Fertitta : " Hockey struggles south of the Mason-Dixon Line, and it's a fact"

[Melrose Munch]

MM- That's a value judgment. Let's parcel it out in detail:
Expansion: 650M, but no minor league affiliation, no front office in place, no nothing, so there is lots more leg-work to do....

Relocation of Yotes: Below average squad (but they had a good 2nd half this year, so it's not the bottom of the barrel), AHL affiliate already in place (Tucson), which supposedly has good players, and some front office.

If you give me my choice, and I can have either in Houston, either one, for 650M, with no Yotes debt load (in other words, all debt is taken care of by my purchase price), it's a tough choice. I say that because the expansion rules can obviously be used to great advantage (see Vegas). Yet, one could also mess that up badly.

The point stands, though. If someone/some place is looking to purchase the Yotes for a relocation, they aren't going to get a discount. The NHL doesn't have a discount to give.

Well they are stuck in Arizona then. They need to eat the losses.

 

[MNNumbers]

Well they are stuck in Arizona then. They need to eat the losses.

And, MM, that's exactly what makes the current situation fascinating to me......

But, as for Houston.....
Regardless of what anyone things of Fertitta's comments, they are HIS comments. And, it is difficult to interpret them in any way other than.....The price is currently too high.

 

[Grudy0]

And, MM, that's exactly what makes the current situation fascinating to me......

But, as for Houston.....
Regardless of what anyone things of Fertitta's comments, they are HIS comments. And, it is difficult to interpret them in any way other than.....The price is currently too high.

And considering Fertitta paid $2 billion for the Rockets and the operating rights to Toyota Center, he's likely looking for a discount on an NHL franchise due to overpayment for the Rockets.

I have zero inclination believing Houston wouldn't be a rather large revenue producer. Maybe not top ten, but certainly enough to carry their own weight.

 

[MNNumbers]

And considering Fertitta paid $2 billion for the Rockets and the operating rights to Toyota Center, he's likely looking for a discount on an NHL franchise due to overpayment for the Rockets.

I have zero inclination believing Houston wouldn't be a rather large revenue producer. Maybe not top ten, but certainly enough to carry their own weight.

Grudy,
If you want to ask:
Is Fertitta correct? Well, there is a lot to discuss about that. I think hockey would do well in Houston because it isn't new there. But, then, he already owns the arena, so game night revenues are the only thing that owning a hockey team gains for his bottom line. So, there are both sides.

If you want to ask:
What do his comments imply if you are predicting the future? Then, that's a different question, and it seems the answer to that is: Probably hockey is not coming soon.

 

[Killion]

Well they are stuck in Arizona then. They need to eat the losses.

Well, their "stuck in Arizona" though not quite in the manner that implies. "Stuck" in that they cant reasonably expect to attract any seriously monied investor injecting the kind of capitol required to buy out Andrew Barroway in whole or in part, and who will then on top of that inject additional funds into marketing, advertising & promotion, buying out a bunch of contracts on & off the ice, upgrading every department and.... coming up with at least $300M - $350M++ for a new building in the East Valley or downtown (which in & of itself is an absurdity - that market already has too much inventory with 2 arenas & other venues).... meanwhile, covering, "eating the losses" as you suggest which could be anywhere from $30M-$50M a year....

We dont know the true number, how much debt has been incurred & exactly how much they lose annually, where they sit in terms of outstanding money owed through at least 2 lines of credit & so on but its just got to be approaching the point of no return, closing in on a half a billion dollars. So as @MNNumbers postulates, the NHL isnt in a position to offer any discounts, Gary Bettman for one thing having promised the Board of Governors that the fight over the right to determine location themselves wouldnt cost them a dime... for another, to be selling the Coyotes at a discount from the $500M threshold, that paid by Las Vegas, and bump that up to $650M with Bruckheimer & Co apparently amenable to dropping that fee no problem... to then give a discount to Tilman Fertitta, Paul Allen or Pierre Karl Peladeau.... just not going to happen. They are not going to eat losses be it a local sale or a sale for Relo. To do so would be for Gary Bettman to break his promise, it would devalue franchise values while making a mockery of their Expansion processes & fee's.

Imagine your Bill Foley, who was indeed interested in the Coyotes provided he could move them to Vegas, told "no, that teams on the road to recovery, not going anywhere, only way in is by way of Expansion, $500M". He agree's to go along with that, the NHL then contemporaneously announces Expansion, receives only 2 applicants, then about a month later the City of Glendale voids the Lease & Management Contract with IceArizona, all Hell breaking loose, but they cant go back to Foley, are unwilling to sell the team or even award an Expansion Franchise to Quebec as the Expansion Train's already left the Station. Foley's dropped $500M. Why should Tilman Fertitta & Houston get in for anything less? But it doesnt stop @500M, tack on another $150M as thats now the price-point for a team....

