Has the Adams rebuild failed completely?

[#freejame]

Just now, SabresVet said:

You want the owner to, because his net worth is in the billions, lose money on your favorite hockey team.  Not going to happen no matter how many times you pound that sand.  

The badly underperforming hockey team is under no obligation to lose millions of dollars a year as an olive branch to bring back fans and win more games.    

We can all agree TPegs is not a good owner, is out of his element, doesn't know hockey like he thinks he does, etc.  Still doesn't mean he's going to open up the check book and splurge like he did back in 2011-12. 

I think the issue is you and I fundamentally disagree on whether or not he is losing money on the Sabres. His asset is appreciating at a substantial clip. He can freely borrow against that asset at greater amounts than any single season loss. I would also reckon his asset increases in value by a more substantial amount than his yearly net loss. 

The Sabres are a private company and are under no obligation to release finances, but there’s also a significant chance that spending an additional $5m per year would lead to more than $5m in additional revenue. Players do not collect from postseason revenue. My very much ***** back of the napkin math tells me that if the Sabres sold 18,000 playoff seats for two games at $100 per ticket (which is low), they would bring in $3.6m in revenue. You can take all of the other gains and throw them towards the expenses, I think it’s still safe to say that spending more would lead to a greater return. 

[JohnC]

2 hours ago, LGR4GM said:

Pegula is not losing money. Let's say for arguments sake that the Sabres are a net -10million every year in real dollars because Terrry drove the team into the ground and ppl don't want to pay him money to be bored for 2.5 hours. Terry bought the team for about 200million and can sell them tomorrow for 1billion without any fuss. That means that it would take 80 years for Terry Pegula to actually be negative on this investment. It is a straight up lie he peddles that he is losing money on the team, he isn't. The asset he acquired has almost doubled 3 times in 13 years which is easily a top 1% in terms of ROI. So sure, Terry might lose a few million because again, he ran his team into the ground and ppl won't pay to watch his trash, but overall the guy is up hundreds of millions of dollars. Never believe Pegula when he claims he "lost money", he hasn't and he won't. Sports teams are a very rare commodity. 

You make a great point that even if he is losing money from this franchise, the loss of revenue can be directly attributed to his mismanagement of it. He basically eroded the market for his product unsurprisingly resulting in less revenue. It's like a person strangling someone and then complaining that the person isn't putting in the effort to breathe on his own. 

Buffalo (including southern Ontario) is potentially a great hockey market. It has been suppressed because of extended systemic incompetence. There is no excuse that a number of other organizations that were behind us when our rebuild started are now in front of us. If the owner and front office don't exhibit urgency through their actions this offseason, then it's obvious that they are not committed to succeed. This situation is inexcusable. 

I'm not advocating for a major overhaul. What I'm arguing for are some impactful personnel decisions that will jolt this team upwards. 

[SabresVet]

8 minutes ago, #freejame said:

I think the issue is you and I fundamentally disagree on whether or not he is losing money on the Sabres. His asset is appreciating at a substantial clip. He can freely borrow against that asset at greater amounts than any single season loss. I would also reckon his asset increases in value by a more substantial amount than his yearly net loss. 

The Sabres are a private company and are under no obligation to release finances, but there’s also a significant chance that spending an additional $5m per year would lead to more than $5m in additional revenue. Players do not collect from postseason revenue. My very much ***** back of the napkin math tells me that if the Sabres sold 18,000 playoff seats for two games at $100 per ticket (which is low), they would bring in $3.6m in revenue. You can take all of the other gains and throw them towards the expenses, I think it’s still safe to say that spending more would lead to a greater return. 

You still don't understand budgeting 101 and that's OK.  Not going to belabor it any further.   

We all see ownership is bad and at some point post-COVID, they adopted a new fiscal plan with this franchise.  One that is damaging the on-ice product and driving fans away.    

[K-9]

Some interesting economic discussion. I’ll add that there’s a difference between asset appreciation/depreciation and cash profits/losses and that borrowing money, unless it’s an interest-free loan, is always going to cost more than the amount borrowed.

As it relates to Pegula and the Sabres, the huge increase in the value of his franchise vs. what he paid for it initially has no real cash value until it’s liquidated and there are valid business reasons why he wouldn’t borrow against that asset value currently. While Pegula (and other owners) didn’t lose value during the pandemic, they lost well over a billion dollars in real revenues that sharply impacted the bottom line. 

