Per SBD: A portion of the Buffalo Bills has been sold

[Taro T]

18 minutes ago, JoeSchmoe said:

My brother is 6'4 and has never mentioned it being an issue. Would a new arena actually fix this? 

Expect the bigger issue of the leg room is people that have arthritis or other leg joint ailments tend to have issues with the seating and those of us fortunate enough to not have them yet don't have issues with them.  Gentleman that sits near me really dislikes sitting in our row even though he's relatively short as the leg room is noticably less than it is for rows behind us.

Have never had major issues with it personally, though when sitting next to someone who likes to "spread out" it can be a little awkward as their leg keeps brushing up against the people sitting next to them.

As others have said, a new arena could likely overcome this issue but at the cost of the seats being even further from the ice surface unless each upper section is directly above the one below it (like the 300's pretty much are directly over the suites at the MMArena).

[That Aud Smell]

32 minutes ago, inkman said:

So does this confirm the Pegulas are cash poor?  Or is it unreasonable for someone to have access to tens or hundreds of millions?

We use "cash poor" here in a relative sense.

9 minutes ago, jad1 said:

They're not cash poor.  This just let's them use their investment in the team to create liquidity instead of their other businesses.  It's a smart move.

It's a result of the NFL changing its ownership rules allowing private equity firms to purchase minority interests in teams.

Presumably they are.

3 minutes ago, triumph_communes said:

Gotta pay for 560mil in stadium cost overruns somehow 

The Ghoul Man has publicly denied that the Pegulas' sale of a minority stake has anything to do with the ballooning cost overruns for the new stadium.

In related news, Pete reportedly has some ocean front property in Iowa he's looking to move.

 

[sabremike]

1 minute ago, Taro T said:

Expect the bigger issue of the leg room is people that have arthritis or other leg joint ailments tend to have issues with the seating and those of us fortunate enough to not have them yet don't have issues with them.  Gentleman that sits near me really dislikes sitting in our row even though he's relatively short as the leg room is noticably less than it is for rows behind us.

Have never had major issues with it personally, though when sitting next to someone who likes to "spread out" it can be a little awkward as their leg keeps brushing up against the people sitting next to them.

As others have said, a new arena could likely overcome this issue but at the cost of the seats being even further from the ice surface unless each upper section is directly above the one below it (like the 300's pretty much are directly over the suites at the MMArena).

Easy solution: Call Scott Malkin and ask to borrow the blueprints for UBS Arena and modify it slightly to get to an 18k capacity.

[JoeSchmoe]

1 hour ago, mjd1001 said:

I have not been to Vegas or Nashville in the arena. I have been to Little Ceasars in Detroit, and over the past decade most recently in Columbus, Boston, and Pittsburgh and they all blow away the KBC.  In Buffalo, I go to my seats and thats it, when the game is over leave.  In those other arenas, its an experience. I have fun in the arena, I want to see what is going on outside them, I could just walk around and look at the different levels and viewpoints.  

So Yes, KBC does its job for being a place to watch hocky. But as I said above, if I am ONLY interested in the game....I get the best viewing experience at home. I go to the arena for the game, and a night out, and to see the game and enjoy other things...and KBC is seriously lacking compared to other places around the league.

I'm only interested in the game and being in the worst seat in the arena is still better than sitting at home. 

I don't need a shiny new toy. Just improve what's on the central 85x200 part of the the arena and I'll be happily fork over my $$$ for tickets.

[msw2112]

1 hour ago, LTS said:

It could fix it.. I was not cramped in Nashville or Vegas.  KBC is a tiny arena so to get as many seats in as they did they had to cram them.

I am 6'2 and I hate the seats at KBC.  They are awful.

