Cannon Posted November 9, 2010 Share Posted November 9, 2010 I'd give up to 10 grand to keep the bills in buffalo. I have $400 to my name right now and would give that. Link to comment Share on other sites More sharing options...
kodak Posted November 9, 2010 Share Posted November 9, 2010 Below is a brief explanation of the idea. Please visit the recently launched website (www.BillsBonds.com) and find us on facebook and twitter, if you are interested. We’re interested to hear your thoughts. ______________________________________________________ - A way for Buffalo Bills fans to invest in the future of their team and to help keep the Bills where they belong -- in Buffalo. - A way of tweaking the Green Bay Packers idea of selling stock to fans so that it complies with current NFL Bylaws. - A way for fans to help save the Bills, while saving money. Please visit the www.BillsBonds.com for more information. ______________________________________________________ Buffalo Bills fans realize that the team is at risk of leaving Buffalo. What's frustrating is that it seems that there's almost nothing fans can do to effect whether the team stays or goes. When Ralph Wilson, Jr. passes away and the team changes ownership, fans will be on the sideline hoping that the new ownership group keeps the Bills in Buffalo rather than moving the franchise to a larger market. This doesn’t have to be the case. Fans do not have to sit idly by and just hope for the best. In 1923, with the Green Bay Packers on the brink of brink of bankruptcy, fans bought the team by purchasing shares of Packers stock. NFL Bylaws now prevent Bills fans from replicating this idea, but with a twist to the Packers idea Bills fans could invest in the future of the Bills. Bills fans could provide a “loan” to a new ownership group that is committed to keep the Bills in Buffalo. Proceeds from that loan, or more specifically bonds (a loan chopped into many pieces and sold to the public), would be used by the new ownership group to help pay the ~$800 million price tag for the team. The Bills new ownership would then pay the bondholders back overtime plus interest with cash flows generated by the team. By purchasing these bonds (called Bills Bonds) fans would be saving the team, while saving money. Please visit BillsBonds.com for more information. if DARREL TALLY WAS INCHARGE OF IT YOU GOT MY MONEY Link to comment Share on other sites More sharing options...
Bills Bonds Posted November 9, 2010 Author Share Posted November 9, 2010 Good idea. I think you're biggest problem is going to be your target market of buyers for these bonds. Someone said we'd need 800,000 people to give $1,000 each, and we'd have $800mm. That is an unrealiztic number if you are planning on marketing these to fans. Normally in a bond issue, the company/group issuing the bonds meets with prospective investment banks to pick the one with the lowest fees/best deal. Once the financial institution is picked, an agreement is setup where that institution agrees to issue so many bonds on behalf of the company/group and guarantees buyers for those bonds. Usually those buyers are hedge funds, large companies, wealth managers, or very wealthy individuals who buy the bonds based on their debt appetite and the tier of the bond (i.e. rate of return versus order of default absorbtion of the debt). The buys are done in large chunks for the most part, since the more transactions that occur, the more it costs the financial institution to sell the bonds. In your scenario, there would be multiple small transactions to fund the bond purchases. This would most likely cause the price of the transaction to increase because of how many individual transactions would have to be made. Also, finding 800k people willing to fork over $1k each is not easy. There probably are not that many people over the age of 30 in WNY, regardless of whether they have the money to invest or not. Even $150mm is a lot to get in $1k increments. Also, when these transactions occur, the financial institution has a set amount of time to sell all the bonds before the deal goes bust and the company/group behind the issue walks away (usually at cost to the financial institution). For this reason alone, it might be difficult to get a financial isntitution to sign on. You make a lot of good points -– yes, a typical bond issuance involves an investment bank (or a group of investment banks) underwriting the bonds and selling them in relatively large chunks to investment managers. As you point out, selling bonds to fans would be more difficult because it would be involve selling smaller chunks to more investors. However, the Packers were able to orchestrate a stock issuance of 120,010 shares to 105,989 separate investors during a 16-week period in 1997 and 1998. So while I agree that it would be more difficult than the typical bond issuance, I do not think it would be impossible. I also think that a commercial bank with a large presence in Buffalo would be able to handle the process better than an investment bank. They already have the branches, bank tellers and online systems –- buying a Bills Bond could be like opening a bank account. On top of the fees that a commercial bank could earn, there could also be reputational benefit associated with running a process designed to help keep the Bills in Buffalo. It wouldn’t be an easy task to get a financial institution to sign on, but I think if the demand is there then one could be attracted. Link to comment Share on other sites More sharing options...
