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Price = Dividend (or income stream) / (risk adjusted interest rate - income stream growth)
Basic present value formula for stocks but works for stuff like this too.
So, if you have a business generating 50mil a year in profit and you feel the risk adjusted interest rate is 8% and that the profits will grow 3% a year on average it's worth.... 50mil / (.08 - .03) = 1 billion
So I just looked at Houston has like 63mil in operating income so if you use 4% growth and 8% interest rate with that you get to almost 1.6bil or in the ball-park.
Forbes noted that the team values are up 3.5 times what they were 5 years ago which is why many of us have some sticker shock.
Yes... Asian population is big in a couple of areas, that's about it.
I think a big man contingent is necessary. Yao, Dikembe, Hakeem... let's get it done.
Yeah Yao's net worth has been exploding through a series of business deals. I see lots of conflicting information but he could be worth over 1 billion soon if he isn't there already. (Things aren't as transparent in China )
The NBA would no doubt be drooling over the idea of making owning portions of nBA teams *a status thing* in a country like China with billionaires all over the place. There is only so much money around the world that is interested in basketball ownership.
Tilman Fertitta is probably the most likely owner for right now. He has business connections on top his already extremely high net worth.
On another note. With Les gone, this opens the possibility of an NHL franchise in Houston.
Great post. That would be over half his net worth to buy the team so he's going to almost certainly need some other money. Heck, 10 years ago he could have plunked down 100mil and gotten some bank loans for the other 300mil. Today it's 1.6billion give or take and that could be a big pill to swallow by himself.
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