La Dodgers bought for 2 BILLION dollars.

[Vinny P.]

Saw no thread about it. I even searched. Heard about it last week, and surprised it's not discussed in here.

I dunno, but are the Dodgers even WORTH 2 billion? The Yankees are only worth 2.15 billion, and I've always assumed they are supposed to be the highest-valued sports franchise in the world. I know they were purchased far above their value. Which I wonder if that was a smart economic move.

[Kobie]

Was the stadium included? That may explain the hefty price tag for a team basically being bought out of bankruptcy court.

[rudel.dietrich]

The price may be a little high now but in a few years this will look okay. TV money it about to completely change the face of baseball. We are already seeing it with the Fielder, Pujols and Votto deals. It is just the tip of the iceberg.

And I believe I read that it does include Dodger Stadium and the parking areas. So not as bad of a deal.

I would also contend that the Dallas Cowboys are worth more than the Yankees.

[dudeosu]

Last summer Forbes still had Man. U. as the most valuable sports franchise followed closely by the Cowboys and the Yanks. All were under 2 billion then but I'd be willing to bet they all surpass that line when this years edition comes out.

[rudel.dietrich]

Originally Posted by dudeosu

Last summer Forbes still had Man. U. as the most valuable sports franchise followed closely by the Cowboys and the Yanks. All were under 2 billion then but I'd be willing to bet they all surpass that line when this years edition comes out.

I read that and frankly that is utter crap. Man U is not even the most valuable franchise in football. I would put Barca and Madrid above both.
Plus Man U still has about $700 million in debt that is owed.

Depending on how you asses debt Man U may not even be the most valuable franchise in England. Chelsea, Arsenal or Man City might be worth more.

I love me some football but I would never own a team unless I could just throw money at it. The economics of soccer are becoming unsustainable and I am afraid some serious changes are going to have to be made or the whole system is going to collapse.
They are horrible business ventures.

North American sports franchises are much safer bets in terms of actually turning a profit.
With that new mega stadium I would feel pretty safe is saying that the Cowboys are the most valuable sports franchise in the world.
To my knowledge they are debt free and own their stadium free and clear.


Edit: If I was selling the Cowboys I would not accept any offer under $4 billion for them.

[dudeosu]

Yeah I dunno how legit Forbe's valuations are, they were just the ones at the top of the google search. *shrug*

CNN had an article about the "other" teams catching up with the Yankees in payroll, so I think you're hitting the nail on the head with the changing nature of baseball's media contracts. I know the Reds are negotiating in a year or two for new TV rights. I just hope they get what they need so Votto isn't the only star on the team in 3 years.

Marlins, Angels help shrink payroll gap in Major League Baseball - MLB - SI.com

[rudel.dietrich]

Originally Posted by dudeosu

Yeah I dunno how legit Forbe's valuations are, they were just the ones at the top of the google search. *shrug*

CNN had an article about the "other" teams catching up with the Yankees in payroll, so I think you're hitting the nail on the head with the changing nature of baseball's media contracts. I know the Reds are negotiating in a year or two for new TV rights. I just hope they get what they need so Votto isn't the only star on the team in 3 years.

Marlins, Angels help shrink payroll gap in Major League Baseball - MLB - SI.com

This is one area I don't understand. I know NFL owners are not all idiots. But sometimes they do act like it
They do so many things in a group that does not make them money. Like TV deals. There is a league TV deal but AFAIK there is no team that has it's own TV deal.
Jerry Jones could easily go out and ask for half a billion for exclusive rights to 4-6 Cowboys games a year and a network would pay for it. It would of course be able the current TV deal expires but I am interested to see if any owners/teams break away from the pack this next time out and try and negotiate their own deals.

[dudeosu]

I don't follow soccer much at all, what's so wrong with their system (or whatever) that makes them financially unstable?

[rudel.dietrich]

Originally Posted by dudeosu

I don't follow soccer much at all, what's so wrong with their system (or whatever) that makes them financially unstable?

I said financially unsustainable, but unstable works too

The main problem is that wages constitute a major part of a clubs financial responsibility. Wages continue to rise higher and higher and higher.
Revenues from things like attendance, prize money for winning competitions and TV money is also rising just not enough to sustain the wage bills.

There is also the problem of over saturation. There are simply too many football clubs competing for fans. I live in a city of 372,000 and we have two clubs in the top flight league and numerous small clubs.
When I lived in Hamburg which is a much larger city the city had five notable clubs.
London is a massive city but has a staggering 14 professional clubs.

European football has never been that bright when it comes to marketing itself. It has always relied on historical popularity to carry it.
Up until the mid 80s uniform makers like Adidas, Puma and Umbro actually received payments from the clubs in order to to let them wear their uniforms.
Finally someone has the presence of mind to think "wait....aren't we the ones doing them a favor?"
They got into TV deals late and even now days the TV deals are lucrative but the networks are still getting a fairer end of the deal since what they are paying is not the full price of the product they are getting back.

