Kirby Jackson Posted June 17, 2020 Share Posted June 17, 2020 1 hour ago, Greg S said: Which drives home the point about having a strong management team run the show. The Bills were just like the Sabres a few years ago. Spinning their wheels and going nowhere. Replace the GM/HC every few years over and over again. Beane and McDermott changed the culture of the Bills. The Sabres need the same. If you judge the Pegula's on only the Bills then they are considered good owners. Judge them off the Sabres and its a different story. Are they? Marrone, Russ, Whaley, REX AND ROB?!? They weren’t good. They got the right people there now. Add in their Sabres hires and fires and they’re batting average is extremely low. That’s my point. They need to get the right people and get the hell out of the way!! Link to comment Share on other sites More sharing options...
BillsFan4 Posted June 17, 2020 Share Posted June 17, 2020 (edited) 3 hours ago, thebug said: Can’t Pegs just drill another well? I’m not 100% sure but I read that the Pegulas entire gas business is shut down, and has been for months. I guess gas prices dropped so low that it wasn’t profitable for them to even drill anymore (at least that’s what I remember reading somewhere). edit - here’s one article. It says they stopped drilling months before the pandemic because of low gas prices. From a quick google search it looks like they’ve been winding down gas production since at least 2019 due to the drop in prices. https://live24x7.news/pegula-sports-and-entertainment-could-look-different-moving-forward-heres-why-the-buffalo-news/ it looks like every business they run is under water right now right now except for the Bills. Amerks, 2 lacrosse teams, their hotels + restaurants, Sabres, PSE. Edited June 17, 2020 by BillsFan4 2 Link to comment Share on other sites More sharing options...
JohnC Posted June 17, 2020 Share Posted June 17, 2020 1 hour ago, Kirby Jackson said: Feels like only yesterday that I failed on the decision to have Kim Pegula as the President/CEO of PSE. At the time I claimed there were 100+ people in their organization more qualified. I’m just here to take a quick victory lap and accept any apologizes that people want to offer. All joking aside, this was the expected outcome. They are over their heads as owners. I believe firing Botterill was the right decision. I believe publicly supporting him and then firing him 2 months later is idiotic. The Sabres have lost credibility with hockey leaders, players and agents. That’s not a good franchise building strategy. The best owners in sports own the teams. They don’t operate them. The firing of Botterill was not a hockey decision. It was a financial decision. If you recall he was retained to finish the last year of his contract. The reason why he was let go was because he was not receptive to the owners' plan to dramatically strip the staffing in the organization in order to save money. As you well know the economics of football are different from the more challenging economics of hockey. In football it is nearly impossible to lose money. Even poorly managed football franchises make money. That's not the case in hockey. The Sabres were hemorrhaging money prior to the pandemic and were facing a financial meltdown during the pandemic that will be following the sport into the next season. How the Pegulas have responded to this current precarious economic environment is the same way other industries such as the hotel, hospitality, airlines, retail etc have responded. The strategy is to resort to austerity for the sake of survival and viability for tomorrow. Link to comment Share on other sites More sharing options...
Greg S Posted June 17, 2020 Share Posted June 17, 2020 19 minutes ago, Kirby Jackson said: Are they? Marrone, Russ, Whaley, REX AND ROB?!? They weren’t good. They got the right people there now. Add in their Sabres hires and fires and they’re batting average is extremely low. That’s my point. They need to get the right people and get the hell out of the way!! When they took over Marrone quit because he wanted the Jets job (if I remember correctly). Whaley was already the GM. Rex was a mistake but they acted quickly to correct that. Beane is their 1st GM hire and McDermott their 2nd HC hire. I would say overall they have done a good job with the Bills so far. Link to comment Share on other sites More sharing options...