I just dont see it happening, Fertitta is absolutely correct to be concerned, numbers just dont make any sense for him, his situation. Common sense should have prevailed, Foley receiving the Coyotes but it was too late. Its not too late to substitute the Coyotes for a blank slate Expansion Team in Seattle. As of right now that group the only ones were aware of willing to drop that kind of money. While its unfortunate that the other 31 teams will see their free~money Expansion Fee proceeds evaporate as those funds go to clear off the debts incurred by the NHL & Barroway since 08/09 BUT... for how long can they keep digging in running up debt in Glendale? Look, the Cavalry's not on the way down there. No one in their right mind takes on that suicide mission. Something has to be done here, the NHL running out of options & time.

They are absolutely in the drivers seat, able to demand $650M from the likes of a Tilman Fertitta as theyve got prcedent, a bird in hand with Seattle, with Vegas @$500M, can point to the Knights amazing success in year one alone, turnaround in Nashville & so on... so so much for your comments about the Mason~Dixon & this is the price period end of story. Maybe Andrew Barroway "comes with" the franchise. Tilman being asked to drop $300M or $350M. Minority or Majority ownership.... Maybe he doesnt like that, doesnt operate that way & actually figures $300M or $350M is really all an NHL franchise is worth lock, stock & barrel for full Majority Ownership & if thats what he's determined, I for one would be in full agreement, and who needs Andrew Barroway as a partner anyway? Guy's not even in the same league financially, bunch of other levels not even close. What does that guy even bring to the party? So ya, problem. Houston like Portland OR, QC & Southern Ontario market's they should be in & Houston at or near the top of that list.

 

[powerstuck]

Translation: I’m not spending $650 million to introduce and grow the game of Hockey in Houston.

Yep seems to me like a polite way to tell Gary and the Owners...you guys are crazy asking for that much money.

 

[gstommylee]

One issue. NHL has zero leverage increasing the sales price for a current team in fact. That should be up between the buyer and the seller to come to an agreement over price not the league to preset a price for franchise. Of course the debt should be included in sale or Buyer assumes all debt to the franchise taking the league out of it.

imo Fertitta has all the leverage here. He can wait it out while the league and Barroway can't. I don't see another group coming up with a 650m check to buy the team and keep it there or move it to a different western market.

 

[Killion]

One issue. NHL has zero leverage increasing the sales price for a current team in fact. That should be up between the buyer and the seller to come to an agreement over price not the league to preset a price for franchise.

In the normal or real world sure.... thing is, these leagues dont operate in the same way normal business do as you well know having lived through the Sonics' debacle. The Leagues absolutely insert themselves into any & all sales transactions be it local or for Relo. Bettman & Daly extremely pro-active in that regard. Get involved with negotiations & requests between owners and municipal, county, state & provincial authorities, you name it. Fully engaged. Not so much on the marketing, promotional side, usual day-day & so on but when it comes to ownership, very much hands on. Controlling. Even more so since the meltdowns in Arizona & Georgia, close calls in Florida, Texas, Tennessee, Pittsburgh etc, Shenanigans of one kind or another going on elsewhere since assuming authority in 1993.

 

[Melrose Munch]

And, MM, that's exactly what makes the current situation fascinating to me......

But, as for Houston.....
Regardless of what anyone things of Fertitta's comments, they are HIS comments. And, it is difficult to interpret them in any way other than.....The price is currently too high.

It is too high, and the it's unexplainable on the NHL's part, given that this situation with Phoenix has been going on for 10 years.

And considering Fertitta paid $2 billion for the Rockets and the operating rights to Toyota Center, he's likely looking for a discount on an NHL franchise due to overpayment for the Rockets.

I have zero inclination believing Houston wouldn't be a rather large revenue producer. Maybe not top ten, but certainly enough to carry their own weight.

Grudy,
If you want to ask:
Is Fertitta correct? Well, there is a lot to discuss about that. I think hockey would do well in Houston because it isn't new there. But, then, he already owns the arena, so game night revenues are the only thing that owning a hockey team gains for his bottom line. So, there are both sides.

If you want to ask:
What do his comments imply if you are predicting the future? Then, that's a different question, and it seems the answer to that is: Probably hockey is not coming soon.

Houston and Dallas can be top 10. We forget Dallas grabbing tons of FAs every season like other big markets is why we had the 2004 lockout. He'll own the team, so revenues are not the problem. It's how long will it take to make the money back on the purchase price. And yes he overpaid for the rockets.

