The truth behind the Lions switch to AM

[inkfreq]

In fact, I would be absolutely shocked if their financial advisors weren't telling them to re-invest heavily in the team. Anything they can amortize for 5 years minimum, like stadium upgrades, new computers and systems, perhaps even a new plane, because all of that helps adjust the taxes again to make them leverageable to any bank.

Banks love that kind of shit. Even if you take some financial losses, it's long term appraisal, not mean value today.

 

[tonyballs]

What are your thoughts Tony. Are they going to sell the team for a cool couple bill once Martha goes to the big croquet club in the sky? Why? Why not?

I don't think they're going to sell. I think it stays with the Fords. Word is that the girls want to keep the football team in the family still.
Personally, i wouldn't mind a change of ownership, but thats unlikely because of the loss of money if they do so. Lets be honest though, the old man treated this team as a hobby. The way Martha is running things are clarifying that woth every move SHE makes. It seems that she cares about this football team and maybe it will be her wish to keep it in the family to someone that cares as well....

 

[cheeno]

Truth be told, these days it's more synonymous with real estate than cars. But the Lions, operating with zero debt in a highly leverageable position are their real bread and butter.

With the operating money they can get from using the team for capital, they could buy the entire city of Detroit. That's where the real money is, in letting banks give you more money than you would ever need by leveraging your assets.

And the Ford family does that better than any family in football.

The tax hit from selling would be insane. I have no idea, honestly, what Mr. Ford bought the team for, but on the high side in the era he bought it, let's say 3 million dollars.

Capital gains on that is going to allow for a 10% annual appreciation, so over the course of 60 years, it would be 600% the return value before taxes. That's $18Mm.

Anything above that is going to be subject to the highest taxes in the land. If they sold for a billion, which would be low for an NFL team now, they would be paying the 70% upper threshold on every dollar between the appreciated value of $18MM and 1 billion, meaning they would take a HUGE bath.

If the kids mortgage the team for even $100Mm after Martha's eventual passing, it resets the capital gains based on market value, and when the family sells it off, they can sell of for even more, without the huge tax hit.

Tax lawyers are damned good at what they do, but for a first generation inheritance on a second generation owner, you just can't hide that. Uncle Sugar wants his cheddar, and he wants it now, and there's just no real breaks they can get.

They are much better off leveraging than selling based on the original value of the team vs. the current market value and the tax percentages.

Interesting stuff and I have to say you make a really convincing argument. What happened with the Bills? How did they get sold?

 

[inkfreq]

Interesting stuff and I have to say you make a really convincing argument. What happened with the Bills? How did they get sold?

I'm really not familiar enough with the team to say, but I have my suspicions. First Ralph Wilson didn't "buy" the team, he was the founder and his initial fee was a franchise fee. A business you start yourself doesn't have an initial investment value for cap gains, so his family was protected from the start in selling, whereas the Fords bought the team at a value.

That's #1.

#2 is what I mentioned earlier. There was no line of succession in place, which really needs to occur prior to the owner's death.

Wilson could leave everything in a family trust, which I am sure he did, but the board of directors of the team needs to really name the new managing partner prior to death. After death, if ownership is not explicitly stated in a will, and the board has not named a successor to operate the team and a managing partner, the infighting will begin for control of the team.

That usually lasts all of a week before the lawyers say "Hey, we're not going to resolve this, let's look at options". Since the team was protected from cap gains, it was in their best interest to sell.

Martha is already laying down the succession with Sheila being the top kid and Bill Jr. being pushed out. I am sure by now the board has already signed off on Sheila running the team after her mother's passing, and the will has probably already been drafted if not signed and filed.

The Lions won't face those same challenges, and they aren't protected because it was bought, not founded, so sale makes very little to no sense in their case.

 

[inkfreq]

Oh, I should also add there is a high likelihood that they sell the stadium within the next five years to an investment group.

That's a move that makes total sense for them. They have already built the value of the property, and with other stadiums being built in the same area of the city, and a few casinos, the value is through the roof.

They sell that property, and sign a lease agreement, and they probably get between 1.6 and 2 billion right there to fatten their pockets.

 

[dubbsco]

The Lions aren't a real business.

