Football Finances, come laugh at portsmouth

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Couch: May 16, 2004; COME ON TOT!

I went to a Bundesliga match and it was cheaper than going to an A-League game.

# ? Jun 15, 2010 11:54

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# ? May 8, 2024 22:42

Fiskiggy: Feb 15, 2005; You have impressed FFCiv with your turn time!
They turn a blind eye to the turn times of other civilizations, and your Influence over them has increased by 40.

so an AVERAGE ticket for 2002 would have gone for oh about $480? christ

# ? Jun 15, 2010 11:55

euroboy: Mar 24, 2004

Germany is the best suited place in the world to hold a world cup in terms of cost, logistics, transport and culture. I'm all for passing the world cup around the world to different continents though, but there's no denying that central europe is pretty much perfect for huge sporting events like this.

# ? Jun 15, 2010 12:14

duggimon: Oct 19, 2007; If I had a horse I'd buy it oats and fuck it

euroboy posted:

Germany is the best suited place in the world to hold a world cup in terms of cost, logistics, transport and culture. I'm all for passing the world cup around the world to different continents though, but there's no denying that central europe is pretty much perfect for huge sporting events like this.

well, if you live in europe it's the best place to have it and nearly everyone playing here does

# ? Jun 15, 2010 12:26

partipo: Sep 24, 2005; participaction?

Fiskiggy posted:

japan/korea had three times the ticket revenue of germany? what's going on here

asian people will pay anything in the name of national pride etc etc etc so its not as if there was a risk of them not selling out no matter what they charge

i remember seeing cctv news reporting about people taking out loans to see china play in 2002 and i'm like 'oh god you are going to be very disappointed'

# ? Jun 15, 2010 15:37

Eric Cantonese: Dec 21, 2004; You should hear my accent.

Yet more information about the unsinkable Tom Hicks.

http://www.dmagazine.com/Home/D_Magazine/2010/July/Can_Tom_Hicks_Make_Millions_Selling_His_Sports_Empire.aspx

quote:

Can Tom Hicks be 'Back on Offense' Like He Says?
He claims he�ll make millions by selling off his sports empire. Is that possible?

by Joseph Guinto
Published 6.23.2010
From D Magazine JUL 2010

So this is how it ends. Not with tears and apologies and bowed head, but with more spin than David Beckham could ever put on a penalty kick. In a recent, and rare, media blitz coinciding with the decline and fall of his sports empire, Tom Hicks has made the case that he had always planned to exit the sports business at some point�although, no, he did not expect to sell all three of his teams at the same time�and that the financial failings of the Dallas Stars, Texas Rangers, and Liverpool Football Club will have no bearing on his numerous other businesses. He has made this case in a pair of detailed interviews, one with the Dallas Morning News, where his sons Tommy and Mack sat by his side, and the other with the Sports Business Journal, where Hicks� personal chef whipped up steaks for lunch at his $41 million, 29,000-square-foot Preston Hollow mansion.

Time for some due diligence.

Hicks told the Journal his teams were �never going to be a dynastic asset.� He now contends that the Stars, Rangers, and Liverpool were just an investment. Just another chance to borrow, buy, build, and sell for a profit. Just like the other deals that made Hicks� reputation as the king of the leveraged buyout. So why, then, did he tell BusinessWeek in 2006 that the Stars� 1999 Stanley Cup championship had been the high point of his life? Is that what you say when you�re just in the business to flip the team? Some who know Hicks doubt it.

�Tom clearly had a liquidity crisis that forced him into default, and now he�s just trying to Stalinize what happened,� says a Dallas executive who has seen Hicks� financial books related to his sports teams. �He wants to rewrite history by saying the teams weren�t any different than any other deal. That�s bulls---. Tom always wanted to keep these teams for the long haul. He would tell you that he wanted to pass them on to his kids. This was his legacy.�

