Chapter 956
The Alliance is on the verge of collapse, a golden opportunity at the bottom of the real
Lin Haoran was slightly taken aback after hearing this, and then laughed.
NBA Commissioner Larry O'Brien is a name he is familiar with.
This legendary figure, who became NBA commissioner in 1975, spearheaded the merger of the NBA and ABA, introduced the three-point line rule, and transformed the NBA from a near-bankrupt league into a globally influential sports organization, laying a solid foundation for the NBA's future glory.
But these days, the NBA isn't doing so well.
According to media statistics, 16 out of the 23 NBA teams are losing money, and many teams are on the verge of disbanding.
In addition, NBA ratings plummeted because CBS, the broadcasting network, often re-broadcasts the Finals at 11:30 p.m.
Coupled with rampant drug use among players, frequent brawls, low attendance, and severe racial prejudice in public opinion, the image of the NBA has almost collapsed.
There is also a group of incompetent, stingy, and racist owners in power. Cavaliers owner Ted Spipern fired four male players in one year, sold off all his first-round picks, and openly discriminated against black people.
Clippers owner Donald Sterling: Unpaid wages, unpaid hotel bills, drastically cut operating budget...
In this environment, Larry O'Brien had a very difficult time.
Every day when he opens his eyes, he is faced with a mess: team owners are complaining endlessly, banks are pressing for loan repayments, TV stations complain that the games are not interesting, and fans are utterly disappointed with the league's image.
Larry O'Brien is 65 years old this year and could have retired gracefully, but he can't let go of the league he saved and wants to find a way for the NBA to survive before he steps down.
In his previous life, Lin Haoran watched many NBA team games and had some understanding of NBA history. Moreover, the famous Larry O'Brien Championship Trophy was named after this old man.
It can be said that without the foundation laid by Larry O'Brien during his tenure, there would be no later glory of the NBA.
“Mr. Walter, since President O’Brien wants to see me, let him come. I’ve always been interested in the sports industry and have heard of the NBA’s reputation. This is a good opportunity to learn more about it,” Lin Haoran said calmly, picking up his teacup.
Upon hearing this, Walter Riston smiled and said, "Mr. Lin, it's settled then. I'll have someone tell him that he will definitely attend the dinner tonight."
“By the way, Mr. Walter,” Lin Haoran suddenly remembered something, “President O’Brien wants to see me because he wants me to invest in some teams?”
"Mr. Lin, you guessed right. There are many NBA teams on the verge of disbanding due to various problems. Once the teams disband, the impact on the entire league will be devastating."
For the past two years, President O'Brien has been traveling around trying to find capable investors to take over struggling teams.
For example, Joe Taub, the owner of the New Jersey Nets, is one of them. Due to the team's high debt and operational difficulties, he has made it clear that he wants to sell the team. If no one takes over, the team will have to disband. He has announced that he will no longer invest a single penny in the team.
Besides the New Jersey Nets, seven other teams—the Cleveland Cavaliers, San Diego Clippers, Utah Jazz, Indiana Pacers, Denver Nuggets, Kansas City Kings, and Golden State Warriors—are also facing severe financial crises, with their owners searching for buyers.
However, the NBA's image is currently very poor, and there is a high possibility that the NBA will go bankrupt, so there are very few investors willing to take over.
In addition, teams such as the Washington Bullets, Detroit Pistons, Chicago Bulls, Houston Rockets, Atlanta Hawks, and Philadelphia 76ers, while not currently showing signs of bankruptcy, are also suffering significant losses.
Currently, only seven teams in the entire league are profitable. Walter Riston clearly has a good understanding of the current NBA, explaining the situation to Lin Haoran in detail.
Lin Haoran was secretly surprised after hearing this.
He knew the NBA was in a difficult situation in the early 1980s, but he didn't expect it to be this difficult.
Eight teams are facing disbandment at the same time, accounting for almost one-third of the league.
If these teams were to actually disband, the NBA would be effectively dead.