Kirby Jackson Posted June 17, 2020 Share Posted June 17, 2020 8 minutes ago, JohnC said: The firing of Botterill was not a hockey decision. It was a financial decision. If you recall he was retained to finish the last year of his contract. The reason why he was let go was because he was not receptive to the owners' plan to dramatically strip the staffing in the organization in order to save money. As you well know the economics of football are different from the more challenging economics of hockey. In football it is nearly impossible to lose money. Even poorly managed football franchises make money. That's not the case in hockey. The Sabres were hemorrhaging money prior to the pandemic and were facing a financial meltdown during the pandemic that will be following the sport into the next season. How the Pegulas have responded to this current precarious economic environment is the same way other industries such as the hotel, hospitality, airlines, retail etc have responded. The strategy is to resort to austerity for the sake of survival and viability for tomorrow. I’m sorry but I’m having a hard time with the “financial woes” of the Sabres. They paid $189M for them less than a decade ago and would get $550M+ tomorrow. The franchise value went up $25M last year alone. This isn’t like other businesses. The rarity, exclusivity and demand for sports teams by billionaires make them different. They value of the business doesn’t go up and down like a restaurant based on sales. The operating income may fluctuate some but the largest expense, player salaries, is a percentage of overall revenue. It’s not like you need to maintain the same pay without the same income. I’m not, and WILL NEVER buy into sports owners crying poor. 5 minutes ago, Greg S said: When they took over Marrone quit because he wanted the Jets job (if I remember correctly). Whaley was already the GM. Rex was a mistake but they acted quickly to correct that. Beane is their 1st GM hire and McDermott their 2nd HC hire. I would say overall they have done a good job with the Bills so far. They’ve owned the team for 6 years, had 3 HCs, 2 GMs, multiple presidents. They lost their top leadership on the business side almost across the board in both franchises (Russ, Wheat, Sinclair, Popko, etc..). That sort of attrition doesn’t happen in top organizations. Now it looks like they got it right with McDermott and Beane. Even a broken clock is right twice a day. They should do everything in their power to extend them and stay out of their way. Link to comment Share on other sites More sharing options...
Greg S Posted June 17, 2020 Share Posted June 17, 2020 5 minutes ago, Kirby Jackson said: I’m sorry but I’m having a hard time with the “financial woes” of the Sabres. They paid $189M for them less than a decade ago and would get $550M+ tomorrow. The franchise value went up $25M last year alone. This isn’t like other businesses. The rarity, exclusivity and demand for sports teams by billionaires make them different. They value of the business doesn’t go up and down like a restaurant based on sales. The operating income may fluctuate some but the largest expense, player salaries, is a percentage of overall revenue. It’s not like you need to maintain the same pay without the same income. I’m not, and WILL NEVER buy into sports owners crying poor. They’ve owned the team for 6 years, had 3 HCs, 2 GMs, multiple presidents. They lost their top leadership on the business side almost across the board in both franchises (Russ, Wheat, Sinclair, Popko, etc..). That sort of attrition doesn’t happen in top organizations. Now it looks like they got it right with McDermott and Beane. Even a broken clock is right twice a day. They should do everything in their power to extend them and stay out of their way. Agree 100%. If they let Beane and McDermott call the shots then I think the Bills will be a contender more often than not. Hopefully that means a championship along the way. 1 Link to comment Share on other sites More sharing options...
plenzmd1 Posted June 17, 2020 Share Posted June 17, 2020 54 minutes ago, Kirby Jackson said: Are they? Marrone, Russ, Whaley, REX AND ROB?!? They weren’t good. They got the right people there now. Add in their Sabres hires and fires and they’re batting average is extremely low. That’s my point. They need to get the right people and get the hell out of the way!! I look at it the other way...they were not afraid to buck the " continuity at all costs" idiocy ..and at least know when they made a mistake. Link to comment Share on other sites More sharing options...
BillsfaninChicago Posted June 17, 2020 Share Posted June 17, 2020 Man when Darcy Regier said there would be some suffering seven years ago he wasn’t kidding... Link to comment Share on other sites More sharing options...
