Bad Economy hits the Redskins

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 The Tribune Company diddled around and now ALL of those bids have been rescinded by the potential buyers.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...?

I agree. They were not laid off because of the economy, they were fired because they were not wanted anymore.

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Having worked for an NFL team usually when the team performs average to below average the first people to get cut are not coaches and players.

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 (http://money.cnn.com/2008/12/05/news/economy/jobs_november/)
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.

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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.

Well it's bad news in 2 ways how I see it: sure it sucks for the poor blokes out of work, but I don't see that any "underperforming" coaches got the axe. In fact, we've only seen the one leave on retirement. Unbelievable to me that Stan Hixon has a job. Unbelievable.

"My job is to develop WRs in the National Football League and in 5+ years i can't point to one guy I mentored to a higher level. In fact, I've just had one bust after another come through my locker room." Putting it an f'ing t-shirt and sending it to Redskin Park addressed to Stan Hixon.

How exactly are NFL teams feeling the crunch of the economy? I'm not buying it. Just wait and see how much they spend in free agency, meanwhile some guy who works at the stadium is out on the street. F'd up.

Why is it F'd up? They can employ whoever they want can't they? If they offered you 5 mil to play QB would tell them "Nah, I wouldn't be any good and it'd be F'ed up that you were paying me a bunch of money to do a bad job when the guy sitting in the cube next door could do the same as me." They are a busniess and should be able to hire and fire who they want shouldn't they? If they don't need the employee why continue to employ them? Did Snyder turn them into a charitable group and I didn't know it?

Why is it F'd up? They can employ whoever they want can't they? If they offered you 5 mil to play QB would tell them "Nah, I wouldn't be any good and it'd be F'ed up that you were paying me a bunch of money to do a bad job when the guy sitting in the cube next door could do the same as me." They are a busniess and should be able to hire and fire who they want shouldn't they? If they don't need the employee why continue to employ them? Did Snyder turn them into a charitable group and I didn't know it?

Just don't use the the economy as an excuse. It's a laughable one the minute they sign their first big ticket free agent to a multi-million dollar deal. And we're supposed to believe Joe Schmoe's $30k a year salary is putting them in a bind? Please.

Just don't use the the economy as an excuse. It's a laughable one the minute they sign their first big ticket free agent to a multi-million dollar deal. And we're supposed to believe Joe Schmoe's $30k a year salary is putting them in a bind? Please.Well, salary floor. I understand what you are saying though, but cutting costs can only be done to a certain degree with the million dollar players on the field.

The realities of revenue sharing means that the Redskins have to cut costs even if they don't see a downturn in revenue, simply because they'll owe more to other franchises who are being more directly affected.

How exactly are NFL teams feeling the crunch of the economy? I'm not buying it. Just wait and see how much they spend in free agency, meanwhile some guy who works at the stadium is out on the street. F'd up.

I agree, the NFL teams arent feeling much of a crunch, these layoffs are a ploy to make it appear they are suffering like everyone else. Unfortunately the little guys in the organizations are the ones that suffer and thats f'd up.

BTW, a previous poster mentioned DS and not doing good with 6 flags. I have read in a few places that DS is much more interested in 6 flags for the real estate value than for running an amusement park. He couldnt care less how the park perform because the real $ is in the land the park is on.

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Having worked for an NFL team usually when the team performs average to below average the first people to get cut are not coaches and players.

True dat

When Snyder took over this team was not the cash cow it is now. I mean look at all the advertisng all over the stadium. I know the advertising has calmed down a bit during these times but still. He's done a nice job marketing the team. Plus he came up with the local Redskin stores. He has made the team a lot more valuable than when JKC had the team. Now he's lucky to be in this market, that helps.

Agreed, but value schmalue. Fans are tired of hearing the praises of Snyder's balance sheet. And unlike JKC, Snyder has not made the Redskins winners - something that justifies dropping $500 for a ticket and a beer.