Anyone paying $400 million or more for the NBA's Golden State Warriors in the current California economic climate is a damn fool twice over. The Golden State Warriors are not worth $400 million, let alone the Forbes-estimated value of $315 million. But that's a good place to start.
The problem is because of California's high unemployment, currently at 13.2 percent, and Golden State's home town Oakland's unemployment rate, last estimated at over 17 percent, offering the old value of $315 million estimated based on 2008-2009 numbers before the economic dive hit rock bottom is not the right decision.
Because of the terrible jobs picture, which harm game ticket sales, the largest revenue generator for sports organizations absent any television revenue-sharing agreement, The Warriors had to drop ticket prices for the 2010-2011 season. The ticket prices were reduced between 8 percent and as much as 28 percent. Golden State Warriors President Robert Rowell said...
"We know the economy's been tough. We know the season's been tough. When putting pricing together, we realized we needed to do something to address the fact that our fans have hung with us as long as they have."
The guess in this space is Chris Cohan's selling the team because he doesn't see the California economy improving anytime soon. Since that's almost certainly the case, paying over $315 million for the Warriors at this stage in time is a bet that the economy will get much better. Why should anyone make a bit that Cohan, who knows the organization, isn't willing to make himself?
How much should one pay for the Golden State Warriors? A fair price for the Warriors reflects a weighted average of the percentage drop in ticket prices, the best indicator of the current economic problem. Since a full seat schedule of prices changes by location is not available as of this writing, a reasonable factor is 10 percent. Thus a fair price for The Warriors is $283.5 million.
But $400 million? You've got to be kidding!
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