But now, because Hicks couldn�t�or wouldn�t�make payments on the $540 million in debt he�d run up on the Stars and Rangers and some related real estate holdings and couldn�t�or wouldn�t�make an equal-size investment in a new stadium for the Liverpool Football Club, that legacy is gone. Which is perhaps why Hicks insisted that the News include his two oldest sons in the photo that ran with the front-page story about his business interests outside sports. �This year, we�re back on offense,� Hicks told the News. The offensive includes the potential buyout of an unnamed consumer services firm, the potential creation of a new investment company, several actual commercial real estate developments in Texas and California, and a pair of potential resort developments in Argentina including �maybe even a winery someday.�

Maybe. Or there may instead be long-term fallout from Hicks� loan default. Some 40 different financial institutions and investment groups loaned money to prop up the Stars and Rangers. That means dozens of executives vouched for Hicks� ability and willingness to pay them back�or at least to continue paying the $10 million Hicks owed in quarterly interest. But even though he owns a $41 million house and a $60 million pet food company in Argentina and had a half billion of investors� money under his management, he still stopped paying in March 2009. He said the banks needed to be more �realistic� about his teams� finances. How likely is it that any of those banking executives will okay financing when Hicks is ready to build his Patagonian resort?

There�s always private capital. And Hicks has been raising private capital from Dallas� rich and famous for decades. But his last major initiative to do that came in 2007, the same year he bought half of Liverpool FC. That year, Hicks raised $536.1 million from investors who gave him a two-year window to invest in something worthwhile. In September 2009, days before the window closed, Hicks finalized a merger with Colorado-based Resolute Energy. Hicks� investors now control 82 percent of that firm, which had a market cap nearing $700 million at press time. But careful reading of the proxy statement on the merger shows that Hicks personally, and the top directors and employees of his Hicks Acquisition Company were required to dilute their stake in the combined firm to make the deal happen.

So time will tell if Hicks is really back on the offensive, but there�s reason to believe that deal-makers are already starting to push him around. It could get tough for Hicks.

Now let�s have a look at the notion advanced in the Journal story that Hicks will make money on the sale of his sports empire��as writer Bruce Schoenfeld put it, that Hicks will be �richer than ever.�

Hicks paid $84 million for the Dallas Stars in 1995, $250 million for the Texas Rangers in 1998, and was a 50-50 partner with American investor George Gillett in buying Liverpool Football Club in 2007 for $437 million. That�s $552.5 million total. But that wasn�t all his own money. Each of the sports deals was done the way the LBO King has always done his deals: leveraging a small amount of his own money to borrow much more. According to the source familiar with Hicks� Rangers and Stars investments and according to published reports, it is likely that Hicks (whose net worth Forbes once pegged at $1.4 billion, though it fell to $1 billion last year) put no more than $50 million in cash into the Rangers. He financed the other $200 million with three tiers of debt. Forbes estimates his total Rangers-related debt�after borrowing even more money, some of it from Major League Baseball�at $470 million, and guesses something similar for the Dallas Stars, whose debt it pegs at $200 million, almost equal to the team�s projected market value of $246 million.

Taken together�the debt on the Rangers and Stars and the debt related to his investments in Victory Park and to the land around the Ballpark�it adds up to the $540 million that Hicks defaulted on in the spring of 2009.

But it gets worse. Hicks has admittedly reached into his own pocket to fund his NHL and MLB teams. The Wall Street Journal quotes Hicks� associates as saying that he has put $275 million into them in recent years. Hicks himself has said $80 million.

Let�s do it this way: $275 million + $540 million + accrued interest of about $30 million = more than the Stars and Rangers are worth. �After 10 years of ownership,� says the source familiar with Hicks� sports finances, �Hicks will probably lose $100 million on the Stars and Rangers.� Hicks actually told the News in May that he expects to lose $200 million on the Stars and Rangers.

How, then, will he end up �richer than ever�? We have to go to England to find out.

When Hicks and Gillett paid $437 million for Liverpool in 2007, they promised to bring better talent and a new stadium to the club. They have delivered neither. It would be an understatement to say the club�s fans are enraged over how the owners have run the onetime perennial championship contender. But it�s debt, not anger, that is finally running Hicks and Gillett out of Liverpool. The pair have put the team $347 million in the red since they took over. And the Royal Bank of Scotland, which holds most of the team�s financing, plans to call in $144 million of that debt for payment this month. If Hicks and Gillett can�t pay, RBS has hinted that it will foreclose on their loans.