No wonder NBA Commissioner Larry O'Brien is now like a headless fly, swarming around any rich person he sees.
However, despite his surprise, he was more excited.
Crisis, crisis, but there is opportunity within crisis.
The more the NBA is in a slump, the lower the team's valuation becomes, making it a more worthwhile time to buy.
Once David Stern takes office and implements a series of reforms to transform the NBA into the world's top sports league, the value of these teams will skyrocket.
He asked curiously, "How much does it cost to acquire a football team these days?"
Walter Riston thought for a moment and said, "I remember the Los Angeles Clippers were acquired for $1250 million last year, and the Houston Rockets just changed hands this year for $1100 million."
For a team like the New Jersey Nets, which is suffering heavy losses and on the verge of bankruptcy, the acquisition price would be at most $800 million to $900 million, or even less.
After all, Tao Bu just wanted to get rid of the stock as soon as possible; he'd be grateful if he could recoup even a portion of his costs.
Lin Haoran nodded, but was secretly surprised.
That's cheap! You can become a team owner for less than ten million US dollars!
He remembered that the Los Angeles Lakers were acquired for a staggering $100 billion in the future, and the Boston Celtics were acquired for a staggering $61 billion.
Before he traveled through time, the minimum acquisition threshold for an NBA team had already reached over $40 billion.
In other words, an ordinary team costs several billion dollars, while a top-tier club costs tens of billions of dollars.
Now, a team can be acquired for just eight or nine million, or even ten million US dollars—a price difference that's simply enormous.
If one could control multiple teams simultaneously, or even the entire NBA league, the returns over the next few decades would be unimaginable.
However, he remembered that in the NBA, one person cannot control multiple teams; this is a strict rule established by the league to prevent game manipulation.
It remains to be seen whether there is any room for maneuver given the current bankruptcy crisis facing the NBA. These are things that need to be discussed.
To be honest, if he could only manage one team, Lin Haoran wasn't really interested.
Even if a team's valuation rises to several billion dollars in the future, for someone like him who holds nearly 40 billion dollars in cash and whose net worth is close to 100 billion dollars, it's just a decent investment, not a strategic move.
But if it involves multiple teams, or directly overrides numerous team owners, then it's a different story.
Having multiple teams means greater say, influence over league decisions, and the potential to form a mutually supportive business network.
Lin Haoran picked up his teacup, took a slow sip, and brought his thoughts back to the present.
“Mr. Walter, let President O’Brien come over tonight. I’ll hear what he has to say before making a decision,” Lin Haoran said with a smile.
Walter Riston nodded, chatted for a few more minutes about the dinner arrangements, and then got up to take his leave.
Lin Haoran saw him to the door, then returned to his seat, looked at John Reed, and smiled, "John, how much do you know about the NBA?"
John Reed shook his head and laughed, "Lin, I don't know much about basketball, but Citibank has business dealings with the NBA, so I know a bit about their finances."
The NBA is indeed in a bad situation right now. Most teams are losing money, banks are reluctant to lend to them, and many team owners are unwilling to continue investing.
"If it weren't for Commissioner O'Brien's tireless efforts, this league might have already collapsed."
Lin Haoran nodded, secretly making plans in his mind.
The root cause of the NBA's current predicament lies in its unworkable business model.
With low television broadcast revenue, declining ticket sales, sponsors unwilling to invest, and player salaries continuing to rise, coupled with rampant drug use and frequent fights among players leading to a poor public image, and chaotic management of various teams, a strong leader is needed to turn things around.
He knew this person would appear soon.
In 1984, David Stern will succeed Larry O'Brien as NBA commissioner.
This Jewish lawyer, a graduate of Yale Law School, will use his strict commercial management methods to transform the NBA from a chaotic league into a highly efficient business machine.
At that time, the value of NBA teams will experience explosive growth.
Although Larry O'Brien made enormous contributions to the league and laid a solid foundation for the NBA's glory, he was actually not suitable to be the NBA commissioner.
The reason is simple: Larry O'Brien managed the NBA with a bureaucratic mindset. Prior to his appointment, this NBA commissioner served as U.S. Postmaster General and Chairman of the Democratic National Committee, positions that accustomed him to an administrative work style rather than a business-oriented operational mindset.
His management of the NBA leaned more towards maintaining the league's stability and survival than on how to expand the pie.
This resulted in the NBA being preserved during his tenure, but never finding a truly viable business model.
David Stern, on the other hand, was the complete opposite.
This president, who is a lawyer by training, is a shrewd businessman at heart.
He will run the NBA like a business, using market-based methods to solve the various problems facing the league, and ultimately build the NBA into one of the most successful sports leagues in the world.
Lin Haoran remembered reading a report in his previous life that the first thing Stern did after taking office was to rectify the image of the league.
He introduced a strict anti-drug policy, requiring all players to comply, with violators facing bans or even lifetime bans.
At the same time, he negotiated with the players' union and introduced a salary cap system, which limited the disorderly growth of player salaries and gave all teams a basis for fair competition.
More importantly, Stern knew how to package star players.
He transformed Michael Jordan into a global icon, causing the NBA's brand value to grow exponentially.
He also spearheaded the NBA's globalization strategy, bringing basketball to the world stage.
These are things that Larry O'Brien couldn't do.
However, Lin Haoran meant no disrespect to O'Brien.
This old man has done his best. When he took over, the NBA was a mess. It was a remarkable achievement that he managed to keep the league from disbanding.
Furthermore, his advocacy for the merger of the NBA and the ABA, and the introduction of the three-point line rule to the league, are all historically significant contributions.
John Reed glanced at his watch; it was already past four in the afternoon.
So he stood up and said with a smile, "Lin, I have to go now. We'll go to The Four Seasons restaurant at 6:30 this evening. We've already booked a private room there, and more than a dozen senior executives from Citibank will be there to welcome you."
The Four Seasons is known as the king of power lunches and is the birthplace of the Wall Street power lunch. It is the go-to place for CEOs, bankers, and real estate tycoons to discuss business. Although Lin Haoran has never dined there, he has heard of the restaurant.
He nodded and smiled, "Okay, you go ahead and get busy. I'll sit here for a while and look at these documents. See you tonight."
See you tonight!
John Reed turned and left the office, closing the door gently behind him.
Lin Haoran leaned back on the sofa, picked up his teacup and took another sip, his gaze falling on the thick stack of documents.
He had already roughly looked through the information on the two buildings in Times Square and the three buildings on Wall Street. Each of them was a top landmark in the heart of Manhattan, and each of them was priced so low that it was tempting.
And the remaining stack of documents was still waiting for him to read.
If it weren't for his concerns about buying too many properties and attracting unnecessary attention, he would have loved to buy all of them.
After all, he knew that the New York housing market was at a critical turning point, "at the bottom of the recession and on the eve of recovery," and was about to enter a period of explosive growth.
Until 1988, with Japanese capital making massive acquisitions of landmarks and European and Middle Eastern funds snapping up Manhattan mansions and office buildings, New York's commercial real estate bubble reached its peak.
Ultimately, in 1989, the bubble burst and the market fell into recession again due to factors such as the Federal Reserve's interest rate hikes, the outbreak of the savings and loan crisis, and the sharp decline in investment demand caused by the cancellation of real estate tax breaks in previous years.
Lin Haoran's strategy was to buy at low prices, hold for five to seven years, and then sell when market sentiment was high and Japanese capital was snapping up shares around 1987.
By then, the value of those buildings in his possession will have increased several times over, or even more.
The funds raised from the sale were just in time to capitalize on the stock market crash of October 1987 and buy up US stocks at the bottom.
When the New York housing market crashed again in the early 90s, he could come back and buy up assets at rock-bottom prices for the second time. In particular, the Japanese conglomerates would be forced to sell their New York assets at low prices due to the bursting of the Japanese economic bubble.
At that time, he will be able to reclaim these landmarks that were once snatched away by the Japanese at high prices at a lower cost.