I'm 6'2" and my dad used to have season tickets in the perfect spot - about 20 rows up at center ice.  I remember having to sit almost sideways in order to fit in the seat.  I never had a problem at the Aud in his seats there, before the current building opened.  That said, I've sat in other places in the building and have not noticed an issue, so I think it's dependent on the row/seat.  In any event, the place isn't a state-of-the-art arena, but if the product on the ice is good, the building is more than adequate.  They have food, beer, and bathrooms.  The sight lines aren't bad.  I have not seen the new scoreboard yet, but I'm sure it's an upgrade.  I can't speak to much to the acoustics, but they don't need to be anything special for hockey.  If the product on the ice improves to a good one, and the team can be consistently good for a number of years, the place will be full for most games, revenue will be up, and that would be a good time to pour some money into the place.  Today, if you feel cramped, you can just spill over into the seat next to you, as it's likely empty.

Edited Tuesday at 04:23 PM by msw2112

[inkman]

Hey all you 6’ plus guys complaining about the leg room at the KBC: Suck it.  Your years of banging all the hot chicks, getting promoted solely based on your height, being able to see over wooden fences.  You’ve had your run.  Us 5’10” and under folks are plenty comfy. 

[mjd1001]

46 minutes ago, JoeSchmoe said:

I'm only interested in the game and being in the worst seat in the arena is still better than sitting at home. 

I don't need a shiny new toy. Just improve what's on the central 85x200 part of the the arena and I'll be happily fork over my $$$ for tickets.

I get it, I can understand your point of view. If going to the game was the only way I could see it (no high def TV at home) then I would think the KBC would be fine.  I just found personally...I can watch and follow the game better at home now than I could in the past vs going to the game.

[nfreeman]

1 hour ago, triumph_communes said:

Gotta pay for 560mil in stadium cost overruns somehow 

$560MM and climbing!

I still can't believe TP agreed to fund all overruns -- although I seem to remember that he fired the guy who negotiated the deal with the state not too long after the deal was signed -- maybe that was the reason.

As for the "will the team leave" discussion -- I'd guess we're safe on that for as long as TP owns the team, and after that for as long as the team is good -- but when winter comes, as it always does, the risk will escalate precipitously.  If the team stinks, that stadium will be half-empty for the games in the 2nd half of the season and it will produce 75% less revenue than stadiums in bigger markets produce. 

The PE investors will be smart, persuasive and insistent about moving the team, and there will be plenty of buyers interested in writing a huge check if they can move it to Toronto or other big market.

Nothing lasts forever.

[PromoTheRobot]

2 minutes ago, nfreeman said:

$560MM and climbing!

I still can't believe TP agreed to fund all overruns -- although I seem to remember that he fired the guy who negotiated the deal with the state not too long after the deal was signed -- maybe that was the reason.

As for the "will the team leave" discussion -- I'd guess we're safe on that for as long as TP owns the team, and after that for as long as the team is good -- but when winter comes, as it always does, the risk will escalate precipitously.  If the team stinks, that stadium will be half-empty for the games in the 2nd half of the season and it will produce 75% less revenue than stadiums in bigger markets produce. 

The PE investors will be smart, persuasive and insistent about moving the team, and there will be plenty of buyers interested in writing a huge check if they can move it to Toronto or other big market.

Nothing lasts forever.

I'm not predicting the Bills would leave. Just saying the $850MM poison pill in the lease is not as big a deterrent as it seems.

The Bills are currently valued at $5.35B. The 16th team in value is Atlanta at $6.1B. Add in $850MM to $5.35B and you have $6.2B.

So even adding the penalty the Bills end up costing what an average NFL team is worth.

 

[jad1]

18 hours ago, mjd1001 said:

Yeah, the common theme is "but they have a new stadium, they aren't going anywhere".  Maybe for a bit, and we aren't worried about the next 5-10 years...

But a $2billion dollar stadium in a metro area with 1 million people isn't going to anchor a team here.  We already have had $5+ billion dollar stadiums (Sofi) and Allegiant field in Vegas would probably cost $3-$4B today if it was started.  If Toronto had an opportunity for a team, I don't think I would put it by anyone to build a $5-$6Billion dollar stadium that would generate the owners and the NFL so much revenue, plus the region has about 5-7 times the population, and probably 20 times the wealth.

