Carolina Panthers

[cjd5050]

12 hours ago, cltbwimob said:

I don't know...A move could happen, but the stadium is in good enough condition that some Hard Rock stadium style improvements like sideline suites and super lux seating as well as a few of the other upgrades that the Panthers wanted in their original deal should be enough to ensure the stadium is viable for the next 25 years or so.  I think that new ownership will have them playing in Charlotte for a few more years until the dust from the sale settles.  At a minimum they are contractually obligated to play in Charlotte through next year.  One thing is for sure, the city has got to be proactive  and be ready to propose something to the new ownership group before the new stadium bug bites.

Have had this conversation 1,000 times with people in Buffalo before Pegula purchased the team and committed to staying.  Here is the challenge with new NFL owners.  They are paying so much for the teams that, unless they are liquid billionaires like Pegula, they need to start making a return on their investment right away.   New stadiums are one of the main ways teams in the league make money.   That said, Charlotte is not Buffalo, and many of the possible relocation cities wouldn't be an upgrade.   Well except London but I think Shahid Khan/Jacksonville has dibs on that.  

It's going to be interesting to see what the new mayor/council does with this.  I am going to go out on a limb and assume most of the members are going to come out and say taxpayer money shouldn't go to the team.  It's not as welcoming of an environment as say 10 years ago.  I would give it a 50/50 split at this point.  

[tozmervo]

39 minutes ago, cjd5050 said:

Have had this conversation 1,000 times with people in Buffalo before Pegula purchased the team and committed to staying.  Here is the challenge with new NFL owners.  They are paying so much for the teams that, unless they are liquid billionaires like Pegula, they need to start making a return on their investment right away.   New stadiums are one of the main ways teams in the league make money.   That said, Charlotte is not Buffalo, and many of the possible relocation cities wouldn't be an upgrade.   Well except London but I think Shahid Khan/Jacksonville has dibs on that.  

It's going to be interesting to see what the new mayor/council does with this.  I am going to go out on a limb and assume most of the members are going to come out and say taxpayer money shouldn't go to the team.  It's not as welcoming of an environment as say 10 years ago.  I would give it a 50/50 split at this point.  

I don't understand why a new stadium is necessary to make money. Can you expand on that?

[mad_park]

7 minutes ago, tozmervo said:

I don't understand why a new stadium is necessary to make money. Can you expand on that?

Parking, additional premium seats, additional boxes, selling new PSLs and jacking up ticket prices, etc. Don't think they could 'oust' current PSL owners if they did a 'Hard Rock' type renovation. Would have to raise their seat prices to the point that they let the PSL's lapse....

[cjd5050]

7 minutes ago, tozmervo said:

I don't understand why a new stadium is necessary to make money. Can you expand on that?

It's not necessary but it helps.   A lot.  NFL owners split money from TV, tickets, and merchandise.  Except for Dallas...somehow they don't share merch revenue.  On the other hand, teams keep suite, club seating, and sponsorship revenue.  New stadiums are being built to focus on spaces that don't rev share rather than spaces that do.  New stadiums also allow for new sponsorship contracts that are not legacy burdened.  Atlanta has inked $900 million so far with their new stadium.  I think the BofA deal was less than $150 million.  

[cltbwimob]

1 hour ago, cjd5050 said:

Have had this conversation 1,000 times with people in Buffalo before Pegula purchased the team and committed to staying.  Here is the challenge with new NFL owners.  They are paying so much for the teams that, unless they are liquid billionaires like Pegula, they need to start making a return on their investment right away.   New stadiums are one of the main ways teams in the league make money.   That said, Charlotte is not Buffalo, and many of the possible relocation cities wouldn't be an upgrade.   Well except London but I think Shahid Khan/Jacksonville has dibs on that.  

It's going to be interesting to see what the new mayor/council does with this.  I am going to go out on a limb and assume most of the members are going to come out and say taxpayer money shouldn't go to the team.  It's not as welcoming of an environment as say 10 years ago.  I would give it a 50/50 split at this point.  

I don't know that I 100% but the argument that new stadiums are always a windfall for the owners.  Looking at revenue figures for each team I found that the Minnesota Vikings only brought in $7 million more than the panthers in terms of gross revenue, and they had a brand new $1.5billion stadium.  Our tired and worn BofA stadium was able to generate $385 million in team revenue compared to their shiny new toy which brought in $392 million in gross revenue.

