brackdan70 wrote:cloverleaf wrote:brackdan70 wrote:Yeah I wasn’t claiming or suggesting that profit margin is the driving factor. I think you are spot on that appreciation I really important.
However, with the repeater tax penalties I think it is fair to ask how long a franchise will operate with a net loss. The appreciation is unrealized so you have to come up with money somewhere to cover costs, whether that’s financing, or using owners money. It is fair to ask how long operating at a significant net loss is sustainable.
Like I said I think the Cs will have no problem paying up for 2025/26, but I am unsure what they will do going forward. I’d think if they are winning the keep paying, but at the same time try to induce that bill and at some point in the near future try to reset the repeater tax. I think it’s feasible with the cap going up faster than the value of these extensions the Cs have signed.
I can tell you exactly how long it makes sense: as long as they are winning. I doubt a new purchaser of the C's, very likely in it for more than just "asset appreciation", which is what drives the value of these franchises, would be so short-sighted as to stop spending for a winning team.
Yeah I agree with that…but if the franchise is losing 100 m a year…depending on how deep the pockets of the ownership group is, there may come a point, where you have to reset that repeater tax.
I think this can be done while remaining competitive, so I am not worried.
Realistically our options are:
1) Keep winning, will put pressure on ownership to keep footing the bill
2) Restructure to dip out of the repeater tax hell
If we're not doing #1, people are going to be calling for change anyway, which will be the excuse/pivot point to do #2. We'd need to be in Brady/Belichick three out of four years in the Finals and coming away with wins, to be able to justify the kind of financial losses we'd sustain in years 4-6 of this run. If we get in that territory and we finally have to dip out we should have enough to show for it that I think people will understand.
Either KP or Jrue ultimately needs to go and/or we need to hit on some of our picks and speculative trades (e.g. Springer/Tillman) in order to keep things chugging along. Both probably need to happen.
We've definitely got at least a 2 year additional runway though, so enjoy it while it's here, it's way longer than most teams get anyway.