And if you think about it, why are the best businesses in the country successful? Because they take harsh criticism and use it to propel them forward. This team hears it and has to go all hands on deck to cover it up.

 

[boogerlovejoy]

The Lions aren't a real business.

And if you think about it, why are the best businesses in the country successful? Because they take harsh criticism and use it to propel them forward. This team hears it and has to go all hands on deck to cover it up.

What? This whole post makes little sense.

 

[inkfreq]

The Lions aren't a real business.

And if you think about it, why are the best businesses in the country successful? Because they take harsh criticism and use it to propel them forward. This team hears it and has to go all hands on deck to cover it up.

So you're contention is they are not smart businessmen because they refused to continue to pay as an advertiser, to a station that was using an opinion based talk show to deter fans from continuing to support their business?

Bear in mind, Valenti is NOT a journalist. HIs job is not to provide facts, it's to provide his OPINION.

His opinion, as he stated very clearly recently, was that the Ford family needed to be bankrupted into selling the team, and the fans should stay away from games to make it happen.

So their colossal mistake was.. somehow... not funding a radio station who's objective goal was to hurt their business?

Yep.. makes perfect sense. Sarcasm intended.

ANY business owner would have been stupid not to sever ties. And obviously, you are either so in love with the station, or so upset at the team, you're letting your emotions get in the way of a logical and reasonable decision.

I am honestly surprised they let it go on this long. They should have pulled the trigger on this move a long time ago... because it's a sound business decision to do so.

 

[Mitchrapp]

Most guys grow up dreaming of playing in the NFL. I grew up dreaming of being an NFL GM. Not the average for a young kid.

When everyone else was pretending to be Staubach and Montana, I was pretending to be the guy signing and drafting the players.

I've spent my whole life studying big business. I have worked my ass of from being a high school dropout (drugs were a bad part of my teen years) to being in the position I am in now, where I hope to sit on the board of directors for a multi-billion dollar media conglomerate one day soon.

When it comes to the moves that take place in those closed door meetings, I know what I am talking about. Most of you guys know what an A gap or a B gap is better than me. Hell, I have to watch replays to see every holding penalty. But the corporate structure... I know that part very well, and I don't miss a move there.

You want some truth.. I dreamed of being the backup QB. My favorite player back then, arsonist Jeff Komlo. Before that I was a Steelers fan, and instead of rooting for Terry Bradshaw, it was Joe Gilliam. Sweet, huh?

 

[sggatecl]

Most guys grow up dreaming of playing in the NFL. I grew up dreaming of being an NFL GM. Not the average for a young kid.

When everyone else was pretending to be Staubach and Montana, I was pretending to be the guy signing and drafting the players.

I've spent my whole life studying big business. I have worked my ass of from being a high school dropout (drugs were a bad part of my teen years) to being in the position I am in now, where I hope to sit on the board of directors for a multi-billion dollar media conglomerate one day soon.

When it comes to the moves that take place in those closed door meetings, I know what I am talking about. Most of you guys know what an A gap or a B gap is better than me. Hell, I have to watch replays to see every holding penalty. But the corporate structure... I know that part very well, and I don't miss a move there.

I totally get this. I can't tell you how many times I've simmed Madden seasons just so I could go through the draft/free agent period myself. I've done 20+ year franchises where I only played like 10 games. Fuckin' nerds.

 

[Mitchrapp]

I totally get this. I can't tell you how many times I've simmed Madden seasons just so I could go through the draft/free agent period myself. I've done 20+ year franchises where I only played like 10 games. Fuckin' nerds.

Nothing wrong with that. I didn't buy this years game bit I liked having a franchise where I played all games. A franchise where I was the GM, made all the moves and built the team. And a franchise where I'm a player (though not sure if they do that any more.)

 

[tonyballs]

The Lions aren't a real business.

And if you think about it, why are the best businesses in the country successful? Because they take harsh criticism and use it to propel them forward. This team hears it and has to go all hands on deck to cover it up.

Wow....lol

 

[dubbsco]

Honestly, was it really THAT bad with what 97.1 was saying? Valenti was not the only radio personality on the air. They had several guys on their who would wipe their ass even if they finished 0-16.