Well, their "stuck in Arizona" though not quite in the manner that implies. "Stuck" in that they cant reasonably expect to attract any seriously monied investor injecting the kind of capitol required to buy out Andrew Barroway in whole or in part, and who will then on top of that inject additional funds into marketing, advertising & promotion, buying out a bunch of contracts on & off the ice, upgrading every department and.... coming up with at least $300M - $350M++ for a new building in the East Valley or downtown (which in & of itself is an absurdity - that market already has too much inventory with 2 arenas & other venues).... meanwhile, covering, "eating the losses" as you suggest which could be anywhere from $30M-$50M a year....

We dont know the true number, how much debt has been incurred & exactly how much they lose annually, where they sit in terms of outstanding money owed through at least 2 lines of credit & so on but its just got to be approaching the point of no return, closing in on a half a billion dollars. So as @MNNumbers postulates, the NHL isnt in a position to offer any discounts, Gary Bettman for one thing having promised the Board of Governors that the fight over the right to determine location themselves wouldnt cost them a dime... for another, to be selling the Coyotes at a discount from the $500M threshold, that paid by Las Vegas, and bump that up to $650M with Bruckheimer & Co apparently amenable to dropping that fee no problem... to then give a discount to Tilman Fertitta, Paul Allen or Pierre Karl Peladeau.... just not going to happen. They are not going to eat losses be it a local sale or a sale for Relo. To do so would be for Gary Bettman to break his promise, it would devalue franchise values while making a mockery of their Expansion processes & fee's.

Imagine your Bill Foley, who was indeed interested in the Coyotes provided he could move them to Vegas, told "no, that teams on the road to recovery, not going anywhere, only way in is by way of Expansion, $500M". He agree's to go along with that, the NHL then contemporaneously announces Expansion, receives only 2 applicants, then about a month later the City of Glendale voids the Lease & Management Contract with IceArizona, all Hell breaking loose, but they cant go back to Foley, are unwilling to sell the team or even award an Expansion Franchise to Quebec as the Expansion Train's already left the Station. Foley's dropped $500M. Why should Tilman Fertitta & Houston get in for anything less? But it doesnt stop @500M, tack on another $150M as thats now the price-point for a team....

I just dont see it happening, Fertitta is absolutely correct to be concerned, numbers just dont make any sense for him, his situation. Common sense should have prevailed, Foley receiving the Coyotes but it was too late. Its not too late to substitute the Coyotes for a blank slate Expansion Team in Seattle. As of right now that group the only ones were aware of willing to drop that kind of money. While its unfortunate that the other 31 teams will see their free~money Expansion Fee proceeds evaporate as those funds go to clear off the debts incurred by the NHL & Barroway since 08/09 BUT... for how long can they keep digging in running up debt in Glendale? Look, the Cavalry's not on the way down there. No one in their right mind takes on that suicide mission. Something has to be done here, the NHL running out of options & time.

They are absolutely in the drivers seat, able to demand $650M from the likes of a Tilman Fertitta as theyve got prcedent, a bird in hand with Seattle, with Vegas @$500M, can point to the Knights amazing success in year one alone, turnaround in Nashville & so on... so so much for your comments about the Mason~Dixon & this is the price period end of story. Maybe Andrew Barroway "comes with" the franchise. Tilman being asked to drop $300M or $350M. Minority or Majority ownership.... Maybe he doesnt like that, doesnt operate that way & actually figures $300M or $350M is really all an NHL franchise is worth lock, stock & barrel for full Majority Ownership & if thats what he's determined, I for one would be in full agreement, and who needs Andrew Barroway as a partner anyway? Guy's not even in the same league financially, bunch of other levels not even close. What does that guy even bring to the party? So ya, problem. Houston like Portland OR, QC & Southern Ontario market's they should be in & Houston at or near the top of that list.

They can do it in installments. Have Barroway "move" to houston, like you say, and then pay it over time. Like the NFL is doing with the Rams and Chargers.

 

[gstommylee]

It is too high, and the it's unexplainable on the NHL's part, given that this situation with Phoenix has been going on for 10 years.



Houston and Dallas can be top 10. We forget Dallas grabbing tons of FAs every season like other big markets is why we had the 2004 lockout. He'll own the team, so revenues are not the problem. It's how long will it take to make the money back on the purchase price. And yes he overpaid for the rockets.
They can do it in installments. Have Barroway "move" to huston, like you say, and then pay it over time. Like the NFL is doing with the Rams and Chargers.

The thing is with the NBA though, its easier to break even in on a higher cost due to the national TV deal with espn/tnt. A NBA franchise is worth way more than a NHL team. NHL is a gate driven league NBA isn't hence the higher cost difference.

