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(04-08-2022 01:46 PM)bearcatmark Wrote:  

(04-08-2022 11:55 AM)bearcats23 Wrote:  

(04-07-2022 02:53 PM)bearcatmark Wrote:  Considering all these franchises keep going up exponentially in value, I'm very dubious of the idea that they are losing money.

This is so far off base. You're comparing apples to oranges. Net worth to net income. It's the typical democrat news fodder issue..."so and so is worth $1 billion and paid a lower rate of tax than a school teacher". Yep, great analogy. That's why we have the estate tax in the US. People don't understand the difference between net worth and taxable income.

The Reds lost $42 million over the past two years. That's cash flow losses, and that's kind of a big deal, even to a guy like Castellini. He can't cover expenses with increases in team value and net worth, it takes cash flow.

What the Reds are doing now is cutting costs and stockpiling not just prospects, but they're stockpiling cash as well. They will have a couple very profitable years due to TV revenue, radio revenue, and MLB profit sharing. Then they will take that cash and their shiny new prospects and make a run at it in a few years to hopefully compete with the Dodgers, Yankees, etc. of the world that don't have to play the rebuilding game.

Ignoring the political BS that you cannot resist, these franchises aren't appreciating in value at the rate they do because they are hemorrhaging money. If they were losing money the way you seem to believe..he'd go ahead and cash out to a buyer at 10 times what he bought in for.

He hemorrhaged money for the past two years, in others years, like this year, it will swing the opposite direction quite drastically and they will make a lot of money. I happen to have a pretty intimate knowledge of the Reds finances, their revenue streams, and how the industry works. I don't "believe" that they lost money, it's a fact that they lost a substantial amount these past two years. Again, this is cash flow losses, not loss in value or net worth. These cash flow losses are real to the ownership group. They are now going to make a lot of money for a few years to recoup and then they will have the cash to make a run at it again in a few years. It's the life of small market baseball. So sitting back and saying they didn't lose anything because the value of the club is going up is short sided and ignores the fact that you can't cover overhead with increases in value.

You're also wrong by insinuating that the value of the clubs is based on their cash flows, which isn't even close to accurate. What's funny about the valuation of these sports clubs is that they aren't valued like a typical business based on their discounted cash flows. People are passionate about sports, and if you're a crazy wealthy guy that wants to own a club, you're going to pay far more than what the cash flow valuation would warrant. There's only 30 teams available to own, so there's a limited supply and high demand with wealthy people that are willing to pay far more than what an equivalent non-sports business with identical financial metrics would be worth.