Hicks doesn�t sound too worried. He told the Wall Street Journal this spring that he�ll likely unload Liverpool for $880 million to $1.3 billion. �Liverpool will be the most profitable investment I�ve ever made,� Hicks said.

But there�s good reason to think he�s wrong. There have been two significant offers to buy Liverpool in part and in whole since 2007. In 2008, Dubai International Capital offered to buy all of Liverpool for 400 million pounds�about $780 million at the time but only $574 million today. This year, the Rhone Group, a European investment outfit, offered just $158 million for a 40 percent stake. Hicks rejected that, too.

Suppose the Rhone Group�s most recent offer is an indication of where the market now values Liverpool. That�s bad news for Hicks. It means the team is worth about $400 million. Even Hicks� lowest guess of $880 million seems optimistic in light of the Rhone Group�s offer and Europe�s credit crunch. A more realistic sum seems somewhere between the Rhone Group valuation and Hicks� $880 million. Split the difference, and figure the team could fetch $640 million. Hicks first has to retire his Liverpool-related debts with that money. That leaves about $300 million, split two ways. That�s $150 million for Hicks. Subtract the cash Hicks put down to buy the team�he has said it is $80 million�and Hicks walks away from Liverpool with around $70 million in profit.

$70 million in profit on Liverpool - $200 million in losses on the Stars and the Rangers = a total loss of $130 million. �Richer than ever� that is not. It might even mean diverting losses toward Hicks� leveraged buyout kingdom or the Texas Stars, a minor league team owned by three of his sons. Either way, it doesn�t really matter now.

�The default has finished him,� says the source who has seen Hicks� books. �No one will personally lend to Tom Hicks again. His career is over.�

# ? Jun 30, 2010 16:06

Loving Africa Chaps: Dec 3, 2007; We had not left it yet, but when I would wake in the night, I would lie, listening, homesick for it already.

TyChan posted:

Yet more information about the unsinkable Tom Hicks.

http://www.dmagazine.com/Home/D_Magazine/2010/July/Can_Tom_Hicks_Make_Millions_Selling_His_Sports_Empire.aspx

what a oval office, seems well and truly finished though

# ? Jun 30, 2010 18:18

Eric Cantonese: Dec 21, 2004; You should hear my accent.

For whatever it's worth, Broughton spoke up about the sale of LFC recently.

http://www.liverpoolfc.tv/news/latest-news/broughton-club-sale-latest

quote:

The Chairman today insisted nothing was certain but that the first round of bidding was likely to take place in mid-July.

And he moved to assure fans that the club would be sold to the best - not the highest - bidder.

He told reporters: "There have not been any offers at this stage. There haven't been any offers to turn down and I wouldn't have expected there to have been at this stage.

"There are a number of interested parties but there's no specific deadline on it. We are looking to the middle of July-ish for the first round of bids but that's not a final stage - that's a first entry through.

"We're hopeful - and I wouldn't put it any stronger than that - that a deal can be done by the end of the transfer season. That was always from the outset a hope rather than necessarily an expectation, because these things can take time.

"We are on course, pretty well, with where we would have expected to be."

Broughton also explained his own role in the sale, adding: "The process is well under way and if I can remind you of what that process is - I've been brought in to oversee the sale process. The owners have stepped aside, stepped down. I'm overseeing the process and Barclays Capital are running the process.

"The process is a structured one. The information memorandum has gone out to a number of people who have expressed an interest. We're still in that process."

Quizzed on the role owners George Gillett and Tom Hicks were playing, Broughton said: "The owners can't block the sale of the club. I read all too frequently numbers being floated about in the media, normally associated with Tom Hicks's name. I would like to make it clear there is no number. There is no base line.

"This is a willing buyer, willing seller auction. We will do a deal with what we consider to be the best bidder. The best bidder may not be the highest bidder. It's about more than just money. It's about stadium development, the team and the whole piece.

"Once we've been through the process, the best bidder gets it."

