Yearly Archives: 2007

I’ll do pictures soon…

Posting has been light again, mostly because I’m focussing more on the remodel work. I just finished trimming out the front door, and I’m getting close to finishing off the entry way. I still need to do the base moulding, but we’re getting suprisingly close to “paint ready” in the living room and entry. still need to trim out the hallway and bathroom and do the dining room, which is a significant amount of  work, but I could be paint ready for everything but the dining room by the end of next week; maybe further than that. we’ll see. Happy with the progress and quality, so what the heck.

one phone interview so far this week, and one more in an hour or so. Things continue to bubble, nothing boiling.

And Laurie and I have started planning our post-Labor-day vacation. All that’s decided is that it’ll include a couple of days in Portland and then the northern oregon coast (Astoria and Newport definitely, everything else is tentative. If someone wants to say hi while we’re in town, drop me email and we’ll try to work out the schedule.

Portland is probably going to focus on a photo trip to the zoo, and up the Gorge, since we haven’t done that for a while (and especially not in a while when it hasn’t been miserable and November… ). I want to spend some time doing photo work and birding around Fort Stevens, and some birding around Yaquina head in Newport. Beyond that, we may just — gasp — sit on a beach or something. (us? nah).

I’m trying to decide if I want to put in for a day in Cannon Beach or not as part of it. We’ve mostly decided to do more exploring and less driving, so we’ve cut out the southern coast, and once again Fort Bragg and the Mendocino coast has been relegated to “it’s close enough we’ll go there when we take a long weekend”, which, of course, we never do… (grin)

Oh, and the hockey talk continues over on Two for Elbowing, for those that forgot that blog exists…

Looking into the numbers behind the Tampa Bay sale

I’ve been researching the Tampa Bay sale a bit. Some bloggers (and some newspaper reporters) have been looking at the sale price ($206 million is the reported number) and using it to justify all sorts of statements, from the “owners get rich when they sell a team” to “hockey has failed in the US” (popular in Winnipeg, but it’s really unclear to me how they made this leap of logic).

But is it really true? The numbers, when you look at them in more detail, aren’t quite so rosy…

The numbers as I’ve been able to find: Absolute Hockey is a new partnership led by Doug MacLean and backed by Jeff Sherin, a real estate developer, Oren Koules, a hollywood type best known for the “Saw” series of films.

They’re buying the Tampa Bay Lightning and other properties for $206 million, from Palace Sports and Entertainment. Palace Sports bought the team for $115 million eight years ago, and have reported about $70million in losses since. (throw enough zeroes at it, and it starts looking like real money).

So if you just take those numbers at their base value, Palace has put in $185 million to reap $206m, a net profit of $21 million. Seems like a not-bad investment.

Life’s never that simple, and raw numbers don’t tell the real story. Just on these numbers, starting with $115m and adding in about $8.5m per year for every year, your rate of return is a lousy 2.3%. That’s worse than investing in money markets, S&P 500, or even 12 month CDs over that term (right now, I can get 5.35% from ING on a 12 month CD). They seem to be selling this off having made money — but they could have made more money with less (or zero) risk by simply parking the money somewhere.

There are complications here, of course.

The first one is that losses generated by the team can be used to shield profits by the owners elsewhere. Part of that $70m/ loss will get recovered by keeping money elsewhere from going to Uncle Sam. Let’s assume (since there are no real numbers available) that half that loss is a “paper” loss, that it’s recaptured away from the team. In other words, every year the owners were writing a check for $8.5m to cover operating losses, but writing a tax check that was, say, $4m less to the government because the losses shielded profits elsewhere. If you roll that tax gain back into the the franchise as an asset, you see a rate of return around 5%.

That’s actually a decent rate of return for that time period. Maybe not great; at least it’s not insanely bad.

On the other hand, let’s look at that $206 million number. It’s not for the hockey team.

It’s for a set of properties including the team. The three key components:

The hockey team.

The lease at the arena and the right to operate it

Two pieces of property near the arena totalling 5.5 acres.

The property is on the books and assessed at $17.5 million. They are evidently (from researching them through the tampa papers and local real estate info I could find) properties that have high potential for condos or mixed condo/retail development, except that the market is down right now. But in a longer-term look, these properties have a huge upside to someone experienced in Florida real estate. Oh, gee, one of the partners is a Florida real estate developer. What a coincidence.

So, what are these properties worth? well, they’re assessed at $17.5m, so I’ll go with that, but their value to someone who can develop them is a lot more; This is, if you ask me, the investment upside of the deal.

The arena operations? Tampa’s arena is one of the more profitable in the country; it grossed $18m last year, and is on pace to match that this year. Half of its light dates are non-hockey, but it’s also a business much like a movie house: much of the “profit” goes back to the act, not the house.

But the ticket take isn’t the only story; there’s signage, naming rights, sponsors — and every team/arena deal differs in how these are split between the sports team and the arena, but some of those dollars end up with the hockey team (and factor into the $70m loss above), and some end up as part of the arena management agreement.

All told, it’s not unreasonable to assume around a 10% profit off the arena management — say, $2m a year or so. It’s value? A good round number would be 6x or 7x that profit number, or $12-15m.

So now we can get at least into the ballpark of the value of the hockey team.

$206m for the sale, minus $17.5m minus, say, $12m, or about $175m.

The franchise was awarded in 1991 for $50m. If you just look at that price and the $175m, you get a rate of return of 7.2%. That’s pretty good over 15+ years. But that ignores that the owners were continuing to “invest” by covering operating losses every year. Even at $3m a year, that drops the rate of return to well under 4%, and given the numbers the current owners have announced and taking into consideration both tax advantages and the probably profit on the arena side, your rate of return drops under 4%.

That’s a lousy investment over that time period, even trying to make it as rosy as I can. It wasn’t bad for Palace, but the earlier owners — they didn’t do well.

How does this make things look for the new owenrship?

I’m encouraged. here’s why

Doug MacLean — as a hockey guy, he understands the core of the franchise. By the way, while it looks like all of the money is to be made away from the team — and that’s actually true! — if you don’t own the team, none of the other opportunities exist. you can’t do the arena without the team, and you can’t develop the property without the arena. So to some degree, the Lightning need to do what the Sharks do, which is manage expenses and limit the “losses” in such a way that the arena income and tax offsets make up for the losses.

In other words, you don’t need to be profitable to be profitable. But that doesn’t mean you should assume that any loss is acceptable… By my guesses and assumption, a team like the Sharks or Lightning can “lose” about $5m a year in “team losses” and do okay because of the other aspects of the situation. That’s roughly where I’d put the “break even” point on the entire financial picture, as opposed to just looking at team numbers, if the team manages the arena and the partnership can take advantage of the losses in the taxes.

If MacLean can keep the team competitive on a decent budget and help the organization succceed, they ought to do fine. I’m especially happy to hear they’re planning on moving in and being local owners. that’ll help engage the business community and it’ll also keep someone with motivation to make it work close at hand and watching.

Second, they have a guy from the entertainment industry; increase the entertainment factor, and you can improve your attendance and ticket revenues.

Third, they have those plots of land, and a good person to figure out what to do with them. If they can make that work, they can turn this into a great investment. As it is, it’s a good investment, from what I can see.

Why the geeks were wrong about .Mac….

WWDC Predictions – O’Reilly Mac DevCenter Blog:

Our curmudgeonly java.net editor Chris Adamson, started things off by simply offering up a repeat of his last MacWorld wish:

An end to .Mac. It’s overpriced, it sucks, and it makes iLife suck.

The more I think about it, the more I realize we have a great real-world example that for all we talk about long tails and courting the early adopters and the geek elite as a way to generate buzz and figure out what the Next Big Thing is, we also need to be careful about trusting the geeks TOO much, especially with consumer products. it’s been labeled all sorts of things, including a failure.

Yet….

Chuqui 3.0.1 Beta: analyzing the apple offerings..:

But think about this: 1.78 million .Mac subscribers; how many people would pay $50/year for Facebook or LinkedIn or Twitter or whatever? Much less that $99 for .Mac. The thing people forget: .Mac is aimed at a specific market — and it’s not us geeks.

This is where the geek world falls down — it can’t differentiate very well between “this is bad” and “this isn’t what I want” — too often, they equate the two. .Mac numbers, and sites like LinkedIn (found to be dead and “old news”, but generating good revenue and profitable, unlike new and sexy facebook) or Ning (which geeks seem to look at and go “where’s the meat?” — but 70,000+ sites have found some….) don’t get much respect in the geek community, but seem to be doing very well out in the real world.

It’s a great reminder that we live in an echo chamber, and there is some serious tunnel vision among the residents in it.

The biggest criticism we can really raise at .Mac is that it doesn’t cater to us geeks; for geeks, of course, that’s enough to warrant a death penalty by some — and heck, you saw the same kind of criticism about the iPhone over a lack of developer tools, or the iPod for not being opened up. All these have done, and what we find .Mac has done, is sell well into the consumer segment.

But, of course, that doesn’t matter. If the geeks don’t like it, it sucks.

Hey, do I hear an echo in here? nah…

(hat tip: Bruce)

update: one more

Subtraction: An Important Message for .Mac Customers:

It probably doesn’t need to be said, but yesterday’s announced upgrades to Apple’s perpetually anemic .Mac service left me, and probably many others, pretty disappointed.

Every time you hear someone talk about how bad .Mac is, think about that 1.78 million subscribers, at, oh, $80 per (to count for family packs and etc)…. then compare that to Facebook’s revenue, Twitter’s revenue, my blog’s revenue (hey, I made $1.15 in July! whoo hoo!)

congrats to Barry!

Congratulations to Barry Bonds — 756 is a historic moment.

Today is not a day for talking about the other aspects of this record. Today is a day for letting Barry enjoy what he’s accomplished. that other stuff has been talked about in the past, and will be decided by history, but today, it’s the act that matters.

No, he hasn’t always made himself the easiest person to like, but last night, when he was thanking the crowd and his teammates, you could see the walls he keeps around him come crumbling down; it’ll be interesting to see whether we get a different Barry in the future, now that this is behind him — or whether his detractors throw so enough stones that he simply walls off again. It’s not JUST Barry that is responsible for how he is, after all.

I’ll leave the asterisks to the future, and to those who don’t seem to have a problem describing the details of the bachelor party during the wedding reception — there’s a time and a place, and this ain’t it — I won’t ruin Barry’s party.

I did have one thought last night though — it sure would be fun to see Barry stick around and hit enough MORE home runs to make any talk of asterisks silly and irrelevant. It’d make certain pundits and writers apoplectic to see him do that, because it’d ruin a good rant on their part. I wonder how many that would be? 30? 50 more? 75?

And he could well do it; it might take moving to the AL and DHing, but gee, would that be so bad?

A hockey journalist’s blog

james mirtle: Avery’s arbitration hearing – A hockey journalist’s blog:

And while Brooks rips the Rangers for penny-pinching, the same can certainly be said for Avery who, in fighting for a $2.6-million contract after a career-high 48-point season, surely presented an eye roll-inducing argument as to his value to the team.

This has been almost a classsic example of “how not to make friend and influence enemies” — the joys of arbitration.

The case for Avery: when he was traded to the Rangers, the Rangers DID catch some fire and go on a roll. We have to face the fact that these things did happen together, and it’s unlikely a coincidence.

The case AGAINST Avery: The Rangers are basically correct when they say: “Avery is not a mature player. He plays, at times, like an individual rather than a member of a team. This is sometimes referred to as an inability to see the ice, and in Avery’s case this seems to fit with his overall approach to the game.”

Now, Avery may not like hearing that. But it’s true.

Let’s not forget that Avery is basically one season away from being kicked off a team and sent home, where he was considered such a detriment to the Kings he was told to pack and leave. Where he was put on double-triple-secret-probation by Lombardi and told to keep his nose clean and mouth shut — or else.

I swear, the best thing someone could do for Sean Avery is sign him to a multi-year deal and then trade him to Edmonton or Buffalo, away from the lifestyles of LA or New York. But he’d probably find a way to cause problems anyway.

Avery has always seemed to have a much higher regard for his talent level than his teams. He’s a feisty player with attitude who actually has some talent — but not nearly the talent he thinks he has. His off-ice attitudes reminds me of Link Gaetz in some ways. Yeah, the Rangers got better when he got there; they needed some grit. They can get that grit many other ways than Avery if they need to, though, he’s a very replaceable player. There’s also no indication — or track record — that he would be able to sustain that kind of spark for the entire season for them. Given his career numbers, the chances he’d maintain the scoring impact is zero.

So for me, this one’s a no-brainer. Avery’s feelings might be hurt, but tough. He doesn’t seem to worry about other people’s feelings much (ask Bryan Hayward), and he played way over his head, and way more disciplined, for a short period of time. To believe he can continue that for a full season with that impact is unrealistic.

And he’s once again shown he has trouble handling the truth. A sad reality for a player so happy to get in everyone else’s faces…

I’m with the Rangers here. And if Avery wins arbitration, I’d walk. He’s not worth it, epsecially given the risk for a badly timed off-ice controversy. Not a small issue, given his history.

Freakonomics Blog » Saving the Rhinos: an Addendum

Freakonomics Blog » Saving the Rhinos: an Addendum:

Another more subtle alternative has been proposed by the Harvard economist Michael Kremer. This approach to rhino conservation incorporates elements of both of the schemes you describe in your question.

Why do poachers kill rhinos? Because they get well-paid by middlemen. And why are middlemen able to offer handsome rewards to poachers? Because rhino horns sell for huge sums in the Far East, owing to the scarcity of available horns. So it is high prices that ultimately drive poaching activity.

Now, suppose the government were to announce the strict enforcement of anti-poaching laws and higher penalties rhino killers. Rhino middlemen would quickly realize that supply will grow even scarcer – and hence prices even higher – in the near future. So they’ll buy up as many rhino horns as they can in anticipation of this future of low supply and high prices. But this rush to poach before laws go into effect could itself drive rhinos into extinction.

Professor Kremer’s proposed solution is that the government put together its own stockpile of rhino horns, either from seized contraband or from, as you suggest, controlled harvesting.

As it happens, I was down in Southern California last week and spent time at the San Diego Wild Animal Park in Escondido, and one of the topics that came up was the upcoming extinction of one of the populations of black rhinos. Another was some of the success the park has had in working with the Masai on protecting lions.

One of the assumptions made by Kremer is that there’s enough of a stable government that it’s not only willing to take on these issues, but they’re capable of it. In areas where this is true — South Africa, for instance — it has happened, and there’s been some progress protecting lions and elephants and the reserve lands.

But in other places where governments are unstable (at best) or locked in a civil war, not only might they not see this as a priority, it’s rather hard for them to enforce laws in lands they can’t even visit because the rebels have control over it. That’s been a significant problem both with Rhinos and Gorillas in various areas, especially in Western Africa.

it’s hard for the government to stop poaching when they can’t even send troops or workers into an area without them being shot. The civil instability of the area makes these problems exceptionally difficult to solve — at best.

The second problem with the idea of a legitimate stockpile of horn is that it really doesn’t solve the problem, but it creates a legitimate pool of material that the poached material can infiltrate into. A similar attempt was made to disrupt ivory poaching and trading by filling the market with certified ivory; all that does is leave the poached ivory one forged certificate away from being sold safely. you can look at similar situations in blood diamonds and in the antiquities market (where if you can show that the artifact was expatriated before the restrictions were put in place, it’s okay to keep or sell — and hence there’s a thriving market in falsified histories for poached antiquities). The bottom line is, you don’t solve the problem by replacing an illicit trade with a legal one, you simply give the poachers one more avenue for creating pathways for their product.