Then there is the problem of promotion and relegation. Being relegated to a lower league kills your finances. Your TV revenue is destroyed, you sell less tickets and generally have to charge less for them and you have players who don't like the idea of playing in less of a league do you have to sell them for less than they are worth.

Those are the main points and dozens of smaller ones. Unfortunately things going to come to a head in a few years and some touch choices are going to have to be made about how things are going to continue.
It will be interesting to watch.

[ukhotstove]

Originally Posted by rudel.dietrich

I read that and frankly that is utter crap. Man U is not even the most valuable franchise in football. I would put Barca and Madrid above both.

Plus Man U still has about $700 million in debt that is owed.

Barca and Madrid are in massive debt to the banks and have been for years way before the likes of Man Utd got into debt, actually it really isn't Man Utd in debt it's the owners who got into debt to buy them.

Teams have got a big shock coming though if UEFA stick to the new financial rules they are bringing in, the likes of Barca, Chelsea and Man City will be hit most as they bring in less than the likes of Madrid and Man Utd and rely more on the banks and their rich owners than the others.

[ukhotstove]

Originally Posted by Vinny P.

Saw no thread about it. I even searched. Heard about it last week, and surprised it's not discussed in here.

I dunno, but are the Dodgers even WORTH 2 billion? The Yankees are only worth 2.15 billion, and I've always assumed they are supposed to be the highest-valued sports franchise in the world. I know they were purchased far above their value. Which I wonder if that was a smart economic move.

The Dodgers are a global brand, you go into any store here and you'll see Dodgers caps and tshirts they aren't aimed at baseball fans but sold for fashion along with Yankees and some Red Sox but mostly it's Dodgers and Yankees.

[Le Grande Orange]

Originally Posted by rudel.dietrich

TV money it about to completely change the face of baseball.

Correction: TV money is about to completely change the face of baseball again.

Originally Posted by dudeosu

CNN had an article about the "other" teams catching up with the Yankees in payroll, so I think you're hitting the nail on the head with the changing nature of baseball's media contracts.

The Biz of Baseball has had articles on this for awhile now. Live programming is about the only television content a cable provider can offer that isn't found elsewhere in one form or another, and consequently this is rapidly pushing up local media contracts. They are typically doubling or tripling in value. It's a trend that will continue for a couple of years as existing deals expire and new ones are negotiated.

MLB's national television contract expires after the 2013 season, and there's every expectation that it too will see a hefty increase in value, for much the same reason as are local media contracts.

And if clubs have more money to spend, player salaries will rise. (Though more so for players at the top than for those at the bottom. The main way players at the bottom see salary increases is by the raising of the minimum salary.)

[Vinny P.]

Originally Posted by Kobie

Was the stadium included? That may explain the hefty price tag for a team basically being bought out of bankruptcy court.

As rudel said, I believe the stadium was included in the deal. I remember I read somewhere (forget which article it was. I can't find it now,) that the stadium was something like 115 mil as part of that 2 billion.

Originally Posted by rudel.dietrich

The price may be a little high now but in a few years this will look okay. TV money it about to completely change the face of baseball. We are already seeing it with the Fielder, Pujols and Votto deals. It is just the tip of the iceberg.

And I believe I read that it does include Dodger Stadium and the parking areas. So not as bad of a deal.

I would also contend that the Dallas Cowboys are worth more than the Yankees.

Originally Posted by dudeosu

Last summer Forbes still had Man. U. as the most valuable sports franchise followed closely by the Cowboys and the Yanks. All were under 2 billion then but I'd be willing to bet they all surpass that line when this years edition comes out.

I saw somewhere that the Yanks were valued at 2.15 billion. I know last year's Forbes had them at 1.6 billion. I wonder if that includes the YES network?

TBH, I completely forgot about Man U when I wrote the OP. The Cowboys and the Yankees frequently exchange the number 1 and 2 spot. I don't think I ever really see Man U as highly valued as the Yankees or Cowboys.

[Vinny P.]

Originally Posted by ukhotstove

The Dodgers are a global brand, you go into any store here and you'll see Dodgers caps and tshirts they aren't aimed at baseball fans but sold for fashion along with Yankees and some Red Sox but mostly it's Dodgers and Yankees.

Interesting. The Reds gear here in the US is sold more as a fashion statement than the Dodgers, Red Sox, or even the Yankees. At least, that's been just what I've noticed.

Originally Posted by Le Grande Orange

And if clubs have more money to spend, player salaries will rise. (Though more so for players at the top than for those at the bottom. The main way players at the bottom see salary increases is by the raising of the minimum salary.)

