpays and knows that in advance. I don't see a guy like Golisano overbidding without knowing exactly what he's getting into. But if he has the money and wants to "subsidize Bills fans' fun" as another poster put it, then that's his right. Great for him to be able to do it. Also, not saying he will, but there does appear to be a sentiment afoot that suggests that it's likely.

[Mace]

This whole thread has gone off the hook on the valuation issue. Business value is not determined by what someone is willing to pay it's determined by what the projected future cash flows are. The person is willing to pay based on those cash flows.

Honestly, that's the way it's supposed to be for a sound business model embraced by a practical businessperson.

Some people now have so much overkill wealth though, I'm not sure it will continue to apply. Look at Ballmer paying 2 billion for the Clippers in the NBA. I just read an entire SB nation article (http://www.sbnation.com/nba/2014/5/29/5763084/clippers-sale-value-billions-steve-ballmer-donald-sterling) that reminds you what a mammoth purchase 2 billion is, then goes on to justify the expense with a couple hundred million here, couple there, like 2 billion was not really so mammoth and there won't be yearly expenses to bite into it.

It was a vanity purchase by a guy who wanted a basketball team and has overkill wealth.

I don't even know how to value overkill wealth. Warren Buffet or Bill Gates could buy the team for poops and giggles, the lower end Pegula wouldn't find himself eating ramens to get by if he overbid.

It actually can well be determined by what someone is willing to pay for it. That's actually how free market economy has always worked. Someone comes up to you after you buy a Big Mac and gives you 100 bucks for the bag of your food, that Big Mac is now worth 100 dollars technically though you can get another for less in seconds, but that one was worth 100, does it spike the value of Big Macs and their nutritional value ? No, but that one didn't matter.

Depends on how much the rich guy overpays and means to get out of it, he might not care whatever.

[Typ0]

2, 3 & 4 all are factors in cash flows so are accounted for in that way. It comes down to cash flows and will discuss a caveat in my response to another post below.


Valuations & Sell Price are based on a number of factors which include:

1) Projected Cashflow/NOI: Discounted Cashflow analysis could give you value of asset in today's dollars.

2) Management: From a businesses standpoint Bills have excellent management. Put it this way, they have been able to sell a mediocre product for 15 years now!

3) Competitive Advantage: Bills & NFL are the closest thing to a monopoly. Your investment is safe from the competition.

4) Market: How many qualified bidders and what are they willing to pay. Ultimately, markets are bi-polar, going to high & too low. With qualified investors you might now expect this, but emotions and desire to own Bills as a toy might prevail.


*** BEWARE *** WARNING****
Extreme Pricing: If Bills sell for an extremely high price (well above discounted cash flow, etc) this could only mean one of two things:

1) Pure Emotion: They were bought as an expensive toy for a billionaire who want to keep team in Buffalo.

2) Pure Logic: They were bought as a sound business investment with the intent to move the team in 2020 to a market like LA, which would more than DOUBLE+ their market cap & CF/NOI overnight.

[Typ0]

I don't agree with the vanity purchase idea but there are other factors involved that play into cash flows.

First, a business that wants to grow by expanding into other markets and/or enhancing their product/service offerings in ways that naturally match what they already do. For this reason companies gobble up others such that the overall effect is to create more cash flows than another business might gain in the same transaction. A good example of this was Adelphi owning the Sabres.

Second, from a financial management perspective portfolio diversity plays a role in where a company invests. Without getting into a lot of descriptive statistics the bottom line is CAPM dictates the effective risk of two holdings is less than the two when considered independently. So a large company with massive holdings seeks to diversify with a product portfolio that minimizes risk and maximimizes shareholder wealth.

Third, the government. They do two things: drive tax laws and regulate. In these ways they influence decisions consumers and businesses make.

You put these things together and you can arrive at what you are calling a 'vanity purchase' that really is a well informed purchase that is the best thing that can be done with investment capital at the time.


Honestly, that's the way it's supposed to be for a sound business model embraced by a practical businessperson.

