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Friday, January 30, 2009
There is an old saw in baseball that asks, "How do you become a millionaire?" Answer? "Be a multi-millionarie and buy a baseball team."
Sports News Today reports that another way to make a millionaire is to be a billionaire and buy a cable TV company:
Trail Blazers and Seahawks owner Paul Allen has seen his massive investment in cable TV company Charter Communication all but vanish. Charter's stock was trading at $0.08 per share this week, down from an alltime high of $27.75 after its initial public offering in 1999.Ouch.
An interesting question is how compartmentalized Allen's business operations are. There is an old claim in sports that the outside businesses of team owners generate profits that can be shifted to the sports operation allowing the sports team to operate at a deficit (on its own) but still remain viable. I have never truly bought into that model as most sports teams do just fine without the cross-subsidization. Nevertheless, if the old claim is true then it might be a bad time to be a Blazers or Seahawks fan.
Can Allen turn Charter into a bank holding company? Tarp II is gearing up, so this is the time to get in on the ground floor.
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