I'm not trying to start a doom-and-gloom thread here....the hopful scenario is that the team stays in the Pegula family for the next generation.  But that new stadium won't do much to keep the team in WNY beyond 10 years past its opening.

The good news about the story above is that it says its investors with ties to the STATE of NY (doesn't necessarily mean NY city money).  State of NY could be people with ties to upstate/WNY.  

The sale is to a private equity group, falling under the NFL  ownership rules  change that happened this past summer. 

Under those rules, the equity group can only purchase a non-controlling interest in the team.  This means they have no say in hiring, firing or roster decisions.  They have no say in operations management.  And they have no say in relocation decisions. Also, they are not going to be included in a succession plan.

The minimum stake they must own is 3% and the maximum is 10%. The primary owner must retain 31% ownership in the team.

The equity must retain their stake for 6 years before selling it.

This seems to be a non-voting stock holder type of a relationship, rather than a true minority franchise ownership. 

It's a way for owners to generate investment capital, without cedeing any control of the team.

 

[mjd1001]

7 minutes ago, PromoTheRobot said:

I'm not predicting the Bills would leave. Just saying the $850MM poison pill in the lease is not as big a deterrent as it seems.

The Bills are currently valued at $5.35B. The 16th team in value is Atlanta at $6.1B. Add in $850MM to $5.35B and you have $6.2B.

So even adding the penalty the Bills end up costing what an average NFL team is worth.

 

And a move to Toronto probably makes them a LOT more valuable than the median/average NFL team.

[shrader]

Is this the same group from a month or so ago that had a couple bouncyball players in it?

[pastajoe]

1 hour ago, inkman said:

Hey all you 6’ plus guys complaining about the leg room at the KBC: Suck it.  Your years of banging all the hot chicks, getting promoted solely based on your height, being able to see over wooden fences.  You’ve had your run.  Us 5’10” and under folks are plenty comfy. 

I can only agree with the fence issue, I missed out on the other benefits. 😔 But we also have to bend down farther to pick things up, and pay more for premium seats on planes so our knees aren’t crushed by the person in front of us.

[LTS]

26 minutes ago, jad1 said:

The sale is to a private equity group, falling under the NFL  ownership rules  change that happened this past summer. 

Under those rules, the equity group can only purchase a non-controlling interest in the team.  This means they have no say in hiring, firing or roster decisions.  They have no say in operations management.  And they have no say in relocation decisions. Also, they are not going to be included in a succession plan.

The minimum stake they must own is 3% and the maximum is 10%. The primary owner must retain 31% ownership in the team.

The equity must retain their stake for 6 years before selling it.

This seems to be a non-voting stock holder type of a relationship, rather than a true minority franchise ownership. 

It's a way for owners to generate investment capital, without cedeing any control of the team.

 

Did you mean 51% here?  At 31% it's very possible for an owner to lose all control of the team as long as there are 4 PE groups banding together.

 

[JohnC]

23 minutes ago, mjd1001 said:

And a move to Toronto probably makes them a LOT more valuable than the median/average NFL team.

Public funds to build an acceptable venue are less likely to be used in Canada. So anyone interested in buying the team and moving it north would have to finance a new or renovated facility on their own. Don't see it happening for a Northen transaction.  

[thewookie1]

4 minutes ago, LTS said:

Did you mean 51% here?  At 31% it's very possible for an owner to lose all control of the team as long as there are 4 PE groups banding together.

 

 

Strangely in this system I don't believe they are allowed to do to their non-controlling clauses. Essentially you can't band together votes if you don't have votes to begin with.

Edited Tuesday at 06:06 PM by thewookie1

[That Aud Smell]

1 hour ago, inkman said:

Hey all you 6’ plus guys complaining about the leg room at the KBC: Suck it.  Your years of banging all the hot chicks, getting promoted solely based on your height, being able to see over wooden fences.  You’ve had your run.  Us 5’10” and under folks are plenty comfy. 

