Saturday, August 29, 2009

Random Thoughts on Disconnected Events

I have been semi-following the collapse in the pro-sports world which I think will lead the way for a collapse in the entertainment business bubble. There were two pieces of news today that caught my attention.

One, the NY Mets might be up for sale. The owners lost a lot of money with Madoff so they are looking to unload the "asset." I'd rather call it a liability but that is just me. So here is our fair city's perennial also-run coming to market not at a very opportune time. I will keep an eye on the situation. Remember that the Cubs sale has not closed yet. The whole Zell-Tribune deal is coming under intense scrutiny with this suit reported by Bloomberg. I think that there will be whole book on this deal once it is all said and done: it has all the elements of a great drama, from secular decline, egos, tax structuring, and so on. Fees, fees, fees, and more fees.

Second in the news today, the NHL is engaging in its own version of "extend-and-pretend." Apparently, the league is trying to buy the Coyotes, hold on to it for a little bit and then re-sell it. Well, good luck with that. They do not like the likely high bidder so they have been trying any trick out of the bag to circumvent the proper process. This blog has a nice write-up of the absurd smear tactics used by the league. The blog is not related to the Coyotes team.

Dear NHL: the reason why you are in trouble is because (1) people can't see the puck on TV and (2) people find it hard to relate to a sport that they rarely, if ever, played as kids, ex some of our Northern states. Now you can add (3), you participated in the sports bubble by truly thinking you are one of the top leagues (you are not) and thus, running an unsupportable expense structure and sometimes, strange franchising operations. Why do you need a team in the desert when Minneapolis stayed without a team for years, and MN is probably the top market for your product?

Update 9/11/09: Now it seems that the Panthers deal (linked above) with the SPAC is not going anywhere. The NHL wants someone to back the future expected losses. Haha. At least they admit indirectly that in lieu of owning a NHL team, one might as well do a pyre with $100 bills. The Panthers have lost $100 mm since 2001. About the same amount as the Coyotes (as it turns out, the insider group, incl. Gretzky, have pulled their bid. Now it is only the NHL's shell game and the RIMM guy).


The second event that was in the news this past week was Ted Kennedy's passing away. Two commentaries caught my eye. One is over at Falkenblog:
"I often hear the argument that people like Edward Kennedy (who died Wednesday, brother of John F Kennedy), born to wealth and privilege, are to be praised for working for the poor, becoming 'public servants' (see Blogging Heads below). My ideal servant would not spend all his time trying to boss me around, statistically speaking.

Don Boudreaux over at Cafe Hayek nails it:
While Kennedy didn’t choose a life of ease, he did something much worse: he chose a life of power. That choice satisfied an appetite that is far grosser, baser, and more anti-social than are any of the more private appetites that many rich people often choose to satisfy.

A true altruist gives his money or time to others, via friendship or charity. They don't write laws that force me to serve their ends." I hope Mr. Falkenstein does not mind my republishing it in whole.

The second came from Maoxian: ""Over his Senate career, Kennedy wrote more than 2,500 bills, of which more than 500 became law" 47 YEARS, POSTER BOY FOR MUCH NEEDED TERM LIMITS"

The third event in the news was the Fed chairman's reappointment. The Pragmatic Capitalist has published David Rosenberg's "report card" on Zimbabwe Ben:

BERNANKE’S REAL REPORT CARD

• 4 million lost jobs
• 4.6 percentage point surge in the unemployment rate
• 20% decline in the S&P 500
• 30% plunge in house values
• A 3.5% reduction in real GDP per capita
• 11% decline in the trade-weighed dollar
• 109 failed banks (almost matching the total from the prior 13 years combined)

Skip the mainstream media headlines about "praise", "competent handling", etc. and head straight for youtube. They have an excellent collection of clips of the chairman going back to 2005. And, as in the video title, why are we still listening to this guy? Send him back to the faculty club.

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