Permanence Over Price
Some assets are bought to keep forever — so the rational price and the right price are different numbers.
Kraft's target price for the Patriots was $115-122M; he paid $172M, the highest price ever paid for a sports franchise at the time. Then the seller's lawyer offered him $75M to simply let the lease expire and release the team to St. Louis — a risk-free profit that would have left Kraft still owning the stadium and first in line for a replacement team. He turned it down. His reasoning was explicitly non-financial: as a boy his Boston Braves left town and never came back, and he refused to inflict that on his community. The doctrine extends to his businesses: he won't take the paper company public and won't sell it. 'I get emotionally attached.' He frames the team as a 'community asset' and his companies as a 'family environment,' and contrasts himself directly with private equity ('that's why you wouldn't be good in the private-equity business — we like to sell things').
- Separate the rational price (what a flipper would pay) from the right price (what permanence is worth to you).
- A guaranteed profit to give up the asset is still a sale — decline it if the asset is meant to be permanent.
- Hold-forever ownership changes incentives: you build a 'family environment,' not an exit.
- Know which of your assets are for return and which are for keeping; never confuse the two.
Crystallized in the 1994 acquisition. His late wife thought he'd lost his mind going from a $122M ceiling to $172M, and again when he refused the $75M walk-away. Kraft's anchor was childhood: 'I remember when I was a kid, my baseball team was the Boston Braves... they moved and they never came back, and I was heartsick. It wasn't about the money, it was about the passion.'