Bad Economy hits the Redskins

[memphisskin]

Originally Posted by sportscurmudgeon

The cuts in "staff" for NFL teams including the Redskins is not nearly over yet. And don't look closely at the folks working for teams in "lesser sports"; thos folks' jobs are in serious jeopardy.

The Redskins continue to be the cash cow that was mentioned above, but Danny Boy's other ventures are not doing all that well. Six Flags could delcare bankruptcy; buying up American Bandstand has not been a humongous success; Danny Boy is in the fast food business (forget which minor chain he bought about two years ago) and all of the companies in that business sector are seeing "revenue shortfalls".

These Redskins' folks were laid off because times are getting tighter - - not because the Skins don't want them.

Here is the signal that the franchise might not be pulling down as much $$$ as Danny Boy would want:

Ticket Price Reductions.

The Skins have a top-tier stadium price structure and they have some long term commitments from folks with heavy bread for premium seats. If they reduce other ticket prices, they might see a huge cry for relief in the really expensive seats - - and that is a big part of the cash cow's milk production. The Skins do not want to have to reduce ticket prices - - but they may be forced to do just that.

There may not be an increase in prices, but I am 90% certain there will not be price reduction. There is no need. They have a waiting list in the thousands, the Redskins are the premium sports brand in the region. Let's be clear, for every season ticket holder that doesn't renew, there are five who have been waiting for the chance to buy season tickets.

But lets be real. We are not in the Great Depression. The news makes it seem bleak, but people still gave their kids gifts for Christmas, still flew to see Grandma for the holidays, and still go out to drink, eat, and have a good time, and still will be going to Redskins games, tailgating with friends, and buying merchandise.

Oh, and Giantone, the Skins really are worth $1.5 billion. In the real world.

[Defensewins]

Originally Posted by memphisskin

......But lets be real. We are not in the Great Depression. The news makes it seem bleak, but people still gave their kids gifts for Christmas, still flew to see Grandma for the holidays, and still go out to drink, eat, and have a good time, and still will be going to Redskins games, tailgating with friends, and buying merchandise.

Oh, and Giantone, the Skins really are worth $1.5 billion. In the real world.

Our current "Great Recession" will not hit the "30's Great Depression" type losses only because policymakers learned form the 30's mess. Most of the current great Economists in power like the Fed Chairman Ben Bernanke are students of the Great Depression. Treasury Secretary Henry Paulson remembers the mistakes made by Andrew Mellon the treasury secretary before and during the great depression.
The Great Depression resulted from the end of a housing bubble in 1926 and the end of a high-tech bubble in 1929. But the main reason it reached to such a bad level was from incredible neglect and incompetence/inexperience on the part of policymakers in power at the time. The #1 cause was the Fed's failure to act. It basically stood by as the banking system and the economy collapsed around it.
This time, in contrast, the Fed can hardly be criticized for inaction. Not only has it cut lending rates to all time lows, but it has also thrown a lot of money on the fire. We will be $trillions of dollars further into debt by the end of the 1st quarter of 2009 because of this crisis. This money has been spent to bail out banks, lending institution and large companies (like the big 3 auto companies). This current crisis could have very easily reached Great Depression levels if action was not taken.

Washington DC area is very wealthy and some what insulated from this mess as compared to other parts of the country.
Because you or I have not lost our jobs does not mean this is not a huge economic crisis. 1.9 Million people lost their jobs in 2008 November: Most jobs lost since 1974 - Dec. 5, 2008
I have several friends in Michigan and Ohio who lost their jobs, houses and have to move to another state to find work.
This economic crisis will continue at least into the 1st half of 2009. According to reports, planned jobs cut announcements for January soared to 181,671, the second-highest total on record. This is far from over.

[sportscurmudgeon]

memphisskin:

At the moment, the lower priced season tix are sold out and there is a waiting list. You are correct.

At the moment, the premium seats are NOT sold out and there is "erosion" in the numbers of renewals compared to the number of new purchasers.

