1. Thinking more abt investing in sports after reading @Amarillo_Slim1's great thread on $MSGS and a lot of Nick Train thinking over the years. Still i struggle. I'll be first to say that sport franchises are the pinnacle of luxury products for billionaires, representing dreams

2. and u can't price a dream. Combined with scarcity value of sports clubs, suggest that clubs that have built legacy, fan following over decades should see continue value growth in an era where value of live TV is growing. But what truly determines intrinsic value is ultimately

3. FCF that the biz generate. Here is where it gets tricky. Most football clubs hardly generate consistent FCF after taking into account of player cost inflation. Even NBA franchises like Knicks look "cheap" compared to private mkt valuation done by forbes, but once you look

4. at its financials, you realise quickly it is still valued on sales multiples. As Damodaran puts it, these scarce franchises are priced not valued. so an investment thesis arguably is driven by the belief that the next billionaire will pay a higher price to fulfill a dream.

5. all things considered, i still do think the trend of upward price inflation for sport assets will continue but it just kind of goes against value philosophy. Investing in sport asset is not too diff from someone saying "i wanna pay $2000 for gold because it is scarce" or

6. "i wanna pay 2% FCF yield for this healthcare equipment company growing 5% organic because it is "cheap" relative to other healthcare equipment name growing at 3% organic but trading the same". What i'm saying, buying into sports is playing the "guess the rating" game, rather

7. than trying to gauge the intrinsic value as determined by FCF discounted to present. following this train of thoughts, a sports asset then becomes interesting when it is actually trading at discount to its FCF driven valuation, because then you'd get to ride on not just

8. recovery towards intrinsic value, but also the subsequent rating increase when people start pricing in the scarcity premium too. of course such situations don't happen too often or maybe i'm just being naive in trying to take a value approach to investing in a segment that's

end/ driven more by dreams/emotion/loyalty/feelings than rational thinking.

Long short, investing in sports where valuation stands is more like investing in art. outside my traditional value circle of competence unfortunately