I believe when the new national media contract is being negotiated, the player's union is expecting the minimum salary to rise to $500,000.

[Le Grande Orange]

Originally Posted by Vinny P.

I believe when the new national media contract is being negotiated, the player's union is expecting the minimum salary to rise to $500,000.

Not "expecting". The increases in the minimum salary are a part of the new CBA:

2012: $480,000
2013: $490,000
2014: $500,000

[Skipaway]

Originally Posted by rudel.dietrich

I said financially unsustainable, but unstable works too

The main problem is that wages constitute a major part of a clubs financial responsibility. Wages continue to rise higher and higher and higher.
Revenues from things like attendance, prize money for winning competitions and TV money is also rising just not enough to sustain the wage bills.

There is also the problem of over saturation. There are simply too many football clubs competing for fans. I live in a city of 372,000 and we have two clubs in the top flight league and numerous small clubs.
When I lived in Hamburg which is a much larger city the city had five notable clubs.
London is a massive city but has a staggering 14 professional clubs.

European football has never been that bright when it comes to marketing itself. It has always relied on historical popularity to carry it.
Up until the mid 80s uniform makers like Adidas, Puma and Umbro actually received payments from the clubs in order to to let them wear their uniforms.
Finally someone has the presence of mind to think "wait....aren't we the ones doing them a favor?"
They got into TV deals late and even now days the TV deals are lucrative but the networks are still getting a fairer end of the deal since what they are paying is not the full price of the product they are getting back.

Then there is the problem of promotion and relegation. Being relegated to a lower league kills your finances. Your TV revenue is destroyed, you sell less tickets and generally have to charge less for them and you have players who don't like the idea of playing in less of a league do you have to sell them for less than they are worth.

Those are the main points and dozens of smaller ones. Unfortunately things going to come to a head in a few years and some touch choices are going to have to be made about how things are going to continue.
It will be interesting to watch.

Actually I don't think football is in any kind of problem. The main difference between European football teams and American professional teams is that European football teams typically aren't operated as for-profit organizations.

A lot of European football teams are really all about on the field performance, as opposed to the American counterparts always talking about "fiscal responsibility", while in reality it's all about owners making money.

That's why the Glazers or Hicks and Gillett don't fit that well as club owners. They are trying to extract value out of their investments, when there are many other owners who just want to buy wins.


So by default, the financial situations of an European football club will be less stable than an American professional sports team. That's hardly a problem though. Well-supported clubs always bounce back even after suffering some financial disasters.


American leagues on the other hand hates owners who want to spend more for better teams. Salary caps, luxury taxes, drafts, revenue sharing, and all that. All basically measures to ensure owners who just want to make money can do that safely without somebody who just wants to win undermining them.

[Vinny P.]

Originally Posted by Skipaway

Actually I don't think football is in any kind of problem. The main difference between European football teams and American professional teams is that European football teams typically aren't operated as for-profit organizations.

A lot of European football teams are really all about on the field performance, as opposed to the American counterparts always talking about "fiscal responsibility", while in reality it's all about owners making money.

That's why the Glazers or Hicks and Gillett don't fit that well as club owners. They are trying to extract value out of their investments, when there are many other owners who just want to buy wins.


So by default, the financial situations of an European football club will be less stable than an American professional sports team. That's hardly a problem though. Well-supported clubs always bounce back even after suffering some financial disasters.


American leagues on the other hand hates owners who want to spend more for better teams. Salary caps, luxury taxes, drafts, revenue sharing, and all that. All basically measures to ensure owners who just want to make money can do that safely without somebody who just wants to win undermining them.

George Steinbrenner does VERY well making profits, while "throwing money at wins."

[magnet]

Originally Posted by Vinny P.

George Steinbrenner does VERY well making profits, while "throwing money at wins."

George is currently pining for the fjords.

Google "Yankees profits" and you'll find articles from 2009 saying "Hey, the Yankees will actually turn a profit this year!" which would indicate it isn't normal business procedure.

I remember reading at one point years back that George ran the team in the red pretty regularly. Can a Yankees fan confirm or deny?

[rudel.dietrich]

From what I have read the Yankees do make yearly profits if you factor in the YES network.

Which is why I think the super franchises in every sport need their own TV network.
Cowboys...Lakers...Canadiens

[Skipaway]

Originally Posted by Vinny P.

George Steinbrenner does VERY well making profits, while "throwing money at wins."

Of course he can do that, when he's competing with all the other owners who are interested in making money. That's the point.

If you have a couple of super rich people buying up Red Sox and Orioles and are willing to spend as much as they need to win at all cost, Man City and Chelsea style, Steinbrenner wouldn't be able to make money and win as easily.