Archive for the ‘Business’ Category

Las Vegas Expansion

So the expansion draft is 10 months away for the Las Vegas Spearmint Rhinos, so how do they handle it? How do they allocate scouting resources: Let’s break it down.

The team has to grab 1 player from every team and the minimum are:
3 Goalies
9 Defensemen
14 Forwards

With a minimum payroll of $43.8mm. The league is apparently allowing a window the Las Vegas can negotiate deals with other teams about any and all under the sun.

So how do you play it?

First off, you have a plethora of players to choose from, both in quantity and quality. In theory, you can get close to the minimum payroll and load up with young players and at the same time you can load up on big contracts and have a playoff caliber team in the short term, but it is necessary to balance both short term and long term goals going forward.

An optimal theory would be to have a balance of 4-5 contracts that expire each year over the next 4 years, with fewer in year 1 and more at year 3 & 4. The expansion draft selections would be based on the above along with maximizing value over the next 10 years, so deferring picks is needed.

Other teams will want to unload poorly performing contracts while trying to protect young players who still haven’t fulfilled their upside. Most of those players are not top 6 F or top 4 D and any talent/exposure mismatches will largely be dealt with.

A cursory talent evaluation of the players exposed would suggest a surplus of players that are replacement level to + at both G & D paid close to the minimum and a bifurcation of forwards: Most are bottom 6 on the cheap, yet enough top 6 types that are productive, yet underperforming their contract. Luckily most of them are on contracts that will expire between 1-3 years after the team’s 1st season.

In my view of roster construction, I want to grab the minimal number of contracts that get me to  $43.8mm, while my final budget is mid $50mm that sheds $10mm contracts annually over the following 3-4 years. Beyond that I’m trying to accumulate multiple draft picks going forward over the next 3 to 5 years. You do your league wide roster evaluation as part of your due diligence, then I would suggest the following:

Announce to the other teams my payroll/draft plans at some point, then invite them to a sealed bid auction where the bids would be opened after protection lists would be submitted.  The best offers(those unloading bad contracts coupled with x amount of draft picks that can be claimed over the next 5 years) get taken early, while the others just likely lose the best player available.

This way I force the other teams to spend their resources working out their game theory(while in a prisoner’s dilemma) of making sure their worst assets get unloaded by giving up other picks with none of it binding to my team. No haggling, just their best offer(s). The other teams can conspire all they want, but it’s self defeating. Even if only a third of the league really needs to unload a turkey, it’s still enough to keep them honest and drive up prices for secondary contracts(this is where I’d love game theory input.)

The only time I contact other teams is in the window after protected lists are announced, then I start swinging surplus players(likely D & G) around for more picks and (maybe) prospects. Just accumulating RD staggered in the pipeline should do wonders over the years.

Year 1 I want top end picks who can play in year 2-4, subsequently I want best player available early followed by elite level players who slip because of anything but undersized and lack of physicality.  Tough to get em big enough in the former, can’t teach the latter.

Year 2-5 will have tons of cap space, but signing top end talent not a given, not sure blocking the way of picks advisable as draft pool looks better going forward from 2019. Would rather do short term over 30 deals for guys with the right work ethic, bring them into the community.


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So this is what(and where) I’ll hopefully be working on for the next couple of months.The main house

View from the side

A view of the lake from the Living room

The pavilion

The Stage

The dance floor

A layout of the main house

The place was built around 100 years ago by old school New York money and was bought by my grandparents and a bunch of other Communists back in ’48. The idea is to make it a Hotel/B&B with a restaurant, hosting cultural events(music, dances) at the pavilion. It’s 50 miles from the GWB, the train to Penn Station is 70 minutes away(after they fix it, the hurricane last fall washed out a bit of the line.) It’s on 80 acres with exclusive lake access, mostly surrounded by state forest. At some point we hope to plant some fruit trees on acreage that is lying fallow along with growing as much produce as we can on site. The restaurant would have some slavic food, but would also feature the best food to come from Orange County and the Hudson Valley.

The kitchen needs a bit of work and some bedrooms need to be converted back to their original dimensions, but it’s actually not that bad if we can just get past political headaches and egos.  The Pavilion needs some ADA upgrades and the kitchen needs work(as does the bathhouse and snack shack) but with new LED lighting tech we can install a PA & lighting rig relatively cheaply.