# ? Jul 1, 2010 16:14

Loving Africa Chaps: Dec 3, 2007; We had not left it yet, but when I would wake in the night, I would lie, listening, homesick for it already.

TyChan posted:

For whatever it's worth, Broughton spoke up about the sale of LFC recently.

http://www.liverpoolfc.tv/news/latest-news/broughton-club-sale-latest

must be a relief for liverpool fans but the free spending buyers that they want are surely going to look at spurs first instead of liverpool?

# ? Jul 1, 2010 17:10

Eric Cantonese: Dec 21, 2004; You should hear my accent.

Lyric Proof Vest posted:

must be a relief for liverpool fans but the free spending buyers that they want are surely going to look at spurs first instead of liverpool?

Are Spurs for sale?

If free spending buyers are going to come in, Liverpool are as good of a club to sink funds into as any. This is assuming that the club can keep the star players around for just a bit longer and put in a better performance this time around.

A buyer isn't going to get a bargain for a club with CL status and I don't know if any clubs for sale have better pre-existing stadiums or comparably large fanbases, so I'm less worried about that part. The biggest priority right now will be to clear the debt left by Hicks & Gillett, have the resources to stay at least in the Europa League spots, and be on sound footing to get the stadium built.

I suspect LFC gave up too easily on redeveloping Anfield, but that ship has sailed, apparently.

# ? Jul 1, 2010 17:28

MrBling: Aug 21, 2003; Oozing machismo

Spurs are on the stock exchange, so yes they're for sale. ENIC is sitting on like 85% of the shares though, but if someone comes in with enough money then yes the club is for sale.

It's something to the tune of �500m at least though. Might be more what with the stadium plans approved.

# ? Jul 1, 2010 17:41

Eric Cantonese: Dec 21, 2004; You should hear my accent.

MrBling posted:

Spurs are on the stock exchange, so yes they're for sale. ENIC is sitting on like 85% of the shares though, but if someone comes in with enough money then yes the club is for sale.

It's something to the tune of �500m at least though. Might be more what with the stadium plans approved.

I would think their value jumped up enormously because of that. Spurs have a big, loyal London following, CL football, new stadium ready to get built, and good balance sheet. No majority shareholder is going to get rid of that kind of asset without a takeover bid paying a humongous premium on the market price of the shares, which would skyrocket once word of a takeover bid leaked.

# ? Jul 1, 2010 18:31

Bacon of the Sea: Oct 17, 2008; Dog Suicide Bridge BBQ Team 2k10

Diego Maradona owes �40m debt now. He owed �36m in Jan.

How the gently caress does a man that far in debt get the opportunity to strike up another four million in six months?

# ? Jul 6, 2010 11:56

The Big Taff Man: Nov 22, 2005; Official Manchester United Posting Partner 2015/16; Fan of Britches

Bacon of the Sea posted:

Diego Maradona owes �40m debt now. He owed �36m in Jan.

How the gently caress does a man that far in debt get the opportunity to strike up another four million in six months?

From being famous.

# ? Jul 6, 2010 12:05

Jose: Jul 24, 2007; Adrian Chiles is a broadcaster and writer

How the gently caress does a man who probably doesn't have a massive amount of money in the first place get himself �40m into debt? I mean if you own a business and it collapses I can understand but does Maradona do anything like that?

# ? Jul 6, 2010 12:06

Healbot: Jul 7, 2006; very very very fucjable
very vywr very

Well, that kinda happens when you get paid high sums of money playing in Italy and don't actually pay any taxes for 20 years.

Edit:

Played in Neapel from 1984-1991, accumulated tax sum 13.5m, paid 42.000�.
The rest is pretty much interest and the Italian IRS handing out reminders.

