PuckSniperPensel wrote:
We aren't talking about ROI though, Slesh. We're talking about yearly losses, despite being one of the better franchises in terms of fan support, ticket sales, and TV ratings.
You can argue that ROI makes a franchise a commodity even though they lose money each year because you boost the overall value of the organization. The problem with that is, each one of your owners is looking to sell as soon as they increase the value.
That's not a healthy way to run a franchise.
Suppose the next owner looking to buy low and sell high doesn't do as well as Tommy G in terms of increasing the value of the franchise.
All of a sudden, you have an owner losing money each year in operations, AND in decreasing club value.
This is why the Sabres' long term viability is scary to me. Major changes need to happen in New York in order to help Buffalo start recovering as a city.
All I can say is, I'm really happy the NHL prevented a franchise from moving to Hamilton.
Actually PSP, its all about the RRI/ROI. Every venture created is about an ROI, directly or indirectly (unless your the federal government of the United States). The Return on Investment can be long term or short term depending on the the investors exit strategy.
Choosing to sell the franchise is only 1 option to achieve this goal. Decreasing club value is performance based and plays into the key indicator for a successful venture. Risk Analysis and Risk Assessment. In this case both of these indicators are based upon the strategy initiated by the owner/investor of the franchise. Roll the dice on strategies that are new and not proven risk goes up, utilize existing strategies with proven track records of success and risk goes down. It truly is that simple.
I play in pro forma's all day long. Risk is the key in this day and age. The worth of this franchise is only relivent if your looking for short term gains, long term is really where its at in today's markets. You are correct on one thing, buy low, sell high. How then do you ever get a deal on a franchise? You don't, inflationary rates themselves do not permit the degree of return your looking for, therefore, it is an accurate statement to make that this is a longterm investment.