Hey Terry, Do Us A Favor and SELL

[5 Minute Major]

He forfeits 25% of yearly profit + loses out on 25% of the value of the franchise going forward (which only goes up, at a rate higher than he will get in the open market).

It’s not a smart business decision. It’s a cashing out because you need liquidity.

And you know this how?

 

[SnuggaRUDE]

Bills made an estimated $65M in 2021-2022…25% of that is 16.25M. If he got an ROI of 1.7% he makes more off of that 1B than profits so I’m not sure why you’re factoring that in at all besides just looking for reasons to slam Pegula. (And yes, I’m ignoring taxes for simplicity but even a 3.4% return would be incredibly modest).

As for the 25% of franchise value, it has been speculated for years that the NFL will have to allow private equity or franchise values will stagnant due to the lack of people who can afford teams at these valuations…seems like he might be ahead of the curve on this

IF we don't allow investment banks in our Billionaires won't be able to afford football teams is like a line from a Mel Brooks movie. Don't get me wrong, I get the argument for it, and it makes total economic sense, but it's also complete farce.

 

[sabremike]

I'd say it's pretty high if the right offer came around.

The league isn't allowing ANY relocation (besides and Atlanta/Arizona situation where they literally had no place to play) until at least the next two rounds of expansion. Why would you allow say Atlanta to pay $900 million for an existing team instead of say $2 Billion for an expansion team?

 

[HogtownSabresfan]

I'd say it's pretty high if the right offer came around.

I would say Bettman hates teams moving but there are some unknowns out there. Arizona has to get another shot at a team. We know. The Sabres lease is up in 2027. For sure moving will be used as leverage to improve rink. I would bet pretty heavy on Sabres never moving.

 

[SnuggaRUDE]

And you know this how?

That's the logical conclusion from selling a quarter share

I would say Bettman hates teams moving but there are some unknowns out there. Arizona has to get another shot at a team. We know. The Sabres lease is up in 2027. For sure moving will be used as leverage to improve rink. I would bet pretty heavy on Sabres never moving.

The league isn't allowing ANY relocation (besides and Atlanta/Arizona situation where they literally had no place to play) until at least the next two rounds of expansion. Why would you allow say Atlanta to pay $900 million for an existing team instead of say $2 Billion for an expansion team?

Seattle paid 650 two years ago, I'm not sure they get 2B for an expansion right now. Most of the teams are valued well under 2B, although some are more.

Buffalo certainly offers the league less than Houston, Portland or Atlanta would.

 

[5 Minute Major]

That's the logical conclusion from selling a quarter share

Is it logical? None of us know why. To assume it’s because they need the money is very presumptuous.

 

[Deevo]

Is it logical? None of us know why. To assume it’s because they need the money is very presumptuous.

If he doesn't need the liquidity, why wouldn't he keep the stake and watch it grow every year??

 

[Selanne00008]

Obviously he's not doing that but the value of the Bills is insane compared to when he bought them. I think he paid around $1 billion and they are now valued at $4 billion.

Between the NFL as a whole just growing exponentially and Allen making the market a hotbed for football again, Pegula is printing cash. All those extra playoff games and public financing to go towards a brand new stadium, too? Jeez.

He forfeits 25% of yearly profit + loses out on 25% of the value of the franchise going forward (which only goes up, at a rate higher than he will get in the open market).

It’s not a smart business decision. It’s a cashing out because you need liquidity.

Just sayin. Take 1.4B in Fall 2014 and invest it into S&P500 and do Nothing, you got 4.3B with investing the dividends. Bills worth 4.3 currently?

Obviously many many aspects. What's Bills annual profits look like, etc.

But it's way closer than we all think.

 

[RefsIdeas]

Bills made an estimated $65M in 2021-2022…25% of that is 16.25M. If he got an ROI of 1.7% he makes more off of that 1B than profits so I’m not sure why you’re factoring that in at all besides just looking for reasons to slam Pegula. (And yes, I’m ignoring taxes for simplicity but even a 3.4% return would be incredibly modest).

As for the 25% of franchise value, it has been speculated for years that the NFL will have to allow private equity or franchise values will stagnant due to the lack of people who can afford teams at these valuations…seems like he might be ahead of the curve on this

I'm not sure why you're ignoring that he also loses 25% of the franchise going forward. That's where he's really going to lose out on money in the future.

Just sayin. Take 1.4B in Fall 2014 and invest it into S&P500 and do Nothing, you got 4.3B with investing the dividends. Bills worth 4.3 currently?

Obviously many many aspects. What's Bills annual profits look like, etc.

But it's way closer than we all think.

Sure, but the value of the NFL team has gone up a similar amount in the same time period + he loses out on 25% of the yearly profits (pennies to the value of the franchise, but it's still something).

He's just making himself more liquid. That's all this is.

 

[RefsIdeas]

And you know this how?

