You're Problem Starts at Woody Johnson.

[Queens Jet Fan]

Originally Posted by NYCFan

Funny Money.

Most of the increase is the addition of the Stadium asset, for which he is leveraged up the ying yang (as are the Giants, BTW). The Jets have $750 million of debt against a total value of $1.1 billion, giving a net value of around $300 million. The Patriots, by way of comparison, are valued at $1.4 billion with debt of around $275 million for a net "value" of around $1.1 billion. The Patriots also generate more revenue in a much smaller market.

I think it's the difference between a guy who bought a team with his daddy's money and a guy who had earned every dime he paid for his team.

And let's not forget cash flow and the bottom line of operating the team. Like you said the value of the team is just funny money of a hypothetical of what the team is worth. Woody doesn't have that money to spend.

The laying off of secretaries during the lockout, the huge debt burden, the mindless haggling (ie Slauson) with players over a few thousand, and Woody being one of the owners preaching a hardline with the refs suggest a definite cash flow problem.

[NYCFan]

Originally Posted by Queens Jet Fan

And let's not forget cash flow and the bottom line of operating the team. Like you said the value of the team is just funny money of a hypothetical of what the team is worth. Woody doesn't have that money to spend.

The laying off of secretaries during the lockout, the huge debt burden, the mindless haggling (ie Slauson) with players over a few thousand, and Woody being one of the owners preaching a hardline with the refs suggest a definite cash flow problem.

very good point. and, maybe it influences his life style since his daddy was probably too smart just to give him all his money. the Wood man probably has an (albeit generous) income from a Trust, out of which he has to cover cash shortfalls from the Jets operation. in other words, even though he's rich on paper, he isn't a big swinging dick like the Kochs.

[batman10023]

Originally Posted by NYCFan

Funny Money.

Most of the increase is the addition of the Stadium asset, for which he is leveraged up the ying yang (as are the Giants, BTW). The Jets have $750 million of debt against a total value of $1.1 billion, giving a net value of around $300 million. The Patriots, by way of comparison, are valued at $1.4 billion with debt of around $275 million for a net "value" of around $1.1 billion. The Patriots also generate more revenue in a much smaller market.

I think it's the difference between a guy who bought a team with his daddy's money and a guy who had earned every dime he paid for his team.

i think your foolish to think the Jets (stadium and football team) are worth only 300mm. Not even in the right zip code

there would be hundreds of people who'd buy the Jets at that value. Where are you coming up with this number?

Forbes has them at 1.2b i think.

[batman10023]

Originally Posted by Queens Jet Fan

And let's not forget cash flow and the bottom line of operating the team. Like you said the value of the team is just funny money of a hypothetical of what the team is worth. Woody doesn't have that money to spend.

The laying off of secretaries during the lockout, the huge debt burden, the mindless haggling (ie Slauson) with players over a few thousand, and Woody being one of the owners preaching a hardline with the refs suggest a definite cash flow problem.

it's not too late to change teams QJF. maybe go with an NFC team.

[Queens Jet Fan]

Originally Posted by batman10023

i think your foolish to think the Jets (stadium and football team) are worth only 300mm. Not even in the right zip code

there would be hundreds of people who'd buy the Jets at that value. Where are you coming up with this number?

Forbes has them at 1.2b i think.

Do you understand the meaning of the word "net"?

[batman10023]

Originally Posted by NYCFan

very good point. and, maybe it influences his life style since his daddy was probably too smart just to give him all his money. the Wood man probably has an (albeit generous) income from a Trust, out of which he has to cover cash shortfalls from the Jets operation. in other words, even though he's rich on paper, he isn't a big swinging dick like the Kochs.

who would you like to own the Jets?

[Noose]

Originally Posted by batman10023

i think your foolish to think the Jets (stadium and football team) are worth only 300mm. Not even in the right zip code

there would be hundreds of people who'd buy the Jets at that value. Where are you coming up with this number?

Forbes has them at 1.2b i think.

$1.2 billion is the estimated value of the assets. It doesn't take into account debt.

If they have $750-$800 million in debt, which they do, then the equity value (i.e. the price someone would actually pay), is around $400-$450 million.

