Why I wasn't an Economics major

[Hawkmoon]

This stuff doesn't make sense to me.

According to this article ( https://variety.com/2020/tv/news/alex-rodriguez-jennifer-lopez-mets-1234585417/ ) A-Rod and J-Lo want to buy the NY Mets. Early in the article, it says the team is valued at $2.6 billion. Toward the end of the article, it says the team is losing at least $50 million per year.

I always thought when someone considered buying a business they looked over the books to verify that the company is showing a profit. How can any business that's losing $50 million a year be worth $2.6 billion? How can it be worth anything?

[MechAg94]

In this case, scarcity I imagine.  Not too many professional teams near New York.  Some people will pay for the "prestige" of ownership. 

There might be other reasons the team is losing money.  I wouldn't know.

[charby]

Same thing can be said about farming.

[230RN]

This stuff doesn't make sense to me.

According to this article ( https://variety.com/2020/tv/news/alex-rodriguez-jennifer-lopez-mets-1234585417/ ) A-Rod and J-Lo want to buy the NY Mets. Early in the article, it says the team is valued at $2.6 billion. Toward the end of the article, it says the team is losing at least $50 million per year.

I always thought when someone considered buying a business they looked over the books to verify that the company is showing a profit. How can any business that's losing $50 million a year be worth $2.6 billion? How can it be worth anything?

They probably saw some of those funky baseball / soccer / hockey / football movies where a woman buys or inherits the broken down tail-end-of-the-standings team and despite the highly vocal doubts of the team and the coaches and the fans brings the team <cue uplifting music> to the worldwide championship <cue even more dramatic upliftng music>.

In some instances of this canned storyboard, they enlist the help of an angel or other supernatural agency (such as the spirit of a former great player or coach), yet never realize that using the help of this external entity is, inherently, cheating.  (Neither does the external entity or the audience.)

Sample voluntary side stories designed to enhance cutesiness or empathic impact:

(1) The woman's yappy little lap dog finally comes to accept her boyfriend, who was instrumental in making all the team members and coaches accept her leadership.  Awwwww....

(2)  Some developer wants to buy the team to destroy their historic and beloved stadium and put up a shopping mall and they thwartily thwart his efforts.  Yayyyyyy...

(3) Some combination or (1) and (2) above.

Welcome to the dream world of show biz.

 Gee, that was fun.

Terry, claster of icons, 230RN

[zahc]

Some people are so rich they don't mind, or even want, to lose money. Business losses can be used to offset revenues and reduce taxes. 

Also, the fact that they lose 50mil per year might easily be artificial in itself. There's plenty of ways to make a business lose money on purpose while actually making money off of it in the big picture. Again, a business that loses money owes no taxes. Some businesses are raking in plenty of profit over expenses but their books show losses because they are writing down massive amounts of capital depreciation every year, even of the capital itself is effectively paid off, or if it's purchased on a low-interest loan.

[230RN]

Nah, we knew all about that. They're just living in that previously-outlined show biz dream world.

Boy, you're no fun.