By Dan Radzicki
People have dreams. For a LOT of people, the dream they have is to be a major league athlete. Maybe the Quarterback that leads his team to a win in the Big Game. Maybe it’s having the ball in the 9th inning to win the game. Or maybe you want to be the player that is first to hoist Lord Stanley’s trophy. Or hold that big metal basketball against your head because you were the next Jordan?
Not me. Nah.
Sure, when I was 13 I wanted to be the starting centerfielder for the New York Mets. But then I faced major league pitching at one point and realized it was time for plan B. I thought “maybe a coach?” So I tried that, and it was fun, but it came with limits. Coaches have short careers, and can’t manage a roster, so coaching was a fleeting thought.
The next want was General Manager. Anyone who has read the last near decade of these blogs on various platforms knows that I was 100% confident that I could do a better job with running the Islanders than Garth Snow. But who couldn’t?
However, walking from a different career into a GM spot is something that no team would do. After all, who would hire a guy with no experience to run an entire organization? They’d be a world class moron for such. #Wilpons #Wang Another dream deferred.
What about ownership? Now, that’d be something awesome. But how to finance a sports team? Can you or I buy a sports team? Can we mortgage a house to buy a team? Can we get a few buddies to join in to cover the difference?
I was quoted in Newsday a few years back (https://www.newsday.com/long-island/liers-scoop-up-tickets-for-325m-powerball-jackpot-1.4257051) saying that if I hit a big Powerball jackpot that I would absolutely buy the Islanders and keep them playing in the Nassau Coliseum. That wasn’t a lie. Say I won and cleared $500 million and used all of the money to purchase the team. Financial advisors would say I’m stupid. It’s always a bad idea to put your eggs in one basket. Why would I do such a thing? As a Series 7 license holder, wouldn’t I want to keep a few bucks for myself instead of put my eggs in one basket? Wouldn’t I want to diversify? Save for a rainy day? Earn some profits from the investment?
If I bought a pro sports team, I just did.
Owning a major league sports team is akin to having a bank account with a crazy interest rate. Say I did spend the entire lottery winnings on a sports team. Would I be afraid of a downturn in value? Would I be afraid of my $500 million becoming $400 million a year or two later?
Not a fucking chance.
Look at that pig Donald Sterling that owned the LA Clippers. He bought that team for $12 million in 1981. He sold the team for 2 billion dollars. I’m not sure about how many investments earn 1400% in 30 years. Even if interest rates were 10% a year, it would take 140 years to see the same return. Of course you can add the value of the tax breaks, business write offs, annual profits, and you’re looking at the Clippers guy that hangs with gold digging skanks making money all the way during his ownership on top of his $1.988 billion profit. Well beyond $2 billion. So he earned 1800%? And won what exactly?
What about…well, just name the owner that lost money. These other rich shitbags that buy franchises, make some changes, usually fail, then sell to make a fantastic profit while simultaneously holding a city hostage for the new owner to come in and get a sweetheart deal. Oh, does that sound crazy?
Look at the deal New York State gave to the New York Islanders. There are lots of arenas within 20 miles in state of each other. There’s an arena in Queens. There’s an arena at Jones Beach. There’s a remodeled Nassau Coliseum. There’s a Barclays. MSG. So why was New York in such a need to build a Belmont, where the owners will PAY NO TAXES. NOT A DIME.
Do Long Island homeowners pay taxes? The highest in the country. Now you know why. We pay for rich assholes.
Do you think that two guys who agreed to a sale price with Charles Wang- another guy that vastly profited from owning a sports team- suddenly had to add a third owner because they didn’t have a bigger picture? They kept money in hand so that they could make a billion dollar investment for a new arena complex. And to stop paying taxes. And to increase the resale value of the team. After all, what’s the resale on a team with a Stanley Cup winning coach in a brand new 19500 seat arena with a hotel and shopping complex next to a major horse racing site that pays no taxes to anyone? With a Hall of Fame general manager? You think when Ledecky and Malkin sell the team- and they will- they’re not seeing a $2 billion return? You don’t think they’ll double their money? After Wang nearly tripled his? Pfft.