[Green_man]

So if the team evaluation is around $2.3 billion and JR's portion is 48% stake, then we should expect this sale in the  $1.1-1.2 billion range? 

Seen some press about Diddy, Steph Curry, and Maurice Jones-Drew wanting to go in together.  That's some pretty big star power there!

[cjd5050]

30 minutes ago, cltbwimob said:

I don't know that I 100% but the argument that new stadiums are always a windfall for the owners.  Looking at revenue figures for each team I found that the Minnesota Vikings only brought in $7 million more than the panthers in terms of gross revenue, and they had a brand new $1.5billion stadium.  Our tired and worn BofA stadium was able to generate $385 million in team revenue compared to their shiny new toy which brought in $392 million in gross revenue.

I am not saying BofA is bad.  I am saying that a new stadium would most likely produce more revenue than the current.  Revenue is also not profits.  Richardson and Co. most likely do not have any debt service on the team.  A new owner might.  Going from $385 million to say $415 means something when you're trying to pay down $2.3 billion.  

36 minutes ago, Green_man said:

So if the team evaluation is around $2.3 billion and JR's portion is 48% stake, then we should expect this sale in the  $1.1-1.2 billion range? 

Seen some press about Diddy, Steph Curry, and Maurice Jones-Drew wanting to go in together.  That's some pretty big star power there!

1

I think it depends on the partnership agreement.  If I were to take a guess I would say that the minority owners would have the first right of refusal to purchase the team but there would also be some sort of stipulation that if they passed they could be forced to sell to a new owner outright.  These are Richardsons partners.  A new owner might not want the same agreement.  

 

 

[cltbwimob]

47 minutes ago, cjd5050 said:

I am not saying BofA is bad.  I am saying that a new stadium would most likely produce more revenue than the current.  Revenue is also not profits.  Richardson and Co. most likely do not have any debt service on the team.  A new owner might.  Going from $385 million to say $415 means something when you're trying to pay down $2.3 billion.  

I think it depends on the partnership agreement.  If I were to take a guess I would say that the minority owners would have the first right of refusal to purchase the team but there would also be some sort of stipulation that if they passed they could be forced to sell to a new owner outright.  These are Richardsons partners.  A new owner might not want the same agreement.  

 

 

Well I don't believe any new owner will be paying $2.3 billion for the team since the value of the franchise as a whole is $2.3 billion and Jerry owns 48% of the team.  A new owner likely would not buy the team outright but would rather purchase Jerry's stake.  With say a $1.1 billion value on his stake (based on a $2.3 billion value for the team), I suspect for someone to buy him out, it will cost somewhere in the neighborhood of $1.5 billion if you assume that he will want a premium over the market value.  

Having said that, I believe the scenario in which an owner purchases Jerry's stake for $1.5 billion and keeps the team in BofA and accepts $385 million dollars in revenue per year is a more financially advantageous scenario than purchasing Jerry's stake for $1.5 billion, paying a relocation fee of ~$500 million, and fronting say 1/3 to1/2 of the cost to build a new stadium elsewhere only to increase revenues to $415 million per year.  While I have no idea what the free cash flows or what the weighted average cost of capital would be under each scenario, my suspicion is that NPV, IRR, MIRR, Payback Period, Discounted Payback Period, and Profitability Index analyses would all show that the first scenario is the better one from a financial standpoint.

[cjd5050]

17 minutes ago, cltbwimob said:

Well I don't believe any new owner will be paying $2.3 billion for the team since the value of the franchise as a whole is $2.3 billion and Jerry owns 48% of the team.  A new owner likely would not buy the team outright but would rather purchase Jerry's stake.  With say a $1.1 billion value on his stake (based on a $2.3 billion value for the team), I suspect for someone to buy him out, it will cost somewhere in the neighborhood of $1.5 billion if you assume that he will want a premium over the market value.  

