Dwight Drane

The debt is a constant thing. Say a club has $300 million in debt and has to pay 7% which is fair rate. That is $21 million in Interest. Now as a means of cash flow, they are going to get a tax break on that most likely, and at 35%, the club will now only take a hit of $13 million+ in actual dollars. That is where owners can get shady when reporting profits or losses to the public. They might report the $21 million as an expense before figuring out all the other goodies. They also can depreciate the stadium they are in if they own it. That is another way the owners can hide positive cashflow. A $400 million stadium probably gets $40 in depreciation knocked off. It effects the balance sheet for an owner, but in terms of real dollars, it is just another way to soak up profits so the tax man doesn't get it and you can cry poverty to the fans. NFL Team X: $50 million revenue $150 million revenue sharing $110 million player salaries $10 million other costs of running team $21 million interest $40 million depreciation Positive Cash Flow= $59 million Report to IRS=$19 million Owner tells public he made $12 million, the number after taxes In reality, owner pockets $52 million That is the business model and what most fans get cranky about, which they deserve to be. The debt thing is a whole new ballgame. The NFL team is valued on what assets they own, and projected future revenues. In this case there was $300 million taken to build a $400 million stadium, but the lender needs to see a profitable business in that stadium in order to finance it, because an empty stadium is worthless if the team can't keep paying their debt. If the team pocketed $52 million this year, a quick and easy way to project how much value that adds to the franchise is to multiply by a fair value factor. In business 10x is a conservative number for a mature market, and 20x is for a market that still has room to grow. Let's say the NFL is in between, so 15x....which is 15x$52million=$780 million. Now add the $400 million stadium to the $780 million in projected revenues, and this team is now worth $1.18 billion. Remember though, they still owe $300 million to the bank, so you have to factor that in as well. This is all great, and everyone is dandy as long as the cash keeps coming in. What happens though if the US goes into a prolonged recession? What happens if people are tight on cash and not spending as much on tickets? Companies start losing money and have to cut costs of luxury items, like suites and extra advertising. The team still has to pay their players the same if not more going forward, they still owe $300 million in debt, but now with a rough road ahead projected, the team only looks like they will bring in $20 million next year. All of a sudden, 15x $20mil= $300 million...Yikes!!! Once numbers like this start getting projected, and they may be in the back rooms of lenders right now, the bank isn't as confident loaning $300 million against a franchise worth $700 million, since $400 million of that is the stadium....which is almost worthless if the team can't make any money and shuts down. Because the revenues look to be dropping, the bank gets even more conservative and says that the $400 million stadium is now really only worth $200 million because they never fill to capacity. Now the Franchise is valued at $500 million. Under the lending agreement, the bank may have proposed that the most they are willing to lend is up tp 50% of team value. Now all of a sudden with $300 million in debt and a value of $500 million, the team is borrowing at 60% of team value. UhOh!....Margin Call!......the bank demands $50 million from the owner of the club to get the ratio back under 50%, and reduce his outstanding debt to $250 million or else the owner will default and trigger either outrageous interest rates, or he may have to surrender the team if he can't come up with the cash. The result: A) Owner has extra cash from other ventures hanging around and believes enough in the long term of the NFL to pay down his debt B) Owner doesn't have extra cash, believes enough in team to keep it at a penalty until he finds secondary investor or lender C) Owner is scared he may go bust and puts the team up for sale....looking to net the $200 in equity he still has This is what the League fears....option C. They want owners to pay down debt now if they can, so it doesn't get to the point where the team values are questioned by the lending banks. It would be a disaster for the image of the league to have 3 or 4 teams scrambling for financing. Banks won't care, since right now...nothing is considered Rock Solid as far as a loan goes, and I'm sure lenders have already started chopping values off of these teams as we speak. It is a world wide problem.....not an NFL problem. Sorry for the longwindedness, and I know it's a bunch of numbers to digest. Bottom line.....NFL doesn't want to ever deal from a position of weakness.

I think some of these stadiums don't get done. Some states are going to panic when setting the '09 budget because there is going to be far much less cash available. That's why I say, in a sick little way it is good for Bills' fans if the overall picture looks a little bleak. Buffalo is viewed as an alternative to India and China to do business in, especially in the service sector. If the dollar keeps getting hammered and resources get scarce, Buffalo may gain some traction. We have fresh water, an open waterway, plenty of cheap land to grow wheat/corn/etc. If the USA is forced to become more self-sufficient, we have a jump start on others and may "Luck" into some mild prosperity without the help of our "Leaders".