Mr. WEO Posted November 9, 2010 Share Posted November 9, 2010 It would have to be a negotiation with the new ownership group. If you are correct that no owner would sign up for that (which may be the case), there are other ways to put up barriers to the team leaving. Here’s an example – the bonds pay a subsidized interest rate of say 3% as long as the Bills stay in Buffalo. But the bonds accrue interest at a market interest rate of say 6% to 10%. This market rate of interest does not have to be paid unless the team is in fact moved. Over time a financial barrier of interest would accrue that would disincentivize an owner from moving the team. We are speaking in hypotheticals and all of this would be a negotiation. But with some creativity hurdles could be overcome. Yes, but your plan also prohibits the new owner from selling to another buyer "who might move the team". Not sure how you can prevent that, no matter what agreement the first new owner agrees to. Also, such a clause would be far to onerous for a second new owner and would prevent the resale of the team. If finances go south, our next owner would be doomed. There's no way the League (which is really the other owners) would allow such a clause to so bind an owner. Link to comment Share on other sites More sharing options...
Bills Bonds Posted November 10, 2010 Author Share Posted November 10, 2010 Yes, but your plan also prohibits the new owner from selling to another buyer "who might move the team". Not sure how you can prevent that, no matter what agreement the first new owner agrees to. Also, such a clause would be far to onerous for a second new owner and would prevent the resale of the team. If finances go south, our next owner would be doomed. There's no way the League (which is really the other owners) would allow such a clause to so bind an owner. You may be right about that. The point I was trying to make is that even without a prohibition on moving the team, there are other ways Bills Bonds could create barriers to the team leaving. The alternative I suggested is structuring the bonds so that interest rates are low if the Bills stay in Buffalo but are high (or at market) if the team ever moves. Interest could accrue that would only have to paid to holders of Bills Bonds if the team actually left. This would not be a prohibition on the team leaving Buffalo (which as you point out the owners and NFL may not allow). But it would create a financial disincentive in moving the team. Link to comment Share on other sites More sharing options...
Mr. WEO Posted November 10, 2010 Share Posted November 10, 2010 You may be right about that. The point I was trying to make is that even without a prohibition on moving the team, there are other ways Bills Bonds could create barriers to the team leaving. The alternative I suggested is structuring the bonds so that interest rates are low if the Bills stay in Buffalo but are high (or at market) if the team ever moves. Interest could accrue that would only have to paid to holders of Bills Bonds if the team actually left. This would not be a prohibition on the team leaving Buffalo (which as you point out the owners and NFL may not allow). But it would create a financial disincentive in moving the team. If the next owner agrees to this type of financing, buys the team and then sells it to another individual (owner number 2) who uses conventional financing, I assume the bonds get paid off upon the sale of the team. Owner number 2 is now free to move the team without the financial consequences of the restrictive bond agreement. Link to comment Share on other sites More sharing options...
Bills Bonds Posted November 10, 2010 Author Share Posted November 10, 2010 If the next owner agrees to this type of financing, buys the team and then sells it to another individual (owner number 2) who uses conventional financing, I assume the bonds get paid off upon the sale of the team. Owner number 2 is now free to move the team without the financial consequences of the restrictive bond agreement. It depends how you write the bonds’ legal agreements. You could write the documents so that the accrued interest portion remains outstanding even after the principal portion is paid off. This accrued interest portion would transfer with the team to new ownership. If any future owner moves the team, that owner would need to pay the accrued interest. This accrued interest portion could even be structured as a detachable security. There is plenty of flexibility in how the financial instruments could be structured. It would all be dependent on negotiations with a new ownership group. Link to comment Share on other sites More sharing options...
stevewin Posted November 10, 2010 Share Posted November 10, 2010 It would have to be a negotiation with the new ownership group. If you are correct that no owner would sign up for that (which may be the case), there are other ways to put up barriers to the team leaving. Here’s an example – the bonds pay a subsidized interest rate of say 3% as long as the Bills stay in Buffalo. But the bonds accrue interest at a market interest rate of say 6% to 10%. This market rate of interest does not have to be paid unless the team is in fact moved. Over time a financial barrier of interest would accrue that would disincentivize an owner from moving the team. We are speaking in hypotheticals and all of this would be a negotiation. But with some creativity hurdles could be overcome. I agree with the previous comments about the fact there there is no way someone would sign an agreement that would prevent them from moving. The angle you discuss above with disincentives I think is more reasonable. It could even be more straightforward than that - if they move they pay the money back etc. The point being that no rational businessman is going to agree to a stipulation you can never move, even if they don't plan on ever doing it, but conditions can change - what you want ideally is to make it painful for someone to leave (want them to tough it out through hard times etc.) while being reasonable at the same time. Link to comment Share on other sites More sharing options...
