OT: Samueli's Broadcom Bought Out for 37 Billion

[TheJoeMan]

Henry and Susan Samueli (we have two owners) have been spending there own money to finance this team each year since they bought it. This team doesn't make a profit and I think at best we might break even or make a little if we make to the Final. Suddenly spending to the cap evaporates that modest profit. Yes, they're billionaires but I'm sure they intend to own this team for a very long time. Finally getting to a place of profit only to spend more of your own money doesn't sound like a method to keep this team for the long haul. A sports franchise is a business whether anyone wants to acknowledge that or not. If the team makes money they'll spend the money necessary to maintain a profit. But it's really irresponsible to just burn money when the team is almost incapable of making a profit. Our arena is too small and we have a tiny fanbase. Winning helps but as soon as we're a mediocre team again the losses will rise. I imagine these two would like to just reinvest profits rather than spend their own money at some point. The Roger's deal and the inevitable expansion fees over the next few years should help a lot. But they shouldn't just start spending to the cap for the sake of being billionaires. I'm happy for them with this new merger and added wealth. That's great news for the work they do in the community and growing the game at the grassroots level.

 

[Dr Johnny Fever]

I have no criticism of Henry as I previously mentioned. But it shouldn't be overlooked that whatever profitability the team shows is not the final big picture. Henry owns the concession rights for all events at HC I believe. His company also owns operating rights for all events booked at HC. You cannot just buy those rights on the open market, they came with the team. So true profitability and return on investment have to be looked at on the whole. I doubt he has ever really lost money on his investment in any given year.

But as I previously stated, I think he's been an excellent owner. I have no complaints.

 

[camshaft]

Henry and Susan Samueli (we have two owners) have been spending there own money to finance this team each year since they bought it. This team doesn't make a profit and I think at best we might break even or make a little if we make to the Final. Suddenly spending to the cap evaporates that modest profit. Yes, they're billionaires but I'm sure they intend to own this team for a very long time. Finally getting to a place of profit only to spend more of your own money doesn't sound like a method to keep this team for the long haul. A sports franchise is a business whether anyone wants to acknowledge that or not. If the team makes money they'll spend the money necessary to maintain a profit. But it's really irresponsible to just burn money when the team is almost incapable of making a profit. Our arena is too small and we have a tiny fanbase. Winning helps but as soon as we're a mediocre team again the losses will rise. I imagine these two would like to just reinvest profits rather than spend their own money at some point. The Roger's deal and the inevitable expansion fees over the next few years should help a lot. But they shouldn't just start spending to the cap for the sake of being billionaires. I'm happy for them with this new merger and added wealth. That's great news for the work they do in the community and growing the game at the grassroots level.

The financial terrain has changed drastically for the Ducks over the last year. The Ducks now qualified for revenue sharing, which I believe last year amounted to around $10 million. They had recently signed a new TV contract with Fox with increase revenue. Forbes has stated that last year the Ducks lost $3.7 million in net income. This year, they have played an extra round, and may have another round in the Cup Final series. I estimate gate revenues for the Conference Finals to be $5 million (based on average ticket of $300) per home game (NHL takes percentage of that) and then there is income for parking, concessions, and merchandise. So if we make it to the Cup Finals, I would guess a 20% increase in ticket prices, giving gate revenue of $6 million per home game. So if the Ducks end up winning the Cup, I would imagine them making $30-45 million dollars this season, especially with all the merchandising revenue. Not only that, but Samuelis purchased Ducks for $70-75 million and Forbes values them at $365 million. But if the expansion franchise fee is $500 million, Ducks will be worth more than that. So we can see the Ducks increasing in value by $425 million in ten years. Plus, when the NHL expands by two teams, Ducks will receive additional $33.3 million. So as you can see, the Ducks can easily spend up to the cap from a business perspective when their window of being serious Cup contenders is open.

 

[TheJoeMan]

The financial terrain has changed drastically for the Ducks over the last year. The Ducks now qualified for revenue sharing, which I believe last year amounted to around $10 million. They had recently signed a new TV contract with Fox with increase revenue. Forbes has stated that last year the Ducks lost $3.7 million in net income. This year, they have played an extra round, and may have another round in the Cup Final series. I estimate gate revenues for the Conference Finals to be $5 million (based on average ticket of $300) per home game (NHL takes percentage of that) and then there is income for parking, concessions, and merchandise. So if we make it to the Cup Finals, I would guess a 20% increase in ticket prices, giving gate revenue of $6 million per home game. So if the Ducks end up winning the Cup, I would imagine them making $30-45 million dollars this season, especially with all the merchandising revenue. Not only that, but Samuelis purchased Ducks for $70-75 million and Forbes values them at $365 million. But if the expansion franchise fee is $500 million, Ducks will be worth more than that. So we can see the Ducks increasing in value by $425 million in ten years. Plus, when the NHL expands by two teams, Ducks will receive additional $33.3 million. So as you can see, the Ducks can easily spend up to the cap from a business perspective when their window of being serious Cup contenders is open.