Healbot fucked around with this message at 12:29 on Jul 6, 2010

# ? Jul 6, 2010 12:24

Loving Africa Chaps: Dec 3, 2007; We had not left it yet, but when I would wake in the night, I would lie, listening, homesick for it already.

http://news.bbc.co.uk/sport1/hi/football/teams/c/cardiff_city/8787586.stm

cardiff hit with a transfer embargo, looks they are still walking the tightrope

# ? Jul 6, 2010 13:40

Total Meatlove: Jan 28, 2007; Rangers died, shoujo Hitler cried ;_;

TyChan posted:

A buyer isn't going to get a bargain for a club with CL status and I don't know if any clubs for sale have better pre-existing stadiums or comparably large fanbases, so I'm less worried about that part.

Looks at Liverpool with �700 million in debt, probably not going to be in Champions league next season, 50,000 seater stadium.

Looks at Rangers with �25 million in debt, probably going to be in Champions League next season, 50,000 seater stadium.

# ? Jul 6, 2010 13:44

Loving Africa Chaps: Dec 3, 2007; We had not left it yet, but when I would wake in the night, I would lie, listening, homesick for it already.

ibroxmassive posted:

Looks at Liverpool with �700 million in debt, probably not going to be in Champions league next season, 50,000 seater stadium.

Looks at Rangers with �25 million in debt, probably going to be in Champions League next season, 50,000 seater stadium.

Looks at Liverpool's tv deal vs rangers

# ? Jul 6, 2010 13:46

Gigi Galli: Sep 19, 2003; and then the car turned in to fire

Healbot posted:

Well, that kinda happens when you get paid high sums of money playing in Italy and don't actually pay any taxes for 20 years.

Edit:

Played in Neapel from 1984-1991, accumulated tax sum 13.5m, paid 42.000�.
The rest is pretty much interest and the Italian IRS handing out reminders.

I have to ask, what language translates Napoli to that?

# ? Jul 6, 2010 13:46

Couch: May 16, 2004; COME ON TOT!

GravityDaemon posted:

I have to ask, what language translates Napoli to that?

German.

# ? Jul 6, 2010 13:48

Adnar: Jul 11, 2002

the most expensive season ticket for Barca is only 700 euro (580 pound)

That's incredible.

# ? Jul 6, 2010 14:26

Total Meatlove: Jan 28, 2007; Rangers died, shoujo Hitler cried ;_;

Wish my club was owned by the fans.

# ? Jul 6, 2010 14:40

Eric Cantonese: Dec 21, 2004; You should hear my accent.

ibroxmassive posted:

Looks at Liverpool with �700 million in debt, probably not going to be in Champions league next season, 50,000 seater stadium.

Looks at Rangers with �25 million in debt, probably going to be in Champions League next season, 50,000 seater stadium.

I forgot that Rangers were up for sale (or at least in a lot of debt trouble?) as well.

Like Lyric Proof Vest said, though the fiscal and fame chasm between the SPL and the EPL and between Rangers' and Liverpool's international profiles is what would make the big difference here.

Otherwise, you're right.

Adnar posted:

the most expensive season ticket for Barca is only 700 euro (580 pound)

That's incredible.

I take it that comes from the economies of scale that Real and Barca have been able to build up by having such enormous followings who can fill up large stadiums of close to 100,000 people?

Also, I'm sure the fan ownership scheme has something to do with it too.

# ? Jul 6, 2010 14:46

Jose: Jul 24, 2007; Adrian Chiles is a broadcaster and writer

Would have been funny if the City owners bought Rangers instead turning them back into a major european force and causing the SPL to get lots of money again.

Wait no it wouldn't.

# ? Jul 6, 2010 14:47

Loving Africa Chaps: Dec 3, 2007; We had not left it yet, but when I would wake in the night, I would lie, listening, homesick for it already.

Adnar posted:

the most expensive season ticket for Barca is only 700 euro (580 pound)

That's incredible.

mate got offered a season ticket in the kop for �600. season tickets we have are 3 times that, each

# ? Jul 6, 2010 14:50

Total Meatlove: Jan 28, 2007; Rangers died, shoujo Hitler cried ;_;

Jose posted:

Would have been funny if the City owners bought Rangers instead turning them back into a major european force and causing the SPL to get lots of money again.

Wait no it wouldn't.

You're mean

I hope Joey Barton breaks Carroll's legs in training.

