Locked out of their training facility would work - there aren't that many NFL teams that actually own their stadium anyway.
The Texans don't - NRG Stadium's owned by the county and the Texans lease it already. The lease is actually public information!
Yeah, the joke made me think, though - how exactly would a PE firm do things differently?
I think the risk isn't to the *teams* - it's to *us*. The teams already said "yah, don't feel like buying real estate, how 'bout you do it for us?" and it *worked*. PE might say "let's do that again."
No, I think they could. What if they told local governments "nope, lower that lease payment or we move," or "yeah, give us a training facility or we move" or "create a new tax zone for our employees or we move."
It's not a big marginal improvement though, since player costs are dominant.
I guess NFL teams have the managerial factor of letting the owner's worst managerial instincts come to life, but is that actually better than making all decisions based on the profit then available to pay off the leverage used to buy the team in the first place?
I think there is a spending floor, too. Didn't the Colts deal with that in the last couple seasons? Something like, over any 3 year period, spend X% of the total salary cap.
Yeah, it’s either 89% or 90% of the salary cap per year, but there’s some creative accounting things they can do to hover a little lower (has to deal with rolling over unused cap but I’m not an expert on it)
The usual private equity move is to take over, rapidly sell or borrow against every asset to hand the people behind the takeover an instant profit whatever happens to the company being taken over, then let the resulting zombie company lurch onwards.
Might be hard to apply to an NFL team.
On the other hand, maybe my conception of what an NFL team is is too narrow, there might be assets to sell off after all, especially the stadium and nearby land.
Thinking of the Texas Rangers model: isn't really a baseball team, it's a politically connected land seizure and redevelopment company.
That frequently can use the team and fandom as a political lobbying group for said land development schemes. A bunch of "official fan clubs" are basically designed to mobilize fans into pressuring politicians to give the teams money
This. Normal people might think of an NFL team as, you know, the sports team, whereas equity vultures simply see that as one aspect and then there are the properties, the accounts, the licensing, you know, the true stuff they can pillage and loot.
Each player’s contract is an asset. Sell all the contracts then lease them back at temp wages. Outsource the healthcare to an HMO and fire the training staff. Rent the locker space out and open the facilities to event rentals.
This has happened to some European football clubs and brought about regulation. I'm sure politicians and courts in the US will embrace similar regulation. /s/
Somebody pointed out that major league teams aren't functionally in a market. They don't face relegation for losing like European teams, they have special labor and monopoly laws to allow the draft, cities subsidize their facilities and traffic needs
This kind of bit the Portland NBA team when they were looking at moving a decade ago, they had split up ownership of the team, the arena, etc. into different companies, and in the complication of the structure, it kept them from moving because of how the different internal contracts all overlapped
I think the idea here is to maximize profits from the team, and as teacher's pension funds have owned sports teams here in Canada for extended periods of time, the general motif is: go cheap on player salaries, gouge on ticket sales and merch prices, assume that team quality is unimportant
take over, hoover up all the finances to payoff the imaginary funders, then declare whatever stadium to be bankrupt and demand the locality pass more public funds to pillage
Sure, but it all depends on whether there are assets that can be rapidly spun off or borrowed against to rapidly repay the takeover investors while leaving the company a hollow shell. Team-intrinsic assets (player contracts, broadcasting rights, merch) seem a poor bet, but maybe the stadium etc?
I wonder if they could sell the team’s publicity / TV rights to someone else and have the team lease them back.
Also all the infrastructure they use to train or move people about the country, etc.
Most (*) NFL teams don't own the stadium, the government does and they lease it.
They did the leveraged buyout trick first, except they did it better. They just got someone to *give* them land for ridiculously cheap.
*: many, at least
Oh come on, watching them field a team of 9th graders wearing "football player" costumes from Spirit Halloween because salaries etc. were an easy "expense" to cut in order to load up their own pockets with "performance bonuses" would be briefly hilarious.
I think this is thinking about it wrong: an NFL team's biggest asset, *by far*, isn't anything physical.
It's the fans, and their desire to Keep Their Team or Have A Team. NFL teams generally don't move That Much (despite recent movement!) so you wonder if PE would be much more cutthroat.
Seriously. Very few people care how they get their news, so all the shit we have seen with PE and journalism doesn't make a ripple. But if your favorite team all of a sudden gets sold off for parts, you'll say something.
