Forbes White Sox evaluation- #14 worth $1.685 Billion

[Dick Allen]

Estimates they lost $40 million last season.

Also interesting, their numbers, who industry insiders say are all wrong, spit out these evaluations, and the Mets were sold within !% of their evaluation.

[EloyJenkins]

pretty good value for not owning a stadium. 

[ptatc]

16 minutes ago, EloyJenkins said:

pretty good value for not owning a stadium. 

This may actually help. They don't have the debt but have a really good stadium deal.

[bmags]

this feels low to me but the mets deal was lower than I'd have predicted, maybe forbes is finally close to reality.

[raBBit]

How does Forbes even start to go about projecting the financials of a private company? I don't get it at all.

[ptatc]

18 minutes ago, raBBit said:

How does Forbes even start to go about projecting the financials of a private company? I don't get it at all.

Their business is business and valuations. They are much smarter and better at it than most of us here, I would assume.

[EloyJenkins]

2 hours ago, ptatc said:

This may actually help. They don't have the debt but have a really good stadium deal.

tax payers offset so much of the stadium though. In Cobb County (where I live and Braves play), we are footing 392 million of the stadium bill. 

[raBBit]

Just now, ptatc said:

Their business is business and valuations. They are much smarter and better at it than most of us here, I would assume.

I work in a related field myself. I know what the Sox people think of the Forbes projections. I don't have any asymmetric info compared to the public but I know people who do and despite this being what Forbes does they don't do a great job - at least with regard to the Sox. People take these numbers seriously and they probably have no idea they are bs. 

[ptatc]

7 minutes ago, EloyJenkins said:

tax payers offset so much of the stadium though. In Cobb County (where I live and Braves play), we are footing 392 million of the stadium bill. 

Correct. That's why I was thinking the White sox may look "better" with financials because they don't have the huge amount of debt like the Cubs who had to purchase and fund renovations to a stadium. The stadium deal for the sox is pure profit, not debt. The same would apply to the Braves as well.

Edited April 5, 2021 by ptatc

[ptatc]

4 minutes ago, raBBit said:

I work in a related field myself. I know what the Sox people think of the Forbes projections. I don't have any asymmetric info compared to the public but I know people who do and despite this being what Forbes does they don't do a great job - at least with regard to the Sox. People take these numbers seriously and they probably have no idea they are bs. 

Ok. I didn't realize Forbes had such a poor reputation.

[raBBit]

2 minutes ago, ptatc said:

Ok. I didn't realize Forbes had such a poor reputation.

That's now what I said. Their projections for the Sox are not accurate though.

[ptatc]

Just now, raBBit said:

That's now what I said. Their projections for the Sox are not accurate though.

You have to assume that it wouldn't be just for the one team though. If their modeling was off for one, it would be for more.

[Dick Allen]

9 minutes ago, raBBit said:

I work in a related field myself. I know what the Sox people think of the Forbes projections. I don't have any asymmetric info compared to the public but I know people who do and despite this being what Forbes does they don't do a great job - at least with regard to the Sox. People take these numbers seriously and they probably have no idea they are bs. 

There was a time about 10 years back when KW was telling everyone who would listen the Forbes numbers were wrong, not even close, but then used the Forbes numbers that stated they used the highest percentage of their money on player salaries.

[Soxbadger]

16 minutes ago, ptatc said:

You have to assume that it wouldn't be just for the one team though. If their modeling was off for one, it would be for more.

If you look at the way Forbes structured their estimate its based on:

 

9. Portion of franchise's value attributable to revenue shared among all teams.

10. Portion of franchise's value attributable to its city and market size.

11. Portion of franchise's value attributable to its stadium.

12. Portion of franchise's value attributable to its brand.

 

They really arent taking the private finances into account, because a franchise isnt a normal business valuation. There are only X total, only Y available at any time. So the valuations are based on comparing other teams and their figures. When you look at the list, the Sox at 14 makes sense, although you could easily argue they should be higher. Every team lower than them wouldnt really present a better purchasing opportunity.

[WBWSF]

I don't believe the White Sox lost $40 million. JR would sell the team if that was the case.

[Texsox]

1 hour ago, WBWSF said:

I don't believe the White Sox lost $40 million. JR would sell the team if that was the case.