The astronomical returns these owners make are unmatched by hedge funds, companies that play with options, and other investments. Why? Because nothing appreciates without such unique circumstances. Cities want a team. That demand inflates a value from the get go. Cities with no teams will make plays to take your cities investment. Ask the salty fans in San Diego about football or heartbroken Hartford fans about how your team can be poached. Look out Florida Panthers and Carolina Hurricanes! Why? Because another city will overpay to steal your brand and organization and history.
Just look at the expansion fee paid by the new Seattle NHL team, or the last fee paid by Las Vegas. Vegas dropped $500 million just to exist. That means that every other team in the NHL is worth more than $500 million. Seattle is paying even more. The baseline for owning an NHL organization is just about $700 million. Has any owner paid as much as $700 million dollars to field a team?
Check out the NFL Raiders moving to Las Vegas. Or the Chargers returning to Los Angeles. Or the Vancouver Grizzlies moving to Tennessee. Every time these team moves they became more valuable. BAD TEAMS SOMEHOW BECOME VALUABLE. Does your beat up jalopy gain value after 10 years of depreciation? No, no it doesn’t.
I begrudge none of this profiteering on the surface. It’s American to steal as much of someone else’s money as you can. However, I do have issue with the representation of a very basic concept of capitalism. That idea? You get what you pay for.
Sports teams owners buy and sell teams at amazing profits with assured regularity. But who really owns a team? What is a balance of power? What if fans never showed up for a game?
Look at the New York Mets. The Mets are one of the worst run organizations in all of sports. They play in maybe the biggest market in the league, own their stadium, have their own basic cable channel, insure large player contracts to get a financial return on injuries, actually profited (allegedly) from the Bernie Madoff scandal, and yet spend money organizationally like it’s the Deer Park Little League.
If I were the Mets GM (see prior dream jobs) my payroll would be 1 cent less than the amount that triggers the luxury tax. My scouting staff would number in the hundreds, maybe the thousands. I would poach scouts, coaches, executives and management from other organizations as a practice, not a rarity. I would have one rule- everyone I hire has to be smarter than me, because those guys will make me look good. Garth Snow never got that. Nor do the Wilpons, who hired an agent to run an organization. An agent that negotiated half a dozen Mets players contracts. That’s like making the guy that does your dry cleaning the buyer for Macys.
Back to the Mets. In the past decade they had two playoff appearances. 20% of the decade was playoff bound. Sounds acceptable? Well, what about the other 8 years?
Sub 500 winning percentage. 8 losing years. Does a World Series loss and a playoff loss balance out 8 years of being shit? No. It’s just a new place to lose. Losers.
Does Charles Wang’s 12 years of ownership with 3 playoff appearances and one series win deserve New York state taxpayers to be on the hook for all of the taxes their new arena will generate for 40 years? Hell no.
And do teams need to be so cost prohibitive that some owners have teams in multiple sports because regular multimillionaires are priced out of ownership? The LA Rams are owned by the same guy that owns the Colorado Avalanche. It shouldn’t.
But how do we fix such a system where demand is inflated and supply is limited? The same way your company looks at your job. Yay capitalism.
It’s time to fire the dead weight. It’s time to increase the supply of owners.
Here’s the starting premise. If your team in any major sport misses the playoffs for 5 consecutive years, you have to sell your team. Why’s that?
Most sports leagues have greatly expanded the money making playoffs format, and in doing so have created extra regular season buzz as your favorite team moves towards making a postseason. That’s all good for a fan experience. But what about the fan experience for a team that loses a lot? What’s the consequence for a team that disappoints fans on an annual basis? Sell.
What would selling more teams cause? Think about what would happen if 5 of your neighbors all put their houses up for sale at the same time. What would happen to the asking prices of their home? What would happen to the value of your home? Everyone plummets. In some neighborhoods it allows for social mobility to happen. American dreams, yo.
