WP: Nats MASN deal renegotations will have a huge impact

[PowerBoater69]

Oh, I don't think it is likely they'll sell anytime in the next 15 years.  I think Mark and his generation want to keep the team.  It would be something like divorces among that generation, family fights, or estate planning for them that'll drive a sale.  I was just speculating as to why they might do something I don't expect them to do.

Definitely they aren't selling as long as Mark is around. Just pointing out that a fairly significant portion of that $1.6 billion in team value is available immediately if they had the need or desire to liquidate a portion of the team.

Those Forbes estimates always seem to be low compared to actual sale prices. Probably the actual resale value is closer to $2 billion.

[NJ Ave]

If they wanted to realize some of the gains they could certainly sell shares. But I've never heard any indication of that.

Why would anyone sell? Being a team owner is probably one of the best gigs and best investments you can ever have. They've been appreciating by 10% a year with seemingly very little downside - when was the last time franchises seemed to go down in value? Plus you get to hang out in the owner's box and have your ass kissed by a ton of athletes and important people. Way better than being a landlord, that's for sure

[JCA-CrystalCity]

I kind of suspect there's going to be some populist retribution towards owners soon all across sports. 

[Natsinpwc]

I kind of suspect there's going to be some populist retribution towards owners soon all across sports.

It's a very tough time to be filthy rich. Tax cut coming. Stock market at record highs. Low interest rates. All that money to decide what to do with.

[HalfSmokes]

I kind of suspect there's going to be some populist retribution towards owners soon all across sports. 

I would expect that to impact teams needing new stadiums more than anything.

[NJ Ave]

Why would anyone sell? Being a team owner is probably one of the best gigs and best investments you can ever have. They've been appreciating by 10% a year with seemingly very little downside - when was the last time franchises seemed to go down in value? Plus you get to hang out in the owner's box and have your ass kissed by a ton of athletes and important people. Way better than being a landlord, that's for sure

I forgot about leverage as well. The underlying value of the investments have been increasing 10% a year, but people like the Lerners might only have a couple hundred million invested in the team at any one time. So nowadays they're making $150 million a year on appreciation on maybe $200-300 million invested. Pretty nice if you can get it.

[HalfSmokes]

Franchises in baseball/football/basketball have to be the best investments- artificially depressed labor costs, publicly financed facilities, floors on revenue thanks to long term tv deals

[tomterp]

to diversify?  Even for the Lerners, the team is a high % of their assets.  Cash flow?  If interest rates spike, then you could see real estate crashing the same time attendance drops and it is tougher to finance the team.  If they need cash (thankfully for them, probably not for estate taxes  ) , you could see them scrambling a bit.

The team represents a level of diversification from their real estate businesses. 

I'm not saying "no, he's not going to sell the team", I'm just saying there's no reason for doing so from what little we know, or can even guess.  Pretty sure too the family is smarter than Jack Kent Cooke in terms of estate planning.

[Ray D]

I kind of suspect there's going to be some populist retribution towards owners soon all across sports. 

I sure hope so.

[Ray D]

 
.  Pretty sure too the family is smarter than Jack Kent Cooke in terms of estate planning.

His estate planning was fine, it was his estate disposition that was the issue.  And I'm pretty sure he knew exactly what he was doing, I just can't tell you what that was.

[tomterp]

His estate planning was fine, it was his estate disposition that was the issue.  And I'm pretty sure he knew exactly what he was doing, I just can't tell you what that was.

I thought they had to sell the team because nobody could afford the taxes without doing so, is that not correct?

That's terrible estate planning if true.

[HalfSmokes]

I thought they had to sell the team because nobody could afford the taxes without doing so, is that not correct?

That's terrible estate planning if true.

