[bob_loblaw]

Especially since this so very common in the sports world - Derek Jeter and the Marlins, George W. Bush and the Rangers (back in the day), etc.

But, professional sports teams print money. Most of the infrastructure is funded by tax payers. Salary caps (this includes baseball) keep expenditures down. Fans root for laundry, so rationality is out the window. Just look at baseball, you can pull down a healthy profit while having a dog-crap team (looking at you Pirates). As long as the team is a private entity, there is zero financial incentive to put a winning team on the field. Owning a sports team is a pretty sweet deal.

[petesergeant]

From "Billions":

> Sports franchises are how we knight people in this country

[dylan604]

You know Ryan already owns a sports team, right? There's an entire TV show about it. This isn't his first dip in that particular pool

[deepzn]

Sports teams' value is based on the brand. In terms of operations, they actually lose money for the most part, or it's not that profitable. I saw an interview with the Bucks owner Marc Lasry, who recently is selling his stake in the Bucks. The average NBA brand like the Bucks is worth around $3B right now. He bought his stake in 2011 for 150-300M.

[bob_loblaw]

I am highly skeptical of any claims made by owners/teams about their profitability. Here's a quote from a former MLB executive[1]:

"Anyone who quotes profits of a baseball club is missing the point. Under generally accepted accounting principles, I can turn a $4 million profit into a $2 million loss, and I can get every national accounting firm to agree with me."

There are all kinds of financial tricks one can play. I'm a baseball fan, so I'm going to lean on that sport, but I assume other sports do similar things. Let's say you are the Red Sox. Your parent company also owns 80% of the regional sports network (NESN) that broadcasts the bulk of your games. If you sell that TV contract to NESN for $1, then you just "lost" a hell of a lot of money. Except that money isn't lost at all. It just moves from the right pocket to the left pocket. Same thing with parking cars. Just start an external company to park the cars. Profits go to the company, not the team.

That's the real crux of the problem. Revenue not generated by the team isn't counted toward profitability. That's why most sports teams are advocating for mixed-use facilities. All of the profits from the surrounding businesses go to the owners, but are not reported on the teams financial books. This explains why the Red Sox and Cubs are investing so heavily in real estate around the stadiums instead of say locking up Betts, Bogaerts, and Devers to build a core around which to build. Or why the A's are balking at renovating their current location in Oakland instead of getting new land to build a mixed-use facility.

Then you see the expanded playoffs. Playoff games are sold as a separate TV deal, and all money (in baseball at least) is divided equally between the teams. It doesn't matter if your team is good or not, the owners share in bounty. The modern sports franchise sees profits independent of on-the-field performance. Separating revenue streams from the team itself means that you can paint a bleaker financial picture that isn't tied to reality.

A few teams (Packers and Braves) are public. Look at their financial accounts. Again, lots of legal (and commonly used) accounting practices will obfuscate the picture a bit, but these teams serve as a blue print for what is actually happening. The financial situation is never as bad as they say. Well, there have been a few exceptions like the Dodgers under McCourt or the Rangers at the end of the Hicks era.

I could keep going, but I'll end with this. Owners lie. The Cubs said they were facing biblical losses[2]. Yet, the same family was considering purchasing Chelasea FC. So much for being poor. More than just lying, the owners expect their colleagues to adhere to this lie. MLB owners are already angry with Cohen and the Mets [3] (I'd lump the Padres in here as well). Read the quotes from unnamed sources. The owners can afford to raise payrolls, but they don't want to. The party line is to cry poor. Owners who step out of line will face some sort of fallout from this.

[1] - https://www.cbssports.com/mlb/news/why-small-market-excuses-... [2] - https://www.forbes.com/sites/danschlossberg/2020/06/03/cubs-... [3] - https://www.cbssports.com/mlb/news/mets-offseason-already-ha...

[deepzn]

I get your point about financial tricks. I've read the tax harvesting many owners use/do as well. Advertising and Real estate are also bonafide revenue streams, but arguably not good enough of a return by in itself. Also real estate, etc are huge projects, and not just bought for land to appreciate. A lot of it requires careful and strategic planning. It will not always work out.

But, it's missing my point that many owners are getting a 10x return on their investment when they flip the sports team mostly due to the brand going up in value, being a luxury item for the wealthy, or a status symbol, and hence growing 10x in Therefore, many new owners, and prospective ones at that as your example, the ones buying football or soccer teams...like the tech CEOs, hedge funds or Oil money, etc do so to either flip the trade to make 10x, or buy a brand to associate with for status.

[asdajksah2123]

I love the luxury tax...

Owners of teams like the As who do absolutely nothing to create a winning team get to live off the money made by other teams who are willing to spend on their teams and players.

[pstuart]

> Fans root for laundry

That's a keeper, thanks!

[criddell]

It's from Seinfeld:

https://www.youtube.com/watch?v=we-L7w1K5Zo

[bob_loblaw]

I stole it from someone else, but I couldn't remember who. Pretty sure it wasn't Seinfeld, but I definitely didn't come up with it on my own.