GG Posted June 17, 2020 Share Posted June 17, 2020 53 minutes ago, Kirby Jackson said: The operating income may fluctuate some but the largest expense, player salaries, is a percentage of overall revenue. It’s not like you need to maintain the same pay without the same income. I’m not, and WILL NEVER buy into sports owners crying poor. Never conflate the value of a franchise with cash revenues and expenses. There have been many owners who hit a liquidity wall at the worst times for them. It's not uncommon for small market teams that are not well run into cash losses. The owners then turn to their reserves to meet that shortfall. It's not too far fetched to see that Pegulas are scrambling for cash now, since every business they own has been hit pretty badly and there's no visibility for a recovery. Their cost cutting actions are similar to nearly every company that's in oil& gas, entertainment & hospitality. A pretty toxic mix of assets in these times. 2 Link to comment Share on other sites More sharing options...
Kirby Jackson Posted June 17, 2020 Share Posted June 17, 2020 (edited) 21 minutes ago, GG said: Never conflate the value of a franchise with cash revenues and expenses. There have been many owners who hit a liquidity wall at the worst times for them. It's not uncommon for small market teams that are not well run into cash losses. The owners then turn to their reserves to meet that shortfall. It's not too far fetched to see that Pegulas are scrambling for cash now, since every business they own has been hit pretty badly and there's no visibility for a recovery. Their cost cutting actions are similar to nearly every company that's in oil& gas, entertainment & hospitality. A pretty toxic mix of assets in these times. I’m not conflating franchise value with cash revenue. Just saying, the entire cost of the people that they just cut is MAYBE $2M or so. When your net worth $5.1B that’s peanuts. He made $2M yesterday (.03% of his net worth). https://www.forbes.com/profile/terrence-pegula/#13714b983cc7 Edited June 17, 2020 by Kirby Jackson Link to comment Share on other sites More sharing options...
GG Posted June 17, 2020 Share Posted June 17, 2020 Just now, Kirby Jackson said: I’m not conflating franchise value with cash revenue. Just saying, the entire cost of the people that they just caught is MAYBE $2M or so. When your net worth $5.1B that’s peanuts. He made $2M yesterday (.03% of his net worth). https://www.forbes.com/profile/terrence-pegula/#13714b983cc7 In the process of saying you're not conflating wealth & income, you proceed to conflate wealth & income. Exactly how did he make $2 million on his wealth yesterday? Do you have an actual insight on his cash generating assets? I doubt it. The best example I can give is someone may own a priceless Picasso, but can't afford to keep the lights on because there's no way to charge other people to see the artwork. So you are very asset rich, but the expenses of keeping the Picasso hung safely on the wall mean that you need to tap into your savings or look to severely cut costs of maintaining the artwork. No too different than what Pegulas are doing now. Link to comment Share on other sites More sharing options...
Kirby Jackson Posted June 17, 2020 Share Posted June 17, 2020 (edited) 6 minutes ago, GG said: In the process of saying you're not conflating wealth & income, you proceed to conflate wealth & income. Exactly how did he make $2 million on his wealth yesterday? Do you have an actual insight on his cash generating assets? I doubt it. The best example I can give is someone may own a priceless Picasso, but can't afford to keep the lights on because there's no way to charge other people to see the artwork. So you are very asset rich, but the expenses of keeping the Picasso hung safely on the wall mean that you need to tap into your savings or look to severely cut costs of maintaining the artwork. No too different than what Pegulas are doing now. Do you believe the Pegula’s to be cash poor?!? I’m sure not buying that. To be clear, they are entitled to make whatever decisions they want. I’m just not standing for the myth that they are forced to financially. This is a decision that they WANT to make not that they HAVE make. Edited June 17, 2020 by Kirby Jackson Link to comment Share on other sites More sharing options...
GG Posted June 17, 2020 Share Posted June 17, 2020 4 minutes ago, Kirby Jackson said: Do you believe the Pegula’s to be cash poor?!? I’m sure not buying that. To be clear, they are entitled to make whatever decisions they want. I’m just not standing for the myth that they are forced to financially. This is a decision that they WANT to make not that they HAVE make. Based on the assets they own, I think they are running pretty big operating cash deficits since they're generating almost no revenues but are still incurring heavy fixed costs. Their choices are to keep cutting costs, sell assets or borrow. Link to comment Share on other sites More sharing options...