With this back and forth, he can make a fortune just from the real estate sector alone.
This is the true cross-cycle strategy.
However, he also knew that one must eat one bite at a time and walk one step at a time.
Buying too much at once is indeed too conspicuous.
So, buying a few dozen buildings should be enough; let's sell off this batch first.
The thick stack of documents in front of us contains nearly 150 files, representing almost 150 buildings in the heart of Manhattan. Selecting the dozens of buildings that are most worth investing in will definitely require careful selection!
Lin Haoran put the five documents he had already read aside and began to look at the documents he hadn't yet read.
The buildings here are mostly located in Lower Manhattan, Midtown, and Upper Manhattan, covering famous areas such as Wall Street, World Trade Center, South Street Seaport, Rockefeller Center, Park Avenue, Lexington Avenue, Fifth Avenue, Madison Avenue, 34th Street, 47th Street, Seventh Avenue, SoHo, etc. Each building has its own unique value and story.
Lin Haoran flipped through the documents one by one, at a moderate pace, examining each one carefully.
Some buildings are in good locations but are overpriced, some are cheap but are in poor condition, some are good in all aspects but have complicated ownership relationships, and some have poor rental situations and high vacancy rates.
In short, from the perspective of people in this era, it seems that not as many of these buildings are truly worth buying as one might imagine.
But in Lin Haoran's eyes, every single one of them was a treasure.
Because he knows how high Manhattan land prices will rise in the next few decades, which areas will become hotspots, and which buildings that seem insignificant now will become top-tier assets in the future.
For example, an old office building in SoHo is currently priced at only six million US dollars. It looks ordinary, but Lin Haoran knows that this area will become New York's most fashionable art district after the 1990s, and the land price will increase dozens of times.
For example, a department store on 34th Street is currently struggling and the owner is eager to sell it for $12 million. However, this street is expected to become one of the most bustling commercial streets in Manhattan in the future, with Macy's flagship store nearby and huge foot traffic.
This information is invisible to people of this era, but Lin Haoran can see it.
Before we knew it, more than an hour had passed.
As Lin Haoran was engrossed in looking at the documents, his thoughts were interrupted by a knock on the door.
"Please come in." Lin Haoran snapped out of his reverie and closed the document in his hand.
"Boss, Mr. John asked me to remind you at six o'clock in the evening, and it's already six o'clock now." The door opened, and Liu Xiaoli came in. She had stayed at Citibank all afternoon and hadn't gone out.
Upon hearing this, Lin Haoran suddenly looked at his watch and, sure enough, the hands of the watch pointed to six o'clock.
He was slightly taken aback, not expecting that he had become so engrossed in reading the information that he had forgotten the time.
He rarely does this, since each group has its own person in charge, and he usually acts as a hands-off manager.
But today, the information on these buildings is just too attractive; each one is like gold buried in the ground, just waiting for him to dig it out.
"Okay, I understand." Lin Haoran nodded, closed the documents in his hand, and placed them on top of the stack of more than a hundred documents. "Have Weiguo come in and take these documents back to the hotel."
"Okay, boss." Liu Xiaoli turned and left. A moment later, Li Weiguo came in, carefully carrying the thick stack of documents in his arms, and left the office.
The Marriott Hotel where I was staying was in the building next door, so it wasn't too inconvenient.
He plans to look at these materials again tonight; he hadn't even finished half of them yet.
I'm attending a dinner party at 6:30 PM, so I can't bring all this stuff to the restaurant, and it's not appropriate to leave it in the car either. It's better to just move it back to my hotel room.
Lin Haoran stood up, and Liu Xiaoli helped him straighten his suit. Then he picked up the coat draped over the back of the chair and put it on. He took one last look at the office where he had spent half the day before walking out.
Li Weidong was waiting in the corridor when he saw Lin Haoran come out. He immediately went up to him and said, "Boss, the driver is already waiting downstairs."
"Okay, let's go downstairs. We'll leave once Weiguo returns from the hotel," Lin Haoran nodded. (End of Chapter)