Anyone know the outcome of the suit that Pegula, 19 other owners, and the NHL brought against the insurance company to recoup those pandemic losses? Last I heard, the insurance company refused to pay because the insurance company claims that the pandemic losses are excluded from coverage. 

Edited April 15 by K-9

[SwampD]

5 minutes ago, SabresVet said:

You still don't understand budgeting 101 and that's OK.  Not going to belabor it any further.   

We all see ownership is bad and at some point post-COVID, they adopted a new fiscal plan with this franchise.  One that is damaging the on-ice product and driving fans away.    

Dude, we get it. The Sabres are losing money every year, Terry is not losing money every year for owning them.

If he didn't come in here swingin' his dick about drilling another well, we might not be as hard on him, but he did so it's his own making.

Edited April 15 by SwampD

[SwampD]

Also, if they didn't spend money on retired players to get to the floor, so he could take money out of the pockets of other owners, I might cut him some slack, but they did, so he can ***** off.

Sell. The. Team.

[#freejame]

20 minutes ago, SabresVet said:

You still don't understand budgeting 101 and that's OK.  Not going to belabor it any further.   

We all see ownership is bad and at some point post-COVID, they adopted a new fiscal plan with this franchise.  One that is damaging the on-ice product and driving fans away.    

Prefacing this with my own “this is obnoxious,” but…
 

I don’t think you have any understanding of finance or economics. I’m not saying I do, but at least I’ve got a degree in it and a bookshelf full of different peoples ideas on the topic that I’ve read. Go back to Dave Ramsey if you’re just going to talk about budgets. *****, Terry could budget out and invest the next five years of Sabres expenses and the return would more than cover cost. Or is that not the budgeting you want to do?

[matter2003]

not at all.  Might be taking a little longer than expected and experiencing more bumps in the road than he'd like but I don't think it will matter once it gets airborne and stays there over several years after.

Edited April 15 by matter2003

[Flashsabre]

https://www.tsn.ca/nhl/bill-zito-promoted-to-florida-panthers-president-of-hockey-operations-1.2104757
 

I remember when Zito’s name was being mentioned for the Sabres job. They always seem to make the wrong choice

[Flashsabre]

https://www.cover1.net/where-the-buffalo-sabres-got-it-wrong/
 

This is a great article. Really makes you wonder how much sway Ventura and the Analytics Dept have with this team.

[Weave]

33 minutes ago, Flashsabre said:

https://www.cover1.net/where-the-buffalo-sabres-got-it-wrong/
 

This is a great article. Really makes you wonder how much sway Ventura and the Analytics Dept have with this team.

There is going to be alot of agreement with that article on this forum.  Lots of familiar comments and criticisms.

 

[Sabres73]

8 hours ago, Pimlach said:

Disciplined rebuild?   We just saw a regression in team play despite finally getting , and wasting, quality NHL goaltending.  

Next several years?   This year they are going to finish at least 4 slots out of the final playoff spot.  

You seem to be tied into Adams plan.   What year do they make the playoffs?

What year do they catapult to the Cup and show us all the big picture?  

What is obvious about the team’s direction that even the National media hasn’t picked up on yet? 
 

To my eyes they have to upgrade the coaching staff,  and they are still several players away.   

 

To answer your questions - they make the playoffs next year.

Legitimately challenge for the Cup within 3-4 years. In the playoffs for the foreseeable future.

What is obvious about the youngest team in the league's direction is that the hardest part is done, accumulating talent. The rest is natural growth and experience, and some tweaking of the roster.

That's what my eyes see. Your opinion may be different. 

[#freejame]

2 hours ago, K-9 said:

Some interesting economic discussion. I’ll add that there’s a difference between asset appreciation/depreciation and cash profits/losses and that borrowing money, unless it’s an interest-free loan, is always going to cost more than the amount borrowed.

This is unrelated to the Sabres or Terry and more of a general question I’m hoping you have the answer to. I’ve always heard that the borrowing costs for the very, very wealthy were incredibly low to non-existent because of the value having the assets held by the borrower typically outweigh the costs associated with the loan or potentially losing the client. Is this not the case? 

[...]