I always laugh at people who look at the value Forbes magazine assigns to a franchise and think that is the price it would trade hands at.

[extra714]

Originally Posted by HuckPenny

Seriously, after the Tebow trade went down I started checking out how old Woody is. When is he gonna kick? How soon can we get a new owner in here?

The good news: he's already 65. The bad news: in a very broad sense, wealthier people tend to live longer. We're probably on the hook for another two decades.

Everyone forgets what a clown Woody was (Jay Cross!) when he first took over; after firing Bradway and Herm, he shut up, took a back seat and started writing checks for a couple years. Seems like that's over with now that the stadium's been built and the team's in debt up to its eyeballs. What a disaster...

I understand that he occasionally rides a motorcycle so that may change his odds somewhat.

[HuckPenny]

Originally Posted by extra714

I understand that he occasionally rides a motorcycle so that may change his odds somewhat.

Ooh, good intel! I'm slightly less depressed now. Hey Woody, who needs a helmet anyway? Only sissies wear those things, right?!

[batman10023]

Originally Posted by Noose

$1.2 billion is the estimated value of the assets. It doesn't take into account debt.

If they have $750-$800 million in debt, which they do, then the equity value (i.e. the price someone would actually pay), is around $400-$450 million.

I always laugh at people who look at the value Forbes magazine assigns to a franchise and think that is the price it would trade hands at.

wrong. the forbes value takes into account stadium debt.

attention to detail is a great thing so one of us is missing it.

and generally, franchise trade very well. pretty sure a NY NFL team would trade pretty well.

[NYCFan]

Originally Posted by batman10023

i think your foolish to think the Jets (stadium and football team) are worth only 300mm. Not even in the right zip code

there would be hundreds of people who'd buy the Jets at that value. Where are you coming up with this number?

Forbes has them at 1.2b i think.

Read my post again.

Now, read the following.

Like you, I used Forbes and said in my post that their value is $1.1b (Forbes pegs it at $1.440 billion...you rounded that up to $1.2, I rounded it down to $1.1...while technically it's more correct to round that down than up, it's no big deal to round it up).

The Jets' portion of the new stadium would be the largest single item on the Jets balance sheet. The Stadium Cost was $1.6 billion, so, assuming they could capitalize their entire 50% share thereof, that would show up on their balance sheet as $800 million.

Next. Johnson paid $635 million for the Jets. Leon Hess had paid roughly $20 million for the team in 1973 and we have no idea what the Asset values were when Johnson acquired them in 2000, but he was widely viewed as having overpaid significantly in his bidding war with Charles Dolan; at the time, some estimated the Franchise as being worth closer to $250, but that's neither here nor there since, in the end, something is worth what you pay for it. But, since we don't have access to the information, we have no idea how much of the balance sheet at that time was in assets (like the stadium lease) and how much would have been shoved into Goodwill. To keep things simple, we can assume that the Asset side of the balance sheet totalled the $635 million with a whole bunch on the Goodwill line.

Forbes does some proprietary number crunching and estimates that the whole thing ends up being worth the $1.2 or so you cite and that's probably the basis of their numbers, assuming that the entire stadium value couldn't be capitalized.

Then, Forbes reports that they are carrying $750 million of debt, nearly all of which would come from the stadium.

Now, Finance 101, in case you were absent that day: Subtract Debt from Total Value to get "Net" value or "Net Worth."

$1,100,000,000 minus $750,000,000 equals $350,000,000 (I said "around $300 million").

So, the "net worth" of the Jets is, as I said, "around $300 million."

The cash that someone would actually pay for the team is a function of Revenues, Operating Profits and Asset value. But, I doubt very much that a buyer would be willing to assume all of that debt and hand Woody $1.1 or $1.2 billion for the team.

That's why I said the doubling of value was "funny money." We have no idea what a sale of the Jets would garner until they are actually up for sale and someone has to part with Cash to get them. In the Jets case, the operating income would be severely impaired by the interest burden.

By contrast, the "value" assigned by Forbes to the Pats is around $1.4 billion with $270 million of debt, leaving a net "worth" of over $1 billion.

Thus endeth the lesson.

[batman10023]

Originally Posted by Queens Jet Fan

Do you understand the meaning of the word "net"?

yes i do. do YOU?

you don't like the Jets anymore now that they don't live in your zip code. that's pathetic.