You can't play games with debt on your own book. Now the lender to the NFL can play games with the outstanding loan value. If you divide the $9 billion up, it's around $300 million per team. The average team is valued near $1 billion or so. You're looking at debt to value of about 30%. Now say market conditions change....and advertising $$$s dry up, the US is in an extended recession and ticket sales lag, plus the bank no longer has unlimited funds to lend out to parties looking for cash. All of a sudden, Mr Citibank CEO tells the Giants....No More Cash! There is nobody willing to buy bonds at a reasonable rate, and Citibank's pockets are empty. Just that fact alone takes a chunk out of every NFL franchise value, as they are a growth business, or at least they have been. Now all things considered, the owners of these teams have to decide if they are going to bankroll improvements on their own, or if they are just going to ride out the near term storm and hope for greener pastures. Worst case scenario......a year from now, nothing has improved and NFL values start having an ax taken to them. Projected revenues are down 20% and the banks now value a $1 billion franchise at $600 million. All of a sudden, the bank is no longer comfortable to lend $300 million against a $600 million non-guaranteed asset. Revolving credit lines are closed down to teams that have a heavy debt burden. Some teams may be forced to sell. That is why the warning came out from the league. If you are in a position to shore up your balance sheet, do it now because we don't want 3 owners trying to sell their teams at this time next year because they need cash. That would look disasterous for the NFL, and their house of cards then comes crumbling down.

This was discussed a few weeks ago, yet nobody thought it meant anything. As I said in that post....MARGIN CALL! The US is pretty much bankrupt. The debt market is locked on so many levels. The Fed stepped in like good socialists would, but instead of lending the money out to consumers and companies, the banks need that cash as a life preserver. The net effect on everyone has been that nobody can borrow against an asset that has the slightest question about it. Really, what is an NFL team worth if all the fans are suddenly out of jobs and have no excess cash to spend? In the back rooms, while a lender was willing to give out $300 million on a franchise figured to be worth $1.1 billion...they are looking at that franchise much more conservatively and may only value it at half the price in terms of lending new money. Ralph is in good shape. This economic setback is probably good for keeping the Bills in Buffalo, as less and less people have the means to move a team. Look at the property values here....we don't really rise in a national boom, and we don't really fall in a crash. Go Bills! 2012 and beyond!

Give me a freakin' break. I see a kid with dreds, a full gold grill, with the vocabulary of Terry Schiavo.......yeah, I'm going to be judgemental until proven otherwise. By the way, if you are into having the screen name of a sodomizer, I suggest you run over to SabresSpace and take H.Tallinder10. See....even white guys do bad things.

Actually, on the field Kelly looks like a mix between TO and Chad Johnson. He is long striding and fluid like Johnson and has good hands. He has great leaping ability and burst to the ball, much like TO. I was a little worried with the raps and all that the kid may be tainted, but after listening to him on GR with Howard Simon, he sounds all right. If you just looked at Marshawn Lynch, you'd call 911 thinking it was gang initiation night. In reality Marshawn is a big puppy dog for the most part. Kelly comes across as a bit of a thinker, which isn't always the strongsuit of a WR. If we can draft him and resign Evans, then draft one of the top TE's....we are going to have a young, intelligent, hard working, balanced team. I would bet anyone out there that we win at least 30 of the next 48 regular season games. Thomas and Sweed are probably going to be decent players as well, but those are the kind of guys you take if they are around when you pick...Kelly is the type of guy you pray is there when you pick, and even make a move up on. Not that the Bills will have to move up most likely. I'm pumped!

I've said before....if Kelly runs in the 4.4's......this team is going to be worried that Kelly won't be there at 11. I pray to the baby Jesus that we take Kelly.

YES! He was making great strides in preseason too. I don't know if anyone was able to watch the games, but there were a few 3rd down plays where Simpson showed up at the last second, and literally knocked the guy out as he had the ball touch his hands. He reminded me of how Mike Peca would blow people up with their head down. He just had PERFECT timing, and if he was that hungry in preseason, I would think some receiving corps would be mighty nervous with Simpson and Whitner patrolling the field in the regular season.

There was a guy shot at 5 AM a few days ago where he says he got out of his car to check for damage and then took a shot to the leg by the car behind him. The police did find 7 shells where the guy said he was shot, so it checked out. Here's the problem.....MS-13 is all over the place in Long Island. The NYC are is flooded with immigrants, and the welfare services suggest that people head up to Buffalo since it is easier to get placed into the system. Over time I can see where there would be an influence. These guys are bad news though. If there was ever a city that might be able to turn them back, it would be Buffalo. Call a truce among the locals, and we all toss these suckers out.

