Bills Bonds - An Idea for Helping to Keep the Bills in Buffalo

[BillsPhan]

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.

 

 

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- 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.

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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.

 

You don't understand the mentality of the billionaires or groups of millionaires that may actually line up to buy the Buffalo Bills after Wilson dies. They won't need a BillsBonds loan, but more importantly, they won't want a BillsBonds loan. The last thing any prospective ownership group will want, in my humble opinion, (including the phantom Jim Kelly-led local group if they really exist), is a loan made up of thousands of bonds purchased by WNY based Bills fans to have to answer to.

 

Your time and efforts would be much better served if you just contacted Jim Kelly and simply asked him if you could set up your BillsBonds group as part owners of his existing group. And if that is not allowed in today's NFL bylaws, then I say simply forget this idea. As awesome as it is, it simply won't be welcomed or needed.

[Bills Bonds]

You don't understand the mentality of the billionaires or groups of millionaires that may actually line up to buy the Buffalo Bills after Wilson dies. They won't need a BillsBonds loan, but more importantly, they won't want a BillsBonds loan. The last thing any prospective ownership group will want, in my humble opinion, (including the phantom Jim Kelly-led local group if they really exist), is a loan made up of thousands of bonds purchased by WNY based Bills fans to have to answer to.

 

Your time and efforts would be much better served if you just contacted Jim Kelly and simply asked him if you could set up your BillsBonds group as part owners of his existing group. And if that is not allowed in today's NFL bylaws, then I say simply forget this idea. As awesome as it is, it simply won't be welcomed or needed.

 

Suppose a new owner could get 3% financing on $400 million of Bills Bonds (purely hypothetical as that is a lot to raise) instead of 10% from a bank (like Dan Snyder got when he purchased the Redskins). Instead of paying $40 million in interest per year, the new owner would pay $12 million. That $28 million of interest savings per year is what would appeal to a new owner (especially when you consider that the Bills only earned a profit of $28 million last year according to Forbes).

 

Also, what do you mean by answer to bondholders? Bondholders are entitled to interest and principal payments, and as long as those payments are being made, bondholders don’t have a say.

 

I like your idea of having fans as part owners. However, according to NFL Bylaws, an ownership group can have no more than 25 limited partners.

[Thoner7]

I had this same idea a few months back.

 

The problem I had was paying off the loans. I figured the Bilsl will sell for 650ish Million. Paying off that amount the same way a mortgagee is amortized, you would need 2% or less interest at around 35+ years to remain profitable (assuming the Bills retain their currently profitability, a reported 34 Mil/yr last I heard) Whether you could fund the entire team or a fraction, that will remain the same as you will only get a fraction of the profitability.

 

I didnt read your entire site, but the one thing you need to have in there is a type of deed restriction on your bonds, and with that it would increase your chances of success. Offer a 40 or 50 year term in essence a lifetime term. In each bond you sell, you need to have a restriction stating the Bills cannot be moved. Essentially guaranteeing the Bills remain in Blo for the bond owners lifetime.

 

I put together a huge spreadsheet on this same stuff and would be glad to help you if youd like. I have always thought this may be the key to keeping the team here. I have connections with a big time Lawyer who just handled the sale of the Rangers- he may be able to handle all this for a % of the team as his fee, depending on how likely it seems. I would want to be part of the ownership group though, with a big say in who the F we draft

 

EDIT: I just read your other posts. You want to loan to the Millionaire…. I think you personally should make up part of the ownership group with your % of the franchise being paid for by the bonds, don’t loan them to someone else!

Edited November 12, 2010 by Thoner7

[Bflojohn]

I would think the key to keeping the Bills in Buffalo is future profitability! The funds that you are proposing are better spent on acquiring the luxury boxes or "guaranteeing" a sold out venue! The investment can come from Bills fans world-wide assuming that they are willing to pay the freight on higher ticket pricing and internal budgetary needs of the franchise. Promo is on to something here, whereby, the fans can buy their stake in the future of the club and write it off as investment, by donating seats to charity organizations, or having a ticket redistribution, of sorts, that allows for return on your money any given week of play. I've always wondered why the ticket pricing angle is never talked about enough. If the incentive is keeping the Bills in Buffalo, count me in for seats I'd control and distribute at my own whim! Just a thought!!!

[The Chief Corky]

I have an idea...how about if the bills started WINNING FOOTBALL GAMES...

[ieatcrayonz]

Suppose a new owner could get 3% financing on $400 million of Bills Bonds (purely hypothetical as that is a lot to raise) instead of 10% from a bank (like Dan Snyder got when he purchased the Redskins). Instead of paying $40 million in interest per year, the new owner would pay $12 million. That $28 million of interest savings per year is what would appeal to a new owner (especially when you consider that the Bills only earned a profit of $28 million last year according to Forbes).

 

Also, what do you mean by answer to bondholders? Bondholders are entitled to interest and principal payments, and as long as those payments are being made, bondholders don’t have a say.

 

I like your idea of having fans as part owners. However, according to NFL Bylaws, an ownership group can have no more than 25 limited partners.

Do you think this could get by the NFL powers that be? And why get an old baseball player with a bad reputation involved? There are plenty of rich people like Jim Kelly, Thurman Thomas, the estate of Tim Russert and on and on before even having to get a loan from Barry Bonds. Even if you go there, is he still really that arrogant that the whole project has to be named after him? It would not be good publicity.

[Bills Bonds]

Bills Bonds was discussed on Jerry Sullivan’s live sports chat on November 12th (see minute 1:08 in the link below or the text copied below):

http://buffalonews.typepad.com/sully_on_sports/

 

“Comment from Jim: Sully, I think you've seen the Bills bonds idea where fans fund the acquisition of the team. It now has a web site, what do you think of the idea?