It's the only logical conclusion. He's going to get slammed on capital gains tax from this, why would you:

1. Pay a bunch in taxes of the sale
2. Lose 25% of your yearly revenue
3. Lose out on 25% of the value of your franchise
4. Now have a minority partner involved who you will now have to deal with for business decisions

Unless you want liquidity now? People saying it's a "smart business decision" don't really understand business, imo.

 

[BloFan4Life]

Completely inaccurate. PSE was paying a retainer for over a year with a highly regarded merger and acquisition attorney with the sole intention of working with investment bankers to secure a buyer for 100% of the franchise. When that didn't work, they looked for a minority owner, with the intention of full control in the future. There wasn't a serious buyer and pretty much the only interest was from foreign investors. Since that point, PSE has dismantled and the Sabres are completely separate from it.

Since the Pegula's have taken on the Bills, the Sabres are an after thought. It is a constant money drain and none of the family wants to take on the responsbility. The daughter you speak of, is so heavily involved with the Bills and Stadium building, that she was never around the Sabres offices for years now.

Like I was saying back in Jan, the Pegula's have been working with lawyers for years now that have been seeking out investment bankers. No one wants the Sabres. The focus has now shifted to the Bills, which will net about the same as selling the Sabres would, and they would just need to sell a small fraction. If the Pegula's would have found a buyer for the Sabres, they wouldn't be doing the Bills minority route.

 

[5 Minute Major]

If he doesn't need the liquidity, why wouldn't he keep the stake and watch it grow every year??

Because maybe he would like to reap a benefit of owning the franchise before he dies? Maybe to also have another source of money besides his own with future costs of the team? The Pegula’s will still call the shots. Imagine being able to still call the shots and have someone else also chip in with costs? Like I said, none of us know to include myself. If he needs money that bad why not just sell the Sabres outright? He is hardly around the team, unlike the Bills.

 

[RefsIdeas]

Because maybe he would like to reap a benefit of owning the franchise before he dies? Maybe to also have another source of money besides his own with future costs of the team? The Pegula’s will still call the shots. Imagine being able to still call the shots and have someone else also chip in with costs? Like I said, none of us know to include myself. If he needs money that bad why not just sell the Sabres outright? He is hardly around the team, unlike the Bills.

Youd have to think he’s pretty illiquid if he needs the 1B sale from the 25% to “reap the benefit”.

 

[joshjull]

I’ve said this before and I always get yelled at - but the Pegulas need more liquidity. This makes perfect sense in that context.

Yes, you can Google their net worth and it’s high. But almost all of it is tied up in the Bills/Sabres.

He’s ran many businesses into the ground. He tried to ramp up his fracking business and got sued/fined and ended up not producing much. He started a wealth management company. It all added up to him trying to create more liquidity due to non-Bills businesses failing.

And now here we are. I wouldn’t be surprised if there’s more to come.

Nothing in this post is remotely accurate.

For starters, How on earth can Pegula have money tied up with the Bills? He paid 1.4 billion in CASH to buy the them. Which means he has no debt to service and is basically printing money with the Bills.

The Pegulas’ are worth 2-3 billion more than they were at the start of the pandemic. Pretty amazing accomplish for the terrible businessman you’re describing.

As for selling 25%, the reason for that should be fairly obvious. Its to pay for his portion of the new stadium. Which will cost at least 550 million. It could be more. I don;t know what the agreement says about who pays for overages.


EDIT: You may see something similar with the Sabres to pay for all the projects that have been announced for the arena recently.

 

[RefsIdeas]

Nothing in this post is remotely accurate.

For starters, How on earth can Pegula have money tied up with the Bills? He paid 1.4 billion in CASH to buy the them. Which means he has no debt to service and is basically printing money with the Bills.

The Pegulas’ are worth 2-3 billion more than they were at the start of the pandemic. Pretty amazing accomplish for the terrible businessman you’re describing.

As for selling 25%, the reason for that should be fairly obvious. Its to pay for his portion of the new stadium. Which will cost at least 550 million. It could be more. I don;t know what the agreement says about who pays for overages.


EDIT: You may see something similar with the Sabres to pay for all the projects that have been announced for the arena recently.

When people Google his net worth, it says 6.8 billion. 4ish billion of that is tied up in the Bills. That is not liquid cash.

His net worth has gone up because the Bills and Sabres values have gone up. That’s how this works.

I hope this helps.

 

[Ace]

I’m going to need something more than “lol he’s giving up 25 percent of future profits because he needs cash” to sell me on the following being a bad business plan:

Buy an NFL team for what was one quarter of its current worth just years latee

Sell a quarter of it to recoup your full investment

Continue taking in 75 percent of future profits and franchise value…which is still three times what you paid for it at 75%

Pay off your big stadium bill with no debt

…

The man is a terrible hockey owner. Perhaps the worst in the history of the sport. But he’s not a bad businessman. You’re watching him turn a billion into three times that while paying off a stadium and maintaining full voting control of the operation.