Bills Bonds Posted November 10, 2010 Author Share Posted November 10, 2010 I agree with the previous comments about the fact there there is no way someone would sign an agreement that would prevent them from moving. The angle you discuss above with disincentives I think is more reasonable. It could even be more straightforward than that - if they move they pay the money back etc. The point being that no rational businessman is going to agree to a stipulation you can never move, even if they don't plan on ever doing it, but conditions can change - what you want ideally is to make it painful for someone to leave (want them to tough it out through hard times etc.) while being reasonable at the same time. Stevewin and Mr. WEO thanks for your thoughts and feedback. I agree with your comments that putting these types of barriers in place is more realistic than a provision on not moving the team. It takes feedback like this to improve the idea -- I appreciate it. Link to comment Share on other sites More sharing options...
Fitzmagic Posted November 10, 2010 Share Posted November 10, 2010 I'm interested Link to comment Share on other sites More sharing options...
Fitzmagic Posted November 10, 2010 Share Posted November 10, 2010 After reading the PDF file on the website... this needs to be reality. How soon can we get this started? Link to comment Share on other sites More sharing options...
bills_fan Posted November 10, 2010 Share Posted November 10, 2010 You make a lot of good points -– yes, a typical bond issuance involves an investment bank (or a group of investment banks) underwriting the bonds and selling them in relatively large chunks to investment managers. As you point out, selling bonds to fans would be more difficult because it would be involve selling smaller chunks to more investors. However, the Packers were able to orchestrate a stock issuance of 120,010 shares to 105,989 separate investors during a 16-week period in 1997 and 1998. So while I agree that it would be more difficult than the typical bond issuance, I do not think it would be impossible. I also think that a commercial bank with a large presence in Buffalo would be able to handle the process better than an investment bank. They already have the branches, bank tellers and online systems –- buying a Bills Bond could be like opening a bank account. On top of the fees that a commercial bank could earn, there could also be reputational benefit associated with running a process designed to help keep the Bills in Buffalo. It wouldn’t be an easy task to get a financial institution to sign on, but I think if the demand is there then one could be attracted. No. First of all, the bond is a security. In most cases, it is unlawful for any entity that is not a registered broker-dealer to sell a security per the Securities Exchange Act of 1934. So nix the commercial bank idea. A large commercial bank in Buffalo with a broker-dealer in its branches could be workable provided that any individual purchasing the bonds also opens a securities account with the broker-dealer. Another problem you will run into is state Blue Sky laws. I'm assuming these bonds will not have the benefit of Federal pre-emption of state securities laws pursuant to Section 18 of the Securities Act of 1933, therefore these bonds will likely need state registration (which can be a bear). New York would likely be doable provided the bonds were sold by a registered broker-dealer, but registration in other states could be problematic. The Sports Acquisition Corp. that tried to buy the Panthers was a SPAC (Special Purposes Acquisition Company) that went public to raise the money for its special purpose. The purchase failed and it is returning the money. However, because it was a listed, public company, it did not need state registration. It would help you if you get hold of the Packers offering document from 1998. That may help give you some ideas. Link to comment Share on other sites More sharing options...
Bills Bonds Posted November 10, 2010 Author Share Posted November 10, 2010 No. First of all, the bond is a security. In most cases, it is unlawful for any entity that is not a registered broker-dealer to sell a security per the Securities Exchange Act of 1934. So nix the commercial bank idea. A large commercial bank in Buffalo with a broker-dealer in its branches could be workable provided that any individual purchasing the bonds also opens a securities account with the broker-dealer. Another problem you will run into is state Blue Sky laws. I'm assuming these bonds will not have the benefit of Federal pre-emption of state securities laws pursuant to Section 18 of the Securities Act of 1933, therefore these bonds will likely need state registration (which can be a bear). New York would likely be doable provided the bonds were sold by a registered broker-dealer, but registration in other states could be problematic. The Sports Acquisition Corp. that tried to buy the Panthers was a SPAC (Special Purposes Acquisition Company) that went public to raise the money for its special purpose. The purchase failed and it is returning the money. However, because it was a listed, public company, it did not need state registration. It would help you if you get hold of the Packers offering document from 1998. That may help give you some ideas. I have my Series 7 & 63 FINRA certifications, but you seem to have me beat on securities regulations (all you need is a 70% to pass those tests). Thanks for your comments. You are correct that a commercial bank that is not registered as a broker dealer could not run the process on its own. I was simply making the point that from a distribution perspective a bank with a large presence in Buffalo would have many advantages. Maybe a commercial bank in Buffalo could team with an investment bank and get involved in the syndication process. Maybe I’m an optimist, but I think if the demand/interest is there then the proper registrations could be figured out. I will explore the Packers stock offering document for ideas. However, I would think that the document is a bit atypical given that it is stock in a non-profit entity. Link to comment Share on other sites More sharing options...