8 hours ago, K-9 said:

Has the rebuild failed? Failed!? Why, it’s only just begun! So let’s exercise a little patience, ok folks? 

THAT'S THE SPIRIT!

[LGR4GM]

1 hour ago, Flashsabre said:

https://www.cover1.net/where-the-buffalo-sabres-got-it-wrong/
 

This is a great article. Really makes you wonder how much sway Ventura and the Analytics Dept have with this team.

Wow, that's damning at a minimum and an outright call to pitchforks and torches at maximum. 

Granato has to go and Adams should go to. Make Karmanos gm.

10 minutes ago, Sabres73 said:

To answer your questions - they make the playoffs next year.

Legitimately challenge for the Cup within 3-4 years. In the playoffs for the foreseeable future.

What is obvious about the youngest team in the league's direction is that the hardest part is done, accumulating talent. The rest is natural growth and experience, and some tweaking of the roster.

That's what my eyes see. Your opinion may be different. 

I think your take is delusional to be honest. No one on this team except 22yr old Peterka improved. No one. Yet here you are saying we'll be  great anyways. By 23 most players are who they are. For example, this team should move on from Krebs. Without a major coaching overhaul and probably 1 new defender and 3-4 new forwards, next year Buffalo will finish in the 80pt region yet again. Quinn is only gonna be worth maybe 2 games more wins in a full season. There's just no major jump coming. 

Edited April 15 by LGR4GM

[Cranky old man]

If the rebuild has just begun, were the last three years lost in some episode of Dallas? So no I will not have any patience at all for the knuckleheads who are running this hockey club on and above the ice. The speculation that there are spending restrictions has not stopped the rendering of monstrous seven year deals to five players. Why would a gm tie up all his money and leave himself to sign Tyson Jost ? I don’t buy. It looks like dum dum to me. 

[K-9]

2 hours ago, #freejame said:

This is unrelated to the Sabres or Terry and more of a general question I’m hoping you have the answer to. I’ve always heard that the borrowing costs for the very, very wealthy were incredibly low to non-existent because of the value having the assets held by the borrower typically outweigh the costs associated with the loan or potentially losing the client. Is this not the case? 

Certainly the ultra wealthy are going to get the most prime rate and there are more lending outlets of differing types available to them, but I don’t know if they get interest free loans as a matter of course. 

[Scottysabres]

I don't know if it failed completely. There are some good components he added, not superstar, but good, at least as of now.

The lack of superstar talent would need to be offset with 4 lines of really good players, and not just good with skill, but chemistry, firing on all cylinders of gameplay. That's not happening as of now, here in Buffalo. Imho.

[Thorner]

10 hours ago, K-9 said:

Some interesting economic discussion. 

[ska-T Palmtown]

22 hours ago, SabresVet said:

TPegs is a business guy first and foremost.  When he bought the team fan sentiment was still high, the arena was in better shape, and revenue was high(er) to costs.  Now, attendance has declined, the arena needs upgrades, and they're likely losing money overall.  His response is to cut spending to the floor on players and keep a thinner front office while hiring/retaining a GM he knows, but is unqualified.  And we continue to hear that TPegs is meddling in personnel.      

For Bills fans, it's a replay of the late Ralph Wilson years.  RW would spend when the team was good and profits were healthy.  When that changed, spending was cut, which led to less chance the on-field result being decent.  Ralph or his handlers would meddle in personnel decisions as well, allowing the bad seasons to mount.  Then, when they needed coaches or GM's they couldn't hide how no one wanted to work under those conditions.  And, Ralph would only hire people he knew personally which is how, in late 2009, the Bills ended up with Buddy Nix as GM.     

Point to all of this is, despite what they say, owners are business people first and they're not going to lose money to chase wins.  

As I am part of a company that is currently spending hundreds of millions of dollars developing a commercial product to "chase" customers (fans), what you have said rings totally false. It is literally how businesses operate. Companies with a product need to develop, test, and market that product. Usually, you operate in the red for quite some time knowing that once you get a good product to market, you eventually make up for those losses. It is not free to build an oil/gas well. It is not free to build a car factory ... etc

The margins, due to a high floor of costs and relatively low ceiling of potential income, are smaller in hockey than in the other major sports or many consumer markets, but I would think that every team making the playoffs this year is making some sort of profit.

