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Sam Hill
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Post by Sam Hill » Thu Jul 02, 2015 11:06 pm

[quote=""SWSAM""]Comparing a low-level indoor football team with an OHL franchise (which did go Ch. 11 this year) or a AA baseball team is comparing apples and bowling balls.[/quote]

I would have said this, but you did it, so thank you.

Maybe in Pennsylvania, they like to make comparisons that aren't level comparisons, but in Colorado and other places, when someone asks "How many PIFL teams have increased in value and been sold?" someone thinks to answer the actual question, rather than tell them about hockey teams and baseball teams that were originally purchased for way more than $150,000.

Dear dipstick: teams at the extreme low end of the sports landscape usually just fold, they don't appreciate in value and don't get sold (for a profit or otherwise). Which was my entire frigging point.
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Post by preeths » Fri Jul 03, 2015 4:01 am

[quote=""SWSAM""]Your prime example of this was the late USFL, which was fraught with financial issues and rapid overexpansion. Out of all the teams that shuttled in and out in the three seasons of the league, exactly one franchise (the Denver Gold) was purported to have ever sold for a profit, which was after the first -- and most successful -- season of the league.[/quote]

Not sure that's right. The Denver Gold, and possibly Tampa Bay, reportedly earned a profit in 1983, but I'm pretty certain more than one franchise actually sold for a profit. New Jersey comes to mind as does Boston, LA and maybe Washington.

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Post by preeths » Fri Jul 03, 2015 4:03 am

[quote=""Sam Hill""]Dear dipstick: teams at the extreme low end of the sports landscape usually just fold, they don't appreciate in value and don't get sold (for a profit or otherwise). Which was my entire frigging point.[/quote]

Chill it with the insults. Let's not go down the same path we have before. Several people are making the point, so there's no need to beat it in with your shoe.

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Post by SWSAM » Fri Jul 03, 2015 4:38 pm

[quote=""preeths""]Not sure that's right. The Denver Gold, and possibly Tampa Bay, reportedly earned a profit in 1983, but I'm pretty certain more than one franchise actually sold for a profit. New Jersey comes to mind as does Boston, LA and maybe Washington.[/quote]

Here's some background on it.

http://usfl.info/spedding.html

http://usfl.info/blanding.html

Tampa never sold to another ownership group, and Trump bought into part - not all - of the Generals.
Last edited by SWSAM on Fri Jul 03, 2015 4:45 pm, edited 2 times in total.

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Post by preeths » Fri Jul 03, 2015 6:44 pm

We might be looking at this slightly differently. In the USFL cases I cited, the franchises sold for more than they were purchased for so the asset value increased, which really is what we're looking at here. Whether the sale price was more than purchase price plus the difference between revenue and expenses, that involves an awful lot of speculation. As for NJ, I can't speak to tiny investors, but Trump bought the Generals, including Duncan's 90 percent interest and Fairbanks' 10 percent.

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Post by nksports » Fri Jul 03, 2015 9:01 pm

[quote=""preeths""]We might be looking at this slightly differently. In the USFL cases I cited, the franchises sold for more than they were purchased for so the asset value increased, which really is what we're looking at here. Whether the sale price was more than purchase price plus the difference between revenue and expenses, that involves an awful lot of speculation. As for NJ, I can't speak to tiny investors, but Trump bought the Generals, including Duncan's 90 percent interest and Fairbanks' 10 percent.[/quote]

I wonder what Trump did with his part of the $3 the league made in its antitrust suit against the NFL (that was $1 with triple damages).

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Post by SWSAM » Sat Jul 04, 2015 8:08 am

[quote=""preeths""]We might be looking at this slightly differently. In the USFL cases I cited, the franchises sold for more than they were purchased for so the asset value increased, which really is what we're looking at here. Whether the sale price was more than purchase price plus the difference between revenue and expenses, that involves an awful lot of speculation. As for NJ, I can't speak to tiny investors, but Trump bought the Generals, including Duncan's 90 percent interest and Fairbanks' 10 percent.[/quote]

I put the word "purported" in my original response for a reason - part of the USFL folklore was that the original Gold owner was able to get out after the first season and sell for more than what he paid for the initial fee, and might have been the only owner to do so. The genesis of this was the post-mortem "The $1 League" that was published in 1987 after the league folded.

Perhaps the original owners of the Generals and Bandits realized a profit, but it's been 30 years now, and that information isn't as easily accessible. Regardless, it's still a small fraction of the 18 franchises to take the field in the league's history. Given the timing of the Bandits' sale -- this was in August 1985, after the announcement of the fall schedule switch for 1986 and John Bassett's health was in decline -- I'm skeptical that Bassett realized a profit from the sale to his other partners.