PUT IT IN THE LOUVRE

[nfreeman]

39 minutes ago, jad1 said:

The sale is to a private equity group, falling under the NFL  ownership rules  change that happened this past summer. 

Under those rules, the equity group can only purchase a non-controlling interest in the team.  This means they have no say in hiring, firing or roster decisions.  They have no say in operations management.  And they have no say in relocation decisions. Also, they are not going to be included in a succession plan.

The minimum stake they must own is 3% and the maximum is 10%. The primary owner must retain 31% ownership in the team.

The equity must retain their stake for 6 years before selling it.

This seems to be a non-voting stock holder type of a relationship, rather than a true minority franchise ownership. 

It's a way for owners to generate investment capital, without cedeing any control of the team.

 

You're right about the rules and that the PE investors don't have control -- but they will still have the ear of the controlling owners and will certainly try to convince them.  These are skilled, articulate professionals who create presentations and financial models for a living and they are going to be constantly banging the drum on this.

 

11 minutes ago, LTS said:

Did you mean 51% here?  At 31% it's very possible for an owner to lose all control of the team as long as there are 4 PE groups banding together.

 

I could be wrong, but I think the 10% limit is the total permitted PE ownership for each team -- so there wouldn't be a few different 10% PE investors.

[Taro T]

50 minutes ago, shrader said:

Is this the same group from a month or so ago that had a couple bouncyball players in it?

One of the 2 equity groups does have that group within it's 10% stake.  (The article had it somewhere between a 1% and 3.something % stake; don't recall as the list of smaller investor groups was fairly large for only a 10% stake.)

8 minutes ago, nfreeman said:

You're right about the rules and that the PE investors don't have control -- but they will still have the ear of the controlling owners and will certainly try to convince them.  These are skilled, articulate professionals who create presentations and financial models for a living and they are going to be constantly banging the drum on this.

 

I could be wrong, but I think the 10% limit is the total permitted PE ownership for each team -- so there wouldn't be a few different 10% PE investors.

The article said that at the end of the day, Pegula will keep a 79.9% stake in the Bills.  There are 2 separate roughly 10% equity groups that are up for league approval, one of which is actually a whole bunch of groups each getting a much smaller stake in the Bills to add up to their ~10% stake.

[jad1]

5 minutes ago, nfreeman said:

You're right about the rules and that the PE investors don't have control -- but they will still have the ear of the controlling owners and will certainly try to convince them.  These are skilled, articulate professionals who create presentations and financial models for a living and they are going to be constantly banging the drum on this.

 

I could be wrong, but I think the 10% limit is the total permitted PE ownership for each team -- so there wouldn't be a few different 10% PE investors.

You're right about the rule that PEs can only own up to 10% of a franchise.  I'm a bit confused though because the report is that Pegula is selling 10.6% of the Bills. Maybe that's a reporting mistake on the sale.

My guess is that the percentage will increase after the initial investments as a way to increase capital.  Once they are sure it works the way they anticipated it working.

Another rule is that these PE firms can hold an interest in up to 6 different teams at once. This shapes it more as a passive, high-end investment opportunity, rather than traditional ownership, so my guess is that after the initial purchase, owners will pretty much ignore these guys.

[ska-T Chitown]

1 hour ago, nfreeman said:

$560MM and climbing!

I still can't believe TP agreed to fund all overruns -- although I seem to remember that he fired the guy who negotiated the deal with the state not too long after the deal was signed -- maybe that was the reason.

As for the "will the team leave" discussion -- I'd guess we're safe on that for as long as TP owns the team, and after that for as long as the team is good -- but when winter comes, as it always does, the risk will escalate precipitously.  If the team stinks, that stadium will be half-empty for the games in the 2nd half of the season and it will produce 75% less revenue than stadiums in bigger markets produce. 

The PE investors will be smart, persuasive and insistent about moving the team, and there will be plenty of buyers interested in writing a huge check if they can move it to Toronto or other big market.