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The Booze Biz

The 1st time I ever visited Hawaii I went to the top of Haleakala volcano when I saw an amazing plant called a Silversword plant. Looks like a yucca, but with fine hairs to capture moisture out of the air:

When I was leaving I went looking for a bottle of local rum to take home and couldn’t find any, all of a sudden I plucked a little mind grape, but did nothing with it. Then last April I discovered I could do trademark searches online, so I looked for Silversword  and found only a video poker manufacturer and decided to claim it for myself. 6 months later I received a trademark and started pieceing together what I’d have to do. It looks as if I’ve got someone to partner with on the distro/sales side and now am in the process of getting a bottle sculpted and 3D scanned for CNC mold making. Gonna sorta look like this:

Can contract out the brewing and distilling at a reasonable price on the islands, shipping in bulk to the mainland and getting it bottled in California. Can get the cases designed here in town and printed close to the bottlers. Taxes are $2-3 a bottle between the feds and state. Upfront costs are molds & permits along with initial batch costs which ain’t bad at all, then there’s marketing.  We can keep it slow at first and use our contacts in the biz, then when it cashflows we can get into pushing the product wide.

Lots of work to be done, but at least progress is occurring.

Update: Got a url, bar codes for bottles and cases, setting up a meeting with a glass manufacturer.

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It looks like this Super Bowl “Big Game” might be culmination of the last season of NFL football as we know it. The party line is unless an agreement can be hashed out between the players and the owners the league will have an uncapped year in 2010, followed by a lockout in 2011.

The realty is unless the owners can hash out an agreement amongst themselves the league will basically  rend apart in 2010, followed by mass suicide in 2011.

The problem isn’t what the players make(which invariably works out to about what the TV contract is within 5%) it’s what counts for revenue sharing amongst the owners and the wide disparity between the haves and have nots amongst billionaires. Regular ticket sales are split 60-40 between owners to smooth out revenues, while club seats and sky boxes aren’t. Parking isn’t split, the same with concessions.  As a result, you have the Dallas Cowboys charging almost $70 a carload and Washington not having replay screens so they can rent out handheld sets for an arm and a leg to maximize non shared revenue.  The non shared cash these stadiums throw off (even allowing for the insane debt servicing levels) allows them to spend big on free agent signing bonuses and gain a competitive advantage. This has forced teams like Buffalo to move regular season games to Toronto and the Vikings and Jacksonville to look longingly towards Los Angeles.

Next season not only will be a uncapped season, it will also not have a salary floor. You could see a number of teams spending below the floor such as Arizona, Jacksonville, St Louis, Buffalo and the poster child, Tampa Bay.

The Glazer’s just refinanced their purchase of Manchester United again, bringing the total debt outstanding to over $1.1 billion dollars. The current debt servicing this year is $70mm alone. Facing that and a crappy on field product, I could see them trading down from the #3 overall pick and possibly even out of the first round altogether in order to save money and rebuild the roster quickly. Payroll could be substantially below this year’s floor of $112mm.

So you have billionaire who’ve had a rough go in this economy and want the players to become a junior partner in order to get that extra zero back in their net worth, but a  lockout in 2011 would be very damaging to teams that facing massive debt servicing. In a perfect season a team at best will only have 13 games(if they host the Super Bowl) to generate revenue, save the odd concert or monster truck rally. Jerry Jones is working his tail off to get as many events as humanly possible there in order to service his $700mm stadium debt. The Jets and Giants will have 20 games(plus playoffs) to whack away at their shared debts.

It’s odd that the teams that stand to benefit the most from the status quo will be the most exposed if there is no season in 2011.

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Everybody and their monkey’s uncle is now opining on how the new device is a dud because it doesn’t have a camera, or flash, or will suck a golf ball through a garden hose, how it’s not as good as a laptop and pricier than a netbook; these people are completely missing the point:

The iPad could help revolutionize Jr. High-postgrad education.

Instead of breaking kids backs with 50 lbs of textbooks, they’ll just have 1.5 lbs to schlep around to do their homework, reading, testing, you name it. Anybody teacher or school district can put together their lesson plans online, can find superior lessons plans beyond what the traditional publishers put on offer. Lesson plans and text can be updated instantly to correspond with the changes in science or politics. School districts can keep books for K-4 or 5 because the subject matter is fairly constant, but after that every child should be issued one. Kids won’t want to steal them because they all have them. Now with kids having an Apple product may entice parents to convert the home to a Mac along with airport express for ease of function. It plays movies to boot? YAHTZEE!!!

Prices on “e-xtbooks” will be driven down due to both a lowering of barriers to entry and by publishers being able to slash overhead on printing and distro.

Schools are already buying iTouches for schoolkids, the iPad is right in their wheelhouse. They can buy in bulk and get their money’s worth on the warranty plan.

3G won’t matter except for a different market segment who will need it for offsite work, say Census Bureau enumerators.

I won’t buy one, but this device isn’t for me.

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Ghost Note Studios

Some photos of my studio here in town:

The console is originally from Trident Studios in London; Bowie, T.Rex, Queen and Elton John recorded using this desk. It then went on to Impact Recorders in LA where the 1st 2 Cypress Hill records were done.

The piano is a Baldwin 9 footer, also have a Hammond A100 organ with Leslie Cabinet a variety of guitars and low watt amps along with a Marshall head.

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