There's not a chance they will make that much money that year. What you're suggesting is 1000%-1300% increase in revenue. That's outrageous. I have no doubt financially things will look pretty good if we make it the final round but your accounting here is completely off. We have no idea how much money is being generated nor do we know what much it costs to put on a playoff series or how much gets divvied up elsewhere. I mean the Kings played 12 home games in the playoffs last year, have a higher capacity in their building and have bigger advertisers and they didn't make that kind of money last season.

But you're interpreting a one-yea windfall in revenue as a greenlight to suddenly ignore the budget system they've had in place that has allowed to be competitive. Based on your rationale the Ducks will have to make it all the way to the Stanley Cup Final every year to be a cap team. Because we can't spend to the cap for one season and then just revert back to a budget team if we aren't successful next year without making damaging changes to the roster. Making this far in the playoffs is extremely unlikely. If the Ducks win tomorrow they will be the only franchise to have gone that far three times in the last 12 years. You can't bank on continued success like that. If the only way we can make a profit is by going deep into the playoffs than we need to keep spending conservatively. The Kings will undoubtable turn a profit despite missing the playoffs. That's the difference. Teams can spend to the cap when they know they'll be profitable despite a lack of results on the ice. We can't. When we're mediocre people don't turn up. If we happen to sell out on season tickets and bring in some new, bigger sponsors maybe we'll be more of a cap team. But I doubt it. We've been among the best teams in the league for three years now and we're still struggling to fill the building in the regular season.

I find all of this terribly moot considering our GM does an excellent job putting a winning team on the ice while operating with one of the smallest budgets in the league. Not only is spending the cap irresponsible financially it's also unnecessary. He'll have to spend more in about year due to all the new contracts we've discussed at length about but a little bit of success isn't ground to just spend money because you think you have it.

 

[camshaft]

There's not a chance they will make that much money that year. What you're suggesting is 1000%-1300% increase in revenue. That's outrageous. I have no doubt financially things will look pretty good if we make it the final round but your accounting here is completely off. We have no idea how much money is being generated nor do we know what much it costs to put on a playoff series or how much gets divvied up elsewhere. I mean the Kings played 12 home games in the playoffs last year, have a higher capacity in their building and have bigger advertisers and they didn't make that kind of money last season.

But you're interpreting a one-yea windfall in revenue as a greenlight to suddenly ignore the budget system they've had in place that has allowed to be competitive. Based on your rationale the Ducks will have to make it all the way to the Stanley Cup Final every year to be a cap team. Because we can't spend to the cap for one season and then just revert back to a budget team if we aren't successful next year without making damaging changes to the roster. Making this far in the playoffs is extremely unlikely. If the Ducks win tomorrow they will be the only franchise to have gone that far three times in the last 12 years. You can't bank on continued success like that. If the only way we can make a profit is by going deep into the playoffs than we need to keep spending conservatively. The Kings will undoubtable turn a profit despite missing the playoffs. That's the difference. Teams can spend to the cap when they know they'll be profitable despite a lack of results on the ice. We can't. When we're mediocre people don't turn up. If we happen to sell out on season tickets and bring in some new, bigger sponsors maybe we'll be more of a cap team. But I doubt it. We've been among the best teams in the league for three years now and we're still struggling to fill the building in the regular season.

I find all of this terribly moot considering our GM does an excellent job putting a winning team on the ice while operating with one of the smallest budgets in the league. Not only is spending the cap irresponsible financially it's also unnecessary. He'll have to spend more in about year due to all the new contracts we've discussed at length about but a little bit of success isn't ground to just spend money because you think you have it.

The objective of the Ducks is to win the Cup, so even though BM has been very prudent iand efficient n managing his resources, they now are likely spend up to the Cap to accomplish their objective. As you have mentioned, that spending up to the cap is not a guarantee to winning the Cup, but if money is used wisely, then it does certainly help. Even though you may question my gross income projections for this year, you have to admit that the Ducks having been very profitable to Samuelis, seeing how they bought franchis in 2005 for $70 million (Forbes valuation) and worth $365 million as valued by Forbes presently, with a good likihood of going over $500 million after expansion occurs. So that is a 500% increase in value, with possibility of it going up 700% in value in near future.