One major asset and multiple beneficiaries is what I thought it was; you can either screw over all heirs except one or you can sell the team. He had hoped John could put together a group to buy it though https://www.washingtonpost.com/archive/sports/1999/01/11/for-cooke-its-a-loss-for-the-family/cbc52de4-ab0e-4e8f-94af-8a26e667adc6/?utm_term=.f0513c59a0a5

I don’t think this will be a problem for the Lerners  - it’s more of a relic from a time when a team was an owners major holding, for any team sold over the last 35 years, that isn’t the case

[PowerBoater69]

One major asset and multiple beneficiaries is what I thought it was; you can either screw over all heirs except one or you can sell the team. He had hoped John could put together a group to buy it though https://www.washingtonpost.com/archive/sports/1999/01/11/for-cooke-its-a-loss-for-the-family/cbc52de4-ab0e-4e8f-94af-8a26e667adc6/?utm_term=.f0513c59a0a5

I don’t think this will be a problem for the Lerners  - it’s more of a relic from a time when a team was an owners major holding, for any team sold over the last 35 years, that isn’t the case

I always suspected that it was set up so that John Cooke was literally bidding against himself. His bid drove the price up, so he and his siblings all got more money to split. 

[Ray D]

I thought they had to sell the team because nobody could afford the taxes without doing so, is that not correct?

That's terrible estate planning if true.

Cooke left almost all of his fortune to some charity (for "gifted" kids, of all things) leaving very little for his heirs.  It seemed a deliberate attempt to cut them out.

[tomterp]

I always suspected that it was set up so that John Cooke was literally bidding against himself. His bid drove the price up, so he and his siblings all got more money to split.

He was bidding against Snyder.

[mitlen]

He was bidding against Snyder.

Early on, wasn't Snyder part of a syndicate?

[tomterp]

Early on, wasn't Snyder part of a syndicate?

Yes, you're correct.

Snyder will invest about $120 million in cash, with family members adding another $90 million and Drasner and minority partner Mort Zuckerman, the Boston real estate and publishing magnate, putting up $90 million. Zuckerman and Drasner have known Snyder since the mid-1980s and were original investors in Snyder Communications, his Bethesda-based business with revenue approaching $1 billion a year.

http://www.washingtonpost.com/wp-srv/sports/redskins/daily/may99/26/skinsbid26.htm

[PowerBoater69]

He was bidding against Snyder.

Yeah, I mis-worded that. He was in an unusual position as both a bidder and a beneficiary of the sale.

[mitlen]

Yes, you're correct.

http://www.washingtonpost.com/wp-srv/sports/redskins/daily/may99/26/skinsbid26.htm

Thanks TT.    Not sure why that thought was triggered (  when you get old you'll understand).     

[LoveAngelos]

Yes, you're correct.

http://www.washingtonpost.com/wp-srv/sports/redskins/daily/may99/26/skinsbid26.htm

I have never heard any explanation why Zuckerman gave 90 million dollars to start a business to a little twit of a college drop out who already had one failed business venture. The same twit  who has ruined the Redskins; Johnny Rockets and did so well with Six Flags

[Slateman]

Ratings up 12%. #1 in the market on days their games play. This makes them pretty much like every other team in MLB, finally.

http://washington.cbslocal.com/2017/08/24/nats-tv-ratings-juggernaut/

You know, except for getting the revenue they are supposed to.

[tomterp]

Yeah, I mis-worded that. He was in an unusual position as both a bidder and a beneficiary of the sale.

I wonder how unusual that is.  In theory it's the fairest way - auction off all the assets, and beneficiaries are welcome to bid on anything. 

To be fair however, beneficiaries should be credited with their pro-rata share of the proceeds from their own bid.  Say I bid $100,000 on a vacant lot and win, and I am a 50-50 beneficiary with my sister.

I should only have to cough up $50k at time of sale, as the other $50k can be credited to me and used to help fund the sale.  Though I guess there could be timing issues.  I don't really have much estate experience.

[LoveAngelos]

Thanks TomTerp........for the flashback nightmare. You know I suffer from PTSS.......Post Twit Snyder Syndrome........not only was he a college drop out with business failure on his resume but he reportedly grew up in meager surroundings in an apartment  in Silver Spring and yet he is bankrolled 90 miles to start a business. ....ponderous. ..ponderous..........all part of a NFL conspiracy  to ruin the Redskins perhaps

[MarquisDeSade]

It'll never be announced and don't expect to see anything change on the field.

Man, six years flies by in no time. Did anyone ever leak the outcome or is this still in court?

[JCA-CrystalCity]

Man, six years flies by in no time. Did anyone ever leak the outcome or is this still in court?

IIRC, the initial decision that got thrown out I think would have given the Nats an extra $20MM a year, but maybe just a little more than hald of  the money they were asking for.