He was the lead investor when his group bought the team for $20 million. It's now worth well over a billion. He's not selling his shares because of a $40 million one season loss. 

[kitekrazy]

Let's all chip in and buy them out,

[ThirdGen]

20 hours ago, Texsox said:

He was the lead investor when his group bought the team for $20 million. It's now worth well over a billion. He's not selling his shares because of a $40 million one season loss. 

The $20 million also included the ballpark and land, which they sold to the city a few years later in a leaseback deal prior to the new park being built.  So they got a chunk of that $20 million back in a few years, making the return on the portion that was actually the team even greater.

[raBBit]

29 minutes ago, ThirdGen said:

The $20 million also included the ballpark and land, which they sold to the city a few years later in a leaseback deal prior to the new park being built.  So they got a chunk of that $20 million back in a few years, making the return on the portion that was actually the team even greater.

Not to mention this new move him and his sons are making to buy out the other owners. Sox ownership group is really old and his sons are buying out these guys that don't have any marketability to sell their equity for fair value. I imagine he'll be able to amass a more significant share of ownership, hand over control to his sons with minimal penalty in the exchange and the additional equity in the team acquired will come at a discount. It doesn't seem right at all but Reinsdorf truly is brilliant pulling off everything he does.

[ShoeLessRob]

Our tears give JR his strength. 

 

 

 

[Dick Allen]

22 hours ago, Texsox said:

He was the lead investor when his group bought the team for $20 million. It's now worth well over a billion. He's not selling his shares because of a $40 million one season loss. 

He made an even better deal buying the Bulls. They paid nothing. Just assumed some debt. And Michael Jordan was already on the team. Many of the same investors. They print money. Barry Rozner interviewed an investor during their record setting horrid period just after they broke up the dynasty. He was embarrassed how much money they were making. Lee Stern, who is or at least was a White Sox investor, and owned the Sting, wrote a book a few years ago, and I saw him interviewed. He said JR offered him as much of the Bulls as he wanted, and he wanted zero. Said it was the biggest mistake he ever made.

[soxfan18]

On 4/5/2021 at 4:01 PM, WBWSF said:

I don't believe the White Sox lost $40 million. JR would sell the team if that was the case.

Yeah, put it this way, they didn't "lose" $40 million, rather they missed the opportunity to make the $40 million they were already accounting for.  

When I see the word "loss" in terms of money I attribute that to "already had".  They never actually had that money.  

Edited April 6, 2021 by soxfan18

[tray]

I wonder who owns all of the parking lots around the stadium. The Sox have added parking over the years and there is more land in the neighborhood that they can still probably acquire at reasonable cost as Bridgeport continues to gentrify and the South Loop - Halsted corridor continues to improve. I would like the Sox  purchase the small housing development to the South  or possibly  construct new housing in the area and arrange a swap for it.

[GradMc]

On 4/6/2021 at 3:36 PM, Dick Allen said:

He made an even better deal buying the Bulls. They paid nothing. Just assumed some debt. And Michael Jordan was already on the team. Many of the same investors. They print money. Barry Rozner interviewed an investor during their record setting horrid period just after they broke up the dynasty. He was embarrassed how much money they were making. Lee Stern, who is or at least was a White Sox investor, and owned the Sting, wrote a book a few years ago, and I saw him interviewed. He said JR offered him as much of the Bulls as he wanted, and he wanted zero. Said it was the biggest mistake he ever made.

These men aren't sportsmen.

They make money owning sports teams.

Also helps when you can pay pennies on the dollar for two major market teams.

That will never happen again. 

[champagne030]

On 4/5/2021 at 2:43 PM, EloyJenkins said:

tax payers offset so much of the stadium though. In Cobb County (where I live and Braves play), we are footing 392 million of the stadium bill. 

Just using your post as point of reference.  Their numbers are public and anyone can gather a reasonable estimate of how much revenue is coming in the door by looking at the Braves' financials.  And you can go way back and look at when the Indians were public and how much money they took home when every owner was crying poor.  The other factor is how much JR is playing games with funneling dollars thru Comcast.  The White Sox have made hand over fist cash profits forever and that doesn't include the $X equity increase (and yes, that Forbes estimate is way low IMO).