Some people now have so much overkill wealth though, I'm not sure it will continue to apply. Look at Ballmer paying 2 billion for the Clippers in the NBA. I just read an entire SB nation article (http://www.sbnation.com/nba/2014/5/29/5763084/clippers-sale-value-billions-steve-ballmer-donald-sterling) that reminds you what a mammoth purchase 2 billion is, then goes on to justify the expense with a couple hundred million here, couple there, like 2 billion was not really so mammoth and there won't be yearly expenses to bite into it.

It was a vanity purchase by a guy who wanted a basketball team and has overkill wealth.

I don't even know how to value overkill wealth. Warren Buffet or Bill Gates could buy the team for poops and giggles, the lower end Pegula wouldn't find himself eating ramens to get by if he overbid.

It actually can well be determined by what someone is willing to pay for it. That's actually how free market economy has always worked. Someone comes up to you after you buy a Big Mac and gives you 100 bucks for the bag of your food, that Big Mac is now worth 100 dollars technically though you can get another for less in seconds, but that one was worth 100, does it spike the value of Big Macs and their nutritional value ? No, but that one didn't matter.

Depends on how much the rich guy overpays and means to get out of it, he might not care whatever.

[Mace]

I don't agree with the vanity purchase idea but there are other factors involved that play into cash flows.

First, a business that wants to grow by expanding into other markets and/or enhancing their product/service offerings in ways that naturally match what they already do. For this reason companies gobble up others such that the overall effect is to create more cash flows than another business might gain in the same transaction. A good example of this was Adelphi owning the Sabres.

Second, from a financial management perspective portfolio diversity plays a role in where a company invests. Without getting into a lot of descriptive statistics the bottom line is CAPM dictates the effective risk of two holdings is less than the two when considered independently. So a large company with massive holdings seeks to diversify with a product portfolio that minimizes risk and maximimizes shareholder wealth.

Third, the government. They do two things: drive tax laws and regulate. In these ways they influence decisions consumers and businesses make.

You put these things together and you can arrive at what you are calling a 'vanity purchase' that really is a well informed purchase that is the best thing that can be done with investment capital at the time.

I'm not disagreeing it should be as you say for a practical self sufficient owner. It's simply the best way to do it no doubt.

But your examples are not the NFL. A football team (or basketball team via the Ballmer example) cannot expand its products and services, and gobble up other teams to expand market.

Ballmer cares less about portfolio diversity, worth 20 Billion, he wanted a basketball team, not his portfolio and reasonable cash flow. He doesn't have any shareholders.

The government is going to take its share, less if your 20 billion can afford the best tax lawyers, and Ballmer simply didn't care.

Because he has 20 billion and can make a vanity purchase. You can't honestly think 20 billion dollar 58 year old Ballmer bought the Clippers to make some of that there real money with a roomful of accounts clapping in glee.

Vanity purchases are very possible. Pegula did not buy the Sabres to make money, he specifically said that's why he has his business, to make money. I mean there you have the Sabres owner, a Billionaire, stating it outright ?

I had some accounting background, I won't put it against yours, you obviously understand it, but it's just not necessarily as applicable as it should be in the case of modern scale of wealth for some rich people.

[Typ0]

No, I am saying that these people investing in professional sports franchises are the ones expanding their markets and product offerings. Pegula is a good example his major interest is in real estate and utilities both low risk investments with stable but lower returns. He wants to match that with a high risk investment like a sports franchise that can up his public image and provide very high potential returns. Now, maybe he can up that with a purchase of the Bills...and I'm curios were he to acquire the Bills if he would seek to move the sabres to another owner. He's going to look at that decision as a function of how much %% of his portfolio is tied up in these interests. Did he purchase them to make money? Well, he's pretty confident his lower risk holdings will generate the projected cash flows. On the other hand he wants to open up the potential to make a killing because those lower risk ones are only going so far. It's like going to the casino you play with money you can afford to lose and you get a chance to win big. It's basic financial management. Just consider the scope and depth of financial impact on things related to Pegula that will be had were a team he owned to bring home a championship.


