OT: Now it is Cooper Kupp's turn at Mega-deal

[Krangodnzr]

I'm sure most of us realize that, and even have pointed it out multiple times, but it gets overlooked.

This is all about risk management. Wealthy owners, just like wealthy people, take typically more risks. The higher the risk, higher reward. The risk that owners take is spending cash to invest in players now which helps keep the cap number low in future years. They also have to make sure they sign the right people. If they have to trade one of these guys that they re-signed, (Stafford, Donald, Kupp) dead money goes through the roof.

Also, with the cap gradually getting higher, the earlier you invest (sign and re-sign players) the cheaper your overall investment is. It is no different than taking care of Kyler/Lamar at the beginning of the NFL year, instead of the typical August/Sept window. The longer you wait, the more expensive it is.

The money is going to grow crazy soon. That's why if the Cardinals are smart, they sign all of their guys now!

 

[kerouac9]

To some extent yes.

It gets more complicated if you’re not the sole controlling interest

Along with my siblings we inherited the family farm. Technically it’s an asset that I own. However the terms of the trust require that 75% of the owners agree to any sale or pledging of the asset in order to borrow against. V

So the reality is that other than a small check every year even though the balance sheet shows this large asset it does me no good as far as liquidity goes.

And then if you’re trying to borrow year after year to keep up with the real billionaires you run into issues not only the cost of capital but the willingness of lenders.


It seems a few of you are just stubborn about the concept that someone like Kroenke who has billions and billions outside of the Rams has a much easier time raising capital then a owner like the Bidwill‘s or Mike Brown of there Bengals whose wealth is tied 100% with the Cardinals.

Yeah, but that's for personal use. This is within the business, which one imagines that Michael has a lot of control over. The future cash flows into the team aren't speculative (really). Any lender would be happy to advance on the $400-450 million of total TV revenue that will be sent to the team by the league each August (or whenever).

It's silly to think that Kroeke's just swimming in a money vault like Scrooge McDuck, too. Super-rich types have a lot of cash locked up in hedge funds, VC, real estate, etc. The reason that Elon Musk can make an cash offer for Twitter isn't because he's super-liquid (any more than Jeff Bezos is) — there's just an entire economy of bankers willing to lend based on his fairly illiquid Tesla and SpaceX stock holdings.

The constraints on owners is (1) this year's cap and (2) the risk they're willing to take 3-5 years out on these veterans. The cap guys in each franchise have their projections of what the cap is going to be in 2026 and how much dead money on these voidable years they're willing to sit on.

 

[reebokalone2001]

I'm sure most of us realize that, and even have pointed it out multiple times, but it gets overlooked.

This is all about risk management. Wealthy owners, just like wealthy people, take typically more risks. The higher the risk, higher reward. The risk that owners take is spending cash to invest in players now which helps keep the cap number low in future years. They also have to make sure they sign the right people. If they have to trade one of these guys that they re-signed, (Stafford, Donald, Kupp) dead money goes through the roof.

Also, with the cap gradually getting higher, the earlier you invest (sign and re-sign players) the cheaper your overall investment is. It is no different than taking care of Kyler/Lamar at the beginning of the NFL year, instead of the typical August/Sept window. The longer you wait, the more expensive it is.

Well, we have Keim, nuf said.

 

[Goodyear Card]

Full details of Cooper Kupp’s extension: Lower cap hit in 2022, $35M fully guaranteed

The full details of Cooper Kupp's contract reveal his cap hit went down in 2022 and he got $35 million fully guaranteed at signing

sports.yahoo.com

 

[overseascardfan]

Note that they are all owners that inherited the teams

Exactly, they from old money, none of them earned their fortune on their own. I am certain the net worth of Michael Bidwill is the family estate, not his personal wealth. I've read Michael is on a lot of business committees but I don't see any other business ventures he is involved with.

