Investor Pays 125 Million for 1% Stake in Dolphins: 12.5 Billion valuation

[Mr. WEO]

Crazy

[0017]

Looks like they’re getting the money ready so they can release Tua! 😂

[That's No Moon]

Xiaomi the money!

[Augie]

Things are spiraling quickly. Terry’s $1.4 BIL “overpay” is looking better and better.  

[Mr. WEO]

1 minute ago, Augie said:

Things are spiraling quickly. Terry’s $1.4 BIL “overpay” is looking better and better.  

 

today's market isn't comparable to back then.  It was widely felt at that he paid a premium that maybe he didn't have to.  He didn't wildly over pay--but today's market, just over a decade later is an order of magnitude bigger. That's wild.

 

Why set the market on 1% of a team? In 10-12 years, ownerships won't be trading for 125-150 billion dollars. IMagine paying what Pegula did...for 1% of a team 10 years from now?  There just aren't enough of those buyers in existence I would venture.

[strive_for_five_guy]

I thought his first name was Loony?

[Augie]

3 minutes ago, Mr. WEO said:

 

today's market isn't comparable to back then.  It was widely felt at that he paid a premium that maybe he didn't have to.  He didn't wildly over pay--but today's market, just over a decade later is an order of magnitude bigger. That's wild.

 

Why set the market on 1% of a team? In 10-12 years, ownerships won't be trading for 125-150 billion dollars. IMagine paying what Pegula did...for 1% of a team 10 years from now?  There just aren't enough of those buyers in existence I would venture.

 

He won. He didn’t quibble over loose change looking for savings, when the payoff makes those pennies funny money. 

[Bangarang]

And here's Allen owning them for free.

[BuffBillsForLife]

2 minutes ago, Mr. WEO said:

 

today's market isn't comparable to back then.  It was widely felt at that he paid a premium that maybe he didn't have to.  He didn't wildly over pay--but today's market, just over a decade later is an order of magnitude bigger. That's wild.

 

Why set the market on 1% of a team? In 10-12 years, ownerships won't be trading for 125-150 billion dollars. IMagine paying what Pegula did...for 1% of a team 10 years from now?  There just aren't enough of those buyers in existence I would venture.

It sounds ridiculous but this is a legitimate problem facing the NFL moving forward. While there are many more billionaires today then there were 20-30 years ago, they mostly have "only" $1-2B, which is a ton of money but nowhere near what you need to buy 100% of an NFL franchise. Terry is in better shape than a lot of owners, especially legacy ones like Mike Brown or Mark Davis whose wealth is all just the team itself, and are rapidly finding themselves struggling to have enough cash just to put the guaranteed money on big contracts into escrow. 

 

Get ready for a future where teams are sold to private equity companies instead of individuals, since at the rate team values are inflating nobody except Elon or Bezos will be able to afford a team. The number of "super" billionaires is very limited.

[Mr. WEO]

3 minutes ago, BuffBillsForLife said:

It sounds ridiculous but this is a legitimate problem facing the NFL moving forward. While there are many more billionaires today then there were 20-30 years ago, they mostly have "only" $1-2B, which is a ton of money but nowhere near what you need to buy 100% of an NFL franchise. Terry is in better shape than a lot of owners, especially legacy ones like Mike Brown or Mark Davis whose wealth is all just the team itself, and are rapidly finding themselves struggling to have enough cash just to put the guaranteed money on big contracts into escrow. 

 

Get ready for a future where teams are sold to private equity companies instead of individuals, since at the rate team values are inflating nobody except Elon or Bezos will be able to afford a team. The number of "super" billionaires is very limited.

 

 

Huh?  Pegula was one of the first owners to sell a chunk of the team to private equity entities.  Also, the majority of his wealth is now ties to the team's valuation (and the Sabres.  That's true for almost all owners who have had their teams for over 10 years.  Jerry Jones's wealth IS the Cowboys, by and large...

 

As for Brown and Davis (who's Raiders print money), they and all other owners can simply cash out and be rich instantly beyond their wildest dreams--should they not want to put their money on the line.  The teams will continue.

 

[ColoradoBills]

According to Forbes Terry is worth $9.3B.  #137 on Forbes list.

#418 on Billionaires list.

https://www.forbes.com/profile/terrence-pegula/#:~:text=Terrence Pegula,%23372 in the world today

[gonzo1105]

8 minutes ago, ColoradoBills said:

According to Forbes Terry is worth $9.3B.  #137 on Forbes list.