Having said that, I believe the scenario in which an owner purchases Jerry's stake for $1.5 billion and keeps the team in BofA and accepts $385 million dollars in revenue per year is a more financially advantageous scenario than purchasing Jerry's stake for $1.5 billion, paying a relocation fee of ~$500 million, and fronting say 1/3 to1/2 of the cost to build a new stadium elsewhere only to increase revenues to $415 million per year.  While I have no idea what the free cash flows or what the weighted average cost of capital would be under each scenario, my suspicion is that NPV, IRR, MIRR, Payback Period, Discounted Payback Period, and Profitability Index analyses would all show that the first scenario is the better one from a financial standpoint.

Why do you think it's likely that a new owner would both be able to and/or want to just purchase Jerry's stake?   I think it's more likely a new owner wants to purchase the team outright unless it's an ownership group where they can't afford to.   

I see where you're coming from but annual revenue is not the only figure to be looked at.   Consider that in 2015 the Panthers were valued at 1.56B and the Rams (St. Louis) were valued at $1.45b.   Just a few years later and the Rams are now worth $3 Billion.  It's why Kroenke didn't have a problem in paying the relocation fee and stadium costs.  He still came out better on the other end.    

Good news is there is not another LA but the bad news is the NFL has shown very little loyalty to cities.  Just at San Diego and St. Louis how they are feeling today.  

 

 

[cltbwimob]

1 hour ago, cjd5050 said:

Why do you think it's likely that a new owner would both be able to and/or want to just purchase Jerry's stake?   I think it's more likely a new owner wants to purchase the team outright unless it's an ownership group where they can't afford to.   

I see where you're coming from but annual revenue is not the only figure to be looked at.   Consider that in 2015 the Panthers were valued at 1.56B and the Rams (St. Louis) were valued at $1.45b.   Just a few years later and the Rams are now worth $3 Billion.  It's why Kroenke didn't have a problem in paying the relocation fee and stadium costs.  He still came out better on the other end.    

Good news is there is not another LA but the bad news is the NFL has shown very little loyalty to cities.  Just at San Diego and St. Louis how they are feeling today.  

 

 

1. Jerry can only sell Jerry's stake of the team.  When you own 48% of the equity in a team, you cannot put the entire team up for sale.  In order for a new owner to purchase the whole team he would also have to buy out the other 13 owners all of whom are Carolinians and who I doubt will be willing to sell their stake if there is a threat of moving.  Even if they were, you can't assume that they will sell their stake at fair market value but would demand a premium.  As such the purchase price for the team would probably be ~$3 billion.  Very few people can singlehandedly make a $3 billion purchase.  As a result any prospective owner would most likely have to assemble a partnership.  But then the question becomes why not just purchase the minority stake that's already available on the market  and become part of the ownership structure that already exists rather than trying to assemble a partnership to purchase every other owner's stake and still, in the end, be a minority owner (unless you just don't like any of the current owners)?

2.  You can't compare the situation with Stan Kroenke and the Rams to the Panthers.  For starters Kroenke was already owner of the Rams, so he was not having to purchase the team at the outset whereas a new owner or ownership group for the Panthers will not be able to talk about location decisions and new stadiums until they have shelled out however many billions it costs to purchase the team.  Secondly, he moved the Rams to the second largest market in the country at a time when there was no NFL team in that market so he was able to extract an astronomical amount of value just based on the conditions of the market to which he was moving the team.  In fact, the value proposition of moving a team to LA was so great that the new stadium is getting funded almost completely by private money.  Of course it was an easy business decision to pay the relocation fee and move.  In my mind no such opportunity exists elsewhere except maybe London, but I do not believe establishing a team in London is in the cards for the NFL right now.   As such I think the move to LA was the exception rather than the rule.

3.  Stan Kroenke built the stadium to house two teams.  Since the Chargers decided to move he also will have them playing in his stadium and I believe Kroenke is building a host of new restaurant retail and entertainment venues around the stadium.  So even when it's not his team playing, he will still be making money off his investment in the form of stadium rentals, concession sales revenues from ancillary businesses, etc.

4.  A prospective Panthers owner if they did purchase the team outright at say $3billion dollars, had to pay the relocation fee, and then paid 1/3-1/2 the cost of a new stadium would have to extract revenues much greater than Stan Kroenke who just had to pay the relocation fee and the stadium construction costs and did not have to purchase the team at the outset.  The cost of purchasing a team outright and then moving it is, in sum, about twice the cost of just moving the team.  