 

[QuebecCard]

Yep. That is exactly what I am asking. They can easily do so if the wanted to. It is the entire point I, and others are making. It is a choice for them to do it or not.

Furthermore, the price of what franchises are worth are growing exponentially, just like the salary cap. The more time goes by, the less than amount borrowed towards their asset. Do they have to borrow 300M? Nope, but they could do it for one or two signings...

The potential value of the asset is only relevant if you default on a loan. Banks loan money on the ability to repay based on net income.

 

[dreamcastrocks]

The potential value of the asset is only relevant if you default on a loan. Banks loan money on the ability to repay based on net income.

You can't be serious.. defaulting on the loan? That's the main concern here?

 

[QuebecCard]

You can't be serious.. defaulting on the loan? That's the main concern here?

No, it isn't.

My point is that the possible value of the franchise on the open market is largely irrelevant to the present day banking exchanges that the team uses or could use in support if its roster construction. Loans are based on present revenue with some consideration to possible, likely probable, increases via a new TV deal.

 

[BritCard]

New uniforms would help liquidity. Hundreds of thousands, if not millions of new shirt sales.

How many people are still wearing jerseys as old as their kids?

 

[Krangodnzr]

New uniforms would help liquidity. Hundreds of thousands, if not millions of new shirt sales.

How many people are still wearing jerseys as old as their kids?

Jersey sales are split up equally.

 

[mobyhammy]

Rams are like locks to win a couple more Super Bowls

But with a top-loaded roster, they're also only a couple of injuries away from a lost season.

 

[BritCard]

Jersey sales are split up equally.

I stand corrected

 

[Krangodnzr]

I stand corrected

Pretty much most things in the league are. Even the tickets are split between home team and visitor. Concessions at the stadium aren't.

Actually there is ONE team that doesn't share in revenues from jersey sales: the Dallas Cowboys.

 

[kerouac9]

Pretty much most things in the league are. Even the tickets are split between home team and visitor. Concessions at the stadium aren't.

Actually there is ONE team that doesn't share in revenues from jersey sales: the Dallas Cowboys.

I think that luxury box revenue is owned by the team, but tickets aren't.

 

[dreamcastrocks]

No, it isn't.

My point is that the possible value of the franchise on the open market is largely irrelevant to the present day banking exchanges that the team uses or could use in support if its roster construction. Loans are based on present revenue with some consideration to possible, likely probable, increases via a new TV deal.

Then you just don't know what you are talking about here.

Loans are based on the ability to repay. It is that simple. Sigh.

 

[QuebecCard]

Then you just don't know what you are talking about here.

Loans are based on the ability to repay. It is that simple. Sigh.

Precisely what I wrote. Sigh.

Revenue = ability to repay!

 

[Ouchie-Z-Clown]

no. They get less. Teams still have a max amount they can spend and when they pump it all into a few stars...blue collar guys have to take less money.
a 5m guy becomes a 3m guy...a 3m guy becomes vet minimum...
pretty soon teams will be 5 guys making huge bank,,,,and 48 guys making 1m

This doesn’t seem to describe it what is actually happening.

 

[Dback Jon]

Pretty much most things in the league are. Even the tickets are split between home team and visitor. Concessions at the stadium aren't.

Actually there is ONE team that doesn't share in revenues from jersey sales: the Dallas Cowboys.

Why is that?

 

[Krangodnzr]

Why is that?

The Cowboys were the lone holdout...and all the articles I can see are old and behind firewalls.

 

[BulldogCard]

Looks like the Rams are going to be pretty good. I do like that combo of Hop and Hollywood tho. Hopefully the Cards can hang around and actually get hot down the stretch. They will likely have to score a lot of points. Hopefully the Cards can slow it down a bit like during Colt McCoys victories last season and have a solid running attack to balance out the offense. Remember the loss of Gladney really hurt the team and was a sad and tragic loss as well. Hopefully they can add a NT or DT and cb over the summer.