Total Field of Dreams scenario: If Terry builds a winning team, fans (and their wallets) will come.

You still don't understand budgeting 101 and that's OK.  Not going to belabor it any further. <-- I can't figure out how to add this little gem as a quote via the edit function. 

Have you literally never followed ANY company? Amazon lost hundreds of millions of dollars a year as it grew. Major companies world wide regularly report a net loss for quarters or even full years. I don't even care about your point any more, the "I took one night class on budgets at a community college" attitude is hilarious. If you scale things down, it would be like you or me spending $2 more in 2024 than we made, while our other assets (savings, retirement accounts, house) grew by $1000 or more.

Edited April 16 by ska-T Chitown

[ska-T Palmtown]

16 hours ago, #freejame said:

This is unrelated to the Sabres or Terry and more of a general question I’m hoping you have the answer to. I’ve always heard that the borrowing costs for the very, very wealthy were incredibly low to non-existent because of the value having the assets held by the borrower typically outweigh the costs associated with the loan or potentially losing the client. Is this not the case? 

Anecdotally, I have heard the same. It seems to make sense, as long as they are telling the truth it is a pretty safe investment for the bank or whomever. On the surface, of course a loan with any interest rate is going to cost more than the amount borrowed, but business loans are taken out every day in what I assume to be very large quantities because cash is king and to butcher some Sharktank quotes, you gotta pour gasoline on that fire, but gas ain't free!

The notion being peddled (not by you - I think we are on the same page of the same leather bound book on that very lovely mahogany bookshelf of yours) that businesses won't take short term losses to yield long-term returns is beyond silly. The Sabres bottom line is not even a blip on the TP's business radar when you look at all the other assets he has that generate income ... heck, it might not even be a blip compared to the profit the Bills made last year.

[xzy89c1]

On 4/14/2024 at 2:14 PM, Weave said:

I don’t think it is a slam dunk that our core is the right core.  Legit concerns regarding Thompson and Cozens as your 1-2 center punch.

I’m not really concerned about the defense.  

I think Thompson is not a center. The draws are a problem enough but he is so out of position in our own zone. Could be coaching like rest of our defensive effort, but jury is still out on if TT is a center. Cozens might be. again the coaching is an issue, but feel better that he might be a center. We need to sign a good center this offseason who can actually win draws.

[K-9]

21 minutes ago, ska-T Chitown said:

Anecdotally, I have heard the same. It seems to make sense, as long as they are telling the truth it is a pretty safe investment for the bank or whomever. On the surface, of course a loan with any interest rate is going to cost more than the amount borrowed, but business loans are taken out every day in what I assume to be very large quantities because cash is king and to butcher some Sharktank quotes, you gotta pour gasoline on that fire, but gas ain't free!

The notion being peddled (not by you - I think we are on the same page of the same leather bound book on that very lovely mahogany bookshelf of yours) that businesses won't take short term losses to yield long-term returns is beyond silly. The Sabres bottom line is not even a blip on the TP's business radar when you look at all the other assets he has that generate income ... heck, it might not even be a blip compared to the profit the Bills made last year.

The Sabres bottom line may not be a blip on TP’s business radar, but it’s the lifeblood for the the 250+ employees of the team. While revenue losses, especially during the pandemic didn’t phase TP’s bottom line relative to his other vast business holdings, it very much negativity impacted many Sabres employees, so I think it’s important to separate TP “losing money” and the Sabres losing money. 

[ska-T Palmtown]

12 minutes ago, K-9 said:

The Sabres bottom line may not be a blip on TP’s business radar, but it’s the lifeblood for the the 250+ employees of the team. While revenue losses, especially during the pandemic didn’t phase TP’s bottom line relative to his other vast business holdings, it very much negativity impacted many Sabres employees, so I think it’s important to separate TP “losing money” and the Sabres losing money. 

That is an excellent point, it is a bit off to the side (since the talk was about TP losing money?) from the points be talked, but excellent. It is hard to know how TP runs his empire, or even his sports teams. Does the strong team pull the weak team along knowing the tides will eventually change? Hard to say and I would have a much different tone if discussing your point - totally sucks if an owner's poor choices affect the bank accounts of his workers.

[bob_sauve28]

For what it is worth: