This was my original post on the other tread. Do your own DD.
Date: Oct 30 1996 8:24PM EST
Excuse my lack of summary ability, Im not a writer. BTW, I own a small position in
USBS.
On Thursday October 24 and again today October 30, I called and spoke with Daniel
Meisenheimer, Commissioner and Chairman of the United States Basketball League,
Inc. (NASDAQ BB:USBS). I was very impressed with this intelligent soft spoken
gentleman as well as the information he provided on the past, present and future
expectations of the League and the company. While I can't make public the entire
conversation due to ongoing negotiations, I can share some info that I hadn't found
elsewhere.
This is a summer professional basketball league committed to discovering and
showcasing new and upcoming talented players and coaches to it's fans and the NBA. In
fact, since the Leagues inception in 1985, the USBL has sent 100 players to the NBA
including 30 who donned NBA uniforms this year. The USBL initially owned each team
but decided to franchise teams to permit more rapid growth of the League and the
company. Mr. Meisenheimer stated that "if you are looking for a hyped high flyer for the
quick buck, this is not it". However to me, in spite of this statement, the stock seems to
be poised for some worthwile gains, in the relative near term and a likely candidate as a
long term hold. In terms of investors, the company is primarily interested in long term
investors who can see the potential of the FIRST EVER PUBLICLY OWNED
SPORTS LEAGUE, giving the fans the unigue opportunity to have direct ownership and
share in the ongoing national growth of the League. The company and League have been
in existance for 11 years and recently went public in April 1996. With 3.4 million
outstanding common shares, it is thinly traded as there are only 350,000 shares in the
float. The vast majority of the remainder is held by insiders, Mr. Meisenheimer, his family
and other co. officers, and some major investors. Recently, one of those major investors
passed on and his heirs began liquidating his estate, along with his shares. This placed
pressure on the stock price, accounting for it's recent low levels. Mr Meisenheimer is
continuing to accumulate for his children as the overall situation allows. The company is
now profitable with growth in revenues for the first 6 months of FY 96 that have
approached all of FY 95 due to rapidly growing revenue from franchise fees, presently
$300,000 per team (projected to be $500,000 in a few years, with further growth
thereafter) in addition to annual royalty fees of $15,000 to the League, licensing and
sales of promotional items, TV and advertising. Average attendance at League games
has incresed significantly over the past 4 years with a 61% increase this last year. There
are currently 14 teams in the League with expectations of 60 in 8 divisions within 5
years. Though the League has a stated policy of maintaining ticket prices at the movie
price level, the Revenue Per Fan (RPF) has increased from $6 in 1994 to $8 in 1995 to
$11 for 1996 and estimated to be $12 in 1997 and $15 in 1998 from ticket prices,
concessions and promotional items.
The USBL recently entered into an agreement with the American Independent Cable
Network, Inc., which serves 40 of the largest cities in the west. There are also ongoing
negotiations with another major cable network as well as major advertisers. The
company expects that income from cable TV and associated advertising will become a
major source of increased revenue in addition to increased national exposure resulting in
substantially increasing growth from new franchises and markets. The company recently
contracted KCSA of New York, to help handle PR during the next stages of it's ongoing
growth. I spoke with Paul Holm of KCSA and he stated there will be several very
positive announcements and company information made public in the "very near future". I
believe a League web page will be in place within the next 45 days that will provide
League information, schedules, team information as well as the company related investor
information.
There is much more information I received but I believe most of it will be made public
very shortly. This could be one worth watching closely and accumulating at these present
lows. |