# ? Jul 6, 2010 15:23

Healbot: Jul 7, 2006; very very very fucjable
very vywr very

Couch posted:

German.

Yeah sorry, I kinda forgot to translate Napoli.

# ? Jul 6, 2010 17:09

Gigi Galli: Sep 19, 2003; and then the car turned in to fire

Healbot posted:

Yeah sorry, I kinda forgot to translate Napoli.

I was just genuinely curious. The more you know!

# ? Jul 6, 2010 17:26

Adnar: Jul 11, 2002

Healbot posted:

Yeah sorry, I kinda forgot to translate Napoli.

it's one of those places that I sound like a complete douche when I talk about it due to football I don't think I've ever said Naples or Seville or Turin

# ? Jul 6, 2010 17:32

Fiskiggy: Feb 15, 2005; You have impressed FFCiv with your turn time!
They turn a blind eye to the turn times of other civilizations, and your Influence over them has increased by 40.

firenze is the real douche cutoff point

# ? Jul 6, 2010 17:34

Butterfly Valley: Apr 19, 2007; I am a spectacularly bad poster and everyone in the Schadenfreude thread hates my guts.

Lyric Proof Vest posted:

mate got offered a season ticket in the kop for �600. season tickets we have are 3 times that, each

got my man city season ticket for �326

# ? Jul 6, 2010 18:50

Big Black Dick: Mar 20, 2009

Those prices are laughably cheap. The lowest season ticket for the Chicago Cubs is just under $3500.

# ? Jul 6, 2010 19:01

s0meb0dy0: Feb 27, 2004; The death of a child is always a tragedy, but let's put this in perspective, shall we? I mean they WERE palestinian.

wayth posted:

Those prices are laughably cheap. The lowest season ticket for the Chicago Cubs is just under $3500.

You're proud of the fact that your team costs so much?

# ? Jul 6, 2010 19:04

Big Black Dick: Mar 20, 2009

s0meb0dy0 posted:

You're proud of the fact that your team costs so much?

Quite the opposite, I'm exceedingly jealous. I wish season tickets to any professional sport in the US were that affordable.

...and the Cubs are not my team.

# ? Jul 6, 2010 19:06

Akileese: Feb 6, 2005

Transatlantic Gulp posted:

got my man city season ticket for �326

It's nice to see this is more of a sport issue than an American thing. My season tickets for RBNY were $250 or so in the supporters end (8 rows off the field), and when they first became available, you could get midfield seats that were a few rows off the field for like $1300.

Jut curious, what do Arsenal season tickets go for?

# ? Jul 6, 2010 19:12

fat gay nonce: May 13, 2003; _{actual penis length: |-----------|}

Winner, PWM POTM January

Cheapest was 893 pounds but I think the VAT change has pushed that up a bit.

# ? Jul 6, 2010 19:22

Bacon of the Sea: Oct 17, 2008; Dog Suicide Bridge BBQ Team 2k10

wayth posted:

Those prices are laughably cheap. The lowest season ticket for the Chicago Cubs is just under $3500.

Don't baseball teams play about 150 games a season though?

# ? Jul 6, 2010 19:33

Big Black Dick: Mar 20, 2009

Bacon of the Sea posted:

Don't baseball teams play about 150 games a season though?

162 of which a season ticket package is 81 home games.

The NFL is probably the closest analogue with a 16 game season. Google informs me that season tickets for the Chicago Bears are $978.

# ? Jul 6, 2010 19:40

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# ? May 8, 2024 22:42

Akileese: Feb 6, 2005

Bacon of the Sea posted:

Don't baseball teams play about 150 games a season though?

Yeah each team has like 81 home games but the price per ticket is still quite expensive compared to what you can see from how far you're sitting. I think the NFL is the first culprit though. Teams are starting to charge people licensing fees just to buy your season ticket (these fees are usually twice as expensive as your seat will actually cost you).

As you can expect, most people who have baseball season tickets tend to sell at least half the games they go to.

# ? Jul 6, 2010 19:41

The Something Awful Forums > Discussion > Sports Argument Stadium > The Ray Parlour > Football Finances, come laugh at portsmouth

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