The alternative? In places where it’s not safe for anyone (government, NGO, etc) to operate — not much. It’s a tough deal, and seems too late for some populations of rhinos, period.

But one thing that came up at the park I found very interesting. The culture of the Masai is based on the cow. Status and wealth is based on how many cows you own. In Masai culture, when a lion killed a cow, the warriors would hunt the lion in return.

The Wild Animal Park as part of a conservation group worked with the Masai, and agreed to pay market value for any lion-killed cow, if the Masai wouldn’t hunt the lions. What they’ve done is change the dynamics of the relationship (social and financial) and worked with the Masai to become protectors of the lions. According to the people I talked to, it’s been very effective.

This seems to be the trick needed. Poachers are, ultimately, trying to feed their family. The best way to change their idea of how to do this is to change the economic views of the value of the animals; make those animals more valuable alive than dead.

For a number of years, I’ve donated money to an organization called RARE. It’s primary purpose is to help preserve endangered habitat by working with the locals to teach them how to use those habitats in sustainable ways — a key tool is eco-tourism, and they’ve had some good success in South American, and in the last few years have expanded into southern africa. The idea is to teach the locals non-destructive ways to use the resources at hand, to give then incentives to WANT to preserve the resources, not exploit them.

That’s a strategy that seems to work well in some situations. Again, however, it’s not something you can do in the middle of a civil war. In some ways, it’s a carrot vs. stick situation. If you create a context that helps the locals WANT to protect those resources (habitats, species, etc), it’ll happen. Solutions that try to force those changes tend to fail.

Update:

more on this from Salad is Slaughter:

I visited the San Diego Wild Animal Park on the 22nd, and during the Asian Photo Caravan Safari they discussed one of the methods used to save (I think it was) the Southern White Rhino. Instead of putting the poachers in prison, they hired the poachers to protect the rhinos. The poachers didn’t hate the rhinos, they just needed the money. Money from the government or from a conservation society is just as good as from the people dealing contraband. Also, the poachers knew the rhinos’ habits better than anyone, and so knew best how to find and protect them.

One problem they discussed about breeding white rhinos in captivity: the discovered that you need two females before one will go in to heat. That’s because the females actually control their reproductive cycle because they want a girlfriend around to help protect the young.

Women in the Hockey Hall of Fame? Sure, Why Not?

Hockey Rants:

Don’t tell this to Dave Harrison of Prince George, who apparently still pines for the 1930s, and thinks women’s hockey has no place in the Hockey Hall of Fame.

Women’s hockey is just a shade faster than Tai Chi but only half as interesting.

If any event is worthy of an “escape call” early in the first period, it’s women’s hockey.

As a crowd pleaser it seems to appeal only to other women who have convinced themselves that it’s entertaining, feminist promoters of lost causes, anxious sponsors who are about to lose their shirts, milquetoast males who allow their women to choose their clothes (Real Men Don’t Eat Quiche), and husbands who nod in agreement if they know what’s good for them.

No self-respecting, red-blooded, beer-drinking, Canadian male hockey fan ever takes women’s hockey seriously.

I will agree that women’s hockey is boring (to me) and it is like comparing the original Iron Chef to the watered-down American version, but the Hockey Hall of Fame is not exclusively for males, in title or in theory.

How could a serious hockey fan ever discount the impact that certain female players have had on the game and on the national consciousness?

This came up today on the women-in-hockey mailing list Laurie and I have managed for years. You can only imagine the response.

My favorite: he’s welcome to his opinion, no matter how wrong he is.

Me — I’m just sad that those kind of attitudes are not only still in existence in today’s society, but tolerated by some, and promoted as positive by others. Sad, but not surprised.

Jes, without realizing it, defines the problem wonderfully — by looking at women’s hockey in the mirror of the men’s game, and finding it wanting. This is the same reason the WNBA is considered by many a geek show — it’s not really marketed at women, but as a way for male basketball fans to waste some time waiting for the real stuff to return. (The ABL actually wasn’t afraid to market to women as a primary audience — unfortunately, it got eaten by the financial power of the NBA)

Fortunately, women generally don’t CARE what guys like Dave Harrison think; they’re not in it to get validation from some idiot male chauvinist, they’re in it because they enjoy hockey. And that, I think, is what scares guys like Harrison and makes them try to belittle women’s sports.