Nothing lasts forever.

Don't forget, since TP owns a stake in the stadium, he gets the depreciation tax-writeoffs. Not entirely sure how it works, since an NFL stadium, other than the land, is essentially worthless if you don't have an NFL team. Fair market value and other things might be tricky.

[LabattBlue]

4 hours ago, JoeSchmoe said:

My brother is 6'4 and has never mentioned it being an issue. Would a new arena actually fix this? 

The issue is in the 100’s, not the 300’s.  Not sure about the 200’s. 
 

FTR, I am 6’1” and I hate sitting in the 100’s because of leg room. 
 

This was never a problem at the Aud because of the steeper slope, even in the lower bowl. So the answer is either steeper slope, or more space between rows. 

Edited Tuesday at 07:49 PM by LabattBlue

[Kr632]

9 hours ago, JoeSchmoe said:

My brother is 6'4 and has never mentioned it being an issue. Would a new arena actually fix this? 

I’m 6’1” and it’s uncomfortable. 

[Second Line Center]

11 hours ago, EM88 said:

I disagree.

I do not think the Bills are moving in the next 5-7 years. But I do not think a 2 billion dollar stadium anchors them here.

This is not a decade ago. There are closing in on  1000 billionaires in the USA and Canada alone.  Last time I saw a list there are over 50 alone that are worth more than $20 billion, dozens worth more than $50 billion.  Those numbers, both in terms of dollars and the number of people, are growing.  This is without even bringing up how many lesser billionaire or multi-millionaire celebrities might band together in a celebrity ownership group backed by private investors that can do the same.

Leaving behind a $2b stadium in Buffalo is nothing to them, especially with what might be waiting for them in a much larger market.

If an individual really wants an NFL team, and wants them in a much larger market than Buffalo, a $2 billion dollar stadium here is not going to stand in their way. They can write a check for that and the attention they will get for being a new owner, the view they will be for being the hero that brings a franchise to a new city, will far outweigh the money they have to spend to do that.

If the Pegula family continues to own the Bills, or someone with Buffalo roots such as Jeffrey Gundlach decides they want the team because they are a Buffalo fan buys the team, then it will be here longer term. If that does not happen, this team will not be here. Its a very binary thing.  

That $2 billion stadium is a huge deal to this area.  Its not much to anyone outside of the area with outside interests.

 

Find me a situation where a 2 billion dollar plus stadium is built - with the backing of the state of NY - and within 10-20 years or less has relocated.  
 

This would be unprecedented and the city of Buffalo and state of NY should just fold.  
 

The stadium may not anchor it here - but the people that cast that anchor will. 
 

Relocation itself in the NFL is a rarity - in the NHL it’s been common.  

[Porous Five Hole]

1 hour ago, Second Line Center said:

 

Find me a situation where a 2 billion dollar plus stadium is built - with the backing of the state of NY - and within 10-20 years or less has relocated.  
 

This would be unprecedented and the city of Buffalo and state of NY should just fold.  
 

The stadium may not anchor it here - but the people that cast that anchor will. 
 

Relocation itself in the NFL is a rarity - in the NHL it’s been common.  

I agree with you and will expand. 

Yes there is risk that some billionaire will want to put a franchise in his back yard because he can, and Buffalo could be a target. But soon it won’t matter where the franchises are located. The league will eventually be about anytime odds and fantasy football stat lines.
 

Ticket sales will soon be a line item that the league cares less about. Especially when they price the local fan out. They’re building new stadiums with less seat capacity for reason. Ticket sales won’t be  one of their primary sources of revenue.  They’re already playing multiple games in europe ffs.

The NFL is a tv sport, so it doesn’t matter where the games are played. With the new stadium in mind, this is why I expect Buffalo will be a host city in the nfl for a long time to come. 
 

Liger has echoed similar sentiments and I totally agree with him. 

Edited Wednesday at 03:42 AM by Porous Five Hole