The Ducks are also making great strides in the gross operating income area. They signed a new TV contract last year, where revenue has roughly doubled to a little bit over $20 million annually. They have negotiated, where they qualify for being a recipient of revenue sharing ($10 million last year). They are in the process of generating larger fan base, with their involvement in building new ice rinks in Orange and San Diego County, setting up youth leaguse, and setting up high school leagues. This will lead to new fans in the next generation, as well as increasing present fan base since the family of the kids involved in league will become hockey fans.

Finally, this profitably gross income that would occur with deep playoff run is not a one time occurence, but something that occur consistently, given the way the Ducks have position themselves. They are arugably, the deepest team in NHL currently, and they are arguably have one of the best and deepest farm systems according to the Hockey News in their annual Future Watch evaluations throughout the last three years. So though this is not a guarantee of them having a long Cup run in the next three to five years, Ducks have put themselves in a very strong position to do it (better than anyone else, even though Tampa Bay is also in great position). The Ducks have great management from the top down. They have thoroughly thought out their short term and long term plan, both on the ice and off it. So since they have set up a strong foundation, they have the freedom to spend up to the cap when they deem it advantageous, in order to win the Cup. Duck fans should appreciate how management has placed the team in such an advantageous position. LET'S GO DUCKS1

 

[gratefulyours]

Sure, let's say 20 million a year in dividends. So say he earns 10 million a year more in executive salary/bonuses/stocks. Now you want him to spend to the cap. Is he supposed to spend 1/3 of his gross income every year to field a cap team? This is ignoring taxes BTW.

If he wanted to do it he could probably afford it. But it's not like us throwing a couple hundred. It is a significant amount.

guy got paid 37 billion...

with stock payment, he pays no taxes on that until he sells it. probably safe to say he got close to 20 billion cash after taxes...maybe a bit less.

you think he will invest only 20 mil of that...no way.

lets say he only puts down 5 billion that is 100 million income a year. not including whatever he makes on the stocks for the purchase.

that is just potential income from this sale. he has other assets i'm sure.

the team is fine, the internal cap is a business move, not a financial one.

 

[Nurmagomedov]

guy got paid 37 billion...

with stock payment, he pays no taxes on that until he sells it. probably safe to say he got close to 20 billion cash after taxes...maybe a bit less.

you think he will invest only 20 mil of that...no way.

lets say he only puts down 5 billion that is 100 million income a year. not including whatever he makes on the stocks for the purchase.

that is just potential income from this sale. he has other assets i'm sure.

the team is fine, the internal cap is a business move, not a financial one.

He didn't own 100% of Broadcom. His net worth didn't really change from the ~2B as a part of the sale. Maybe a couple hundred mill given the 20% premium on the market price paid by the buyer.

 

[snarktacular]

The financial terrain has changed drastically for the Ducks over the last year. The Ducks now qualified for revenue sharing, which I believe last year amounted to around $10 million. They had recently signed a new TV contract with Fox with increase revenue. Forbes has stated that last year the Ducks lost $3.7 million in net income. This year, they have played an extra round, and may have another round in the Cup Final series. I estimate gate revenues for the Conference Finals to be $5 million (based on average ticket of $300) per home game (NHL takes percentage of that) and then there is income for parking, concessions, and merchandise. So if we make it to the Cup Finals, I would guess a 20% increase in ticket prices, giving gate revenue of $6 million per home game. So if the Ducks end up winning the Cup, I would imagine them making $30-45 million dollars this season, especially with all the merchandising revenue. Not only that, but Samuelis purchased Ducks for $70-75 million and Forbes values them at $365 million. But if the expansion franchise fee is $500 million, Ducks will be worth more than that. So we can see the Ducks increasing in value by $425 million in ten years. Plus, when the NHL expands by two teams, Ducks will receive additional $33.3 million. So as you can see, the Ducks can easily spend up to the cap from a business perspective when their window of being serious Cup contenders is open.

Revenue <> profit. You mention the NHL taking some of the gate revenue. That's a start. What about all the HC operating costs? Taxes? Team operating costs/flights to away games? They do not profit 5 million a game.


But you know what, let's make it simple. You mention the Ducks getting revenue sharing. Why is that? It's because they don't make a lot of money compared to the rest of the league. So why should they spend more than the league to reach the cap max?

 

[TheJoeMan]

The objective of the Ducks is to win the Cup, so even though BM has been very prudent iand efficient n managing his resources, they now are likely spend up to the Cap to accomplish their objective. As you have mentioned, that spending up to the cap is not a guarantee to winning the Cup, but if money is used wisely, then it does certainly help. Even though you may question my gross income projections for this year, you have to admit that the Ducks having been very profitable to Samuelis, seeing how they bought franchis in 2005 for $70 million (Forbes valuation) and worth $365 million as valued by Forbes presently, with a good likihood of going over $500 million after expansion occurs. So that is a 500% increase in value, with possibility of it going up 700% in value in near future.

The Ducks are also making great strides in the gross operating income area. They signed a new TV contract last year, where revenue has roughly doubled to a little bit over $20 million annually. They have negotiated, where they qualify for being a recipient of revenue sharing ($10 million last year). They are in the process of generating larger fan base, with their involvement in building new ice rinks in Orange and San Diego County, setting up youth leaguse, and setting up high school leagues. This will lead to new fans in the next generation, as well as increasing present fan base since the family of the kids involved in league will become hockey fans.

Finally, this profitably gross income that would occur with deep playoff run is not a one time occurence, but something that occur consistently, given the way the Ducks have position themselves. They are arugably, the deepest team in NHL currently, and they are arguably have one of the best and deepest farm systems according to the Hockey News in their annual Future Watch evaluations throughout the last three years. So though this is not a guarantee of them having a long Cup run in the next three to five years, Ducks have put themselves in a very strong position to do it (better than anyone else, even though Tampa Bay is also in great position). The Ducks have great management from the top down. They have thoroughly thought out their short term and long term plan, both on the ice and off it. So since they have set up a strong foundation, they have the freedom to spend up to the cap when they deem it advantageous, in order to win the Cup. Duck fans should appreciate how management has placed the team in such an advantageous position. LET'S GO DUCKS1

There is no guarantee with that. All anyone could talk about last summer was how great the Kings were and how they were poised to win it all again and start a dynasty (that ****ing word again) and they missed the playoffs completely. Don't you see the fallacy in your assumptions? Snark made an excellent point on how you're perceiving how earning a profit actually works. If there were a crystal ball that could show us years upon years of playoff success then sure, we could spend to the cap. But there's not and we can't. Not until we've grown our fanbase and our improved to better sponsors that can assure profits without a playoff run which seems very unlikely.

What you seem to think the Ducks suddenly have is what I'm going to call Rapper Syndrome. That is someone who suddenly hits it big with a hot single, makes a ton money and now can move out of his little Atlanta apartment with his three or four best friends and buys a huge mansion, tons of cars and more diamonds in his teeth than in the crown jewels. But that was his first and maybe only hit. He has no idea if he has lasting popularity but he blew all of his money like he was going to. Now he could go on and become Jay-Z and be the king of hip hop for a decade and buy an island if he wants to or he could be Cisco and hum Thong Song all the way to the unemployment line. This team won the Stanley Cup eight years ago, had a boon in attendance for one year but failed to make it out of the first round until last year and couldn't hold onto those fans they acquired in 2007. Success int the NHL is fickle and this team doesn't have a huge, loyal fanbase. They had a moderately sized causal fanbase with a very small group of die-hards. They can't sustain a business model you're proposing despite your best amateur accounting efforts without a prolonged run of success. Not just one year. Have a few hits first, make sure your fanbase is really there and then buy a Lamborghini. We're still in one-hit wonder territory.

 

[pbgoalie]

I think he should spend to the cap.
Then he should raise ticket prices, parking, food etc

Or are we just going to spend Samueli's money?

 

[camshaft]

There is no guarantee with that. All anyone could talk about last summer was how great the Kings were and how they were poised to win it all again and start a dynasty (that ****ing word again) and they missed the playoffs completely. Don't you see the fallacy in your assumptions? Snark made an excellent point on how you're perceiving how earning a profit actually works. If there were a crystal ball that could show us years upon years of playoff success then sure, we could spend to the cap. But there's not and we can't. Not until we've grown our fanbase and our improved to better sponsors that can assure profits without a playoff run which seems very unlikely.