Why were the Pistons, Wings, and Tigers okay with them being critical, but it's just the Lions that get all offended? Pistons left the radio station on great terms and were fine with the hosts. This organization has done nothing, NOTHING to give them the benefit of the doubt. Now they will go to an AM station which no one listens to other than Rush Limbaugh fans. I'm glad CBS stood up to them. They don't deserve anything. Lions will continue to worry about PR and making sure no one makes fun of them.

Can't wait for Sheldon White to have this interim tag removed. It's happening.

 

[sggatecl]

So you're contention is they are not smart businessmen because they refused to continue to pay as an advertiser, to a station that was using an opinion based talk show to deter fans from continuing to support their business?

Bear in mind, Valenti is NOT a journalist. HIs job is not to provide facts, it's to provide his OPINION.

His opinion, as he stated very clearly recently, was that the Ford family needed to be bankrupted into selling the team, and the fans should stay away from games to make it happen.

So their colossal mistake was.. somehow... not funding a radio station who's objective goal was to hurt their business?

Yep.. makes perfect sense. Sarcasm intended.

ANY business owner would have been stupid not to sever ties. And obviously, you are either so in love with the station, or so upset at the team, you're letting your emotions get in the way of a logical and reasonable decision.

I am honestly surprised they let it go on this long. They should have pulled the trigger on this move a long time ago... because it's a sound business decision to do so.

I think this line of thinking would be accurate for most business models. But the Detroit Lions (any NFL football team really) aren't going to lose money because someone talked shit about them on the radio. Hell, people in this country are so addicted to football that the frickin' Jags/Titans game was the top trending topic on Twitter Thursday night. The only way this was a good business decision is if Cumulus Radio offered as much or more money than CBS Radio. Not sure if we'll ever have that information beyond 'he said, she said' though.

People don't have a false opinion of the Lions because big, bad Mike Valenti was harsh on the radio. They have a false opinion because this team has been dog shit for the greater part of 50 years. People are taking exception with this because it paints the Lions as an organization that isn't accountable for it's ineptitude and I think that's fair.

 

[dubbsco]

Exactly. And I don't think the Lions are exactly hurting for money. The difference between whatever 760 AM and 97.1 FM is a drop in the bucket for their financials.

It's the principle of the entire matter. Like I stated before, the other three organizations in this city have no issue with their radio hosts being critical of their performance. But this Lions franchise cannot stand people that have a voice and say what we all want to say.

 

[mhughes0021]

Radio is media exposure. Media exposure is a "one hand washes the other" affair. When you give a station access to your team, the expectation is better press.

I'd have cut ties too. No team need the hassle of a radio guy making the fans more negative than they already are. It's the right business move for the Lions.

It's called trade-out, and the Lions weren't getting their end of that. It's not a muzzle, it's advertising.

Its the wrong business move because they are going to a shitty station who's average age is 80. If their goal is to have less people listen. ...then they accomplished it. Not a very sound business move. They let a hack run them off their radio show lol. That's the franchise we are all fans of, people. Someone speaks their mind. ...and they run.

 

[Mitchrapp]

Its the wrong business move because they are going to a shitty station who's average age is 80. If their goal is to have less people listen. ...then they accomplished it. Not a very sound business move. They let a hack run them off their radio show lol. That's the franchise we are all fans of, people. Someone speaks their mind. ...and they run.

Well it's not like they just spoke their mind once. Nonetheless, If others really want to listen to Lions talk, program the am station. Otherwise, I doubt Detroit is losing sleep over potential revenue of what, nothing?

 

[tomdalton22]

So you're contention is they are not smart businessmen because they refused to continue to pay as an advertiser, to a station that was using an opinion based talk show to deter fans from continuing to support their business?
.

I'm pretty sure that the radio station pays the Lions for the right to be the "flagship station"...not the other way around.

 

[dubbsco]

That's the problem Mitch. It's not going to be real Lions talk. It's going to be slappy hour.

 

[Mitchrapp]

That's the problem Mitch. It's not going to be real Lions talk. It's going to be slappy hour.

I can't say I know the inner-workings of Valenti and what's his face but it doesn't seem like Lions talk to me. Let say there are Lions fans who are positive.. LKP, new fans or younger people, why would they listen to that show? People listen because of the bitching..