Kirby Jackson Posted June 17, 2020 Share Posted June 17, 2020 2 minutes ago, GG said: Based on the assets they own, I think they are running pretty big operating cash deficits since they're generating almost no revenues but are still incurring heavy fixed costs. Their choices are to keep cutting costs, sell assets or borrow. Again, though we are talking about a fraction of a fraction of “liquidation.” Owners crying about “tightening the belt” is just bs. That’s my point. I don’t care what decision that they make but don’t use the loss of revenue as a crutch. Cutting $2M (or whatever) on staff and infrastructure has ZERO impact on the Pegula’s lifestyle and/or financial position. FWIW, I agree that Botterill should be fired. I don’t agree with gutting everything and hiding behind the revenue not coming in. Just say, “we’ve funded a staff and system that didn’t work. We are going to go in another direction because it was a waste of money.” Owners crying poor just isn’t going to fly with me in 2020. It’s just not a real thing but it is utilized to gain empathy from the public. Link to comment Share on other sites More sharing options...
JohnC Posted June 17, 2020 Share Posted June 17, 2020 1 hour ago, Kirby Jackson said: I’m sorry but I’m having a hard time with the “financial woes” of the Sabres. They paid $189M for them less than a decade ago and would get $550M+ tomorrow. The franchise value went up $25M last year alone. This isn’t like other businesses. The rarity, exclusivity and demand for sports teams by billionaires make them different. They value of the business doesn’t go up and down like a restaurant based on sales. The operating income may fluctuate some but the largest expense, player salaries, is a percentage of overall revenue. It’s not like you need to maintain the same pay without the same income. I’m not, and WILL NEVER buy into sports owners crying poor. The value and appreciation of the Sabres are not part of the equation/calculation because the Pegulas aren't interested in selling the team. The issue is cash flow i.e. dollars in and dollars going out. They don't come close to balancing out. At least right now. What is crystal clear is that the Pegulas are losing a copious amount of money not only on the Sabres but on all their other secondary investments with the exception of the Bills. As an example the Pegulas have control of the arena which for maybe the next year or so won't hold any events. The Sabres are staying within the cap. That doesn't mean that they are not losing money. All the reports that are coming out from a variety of sources indicate that they are from a financial sense a losing venture, just as much as they are on the ice. No one is suggesting that anyone should be sympathetic to the owners. But the numbers are the numbers. The Sabres and all the other secondary investments (minus the Bills) are hemorrhaging money. That's the business reality that is driving the austerity strategy in the hockey organization. Link to comment Share on other sites More sharing options...
BillsFan4 Posted June 17, 2020 Share Posted June 17, 2020 Huh. I thought Botterill was in the last year of his deal. Turns out he had 2yrs left. Elliotte Friedman said the same thing. Link to comment Share on other sites More sharing options...
GG Posted June 17, 2020 Share Posted June 17, 2020 3 minutes ago, Kirby Jackson said: Again, though we are talking about a fraction of a fraction of “liquidation.” Owners crying about “tightening the belt” is just bs. That’s my point. I don’t care what decision that they make but don’t use the loss of revenue as a crutch. Cutting $2M (or whatever) on staff and infrastructure has ZERO impact on the Pegula’s lifestyle and/or financial position. FWIW, I agree that Botterill should be fired. I don’t agree with gutting everything and hiding behind the revenue not coming in. Just say, “we’ve funded a staff and system that didn’t work. We are going to go in another direction because it was a waste of money.” Owners crying poor just isn’t going to fly with me in 2020. It’s just not a real thing but it is utilized to gain empathy from the public. I could care less of the optics they're trying to sell, but understand that they are probably going through a serious cash flow problem right now. That was a major consideration in yesterday's bloodletting, but not the only one. You seem to want to hold them to a different standard than other companies in the industries that they own. Here's a snippet from Marriott's actions. It's not too different in any of the other industries they own. At the end of the day, they're ones who chose their investments, and now it's certainly backfired. But that doesn't mean they don't have cash flow issues. Quote Marriott International announced Wednesday it would be forced to furlough and layoff more employees as the ongoing coronavirus outbreak continues to ravage the hospitality industry. Officials from Marriott said the viral pandemic has hurt business more than 9/11 and the 2008 financial crisis combined, forcing the company to implement additional measures to reduce costs and improve its liquidity. ... Earlier this month, officials announced profits dropped 92 percent as it earned $31 million, or nine cents a share, through the first three months of the year compared to $375 million a year ago. Link to comment Share on other sites More sharing options...
