04-09-2010, 12:17 PM
<!--quoteo(post=87406:date=Apr 9 2010, 11:10 AM:name=1060Ivy)-->QUOTE (1060Ivy @ Apr 9 2010, 11:10 AM) <{POST_SNAPBACK}><!--quotec--><!--quoteo(post=87397:date=Apr 9 2010, 10:57 AM:name=rok)--><div class='quotetop'>QUOTE (rok @ Apr 9 2010, 10:57 AM) <{POST_SNAPBACK}><!--quotec-->In retrospect he overpaid, but at the time it was the market price. This is oversimplifying the issue.
I deal with private equity every day. Private company valuations are marked to "market" every quarter. It doesn't mean the valuations are accurate or reflect debt and equity fully. The process of closing on the sale of a baseball franchise has a time lag embedded into it. Ricketts isn't a fool for paying $800 mil for a team that many thought was worth $900 mil to $1 bil at the time. Then the economy collapsed.
What is your point?<!--QuoteEnd--><!--QuoteEEnd-->
Recall the Tribune was attempting to bring new parties into the Cubs sale as late as last year. If the agreed upon sale price was overvalued, have a hard time believing that the seller would still be attempting to find another a new buyer to purchase at an even greater overvalued price?
It comes down to what's more likely: the Cubs value has decreased by $119 MM or Forbes valuation methodology is faulty?
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The Tribune tried to bring in another party but failed to do so. No one was going to pay more than what was a agreed upon originally especially with credit being so tight. A deal would have dragged on for several more months, and who knows what the final price would have looked like.
And Coldneck is most likely right. The method to value the team with a more up-to-date valuation is not the problem, it is trying to strip out the value of the baseball operation that is key. None of us knows the formula, but I stand by what I've said thus far. I think you are confusing paper valuations with market valuations of a deal such as this, especially when huge time lags between agreement and closing exist.
I deal with private equity every day. Private company valuations are marked to "market" every quarter. It doesn't mean the valuations are accurate or reflect debt and equity fully. The process of closing on the sale of a baseball franchise has a time lag embedded into it. Ricketts isn't a fool for paying $800 mil for a team that many thought was worth $900 mil to $1 bil at the time. Then the economy collapsed.
What is your point?<!--QuoteEnd--><!--QuoteEEnd-->
Recall the Tribune was attempting to bring new parties into the Cubs sale as late as last year. If the agreed upon sale price was overvalued, have a hard time believing that the seller would still be attempting to find another a new buyer to purchase at an even greater overvalued price?
It comes down to what's more likely: the Cubs value has decreased by $119 MM or Forbes valuation methodology is faulty?
<!--QuoteEnd--></div><!--QuoteEEnd-->
The Tribune tried to bring in another party but failed to do so. No one was going to pay more than what was a agreed upon originally especially with credit being so tight. A deal would have dragged on for several more months, and who knows what the final price would have looked like.
And Coldneck is most likely right. The method to value the team with a more up-to-date valuation is not the problem, it is trying to strip out the value of the baseball operation that is key. None of us knows the formula, but I stand by what I've said thus far. I think you are confusing paper valuations with market valuations of a deal such as this, especially when huge time lags between agreement and closing exist.