[Greentide]

Originally Posted by kennyo7

I hate to say it but Bill Belichik knew to run away as fast as possible when Woody bought the team. He knew that Woody was not the type of owner to work for

This

[batman10023]

Originally Posted by NYCFan

Read my post again.

Now, read the following.

Like you, I used Forbes and said in my post that their value is $1.1b (Forbes pegs it at $1.440 billion...you rounded that up to $1.2, I rounded it down to $1.1...while technically it's more correct to round that down than up, it's no big deal to round it up).

The Jets' portion of the new stadium would be the largest single item on the Jets balance sheet. The Stadium Cost was $1.6 billion, so, assuming they could capitalize their entire 50% share thereof, that would show up on their balance sheet as $800 million.

Next. Johnson paid $635 million for the Jets. Leon Hess had paid roughly $20 million for the team in 1973 and we have no idea what the Asset values were when Johnson acquired them in 2000, but he was widely viewed as having overpaid significantly in his bidding war with Charles Dolan; at the time, some estimated the Franchise as being worth closer to $250, but that's neither here nor there since, in the end, something is worth what you pay for it. But, since we don't have access to the information, we have no idea how much of the balance sheet at that time was in assets (like the stadium lease) and how much would have been shoved into Goodwill. To keep things simple, we can assume that the Asset side of the balance sheet totalled the $635 million with a whole bunch on the Goodwill line.

Forbes does some proprietary number crunching and estimates that the whole thing ends up being worth the $1.2 or so you cite and that's probably the basis of their numbers, assuming that the entire stadium value couldn't be capitalized.

Then, Forbes reports that they are carrying $750 million of debt, nearly all of which would come from the stadium.

Now, Finance 101, in case you were absent that day: Subtract Debt from Total Value to get "Net" value or "Net Worth."

$1,100,000,000 minus $750,000,000 equals $350,000,000 (I said "around $300 million").

So, the "net worth" of the Jets is, as I said, "around $300 million."

The cash that someone would actually pay for the team is a function of Revenues, Operating Profits and Asset value. But, I doubt very much that a buyer would be willing to assume all of that debt and hand Woody $1.1 or $1.2 billion for the team.

That's why I said the doubling of value was "funny money." We have no idea what a sale of the Jets would garner until they are actually up for sale and someone has to part with Cash to get them. In the Jets case, the operating income would be severely impaired by the interest burden.

By contrast, the "value" assigned by Forbes to the Pats is around $1.4 billion with $270 million of debt, leaving a net "worth" of over $1 billion.

Thus endeth the lesson.

come on. just read the forbes article.

http://www.forbes.com/lists/2011/30/...ts_304841.html

footnote 1 - stadium debt is included.

thus ended the lesson.

[patman]

I don't like Woody as an owner but it is wrong to infer that he does not give the team the money to compete. Pace, Harris, Scott, Revis, and Cro were all given top dollar contracts. Likewise, Sanchez, Holmes, Mangold, Dbrick were all given top 5 contracts.

His fault is when he puts the business side ahead of the football side. On things like hard knocks, Tebow, Farve, ESPN camping with the jets -that type of crap.

The problem with the jets is Tanny's fault. He spent future dollars and traded up all the time and filled out the roster with Big name FA. Pace, Scott, Cro (yes I know he was traded in the last year of his contract) Faneca and one year rentals.

His caving into Rex and picking Defensive players in both the draft and FA
leaves the team with no cap space next year and needing to replace 1/2 the defense in one year while the offense struggles to get out of their way.

Rex is who he is, he is brash and entertaining and has proved he can have a very good D when he has very good players. This year he doesn't, whether he should be replaced should be based on how well he adapts the D to compensate for the lack of Revis.

The jets are suffering from some play that can be placed at his feet, a lack of urgency and toughness.

I think Rex can succeed but he needs a complementary coaching staff that he does not have at this time, and with Westhof leaving it does not look any better going forward.

[batman10023]

Originally Posted by patman

I don't like Woody as an owner but it is wrong to infer that he does not give the team the money to compete. Pace, Harris, Scott, Revis, and Cro were all given top dollar contracts. Likewise, Sanchez, Holmes, Mangold, Dbrick were all given top 5 contracts.