Lurker Posted June 17, 2020 Share Posted June 17, 2020 18 minutes ago, Kirby Jackson said: Do you believe the Pegula’s to be cash poor?!? I’m sure not buying that. Possibly. There are no revenue streams coming out of the Sabres right now--or for the next six months-- meaning they have to cover all costs from other sources. If those sources are already pledged or illiquid, as the oil and gas assets would be, then they may have a liquidity crunch. The bloodletting seemed more about finances and less about hockey to me. Which is more than a little troubling... Link to comment Share on other sites More sharing options...
Kirby Jackson Posted June 17, 2020 Share Posted June 17, 2020 5 minutes ago, JohnC said: The value and appreciation of the Sabres are not part of the equation/calculation because the Pegulas aren't interested in selling the team. The issue is cash flow i.e. dollars in and dollars going out. They don't come close to balancing out. At least right now. What is crystal clear is that the Pegulas are losing a copious amount of money not only on the Sabres but on all their other secondary investments with the exception of the Bills. As an example the Pegulas have control of the arena which for maybe the next year or so won't hold any events. The Sabres are staying within the cap. That doesn't mean that they are not losing money. All the reports that are coming out from a variety of sources indicate that they are from a financial sense a losing venture, just as much as they are on the ice. No one is suggesting that anyone should be sympathetic to the owners. But the numbers are the numbers. The Sabres and all the other secondary investments (minus the Bills) are hemorrhaging money. That's the business reality that is driving the austerity strategy in the hockey organization. Maybe it’s more semantical? Obviously they aren’t generating the revenue that they needed to. They are in no way “forced” to make any cuts whatsoever. If they kicked in a fraction of a fraction of their own assets they could operate at the same level. They’d never notice the difference. This isn’t a small business situation. If the sandwich shop at the corner isn’t ringing $1000 a day they can’t afford to pay staff, bills, etc... If the Pegula’s and the Sabres miss 13 games, 6 of which are home, that lost revenue isn’t going to crush their business. It’s a PR spin used to get the public to empathize. It’s a BS excuse. We aren’t talking about multi-millionaires. We are talking about people that stroked a $1.4B check for the Bills (who buy the way are still spitting out cash). If my math is right the NFL teams last year each made $50m-$55m PROFIT from the TV deal alone. 14 minutes ago, GG said: I could care less of the optics they're trying to sell, but understand that they are probably going through a serious cash flow problem right now. That was a major consideration in yesterday's bloodletting, but not the only one. You seem to want to hold them to a different standard than other companies in the industries that they own. Here's a snippet from Marriott's actions. It's not too different in any of the other industries they own. At the end of the day, they're ones who chose their investments, and now it's certainly backfired. But that doesn't mean they don't have cash flow issues. Profits dropping 92% is quite different than about 15% of your home games being cancelled. This holds especially true when the player salaries go away with the unplayed games. I’m fairly certain that is the model in the NHL as it is in other sports. So you lose the revenue associated with those games but also your largest expense associated with them. It’s not apples to apples. Link to comment Share on other sites More sharing options...
May Day 10 Posted June 17, 2020 Share Posted June 17, 2020 I think its impossible to overstate the level of terrible management and self imposed turmoil the Pegulas have inflicted on this franchise over the past 9+ years. On all fronts But wait! There's More! 1 Link to comment Share on other sites More sharing options...
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