Now apply this to the sporting world. How many people would be able to buy the New York Knicks? A $4 billion franchise? But say the Knicks HAD to be sold. Suddenly the price drops significantly. Maybe a consortium is able to pull together funds to own a team. A consortium that wants to win, instead of an owner who wants to badly jam on guitar with celebrities as his team again misses the playoffs as the owner refuses to hire a coach with a championship pedigree.
Capitalism promotes this idea. Winners win, losers go bankrupt. Anyone flying on TWA lately? Driving a De Soto? Eating at Wetsons? So why are sports owners exempt from this risk? If your product fails, fuck you. NEXT!
So here’s the premise. It’s January 1 2019. An investor named Mike Oxhurts buys an NBA team. Mike has until the 2024-2025 season to just make the playoffs. First question- is this a heavy burden?
No. In the NBA half of the league makes the playoffs. Well, ok, what if his team sucks?
If they suck? They get to draft elite players. They have ability to add established superstars. If they suck it’s simply the choice of ownership to do so. To steal from their fans. To lie to the community. There is no reason for a team taking one of the top 10 best college players two or three years in a row on a 7 man team with the option to acquire an established player to not at least appear in the playoffs. Forced sale.
And not on the owners terms. Say a team is worth a billion dollars. But they missed the playoffs for 5 years in a row, so clearly they’re overvalued. Your billion dollar company is now a $750,000,000 company. BOO HOO. That’s how Wall Street works.
In hockey more than half of the league makes the playoffs. If you can’t make the playoffs in a 5 year span, BOO HOO. Sell. NEXT!
Baseball has a somewhat more selective deal, but with wildcards 10 teams are playoff bound. Opportunity!
Football’s playoffs format needs a degree in chemistry to understand, but 12 out of 32 teams show up. In major sports the playoff participation rate varies between 30-55%. That’s a 42% average. To make it easy we’ll say half.
Half. Here’s an experiment. Flip a coin. Try to get the results wrong 5 times in a row. It’s impossible. But to demand winning from a team? That should be the goal. Why is that goal impossible? Why would owners want to lose?
That’s an easy punchlist. First off, it’s a long term investment guaranteed to gain value disproportionally to other investments. Next is that the chance to cook books to offset gains in other businesses that these guys own to fatten up their tax returns. After that, you have the guaranteed bank account of not losing on the investment unlike living with market volatility. The ability to relocate creates a new financial incentive. Then there’s what I call the Kool Aid factor.
What’s the Kool Aid factor? It’s something I’ve had to live with since I was 13. By the age of 13 the local teams I rooted for had won 7 championships and lost 2 more. 13 years, 9 title appearances, 7 wins. Add to it the local teams I didn’t root for who provided 4 more title appearances and 3 wins. 13 years, 13 title appearances, 9 wins. Fast forward 8 more years, and local teams added 5 more titles appearances and another championship. So what is the kool aid factor?
Because of this success, fans got “full” from winning, like the team was a buffet and the fans ate enough. They never asked- why did a franchise that was championship caliber stop seeking and/or providing such? But the fans were somehow satisfied with a “good run” of titles, which in all fairness is hard to sustain, and hard to jump back into after you lose. Or maybe it’s not. We’ll discuss that later.
Instead the conversation became “We can return to glory if we just believe!” The Philadelphia 76er’s even made this their mantra- trust the process. The process got assraped in the playoffs last year…BUT THEY MADE THE PLAYOFFS! That’s an improvement. And the best part- under my plan, the owner gets 5 more years to sustain improvements.
So I’m sure you’re thinking like I am. You’re saying “Owners hire league presidents. If they are afraid of losing their team, they’ll fire league presidents.” No, they won’t.
League presidents add value to franchises. So do you think in a sport where half a league annually earns a postseason paycheck that they’re going to fire what works over what doesn’t? You think Jerry Jones sitting on $3 billion dollars really wants to see his doofy league president take a hiatus? Well, he does, and 30 owners shouted him down. Everyone not named Jerry Jones.