If - - I said IF - - problems hit the lower price segment and those seats aren't sold out, the Redskins will face an interesting financial situation. It isn't likely to be a fatal flaw, but it will be one that requires some "poise" as the team navigates through.

Those conditions are not here yet; they may never arrive; or they may be here in about 12 months.

Regarding the valuation of the Redskins at $1.5B, that number comes from estimates done by Forbes and places like that. The Redskins are worth - - in the real world - - what someone will pay for them. Consider:

About 15 months ago, an investment banking firm - - forget which one - - valued the Chicago Cubs franchise including Wrigley Field to be worth $1.4B. The Tribune Company needs to sell the Cubs because its owner, Sam Zell, is sinking under the interest payments on the $12B loan he took out to buy the Tribune Company.

In the first round of bids, the highest bid was $1.3B and the low bid was $1.0B. The Tribune Company diddled around and now ALL of those bids have been rescinded by the potential buyers. One report was that the next round of bids will come in with significantly reduced prices We shall see....

Estimated values by bankers and by magazines are just that - - estimates. If someone tells you that he thinks your house is worth $50M, that does not make it so and it does not mean you have $50M to spend - - in the real world. You need a buyer with that kind of money ready to give you a check for that amount to make it - - real.

Until someone is willing to pony up $1.5B for a team, then no one knows what its value is - - in the real world. Maybe the Redskins are worth $20B...?

[TheSmurfs22]

Originally Posted by Defensewins

Our current "Great Recession" will not hit the "30's Great Depression" type losses only because policymakers learned form the 30's mess. Most of the current great Economists in power like the Fed Chairman Ben Bernanke are students of the Great Depression. Treasury Secretary Henry Paulson remembers the mistakes made by Andrew Mellon the treasury secretary before and during the great depression.
The Great Depression resulted from the end of a housing bubble in 1926 and the end of a high-tech bubble in 1929. But the main reason it reached to such a bad level was from incredible neglect and incompetence/inexperience on the part of policymakers in power at the time. The #1 cause was the Fed's failure to act. It basically stood by as the banking system and the economy collapsed around it.
This time, in contrast, the Fed can hardly be criticized for inaction. Not only has it cut lending rates to all time lows, but it has also thrown a lot of money on the fire. We will be $trillions of dollars further into debt by the end of the 1st quarter of 2009 because of this crisis. This money has been spent to bail out banks, lending institution and large companies (like the big 3 auto companies). This current crisis could have very easily reached Great Depression levels if action was not taken.

Washington DC area is very wealthy and some what insulated from this mess as compared to other parts of the country.
Because you or I have not lost our jobs does not mean this is not a huge economic crisis. 1.9 Million people lost their jobs in 2008 November: Most jobs lost since 1974 - Dec. 5, 2008
I have several friends in Michigan and Ohio who lost their jobs, houses and have to move to another state to find work.
This economic crisis will continue at least into the 1st half of 2009. According to reports, planned jobs cut announcements for January soared to 181,671, the second-highest total on record. This is far from over.

~~~~
Wasn't the unemployment rate in the mid twenties during the Great Depression? We are not in a Great Depression by any means. Are times tight yes? We got so use to going out what we want not just what we need, now we are having to think differently. In this 24-7 media we live in they have to keep the fires going and this is what they are doing right now.
Michigan has been in a recession for a couple of years now. You are so right in the DC area we have always been some insulated to the problems that affect the rest of the country.

I do think that Congress has got to stop throwing money at the problem because as of now it is not working.

[Lancer]

Originally Posted by memphisskin

They have a waiting list in the thousands, the Redskins are the premium sports brand in the region. Let's be clear, for every season ticket holder that doesn't renew, there are five who have been waiting for the chance to buy season tickets.

What have you been smoking? The waiting list is total bullshit and is a myth propogated by the redskins themselves to keep people like you ready to pay anything for a pile of sh*t. The redskins send an email out before every game saying there are tickets available. They turn over upper deck seats every year, and only if you pay 75% over face value will you ever smell lower level seats. That is a fact, jack.