5.  Even with the Rams value rising from $1.45 billion to $3 billion over the course of the last two years, you have to assume that roughly 40-45% of that rise is the result of natural appreciation in value.  Over the same period, the Panthers gained approximately $750 million in value, didn't go anywhere, and are not in the process of building a new stadium.  Had Stan Kroenke stayed in St Louis, the team's value would have probably appreciated significantly as well, just not to the extent it did for the move to LA. But for evaluation purposes, the foregone value rise in St Louis represents an opportunity cost that must be taken into account.  So Kroenke's team value probably only rose about ~$800 million based on the move to LA alone as opposed to $1.55 billion as the raw numbers suggest.  The rest of the value appreciation has more to do with the fact that NFL team values as a whole have been on a meteoric rise for the past few years.

6.  Minnesota and Atlanta are probably better comparisons than LA.  Last year they were valued at $2.4 billion and $2.475 billion respectively.  Both had brand new stadiums that had either just been opened or were on the way and both cost well in excess of $1 billion.  The Panthers by comparison did not have a new stadium and were still worth $2.3 billion.  Furthermore both Minnesota and Atlanta had approximately the same yearly revenue as the Panthers.  With that, my question is why would an owner pay billions of dollars to purchase a team and then pay billions extra to move the team only to gain $100-200 million in value and keep approximately the same revenues?  Any sort of financial analysis will tell you that such a move is foolish.  The amount of debt they will have to take on will quickly sap their profits.  Yes, Panthers could have been sold a few years ago, moved to LA, and the financials would have probably worked out just fine.  However that market is now off the market.  Any other conceivable market such as say Portland, San Diego, St Louis, or San Antonio is going to be more or less a lateral move from a value and revenue perspective (and prestige).  Why would any owner spend the money to move only to capture similar revenues and value vis-a-vis keeping the team in Charlotte at BofA, a stadium which is already paid for?

 

 

[Cadi40]

In my opinion I doubt that we will see a relocation or a new stadium being built, I could see a stadium renovation soon with the new owner. In another thread someone brought up the idea of Jeff Bezos buying the panthers, It would be cool but I doubt it.

[SgtCampsalot]

This may even belong in the Perception of Charlotte thread, but this was a really funny article about P Diddy buying the Panthers, and Charlotte specificially.

Edited December 18, 2017 by SgtCampsalot

[videtur quam contuor]

Not related to the Panthers directly but in my opinion much of the "billionaire buying professional sports franchise" calculation is overweening pride and wang waving. Financial issues play a smaller role. Envy, membership in a small club, distribution of favors to his wealthy friends, name in print, intimidating public officials, all cause an otherwise intelligent person to invest against his own financial interests. That money could be more effectively invested in the field he knows well.

[CharlotteWkndBuzz]

When it rains, it pours.  Thomas Davis is suspended for two games for the hit on Adams...

[Scribe]

This is the type of crap, that Charlotte does not need: http://www.dailymail.co.uk/news/article-5191439/Kaepernick-wants-buy-Carolina-Panthers-Diddy.html

[joshuavmc]

And what crap would that be? Just curious.

[Scribe]

The following are a few examples:

• Where the Panthers franchise is used as a pawn for political ends.
• Where the team is no longer focused on the game but on the politics of the day.
• Where as long as you're making noise - the message does not matter.

That sort of crap.

Edited December 18, 2017 by Scribe

[tarwater]

What if the City of Charlotte purchased the team? I'm guessing the numbers wouldn't work, but it'd be nice to see the public have some stake in this instead of yet another oligarch. 

[KJHburg]

From the Business Journals subscriber only article 

""A sports finance expert outlined a possible acquisition this way: The transaction allows no more than $250 million in debt and the league requires the principal investor to own 30%. So based on a price of $2.25 billion, $250 million could be debt, leaving $2 billion as the cash price with $600 million coming from the majority shareholder. The remaining $1.4 billion would have to be secured by the lead owner through additional investors, likely in increments of $100 million or so. Under such a scenario, the analyst said, it might be more plausible that a lead investor would put in as much as 50% to reduce the number of minority partners that would have to be found.""

