How long can it last?
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Warning Warning
The sky is falling and gloom and doom are all that are left. -
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Better question might be, How can pro soccer last in the PNW? Would hate to see MLS go, but if it does is there a chance our region could enter into another pro league. Seems soccer is bigger in the PNW them most other regions in the US.Originally posted by Unregistered View PostComment
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Not a shocker. If MLS goes under do we still have to wear the patch and call ourselves 'timbers'?Comment
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How did the NFL go from a moderately profitable mid level league to the massive cash gusher it is now? That's your homework. You'll be surprised if you haven't studied this specic topic before. It's not what most people think.
Another issue is that there is funny accounting that goes into the "losses". If you are very wealthy losses are a different animal. It complicated.Comment
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You win the stupid statement of the week. Congratulations!Originally posted by Unregistered View PostComment
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There is not "funny accounting". It is just a reality for some that "offsetting losses can be beneficial. If you want an example of the health of MLS consider that in 1996 (the first year) a franchise fee cost was $5,000,000 today the most recent franchise sold was sold for $100,000,000. It is pretty hard to get a 20x increase in asset value over 18 years you would need to find an investment returning an average of 26% every year to match that kind of performance. MLS is plenty healthy.Originally posted by Unregistered View Post
http://www.forbes.com/sites/chrissmi...aluable-teams/Comment
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Depreciation
If you want to know the "secret" of professional sports then you need to know that in addition to expensing the salaries paid they ALSO get to take depreciation on the value of their "athletes". There is a big Big BIG difference in reporting an after tax loss than reporting negative cash flow.Originally posted by Unregistered View Post
Without similar accounting treatment there would be no horse racing industry and without this tax break the attractiveness of sports franchises would be significantly reduced.Comment
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I dont think financially heathy institutions report losses of $100 Million because they are incredibly clever. Yes it may be a way to still make money in the margin but think they would rather make money the old fasion way.Originally posted by Unregistered View Post
Strong financially sound institutions dont loss money.Comment
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If you bought a club for $100,000,000 and broke even on your operation, you still get to amortize the hundred million you paid for the club. So you get an "expense" of say $5,000,000 per year (20 year write off period which is very conservative), which becomes a loss. Roster Depreciation is usually calculated at a much higher rate.Originally posted by Unregistered View Post
So if you reported a $5,000,000 loss that sounds bad, right?
However you can still probably sell the club for $125 million the next year so you are reporting a loss but really made $25 million. Then you hire an army of tax lawyers and sell it and pay zero taxes.
Many times the talk of losses is cover fire for ticket price increases.Comment
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I know what you say about the NFL is correct but don't have time to (or brains) to investigate the hows and whys. Care to elaborate and also give your thoughts on the future health of the MLS?Originally posted by Unregistered View PostComment
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This is just Don Garber positioning the owners for the coming labor negotiations. MLS is fine and poised to do phenomenally well in the coming years. You know it, I know it, Don knows it and most importantly the players and their reps know it.Comment
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Come on people
There is no way franchises would be selling for over $100 million and be in such high demand if the owners weren't making money. This is labor negotiating 101.Comment
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