Bills Bonds Posted November 10, 2010 Author Share Posted November 10, 2010 After reading the PDF file on the website... this needs to be reality. How soon can we get this started? I like your enthusiasm! Step one - the idea needs to spread beyond message boards. However, if the idea could gain some momentum and get the right people behind it, I believe it could take off quickly. Two parties that are key to this idea taking off are: - A New Pro-Buffalo Ownership Group – Kelly’s group or another ownership group that wants to keep the Bills in Buffalo would need to get behind the idea. - A Financial Institution to Run the Bond Issuance Process – many of the most recent posts have discussed this. Link to comment Share on other sites More sharing options...
Bills Bonds Posted November 11, 2010 Author Share Posted November 11, 2010 Supposedly Bills Bonds got a mention on the John DiTullio show this afternoon. I missed it but a commenter on the BillsBonds.com said the following: "John DiTullio, show host of a daily sports talk show, announced it this afternoon on his show. Spread the word! The concept of investing sounds interesting to do…make sure you consult a financial advisor first!! You can listen in locally or online. Http://www.whtk.com Rochester Sports Talk 1280 and 107.3! (and no, I don’t work for Clear Channel or am staff for the show…) Just a loyal listener and supporter of the “Bills Brothers” on Thursday afternoons at 3 pm EST." Link to comment Share on other sites More sharing options...
superbills315 Posted November 11, 2010 Share Posted November 11, 2010 Below is a brief explanation of the idea. Please visit the recently launched website (www.BillsBonds.com) and find us on facebook and twitter, if you are interested. We’re interested to hear your thoughts. ______________________________________________________ - A way for Buffalo Bills fans to invest in the future of their team and to help keep the Bills where they belong -- in Buffalo. - A way of tweaking the Green Bay Packers idea of selling stock to fans so that it complies with current NFL Bylaws. - A way for fans to help save the Bills, while saving money. Please visit the www.BillsBonds.com for more information. ______________________________________________________ Buffalo Bills fans realize that the team is at risk of leaving Buffalo. What's frustrating is that it seems that there's almost nothing fans can do to effect whether the team stays or goes. When Ralph Wilson, Jr. passes away and the team changes ownership, fans will be on the sideline hoping that the new ownership group keeps the Bills in Buffalo rather than moving the franchise to a larger market. This doesn’t have to be the case. Fans do not have to sit idly by and just hope for the best. In 1923, with the Green Bay Packers on the brink of brink of bankruptcy, fans bought the team by purchasing shares of Packers stock. NFL Bylaws now prevent Bills fans from replicating this idea, but with a twist to the Packers idea Bills fans could invest in the future of the Bills. Bills fans could provide a “loan” to a new ownership group that is committed to keep the Bills in Buffalo. Proceeds from that loan, or more specifically bonds (a loan chopped into many pieces and sold to the public), would be used by the new ownership group to help pay the ~$800 million price tag for the team. The Bills new ownership would then pay the bondholders back overtime plus interest with cash flows generated by the team. By purchasing these bonds (called Bills Bonds) fans would be saving the team, while saving money. Please visit BillsBonds.com for more information. i agree let the fans own the team and have final say on the draft, free agents, and who to resign "kelsey" Link to comment Share on other sites More sharing options...
Chandemonium Posted November 11, 2010 Share Posted November 11, 2010 i agree let the fans own the team and have final say on the draft, free agents, and who to resign "kelsey" What do you agree with exactly? This has nothing to do with the fans owning the team or having any say in personnel decisions. Link to comment Share on other sites More sharing options...
weehawk Posted November 11, 2010 Share Posted November 11, 2010 That's what they said about Bernie Madoff. Keep up the good work, BB. You obviously are smart and know finance. We need guys like you. Link to comment Share on other sites More sharing options...
Bill_in_DC Posted November 11, 2010 Share Posted November 11, 2010 Count me in . . . my uncle bought a few shares of Packers stock. He has one share framed and hanging in his living room. Link to comment Share on other sites More sharing options...
Marv's Neighbor Posted November 11, 2010 Share Posted November 11, 2010 There is no owner alive who would sign that agreement. I think the operative word here is ALIVE! Link to comment Share on other sites More sharing options...
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