I'm not disagreeing it should be as you say for a practical self sufficient owner. It's simply the best way to do it no doubt.

But your examples are not the NFL. A football team (or basketball team via the Ballmer example) cannot expand its products and services, and gobble up other teams to expand market.

Ballmer cares less about portfolio diversity, worth 20 Billion, he wanted a basketball team, not his portfolio and reasonable cash flow. He doesn't have any shareholders.

The government is going to take its share, less if your 20 billion can afford the best tax lawyers, and Ballmer simply didn't care.

Because he has 20 billion and can make a vanity purchase. You can't honestly think 20 billion dollar 58 year old Ballmer bought the Clippers to make some of that there real money with a roomful of accounts clapping in glee.

Vanity purchases are very possible. Pegula did not buy the Sabres to make money, he specifically said that's why he has his business, to make money. I mean there you have the Sabres owner, a Billionaire, stating it outright ?

I had some accounting background, I won't put it against yours, you obviously understand it, but it's just not necessarily as applicable as it should be in the case of modern scale of wealth for some rich people.

[Lone Stranger]

The fans do not literally own the team and have zero voting rights. They sell pieces of paper they call "stocks" when they are worth nothing.

Are you stating that all the fans securities are non-voting?

[Mace]

No, I am saying that these people investing in professional sports franchises are the ones expanding their markets and product offerings. Pegula is a good example his major interest is in real estate and utilities both low risk investments with stable but lower returns. He wants to match that with a high risk investment like a sports franchise that can up his public image and provide very high potential returns. Now, maybe he can up that with a purchase of the Bills...and I'm curios were he to acquire the Bills if he would seek to move the sabres to another owner. He's going to look at that decision as a function of how much %% of his portfolio is tied up in these interests. Did he purchase them to make money? Well, he's pretty confident his lower risk holdings will generate the projected cash flows. On the other hand he wants to open up the potential to make a killing because those lower risk ones are only going so far. It's like going to the casino you play with money you can afford to lose and you get a chance to win big. It's basic financial management. Just consider the scope and depth of financial impact on things related to Pegula that will be had were a team he owned to bring home a championship.

I understand what you're saying. I don't think he'd divest of the Sabres. He'd basically be a WNY hero and reap a harvest of goodwill, with a family to pass them along to and enough money not to worry about relative taxes while the natural gas market will be lucrative past when we're all dead. Pegula also donated 102 million to Penn State in 2010 which was more than Gundlach testified he was worth in 2011, Gundlach being considered a clever investor well schooled in financial management.

Agree with the casino analogy, even, but it doesn't discount vanity purchase ala Ballmer where the sums of money are just insignificant to the rich guy. Besides the accompanying hockeytownish construction with marginal return possibility considering the overall money put into it, Pegula just appears to be happy spending money he doesn't need on what he wants to, ala the 102 million for Penn State hockey. Buffett donated 1.5 billion to the Gates foundation which Bill has given 28 billion too. Bill and Warren aren't going to make more from that money. It goes beyond practical financial management.

Sterling is fighting his 2 billion dollar Clippers sale. He doesn't care about the 2 billion dollars, though 2 billion dollars from a 12.5 million investment makes perfect sense in any practical portfolio strategy.

I just think you're applying a perfectly practical and sound model to a business which may well no longer apply in the scale of modern wealth.

Wilson could have sold long ago, or moved them, invested that return and made even more over time than his estate will, enhancing his portfolio and maximizing return using perfectly sound concepts of financial management.

When you have that much money, you sometimes don't use perfectly sound concepts of financial management.

If Gundlach went from 90 million in 2011 to 1 billion now, in 3 years, there's no possible way he'd duplicate that return in 3 more by spending it on an NFL team with his evident prowess. Makes no financial management sense. He's way better doing what he does, not spending a billion, and making that much more in 3 more using that billion he didn't spend.

I'm not sure what I'm missing here.

[Buckets]

Did I say I either cared about the Wilson family or that they care about me?

I want the Bills to increase their value as much as possible.

Why?