#418 on Billionaires list.

https://www.forbes.com/profile/terrence-pegula/#:~:text=Terrence Pegula,%23372 in the world today

so without knowing the Dolphins exact net profit a year, the average is like 60-100 million according to reports. So he’ll get 600K to a million a year. So a 12 years minimum to get his money back with current averages. Probably would get it back in under a decade 

[ColoradoBills]

1 minute ago, gonzo1105 said:

so without knowing the Dolphins exact net profit a year, the average is like 60-100 million according to reports. So he’ll get 600K to a million a year. So a 12 years minimum to get his money back with current averages. Probably would get it back in under a decade 

 

I don't know if these investors get to pull their "earnings".  I doubt it.  It's probably just stays in the teams worth.

I'm not sure one way or the other.

[MarkyMannn]

8 minutes ago, gonzo1105 said:

so without knowing the Dolphins exact net profit a year, the average is like 60-100 million according to reports. So he’ll get 600K to a million a year. So a 12 years minimum to get his money back with current averages. Probably would get it back in under a decade 

I think the real money maker in owning a club is annual appreciation which is maybe equal to or 3-4 times annual operating profits

[4merper4mer]

Rupees?

[US Egg]

I think he overpaid.

[Richard Noggin]

4 hours ago, gonzo1105 said:

so without knowing the Dolphins exact net profit a year, the average is like 60-100 million according to reports. So he’ll get 600K to a million a year. So a 12 years minimum to get his money back with current averages. Probably would get it back in under a decade 

 

Is that really how annual surplus works in the NFL? Can't be that simple? (Unless we're looking at the MANY unique owners of the GB Packers perhaps?)

 

I've always assumed it's more about acquiring a reliably appreciating asset, and if you're serious about investing in a winning franchise, there can be significant additional, actual cash investment needed most years to spend above and beyond annual salary cap allocations (unless you're the Bengals) and to remain aggressive with marketing, partnerships, etc. The franchise turns a profit each year, but investors aren't necessarily paid out on that profit, right? Investors can use appreciated equity to earn money in other debt-driven ways, but traditionally need to sell shares to profit directly from initial investment. 

 

 

[In Summary]

4 hours ago, MarkyMannn said:

I think the real money maker in owning a club is annual appreciation which is maybe equal to or 3-4 times annual operating profits

Yes. Even with the devaluation of the dollar, the NFL franchises do very well.

[gonzo1105]

9 minutes ago, Richard Noggin said:

 

Is that really how annual surplus works in the NFL? Can't be that simple? (Unless we're looking at the MANY unique owners of the GB Packers perhaps?)

 

I've always assumed it's more about acquiring a reliably appreciating asset, and if you're serious about investing in a winning franchise, there can be significant additional, actual cash investment needed most years to spend above and beyond annual salary cap allocations (unless you're the Bengals) and to remain aggressive with marketing, partnerships, etc. The franchise turns a profit each year, but investors aren't necessarily paid out on that profit, right? Investors can use appreciated equity to earn money in other debt-driven ways, but traditionally need to sell shares to profit directly from initial investment. 

 

 

 

I'm sure it is more along the lines of what your talking about. I was just curious more to see how long it would take for this guy to regain his investment in regular business terms. 

[Buffalo Junction]

1 hour ago, Richard Noggin said:

 

Is that really how annual surplus works in the NFL? Can't be that simple? (Unless we're looking at the MANY unique owners of the GB Packers perhaps?)

 

I've always assumed it's more about acquiring a reliably appreciating asset, and if you're serious about investing in a winning franchise, there can be significant additional, actual cash investment needed most years to spend above and beyond annual salary cap allocations (unless you're the Bengals) and to remain aggressive with marketing, partnerships, etc. The franchise turns a profit each year, but investors aren't necessarily paid out on that profit, right? Investors can use appreciated equity to earn money in other debt-driven ways, but traditionally need to sell shares to profit directly from initial investment. 

 

 

They likely are paid out of profits, however they’re also likely on the hook for their percentage of guaranteed money which has to go in escrow. It’s not really a publicly discussed thing in any league, but interestingly, Bill Maher talked about it after he sold his interest in the NY Mets. The NFL doesn’t exactly function like MLB, but I’d imagine a lot of these minority ownership contracts have similar language.