Quote:
Originally Posted by shawkr
Most NHL franchises are not profitable. This is probably true of sports franchises more generally. A good piece of evidence for this is the fact that so few are corporate-owned. And those that are tend to be the most lucrative (Leafs, Rangers, Blue Jays). Instead, most teams are privately owned by (wealthy) individuals. Because a sports franchise is as much a status good as it is a business enterprise. (NB: status good does not imply "emotional" purchase). Probably more so. This means that we shouldn't look to the discounted stream of expected future profits to do our asset pricing exercise.
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The value for owners is in the total valuation. If you buy in at $200M and can sell at $450M ten years later then a few years of losses in between doesn't make that much of a difference in the long run.
We can all harp on Arizona and Florida losing money but at the end of the day they're worth more today than five or ten years ago.