JP signed his own pink slip. As much as I would like him to stick around as a #2 with enough potential to carry a team for an extended period of time if Edwards goes down....the whole Days of Our Lives thing with Lee Evans last year scares me too much. Even if you can talk some sense into JP and his agent..."Look kid, we're going with Edwards but he can go down at any time. We'd really like to have you here because we trust that you can still lead us to the playoffs with all of the new weapons we added in the offseason."........Lee Evans is going to have the pressure of coming into a contract year, and probably a 1st round WR on the other side, and a new receiving threat at TE. If you throw Losman on top of it, Lee may be too distracted and have another average year. What happens when Edwards loves hitting the TE for 5-7 yds at a pop, and our rookie WR turns out to be very good and snags the tough catches for first downs, and Josh Reed is still reliable underneath.......Evans may have a nervous breakdown. At least with JP not here, Evans can't pout on the sidelines and cuddle with JP.

The only person who fears the Sabres is the Friday night stockboy at Wegmans who has to replace all the Zima that the team wipes out of his coolers. Where did the team change? Since the beginning of the 2006 season, Darcy has made 3 additions to this roster: 1) Danius Zubris 2) Nolan Pratt 3) Steve Bernier Zubrus left town, Pratt was signed as an emergency addition, and Bernier was in return for an All-Star defenseman. Anyone else that is up on this roster was originally brought up because of injury and stayed on because they were a cheap replacement. (Stafford, Paille, Weber, Funk, Sekara, Kaleta) The Buffalo Sabres - Florida Marlined the fans, and didn't even give them the courtesy of adding some veteran leadership and some grit at the deadline last year. The Sabres are much like Menudo...they are put together to appease 14 year old girls, and once someone hits 25, a replacement is right around the corner.

I have a question....if you left your car keys, phone, and a $20 bill on your table at a bar as you were playing a game of darts on the other side of the room, would they be there in 30 minutes?

Bingo! The best part of the NY tax system is that if you have children, they will receive a good-great education in the public school system in places that pop you $6K on a $250K house. There is a beautiful development in Cheektowaga that has prestigious 25 yr old houses, and is surrounded by the nature preserve. I couldn't believe a 3500 sq ft house was offered at $300K. The similar house in a similar area of S. Florida would cost about $1.2 million a few years ago, and maybe $850K today. The catch was the $10K in taxes. Still, if you do a present value of those taxes, it would be like adding $150K or so to the price. That is still around half price. In S.Fla, public school consists of trailers that can hold 25-35 kids and have an in the wall AC unit. For $8,000 you can send you kid to a decent elementary school and $13,000 gets a decent high school. A regular white collar middle of the road job in Buffalo can fetch $50-65K, while in Miami it is probably $60-85K. NY State takes it's 8% though. I am probably going to make a move on a solid house in Buffalo over the next 3-6 months as it will probably be prime time to catch rates before they go sky high, and a few more houses should get spit out. A nice 2,000 sq foot house in East Aurora with a few acres is the same price as a 1,000 sq foot cookie cutter condo down in Miami. My old place down there went from $250K to $170K in the past 20 months. Also, the most you are in your car in Buffalo is usually 30 minutes. The same trip on 95 would take 90 minutes at it's worst. That's 2 hours a day and $1500 in gas you save. There is no nude sunbathing come January in Buffalo though. Or Hispanics for that matter outside of Ferry + Niagara. If I want some goat or tripe, it's west side up here.

The Bills LOVE players with injury questions, as it deflates their projected value and then can be viewed as a steal. Look at our draft last year: 1) Lynch- missed games with continuous ankle and back issues 2) Poz - Blown out knee, out for year 3) Edwards - shoulder, arm, foot, redshirted 4) Wright - knee injury - missed two years and 2006: 1) Whitner - ACL 2004, out for season 2) McCargo- foot, missed most of '05 Not only that, there is so much misinformation thrown around this time of year that you can't take it seriously. One hot rumor and a guy falls 5-10 spots to where you can grab him. Maybe the Bills can pull something off with Dallas after all. Float the rumor "yeah we had that Kelly kid in this weekend, and MAN are his knees shot. Too bad...nice kid. He could have been a nice player." That NFL is a small world, and some guys will dismiss it as BS, yet some will get nervous and think twice. He may actually have bad knees....but nothing a little "compound" can't hold together for a few years. A sprinkle of glycosamine here, a cortizone shot on Sunday, some hydrocodone on Mon-Sat...and we have ourselves a Pro Bowl receiver.

If you look at EVERY position, there are hits, misses, steals, etc. That is why you need a good crew for the draft. The draft and free agency is like running a Mutual Fund. Diversify, and you should do well. One stock may triple, while the one you thought was the best ends up going to zero. If you try and simplify the position of WR, you miss the big picture. Can the Bills find a starting WR in the 3rd round, sure. If the Bills take a WR at #11 is he going to be cut in two years, probably not. I don't think there are many good WR's in this group. I don't want the Bills to take one for the sake of taking one. I myself feel there is someone I would take at #11, as well as someone in the 2nd and 3rd if they are still there. Kelly@11, Sweed or Thomas in the 2nd, and Keenan Burton in the 3rd or 4th. I would pretty much wipe off any other WR's I have seen. Hardy, Jackson, Nelson, etc...I don't like. DJ Hall, maybe in the 4th or so. That's it. If my guys aren't there when I pick, I'll sign a veteran in August.

You seem to miss the point that the Bills will be taking the 1st WR off the board in all probability. When you look at it that way the past 5 years would yield you: Calvin Johnson - Could be your #2 right now Santonio Holmes- Would be your #2 right now Bralon Edwards-Would be your #1 Larry Fitzgerald-Would be your #1 Charles Rogers- Miss All of these guys minus Rogers contributed in major ways by their 2nd year. By their 3rd year, 2 of 3 are all pros and it looks as if the other 2 aren't far off. We have an 80% chance to draft an impact player if we go WR at pick #11 and he is the best of the crop. If you'd like to go back further, feel free.

1 out of 3 ain't bad!

You say it as well as anyone I have seen. 2 years ago, 70 % of the threads on this board weren't "Let's Draft This Guy!", simply because we needed so much help that it didn't matter who we drafted because it was going to be a position of need except for Punter. Last year we had more specific needs, but still didn't have any depth. A blessing in disguise was that there were so many injuries, as we have seen Trent Edwards look good enough to trust running the show, and guys like DiGeorgio, Greer, Scott, Wilson, and Freddy Jackson prove they are NFL players and we can rely on them to spell starters, or take over in case of a future problem. This year we had specific needs. A big WR, TE help and a redzone target, a true starting DT, an upgrade at OLB, and a CB that can be a nickle at worst and develop into a #1 at best. Well, after FA we really only need that big WR, a starting TE, and another nice CB. We signed Anderson as a redzone TE, and added a veteran CB in case we can't find our CB in the draft....but it is quite possible that we fill our only true needs #1-2-3 in the draft. There are also going to be veteran cuts in July/August that can be patchwork if we don't hit big in the draft. Marv Levy took over what was left of our troops that had been ambushed, has fortified the platoon and drawn up a plan, and after the Draft and training camp, we are going to roll out a polished War Machine. I am so confident in what these guys have done the past 2 years and the quality people we have on the team, that I am adding extra season tickets expecting more people will want to be at the stadium and I shouldn't have problems selling extras.

I am willing to wager major dollars that we see a SUBSTANTIAL amount of no huddle this year. Our offense is very intelligent, and if you add a guy like Carlson to go with Malcolm Kelly in the 1st, we will have the pure talent to go with the brains. Edwards- Biggest asset is his decision making and his accuracy. He can handle a complicated system and has a solid enough arm to make the best of it. The offensive line worked great with him because they are nice pass blockers and play their assignments well. They can handle a no-huddle package. Lynch....Lynch is the weak link when it comes to assignments, but Freddy Jackson seems to be able to thrive in a hurry up package. Lynch is supposed to have hands, but I would focus more on having Lynch be the traditional back and Jackson the pass back, much like Maroney/Faulk in New England. TE- Carlson if he is there and we take him, perfect fot the system. Can block on quick draws, and can find the open flat, or turn upfield on a read. We need to address the position no matter what, but you should be able to trust Carlson as a rookie. WR....If we take Kelly, you now have Kelly, Evans, Reed and Parrish. You can change looks, and really nail defenses. If you put these 4 on the field at the same time, the middle of the field is going to open up. The same middle of the field that Trent Edwards should be able to pick apart. We haven't been able to run a system like that because of Losman's decision making. Reed has a great feel for Edwards and is a nice asset as a #3 possesion guy. Parrish is your Don Beebe type. If you limit him to flys and reverses, and try to get him lost in traffic in the slot every now and then, he becomes an asset as your #4. Evans is going to have less pressure on him with a bonafide potential superstar on his other side in Kelly. Evans now will make a few more big plays with the ball in his hands as opposed to being limited to deep routes. He is intelligent as well, and can exploit a defense when focused. Assuming we draft Kelly, which is a big assumption in my part, you now have a complete receiver. Speed, leaping ability, hands, big blocking, across the middle....he has it all. He will be a little behind as a rookie, but he should catch up and really thrive as he matures. You have 3 guys that can beat you deep in single coverage by a CB in Evans, Kelly, Parrish....you have 3 guys who can break off routes, and be trusted over the middle in Reed, Kelly and Carlson, and these 3 can also block as well and would compliment Lynch in a power game when needed. Like I said, it is a big assumption that we will draft Kelly and Carlson, but that would give us all of the tools to be a top 5 team by 2010 at the latest. I am very bullish on this team, and while we may not have proven superstar quality as of yet, we should have plenty of hard working, talented quantity that will not be matched by many teams. We will have in fact copied the Patriots' model perfectly and will be a team on the rise as the Patriots themselves have some gas tanks that will be running on fumes.

Have to come up with $1400 for the SuperBowl lottery the week of the AFC championship game. At least now I am old enough to have a credit card to put it on.

The Devin Thomas Thread is on page 2! My prediction is that by the time the draft rolls around, there is a better chance Kelly goes before we pick than after. If he runs under a 4.5, we might not get him. If he runs over a 4.6 (which I'd be willing to wager he won't), we don't have to reach at #11. If he runs a 4.53, that pordge is just right. I really don't think anyone comes close to Kelly on the field. Sweed runs crisp routes, Thomas is smoother and faster out of pads, but go watch Kelly's short burst when it comes time to fight for a ball, or break on a ball in the air. He really adjusts well. After his interview, I would say he isn't a slouch upstairs either.

Carlson looked like crap at the combine, so I am glad there was an excuse. The #1 reason you draft this kid is for his head. Trent Edwards has a great mind, and a good feel out on the field. A guy like Carlson should know where to put himself in the passing game, and could very easily turn into a go-to guy. NE exploded because of Welker. Welker has the freedom to motion and choose his own routes. Brady is smart enough to feel it too. When you keep hitting soft spots for 4,7,12 yards...you are going to see things tighten up and allow Moss a little more breathing room. Josh Reed is already a smart route runner. If we go WR in the 1st and Carlson is still there in the 2nd, with his 17lbs back on that he lost at the combine....all of a sudden the Bills have all the makings of another K-gun attack.

I think Bills fans learned 2 of the best lessons in life. One, when you get kicked in the nads or punched in the gut...you get up off the floor, dust yourself off, and give another go at something you believe in. A lesser team would have been wrecked and given up. Life is full of tough breaks and heartaches, but if you love something enough, or know you are doing the right thing, suck the pain up and make yourself stronger because of it. Number two.....along the same lines, but the Comeback game against Houston goes to show you never get lazy or underestimate someone or something....and hope with faith can be validated. If the Bills only had hope, they would have lost. They had faith in themselves, thus the hope was validated and a reversal took place. For those lucky enough to be there in person, it also showed that there is no better reward than to have faith an be redeemed. There were 50K left in the stands with 11:00 left in the 3rd quarter. For those that stayed the whole game, it was an amazing lesson. People were hugging each other, screaming in disbelief, crying....it was the day that defined being a Buffalonian in my mind, and much more meaningful than a SuperBowl win.

I am giving you the point.....it was just the timing of policies and decisions that is disturbing. It was probably the proper move to put them out of their misery on a stand alone decision. The rumors are still buzzing even with help. The infusion up top has allowed the big boys to lean down on the intermediaries a little more, and them on the funds. Nobody is strong enough to scream and whip anyone else, but today there were many a call of..."you really need to do something." It's still 85% as tense as it was over the weekend.

They put up $6 Billion on Sunday@ 7PM.....Bear could have borrowed that $6 Billion at 9PM and kept themselves going. What the Fed did was put Barbaro down on the track so that they could collect the insurance money, instead of giving him a chance of surgery and recovery. The end result may have been the same, but heart of the matter can be questioned. Well, on to a new day and new issues. Gold and Oil getting spit up like some bad sushi. At the same time, Dick Cheney is pumping our future conflict with Iran. I had to add to oil and gold today assuming it is just selling off of winners to keep afloat. Beware the Middle East this weekend. Hezbullah may start the games as early as Friday.