At that value and profitability, we need to be permanent members of the luxury tax club, like Los Angeles, Boston, Orlando and Dallas. If the only way to get an all star or two is to take some bad contracts along with the trade, that is what needs to be done to be a winner. As the No. 5 most valuable team, Les can afford to spend with boys, Buss and Cuban, et al.
I've made the argument before, but I don't think very much. This particular appraisal seems to just be based on an NPV of projected cash flows, most of which are coming from ticket sales and sponsorships from US companies. Is Yao really helping these? I notice that, with some mild exceptions, the top teams are lining up with metro size. I don't think it's coincidence. And, I would guess that Houston's strong business community, particularly oil and gas companies, is the main driver of the Rockets' value. It is great for them to have a lot of big corporations here that will be buying suites whether the team is competitive or not (and whether Yao is playing or not). That'll keep profitability from sinking too far, and then they can build on that by putting together winning teams to sell the other seats.
That was 5% of advertising revenue specific to the Houston Rockets, which would be a portion of the Market worth of the franchise, or $158 million. So 5% of $158 million is $7.9 million. 5% of the advertising revenue would be less than this, but let's just work with this number for now. So if the Yao Effect on the Rockets total value is $7.9 million and the total value of the franchise is $443 million, then that would make the Yao Effect worth about 1.78% of the total value of the Houston Rockets organization, which is slightly higher than the value I came up with for 2006 numbers in a recent thread. Summary: The Yao Effect < 1.78% of Total Franchise Worth
Part of the Mav's lower valuation is likely related to the fact that they have siginificant salary/tax liabilities compared to the Rockets. In other words, their owner is spending harder in an attempt to win compared to the Rockets' owner.
I am not sure how true that is, you have to know their revenue stream. In example if Mav revenue is 100 mill and their liablities is 600 that would put them at 400. But if the rockets revenue is 120 million and the liabilites is 800 that would put them at 400 also. a precentage of spending would be a greater indication. In this case the rockets would be spending harder.
Anyone else thinks that it is crazy that Les paid only 85 mill for the team and now it is worth 443. He did this in 18 yrs!!!! the rate of return is crazy! He maid 400+% in 18yrs.... On Average people only double their investements every 7 years... or something like that.
Yeah, you wonder why every team demanded new stadiums with club levels and corporate suites... that's why.
Clearly, we are not getting our monies worth. If they are valued at that much they should be a playoffs team.