 

Sully: I've talked to Brady about it and it's intriguing. But I don't think the league would go for it.”

 

Jerry has a valid concern and a concern that is discussed on the Bills Bonds website (http://www.billsbonds.com/blog/?page_id=76). The NFL could object to the idea. However, Bills Bonds would comply with NFL Bylaws as currently written.

[Bills Bonds]

I had this same idea a few months back.

 

The problem I had was paying off the loans. I figured the Bilsl will sell for 650ish Million. Paying off that amount the same way a mortgagee is amortized, you would need 2% or less interest at around 35+ years to remain profitable (assuming the Bills retain their currently profitability, a reported 34 Mil/yr last I heard) Whether you could fund the entire team or a fraction, that will remain the same as you will only get a fraction of the profitability.

 

I didn’t read your entire site, but the one thing you need to have in there is a type of deed restriction on your bonds, and with that it would increase your chances of success. Offer a 40 or 50 year term – in essence a “lifetime” term. In each bond you sell, you need to have a restriction stating the Bills cannot be moved. Essentially guaranteeing the Bills remain in Blo for the bond owners lifetime.

 

I put together a huge spreadsheet on this same stuff and would be glad to help you if you’d like. I have always thought this may be the key to keeping the team here. I have connections with a big time Lawyer who just handled the sale of the Rangers- he may be able to handle all this for a % of the team as his fee, depending on how likely it seems. I would want to be part of the ownership group though, with a big say in who the F we draft

 

EDIT: I just read your other posts. You want to loan to the Millionaire…. I think you personally should make up part of the ownership group with your % of the franchise being paid for by the bonds, don’t loan them to someone else!

 

I’m glad someone else had a similar idea. Thanks for sharing your thoughts, and I’d be interested to see your spreadsheet. I would note that on the math that you described, the loan amount would not need to be paid down entirely with earnings from the Bills. Some of the debt could be refinanced (most teams and companies maintain a debt balance rather than paying loans all the way to zero). Also, $650 million would be a lot of debt. But again – I’d be interested to see your calculation.

 

With regard to your lawyer friend who advised on the sale of the Rangers, it would be interesting to hear his thoughts. I have run the idea by a number of sports investment bankers, including a few that advised on the recent sale of the Golden State Warriors (link below). They all have said that the idea of Bills Bonds works on paper. However, I have never spoken with anyone on the legal side about it.

http://www.foxbusiness.com/markets/2010/11/12/nba-signs-warriors-record-setting-m-sale/

 

On your last point, as much as I like your idea of me being part of the ownership group, I couldn’t use other people’s money to become an owner of the team (unless I was capable of repaying it). In order to be an owner, I would have to either 1) put in my own money or 2) borrow money that I could repay someday. I’m sure fans would feel better about lending money to a group of multi-millionaires that own an asset like the Bills rather than me (a multi-thousandaire).

 

I would think the key to keeping the Bills in Buffalo is future profitability! The funds that you are proposing are better spent on acquiring the luxury boxes or "guaranteeing" a sold out venue! The investment can come from Bills fans world-wide assuming that they are willing to pay the freight on higher ticket pricing and internal budgetary needs of the franchise. Promo is on to something here, whereby, the fans can buy their stake in the future of the club and write it off as investment, by donating seats to charity organizations, or having a ticket redistribution, of sorts, that allows for return on your money any given week of play. I've always wondered why the ticket pricing angle is never talked about enough. If the incentive is keeping the Bills in Buffalo, count me in for seats I'd control and distribute at my own whim! Just a thought!!!

 

You make a good point. Fans joining together to increase revenue for a new owner would be just a beneficial as fans joining together to decrease interest costs. If, for example, fans agreed to sell out all games for the first 10 years after a new owner buys the team -- that could have a lot of value for a new owner. Your idea is similar to the Business Backs the Bills movement started by Erkie Kailbourne ten years ago (see the link below).

http://www.bizjournals.com/buffalo/stories/1998/08/31/story1.html

[bbb]

Bills Bonds was discussed on Jerry Sullivan’s live sports chat on November 12th (see minute 1:08 in the link below or the text copied below):

http://buffalonews.typepad.com/sully_on_sports/

 

“Comment from Jim: Sully, I think you've seen the Bills bonds idea where fans fund the acquisition of the team. It now has a web site, what do you think of the idea?

 

Sully: I've talked to Brady about it and it's intriguing. But I don't think the league would go for it.”

 

Jerry has a valid concern and a concern that is discussed on the Bills Bonds website (http://www.billsbonds.com/blog/?page_id=76). The NFL could object to the idea. However, Bills Bonds would comply with NFL Bylaws as currently written.

 

Who is Brady?

[Bills Bonds]

Luke Russert just tweeted about Bills Bonds.

 

"Great idea to keep the Bills in Buffalo: http://www.billsbonds.com/blog/ A must read for any Bills fan and Buffalo lover."

 

http://twitter.com/#!/RussertXM_NBC

[bbb]

Luke Russert just tweeted about Bills Bonds.

 

"Great idea to keep the Bills in Buffalo: http://www.billsbonds.com/blog/ A must read for any Bills fan and Buffalo lover."

 

http://twitter.com/#!/RussertXM_NBC

 

I wonder if they talked about it on Nick Mendola's WECK show tonight. Luke is on every Monday......He's such a good guy and even though he wasn't born here, he is a Buffalonian through and through.

[notwoz]

Luke Russert just tweeted about Bills Bonds.

 

"Great idea to keep the Bills in Buffalo: http://www.billsbonds.com/blog/ A must read for any Bills fan and Buffalo lover."

 

http://twitter.com/#!/RussertXM_NBC

Who's Luke Russert, and why should anyone care what he says about Bills bonds? Is he an invetment banker? Does he have skin in the game?