What you seem to think the Ducks suddenly have is what I'm going to call Rapper Syndrome. That is someone who suddenly hits it big with a hot single, makes a ton money and now can move out of his little Atlanta apartment with his three or four best friends and buys a huge mansion, tons of cars and more diamonds in his teeth than in the crown jewels. But that was his first and maybe only hit. He has no idea if he has lasting popularity but he blew all of his money like he was going to. Now he could go on and become Jay-Z and be the king of hip hop for a decade and buy an island if he wants to or he could be Cisco and hum Thong Song all the way to the unemployment line. This team won the Stanley Cup eight years ago, had a boon in attendance for one year but failed to make it out of the first round until last year and couldn't hold onto those fans they acquired in 2007. Success int the NHL is fickle and this team doesn't have a huge, loyal fanbase. They had a moderately sized causal fanbase with a very small group of die-hards. They can't sustain a business model you're proposing despite your best amateur accounting efforts without a prolonged run of success. Not just one year. Have a few hits first, make sure your fanbase is really there and then buy a Lamborghini. We're still in one-hit wonder territory.

As a business, your spending is based on 5 year proections, and Ducks are in 5 year window of contending for the Cup. Thus, you plan to spend up to the Cap for these 5 years, because you are planning to recoup your investment in 3 of those 5 years. The Ducks can easily afford to spend up to cap because they are enormously profitable, where they increased the value $295 million or by 500%, with a good chance of it going up in value to $500 million,which would be a 700% return on investment. This is a phenomona profitablel organization, that can easily afford to spend an extra $5 to 10 million in salary, with the possibility of making a lot more with a series of long playoffs run.

You don't seem to get it. The Ducks are not a one hit wonder hit wonder. They are like a monopoly, where their value is always going up each and every year. In the last ten years, the value increased $295 million, which means every year, Ducks increased in value by $29.5 million. This trend is likely to continue with expansion on the way. And by the way, I have tried to keep the numbers and concepts simple and not to be amateurish. My background involves having degrees in finance, accounting, and taxation, and have run my own company. But it makes sense for Ducks to spend up to cap for next 3 to5 years, because their objective is to win the Cup. They are in good position financially to do it.

 

[Ducks DVM]

The value of the franchise has absolutely zero to do with liquid assets.

 

[la patineuse]

Valuation is not equal to profitability.

 

[la patineuse]

And a sports team isn't the same as other businesses. In the non-sporting business world, you can use the valuation of a business to generate capital because you can get investors, sell stock, etc. In professional sports, particularly when there is a sole owner, you don't have that leverage. The valuation is the market value, but that doesn't translate into cash that the owner can spend on operations and player salaries each year. Furthermore, the product---a professional sports team---behaves much differently than other products on the market and there is a lot less predictability in professional sports.

 

[TheJoeMan]

As a business, your spending is based on 5 year proections, and Ducks are in 5 year window of contending for the Cup. Thus, you plan to spend up to the Cap for these 5 years, because you are planning to recoup your investment in 3 of those 5 years. The Ducks can easily afford to spend up to cap because they are enormously profitable, where they increased the value $295 million or by 500%, with a good chance of it going up in value to $500 million,which would be a 700% return on investment. This is a phenomona profitablel organization, that can easily afford to spend an extra $5 to 10 million in salary, with the possibility of making a lot more with a series of long playoffs run.

You don't seem to get it. The Ducks are not a one hit wonder hit wonder. They are like a monopoly, where their value is always going up each and every year. In the last ten years, the value increased $295 million, which means every year, Ducks increased in value by $29.5 million. This trend is likely to continue with expansion on the way. And by the way, I have tried to keep the numbers and concepts simple and not to be amateurish. My background involves having degrees in finance, accounting, and taxation, and have run my own company. But it makes sense for Ducks to spend up to cap for next 3 to5 years, because their objective is to win the Cup. They are in good position financially to do it.

How do you know? How do you know we aren't going to miss the playoffs next year or even for the next decade? You have no idea how this team is going to perform season to season and our success business-wise is directly tied to that success. Also I have a hard time believing this team will gather more fans when their building is half-full of visitor fans in a Game 7. I couldn't believe how many Hawks fans were at the Pond last night. If people really gave a **** about this team that wouldn't happen. One playoff run isn't going to suddenly produce a sizable fanbase as was clearly evident last night.

 

[Ducks DVM]

How do you know? How do you know we aren't going to miss the playoffs next year or even for the next decade? You have no idea how this team is going to perform season to season and our success business-wise is directly tied to that success. Also I have a hard time believing this team will gather more fans when their building is half-full of visitor fans in a Game 7. I couldn't believe how many Hawks fans were at the Pond last night. If people really gave a **** about this team that wouldn't happen. One playoff run isn't going to suddenly produce a sizable fanbase as was clearly evident last night.

People are at least watching though.