Fortunately, the reason anyone’s even paying attention to this is because this kind of attitude has gotten increasingly rare, or at least, the people who believe this are generally smart enough not to stand up on a soapbox and promote it quite so loudly. We’re making progress.

But it’s clear we’re not there yet.

The real good news is this: the women will keep playing hockey and enjoying it for what it is, without trying to be guys in a guys game. And that’ll continue pissing off guys like Dave Harrison… But where 15 years ago, people like Dave might have been able to influence the situation, now he’s merely a sad voice in the distance.

Oh, and jes? Women find your writing boring, too. But that’s okay, no? Different strokes and all that, right? And more important than that: women really don’t care what you think about their game, as long as they get to keep playing.

And THAT’s what matters. Not what anyone thinks about how they play.

(and me? I”m proud to have been able to support the growth of women being able to play the game and enjoy it in the small way I have. And I find their version of the game far from boring. Different from how men play — but men could learn from them, if they wanted to…)

on the ‘NHL is Too Big’ bandwagon. (no, not me!)

PuckUpdate .: The Hockey Blog :: Archives Archives (weekly):

Larry Brooks is officially on my personal ‘NHL is Too Big’ bandwagon. The league is looking to expand into two more markets (the NHL as Starbucks approach to a league), but Brooks says the active roster should drop down to 20 per game (from 23), with 16 players dressed per game (down from 18). As Brooks points out, two expansion teams would bring 46 players into the NHL and it’s a safe bet they wouldn’t be 46 Joe Sakics.

No; in realty, each team would need to find the equivalent of one mid-2nd rounder to fill out the roster. During the initial expansion, you can expect the rules to be set so the teams suck early on (it’s what we do!), and guys like Brooks will declare how right they were, but over 3-5 years, the teams will be able to build decent teams and it’ll be very much a non-issue.

This argument was made when the league brought in Nashville, Columbus, Atlanta and the Wild — yet nobody today seems to be complaining that the talent is too diluted. it was made when the ducks and the Panthers came into the league. It was made when the Sharks, Senators and Lightning arrived.

heck, this argument was made when the team expanded from 6 to twelve teams.

Funny, the world hasn’t ended. More importantly, expansion in the last fifteen years has had a lot less impact on the quality of hockey than the league rule changes — the TV timeout has allowed teams to focus on the top three lines more, and the rules to cut out obstruction have brought back into the league the smaller, talented player that was being manhandled out of the league (we’ll call that the “Dennis Savard” rule), giving us better hockey than we’ve seen in a decade.

And it would make things much better for players. The Rangers traded center Matt Cullen back to Carolina to free up cap space. But if the Rangers only had three lines, he would have been a keeper, with plenty of money under the cap to keep him. Heck. They could have probably even given him a raise. Instead, the Rangers had to trade a strong player for the sake of salary, and a player who wanted to stay in New York had to leave.

Sorry, but — you want to do away with the jobs of 90 players (3 per team x 30 or 32 teams), and those guys will most likely be younger guys or journeymen, mostly making from league minimum to maybe $1.5m a year — so that we can take that money and give a few players already making a lot of money even more money? And this is good for players — how?

Well, it’s good if you are a top player who’s upset that you’re only making $6 million a year and not $8. It’s not good if you’re Mark Gandler trying to get their client money up to the limit. But benefitting players by cutting a bunch of jobs that hurt the working stiffs of the game? (because, of course, teams aren’t going to cut the roster by cutting their Joe Sakic….)

I just don’t buy it. I wonder what the elite players most likely to benefit from this cut would say. Actually, I think the contracts of Joe Thornton, Syndey Crosby and Jarome Iginla, all of whom took much less than the legal max they could have demanded, already answers that question.