 

[Selanne00008]

When people Google his net worth, it says 6.8 billion. 4ish billion of that is tied up in the Bills. That is not liquid cash.

His net worth has gone up because the Bills and Sabres values have gone up. That’s how this works.

I hope this helps.

Maybe he wants to buy another pro sports team? Maybe he needs the loot for the new stadium?
Maybe he wants to by all the 2-4 multi-family units in Western NY and start a real estate investment one stop shop company that'll make way more than the Bills?

Do we know?

 

[Zman5778]

As for selling 25%, the reason for that should be fairly obvious. Its to pay for his portion of the new stadium. Which will cost at least 550 million. It could be more. I don;t know what the agreement says about who pays for overages.

Pretty sure it's been reported that Pegula is responsible for overages.....and there are rumblings that the project is already coming in quite a bit over budget.

 

[joshjull]

Pretty sure it's been reported that Pegula is responsible for overages.....and there are rumblings that the project is already coming in quite a bit over budget.

That means he may need up to 700mil then to pay for the stadium.

 

[RefsIdeas]

I’m going to need something more than “lol he’s giving up 25 percent of future profits because he needs cash” to sell me on the following being a bad business plan:

Buy an NFL team for what was one quarter of its current worth just years latee

Sell a quarter of it to recoup your full investment

Continue taking in 75 percent of future profits and franchise value…which is still three times what you paid for it at 75%

Pay off your big stadium bill with no debt

…

The man is a terrible hockey owner. Perhaps the worst in the history of the sport. But he’s not a bad businessman. You’re watching him turn a billion into three times that while paying off a stadium and maintaining full voting control of the operation.

Now factor in capital gains taxes.

You do this when you need more cash. Or you don’t comfortably have cash on hand for stadium overages.

 

[slip]

Nothing in this post is remotely accurate.

For starters, How on earth can Pegula have money tied up with the Bills? He paid 1.4 billion in CASH to buy the them. Which means he has no debt to service and is basically printing money with the Bills.

The Pegulas’ are worth 2-3 billion more than they were at the start of the pandemic. Pretty amazing accomplish for the terrible businessman you’re describing.

As for selling 25%, the reason for that should be fairly obvious. Its to pay for his portion of the new stadium. Which will cost at least 550 million. It could be more. I don;t know what the agreement says about who pays for overages.


EDIT: You may see something similar with the Sabres to pay for all the projects that have been announced for the arena recently.

Straight up. He wants someone else to pay for the Stadium costs. Pegulas have billions in hard assets but 500 million in liquidity might tap out their cash reserves.

 

[KeydGV21]

IF we don't allow investment banks in our Billionaires won't be able to afford football teams is like a line from a Mel Brooks movie. Don't get me wrong, I get the argument for it, and it makes total economic sense, but it's also complete

Yeah, I’m not saying it’s good thing…but the NFL is going to have to live with stagnating values or a change in ownership structures…

I'm not sure why you're ignoring that he also loses 25% of the franchise going forward. That's where he's really going to lose out on money in the future.


Sure, but the value of the NFL team has gone up a similar amount in the same time period + he loses out on 25% of the yearly profits (pennies to the value of the franchise, but it's still something).

He's just making himself more liquid. That's all this is.

I’m not sure why you think I’m ignoring 25% of the franchise no longer being his his when you quoted me talking the 25% of franchise value…

 

[Beerz]

Gonna bump my own post and add on with the Athletic Article.

It has been clear for some time Terry needs some more cash.

"Nothing to see here I am not selling anything everything is cool. The years of a leaking roof, keeping the scoreboard for 2x the factory recommendations, adn bottom half spending across the NHL, and getting out of any major contractual obligations are just happenstance" - Terry Pegula

"I am selling stuff"- Also Terry Pegula

Pegula family selling portion of Bills ownership stake: Sources

Sources stressed Pegula eventually might not sell part of the Bills, but for the first time, he’s ready to welcome a limited partner.

theathletic.com

Well, he is about to be 26% away from being a very profitable fan.

You do know that Terry does not own the Keybank Center...right? The County owns it and is responsible for paying for at least partial renovations. It's the County's responsibility to maintain the roof and Pegula is paying for it on his own

 

[Chainshot]

Pretty sure it's been reported that Pegula is responsible for overages.....and there are rumblings that the project is already coming in quite a bit over budget.

Wait, wait, wait... a construction project in WNY that is over budget already?


Well that's something I've never heard before.

 

[joshjull]

Straight up. He wants someone else to pay for the Stadium costs. Pegulas have billions in hard assets but 500 million in liquidity might tap out their cash reserves.

Plus a major project like a stadium is going to financed by loans, investors, public entities or a combo of those elements. Very little, if any, of it would come from cash on hand.