 

""A New York-based franchise analyst told me two things work in Charlotte’s favor: the Panthers are a healthy franchise with good fan support and there are few, if any, better options for an NFL team. Three teams — the Rams, Raiders and Chargers — have been approved for relocation in the past two years, meaning there are few unexplored and untapped markets in the 32-team league. That doesn’t mean relocation would be impossible, but it would be unlikely, several experts believe.""

https://www.bizjournals.com/charlotte/news/2017/12/18/city-readies-to-deal-with-next-owner-of-carolina.html?ana=e_du_prem&s=article_du&ed=2017-12-18&u=oAaDx%2B74FoP4qOJ%2By4AU6dhJPpc&t=1513643401&j=79361521

My input:  However one analyst thinks the team could move if approved by owners to where he does not say to where.  I think the viability of 2 teams in the LA market is very much yet to be determined.  That analyst would be Marc Ganis 

Edited December 19, 2017 by KJHburg

[videtur quam contuor]

Selling a team to an owner who represents himself eager to move said team seems a non starting proposition. Searching my memory, I cannot recall the relocation of a team to a newly approved owner, just existing, long time owners.

The absolute best, 100% guaranteed successful place for a relocation of a pro franchise is greater New York City.  (Fuhgettaboutit)

[JRNYP2C]

5 hours ago, SgtCampsalot said:

This may even belong in the Perception of Charlotte thread, but this was a really funny article about P Diddy buying the Panthers, and Charlotte specificially.

I saw a video of Diddy on the news tonight announcing that the "North" Carolina Panthers were up for sale.  While I like the appreciation for our great North state, they belong to both of the Carolinas.  

[Merthecat]

What with the Davis suspension and the investigation into Richardson, it sounds to me as if Wilmington isn't the only NC city that reeks of cat urine.

[AuLukey]

Just spitballing here, but wouldn’t it be possible for Richardson to enter a clause into the sale contract that would require the team stay in Charlotte for X years? He obviously isn’t selling the team to make a buck. He wants out of the spotlight before he further blemishes his name, his team’s reputation, and (most importantly at the moment) the NFL’s image.

I really hope this whole P Diddy thing is forgotten about after the next minor news event. He’s going to turn this into a circus. His observations about majority ownership weren’t incorrect; but even mentioning CK when you have Newton as your QB is just seeking a reaction.

Also, Thomas Davis... come on man.

[NcSc74]

Couldnt agree more /\

[nakers2]

I think the Panthers have enough of a fan base, and enough popularity nationwide to remain the Carolina Panthers. We're not as die hard as some of the more "mainstream" teams, but as far as the viewership, game attendance, and merchandise sales go, Carolina is doing very good for themselves. If we finally can snag a Superbowl win, I think that will cement us even more than we already are to Charlotte, or at least to the states of North or South Carolina, though I cannot see the feasibility of moving anywhere else than good ol' Charlotte USA, both based on prominence and central location. 

On the new stadium issue, I think eventually a new stadium will not only be desired by the owners, but also be a boon to the city itself, on a few conditions. First, I think it should be indoors, having an NFL sized stadium, but with either a fixed or retractable dome (though it sounds contradictory) will open the stadium up to more events, like large scale indoor concerts and other performances than cannot be done outside, but draws more than the capacity of Spectrum. (Keep in mind, this is down the road, not today.) More importantly though, the stadium needs to be as close as possible, if not ON the site of the current stadium. Unfortunately, despite all the available parcels in Uptown, unless the folks in the First Ward agree to it being built on Levineland, I don't see anywhere inside I-277 or just south of Uptown where this could go. Perhaps elsewhere along the Blue Line at the old rail yard in NoDa, but then Uptown businesses will inevitable suffer as the pre/post game crowd benefits another area of town. Building it on the side of the current stadium brings its own logistical issue then of course, the biggest being that it takes more than an off season to build such a structure, and the Panthers would certainly lose revenue playing in a college bowl (probably Clemson like they did pre BofA Stadium.) 

Considering most of us, myself included agree that a new stadium shouldn't be on the shortlist yet, a lot of us, and those responsible will have their work cut out for them when the time does come, not to mention Uptown and the surrounding ares are not getting any less built up, and I think these are things, like any infrastructure projects, that should be done with much foresight.