His fault is when he puts the business side ahead of the football side. On things like hard knocks, Tebow, Farve, ESPN camping with the jets -that type of crap.

The problem with the jets is Tanny's fault. He spent future dollars and traded up all the time and filled out the roster with Big name FA. Pace, Scott, Cro (yes I know he was traded in the last year of his contract) Faneca and one year rentals.

His caving into Rex and picking Defensive players in both the draft and FA
leaves the team with no cap space next year and needing to replace 1/2 the defense in one year while the offense struggles to get out of their way.

Rex is who he is, he is brash and entertaining and has proved he can have a very good D when he has very good players. This year he doesn't, whether he should be replaced should be based on how well he adapts the D to compensate for the lack of Revis.

The jets are suffering from some play that can be placed at his feet, a lack of urgency and toughness.

I think Rex can succeed but he needs a complementary coaching staff that he does not have at this time, and with Westhof leaving it does not look any better going forward.

Agree on hard knocks being a non football decision but it was lots of fun!

The contracts should be tannys job. Not the job of the owner.

I like Rex but lets see how he handles adversity.

[GuidoYaztremski]

Originally Posted by batman10023

come on. just read the forbes article.

http://www.forbes.com/lists/2011/30/...ts_304841.html

footnote 1 - stadium debt is included.

thus ended the lesson.

You are DEAD wrong here. Re-read the article you linked. It clearly shows a value for the team at $1.22 billion with a debt/value ratio of 61% ($744 million) Do you really think a buyer IGNORES the debt when buying an asset? Sorry, but any Business 101 major can explain how you are 100% wrong here.


Assuming Woody could find a buyer using the Forbes numbers, he would NET around $378 million. Not a penny more.

[Queens Jet Fan]

Originally Posted by batman10023

come on. just read the forbes article.

http://www.forbes.com/lists/2011/30/...ts_304841.html

footnote 1 - stadium debt is included.

thus ended the lesson.

Originally Posted by GuidoYaztremski

You are DEAD wrong here. Re-read the article you linked. It clearly shows a value for the team at $1.22 billion with a debt/value ratio of 61% ($744 million) Do you really think a buyer IGNORES the debt when buying an asset? Sorry, but any Business 101 major can explain how you are 100% wrong here.


Assuming Woody could find a buyer using the Forbes numbers, he would NET around $378 million. Not a penny more.

Guido is absolutely right. Batman did you read the article you linked to? It totally proves our point.
Jets income for the 2 years of the NMS was just $8Mil in 2010 and $25Mil in 2011. Now read footnote 5 next to the Income graph.

5 Earnings before interest, taxes, depreciation and amortization.

What do you figure the interest costs are on $750 Mil of debt. I don't know the interest rate but doubt it would be less then 6% - is probably more. That is $45 Mil of interest which means that for 2011 there was a negative cash flow conservatively figured of at least $20 Mil. There was a greater loss in 2010 before they sold the naming rights and the new CBA. And what about taxes? That's not included in the income figures either.

So now you see how Woody went from making sh*tty money with a lousy lease in Giant Stadium to losing money owning half of Met Life.

Yeah he's a great business man

[sec.101row23]

Originally Posted by Queens Jet Fan

That's what I heard last year when we were below the cap and that's probably what we will hear next year when again we will below it. The fact is during these last few years Woody has been pinching pennies and if that's not a direct result of the stadium being a clusterfu*k I don't know what it is.

LOL...please show us where the penny pinching is. How about the facility in Florham Park? Was that donated from a charity?

[batman10023]

Originally Posted by GuidoYaztremski

You are DEAD wrong here. Re-read the article you linked. It clearly shows a value for the team at $1.22 billion with a debt/value ratio of 61% ($744 million) Do you really think a buyer IGNORES the debt when buying an asset? Sorry, but any Business 101 major can explain how you are 100% wrong here.


Assuming Woody could find a buyer using the Forbes numbers, he would NET around $378 million. Not a penny more.

That's not what the Forbes article says. The value of the team deducts the stadium debt.

Would expect the stadium debt is non recourse to the jets football team.