But what if some owners in the club would suddenly not be in the club. What would a league likely do in the face of flailing owners? They’d expand the playoff format. Owners would pressure each other to make the NFL regular season one or two games less to add 6 more teams to the playoffs so nobody has to sell. Truth be told, I’d rather see 14 regular season NFL games and more playoffs just for the excitement, so that makes my suggestion even more enticing.
And baseball would probably make 4 divisions per league and 4 wildcards, and the wild card with the worst record plays against the team closest to them in record- think 8 versus 9- to see who is the last to make a play in. Suddenly you’ve expanded baseballs playoffs from 10 to 18. So if you’re one of the 14 or 32 that can’t qualify for the vastly expanded post season? SELL.
The next issue I can think of- what if there is a strike or lockout? That season does not count, because it’s not a true season. However, no league CBA can be under 6 years.
I’m sure you’re saying “Well, what if the new buyers want to move a team?” Sure, that’s an option and may even be the impetus for a purchase. So here’s a solution. A Divorce tax. Any man that’s been divorced knows how the court turns that marriage based on love for both into a viscous ass raping based on finances created in fantasy land where the man is impoverished. A housewife has an annual value of WHAT? Amazing nonsense. But it can set a precedent.
Say the Calgary Flames hold true to their threat of moving out of the old Saddle Dome. Sure. How many years were you here? OK, so you claimed how many tax breaks over those 35 years? OK you have to pay half of that back in a lump sum and the rest in annual payments.
Also, there’s an Alimony tax, the tax on a team’s future earnings. Which is another bullshit thing courts do – tax a man’s pension decades after a marriage breaks up. How come they don’t make the person receiving such suck dick for it, like he was accustomed to in the marriage? So your new team is making money in Houston? Great, we get a piece for the next ten years. We need to get back on our feet and save for a new team. And we don’t even have to such off the old team.
Lastly there should be a relocation fee to season ticket holders. “Hey loyal fans, sorry we fucked you. Here’s three years of seat fees, on us to say thanks for the years of your support.” Can you imagine an owner treating their fans with such dignity and class? Me either.
Won’t owners just shift ownership to a family member or a shell company? Not if you make rules against families in consecutive generations passing teams back and forth, and do enough due diligence on a shell company to make sure it’s not run by an absentee or a bad owner.
Maybe this opens up American sports to foreign investment. Didn’t Nintendo own the Seattle Mariners? And they were good?
Some people will say that this plays favorites for large markets at the expense of small markets. But the “small market” 2015 Kansas City Royals won a World Series. The Tampa Bay Lightning have recently both won and lost playing for a Stanley Cup. Green Bay may be the smallest professional market and yet the Packers are multiple time champions. The Cleveland Cavaliers brought a title to Cleveland for the first time in…before man walked on the moon. So are the rest of the “small market” guys shitty owners? Do they deserve to lose a team?
The answers are maybe and maybe. If you look at sports team champions, there’s usually patterns of teams that are well run and return to post season in their era of good coaching and management. I would never sleep on the San Antonio Spurs as long as Greg Popovich is head coach, but they aren’t winning a title in the next two years. But when Pop retires?
Look at the Yankees in the year change between Joe Girardi and Arron Boone. Girardi took a team that was expected to be an 80 win team to a few innings away from a World Series. Boone took a team expected to be in a World Series and had them get smoked by the eventual champion Boston Red Sox. When a great coach leaves, there’s almost always a step back. Did the Mets do better without Davey Johnson? The Cardinals without Tony LaRussa?
Good news Jets fans. When Belichick goes, there will be intolerable pain in Boston.
And that small market argument is invalid. Large market teams can eat a dick, too. The Knicks have been awful for a decade plus. The Flyers stink. The Nationals lose a lot. There are plenty of big market teams that will get impacted by this. And here comes the best part.
When they do, there will be lower prices and new owners with a motivation to win. Not old owners with a motivation for fat TV contracts to larden up their portfolio and eventually create a class system upon the sale of the team. So folks, root for some core changes, and think bigger picture. Imagine how much more fun would be if your team was playing for a championship every game of the season? Until then, you’ll get the same crap you’re presently being fed.
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