The point being missed about the USFL was this -- overexpansion and lower barriers to entry led to greater instability and took value away from franchises. When the league was launched there was a blueprint -- a national TV deal, a focus on top TV markets in top-tier stadiums, and keeping costs under control. Almost immediately, that plan was deviated from and necessitated a 50% expansion for the second season just to keep existing owners afloat. That expansion brought bad owners (Clinton Manges being the most notorious) and sub-optimal TV markets like San Antonio, Memphis and Tulsa. Poor quality ownership in Los Angeles likely sent the league into its inevitable death spiral.

The USFL example is unfortunately mirrored in many lower-level professional leagues, including the PIFL. Without stringent standards for ownership, venues and markets, those leagues are rife with instability on and off the field. As a result, those franchises are unlikely to realize any appreciation of value, especially compared to something like affiliated minor league baseball.
Last edited by SWSAM on Sat Jul 04, 2015 8:14 am, edited 2 times in total.

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Post by preeths » Sat Jul 04, 2015 2:39 pm

The problem with the $1 League is that the author didn't come on the scene until 1984 and didn't have the access that some others did. I'm not sure how many interviews he actually conducted. The Arizona Wranglers were another team that may actually have sold for a profit.

I could make the argument that expansion, whether one considers it too much or not, set the franchise value in 1984, allowing some of the original owners including those in Denver and Arizona to sell for a profit. The USFL had very high barriers to entry, certainly more akin to a major league than a minor one. Manges, I believe, was in the Fortune list at the time, but a drop in oil prices gutted him. In LA, Oldenburg appeared loaded to all outside observers.

The USFL had shown enough promise in 1983 to sell five expansion franchises, allow Dixon to dump his founder's franchise for a good chunk of change, and see several original owners sell their franchises for more than they paid for them. It had the bones an indoor league could only dream about.

You are correct that the USFL deviated from its original plan, but that really started in Chicago, Michigan and NJ in 1983, though in Jersey it may have helped the league as a whole. No doubt Trump helped accelerate spending to unsupportable levels a year later, but expansion didn't contribute to that. Franchises became such money losers, and the announced move to the fall cast so much doubt on their future, that they weren't, by and large, going to sell for much, though a few still changed hands. The current owner of the Miami Dolphins bought the Stars, for instance.
Last edited by preeths on Sat Jul 04, 2015 6:53 pm, edited 1 time in total.
Reason: Changed "Minnesota" to "Michigan"

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Sam Hill
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Post by Sam Hill » Sat Jul 04, 2015 3:25 pm

There was no Minnesota team in the USFL.

I would imagine the folks who got in early and were able to find suckers (like Roulier) to purchase their USFL teams before the enterprise went pear-shaped were more likely to have realized an actual profit than people who were more or less forced by circumstance to sell theirs or who sold after all the drama with Trump and the move to the fall. (I'd be very, very surprised if Bassett ever made a profit, either operationally or when he had little choice but to sell out. He spent A LOT of money.)

But even comparing the USFL - which was a more-or-less major league, with big-name players and coaches playing in major markets and on major TV networks - to the PIFL is silly. The dynamics of the situation are different. One overspent and the other never had any money to begin with.

The idea that you're going to sell a PIFL team regularly, or that there would be enough continuity in a fly-by-night league like that, to make real accrual of franchise value happen across the spectrum of teams, is ridiculous. Most teams in leagues of that ilk just fold. Occasionally they find a sucker who either is blessed with so much hubris that they think they can make it work, or they delude themselves into thinking they're doing something for the community by not letting the fly-by-night team fold.
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Sam Hill
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Post by Sam Hill » Sat Jul 04, 2015 3:29 pm

Also, FunWhileItLasted.net lists these USFL franchise sales:

United States Football League (1983-1985)

Expansion fees:

1983 – Jacksonville Bulls – $6.0 million (Fred Bullard)
1983 – Memphis Showboats – $6.0 million (Logan Young)
1983 – Pittsburgh Maulers – $6.0 million (Edward DeBartolo Sr.)
1983 – San Antonio Gunslingers – $6.0 million (Clinton Manges)
1983 – San Diego (became Oklahoma Outlaws) – $6.0 million (William Tatham Sr. & William Tatham Jr.)

Sales of existing franchises:

1983 – Arizona Wranglers – $7.0 million (Jim Joseph to Dr. Edward Diethrich)
1983 – Boston Breakers – $8.0 million (George Matthews et al. to Joseph Canizaro)
1983 – Chicago Blitz – $7.2 million (Dr. Edward Diethrich to Dr. James Hoffman)
1984 – Denver Gold – $10.0 million (Ron Blanding to Douglas Spedding et al.)


This LA Times story from 1985 says:
Charter (Express) owners Bill Daniels and Alan Harmon got out after the first year, actually reaping about a $2 million profit.
That sale - to "Mr. Dynamite" William Oldenberg - isn't listed above.

But still, that's just housekeeping and fact-checking. The idea that these pissant teams in the PIFL are growing in value and being sold is ludicrous, as is the idea that because hockey and baseball teams are growing in value and being sold, that somehow relates to this discussion.
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