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Originally Posted by Cynical
That's not always the case. For instance, Facebook is valued for a ton of cash, and has never once made a profit. Amazon became profitable for the first time about a year ago. Assets and market control are how a company tends to actually be valued, not how much money it actually makes.
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Amazon became profitable more than a decade ago, although it’s true that they ran at a loss for the first several years of their existence.
This is actually a different situation though. Amazon’s value even in the early days was based on how much money they’d eventually make. A professional sports team’s value is largely prestige based. This is much, much clearer in countries where the locals don’t pay for stadia - a team like Chelsea forces their owner to plow money into it year after year, but they do it because they know that the capital gains on that product is always rising. Even in other US sports, you see a lot of teams - the Clippers come to mind - who don’t necessarily have a history of profit but who sell for a toooon of money.