 

[powerstuck]

One issue. NHL has zero leverage increasing the sales price for a current team in fact. That should be up between the buyer and the seller to come to an agreement over price not the league to preset a price for franchise. Of course the debt should be included in sale or Buyer assumes all debt to the franchise taking the league out of it.

imo Fertitta has all the leverage here. He can wait it out while the league and Barroway can't. I don't see another group coming up with a 650m check to buy the team and keep it there or move it to a different western market.

The league has one big leverage that controls the prices. Barroway could sell Coyotes for $1 (yes one buck) to Fertitta and the league would say there is 649 999 999 in relocation fees.

 

[Killion]

They can do it in installments. Have Barroway "move" to huston, like you say, and then pay it over time. Like the NFL is doing with the Rams and Chargers.

Oh ya, for sure there are creative ways to finance these transactions. That deal in Dallas with the Stars quite the piece of work. Tampa as well. However Arizona so far off the charts.... and based on what we know its saddled with a very very heavy debt to equity load as it is so it starts getting complicated, expensive whereby a sizeable amount of cash would be required to retire the debts, outstanding lines of credit, one of which is riding at a rather high level of interest.

But sure MM, could be done but why do it if the numbers dont add up in making the service payments on that new debt youd incur in financing the purchase, the franchise valuation over-inflated so youd still have to come up with cash & lots of it.... Last time I looked Fertitta had a net worth of somewhere around $2.5B (which is mind boggling for what is essentially a restaurateur though he has expanded into resort/hotel ownership & so on, quite the amazing story) and he's already "in" Big Time with the NBA & Toyota Ctr.

 

[MNNumbers]

......

He'll own the team, so revenues are not the problem. It's how long will it take to make the money back on the purchase price. And yes he overpaid for the rockets.

...

I'm going to try to explain my logic from a different direction, Melrose.....

Let's say you and I bought the team with no debt, and wanted to play at Toyota Center. And, let's say that Fertitta was nice enough to not charge us rent. "Nope use it 43 nights a year, more if there are playoffs. No problem." And, all we have to pay is our own staffing for game nights. And, in turn, we get the following:
Whatever %age the Rockets get of concession profits, we get for game nights.
We get all ticket revenue.
We get our own local TV income
We get our own local sponsorship money.

What we don't get is 'Naming Rights" income. Or, arena sponsorships in general. Or, anything whatsoever associated with running the arena. Nothing. We just get our own stuff from game nights - Aeros (???) income only.

Now, could we make it like that? I'm not sure. I know we couldn't in Minneapolis at Target Center, and that's why there is a team in Arizona. I know we couldn't in Arizona. I know we couldn't in KC. So, I don't know if we could in Houston.

And, our situation there is EXACTLY what Fertitta would have if he purchased the Yotes, or an NHL team. The presence of the NHL team doesn't increase his arena sponsorships much, nor Naming Rights. None of that. There is a slight discount he would have in labor costs in staffing the arena, if the Rockets fill more nights than they scare away. And, perhaps a slight overlap in sales staff. But, mostly, owning both teams is a matter of treating the 2nd one as if they were simply playing with free rent.

I don't blame Fertitta for being careful with that.

 

[gstommylee]

I'm going to try to explain my logic from a different direction, Melrose.....

Let's say you and I bought the team with no debt, and wanted to play at Toyota Center. And, let's say that Fertitta was nice enough to not charge us rent. "Nope use it 43 nights a year, more if there are playoffs. No problem." And, all we have to pay is our own staffing for game nights. And, in turn, we get the following:
Whatever %age the Rockets get of concession profits, we get for game nights.
We get all ticket revenue.
We get our own local TV income
We get our own local sponsorship money.

What we don't get is 'Naming Rights" income. Or, arena sponsorships in general. Or, anything whatsoever associated with running the arena. Nothing. We just get our own stuff from game nights - Aeros (???) income only.

Now, could we make it like that? I'm not sure. I know we couldn't in Minneapolis at Target Center, and that's why there is a team in Arizona. I know we couldn't in Arizona. I know we couldn't in KC. So, I don't know if we could in Houston.

And, our situation there is EXACTLY what Fertitta would have if he purchased the Yotes, or an NHL team. The presence of the NHL team doesn't increase his arena sponsorships much, nor Naming Rights. None of that. There is a slight discount he would have in labor costs in staffing the arena, if the Rockets fill more nights than they scare away. And, perhaps a slight overlap in sales staff. But, mostly, owning both teams is a matter of treating the 2nd one as if they were simply playing with free rent.

I don't blame Fertitta for being careful with that.

The increase of sponsorship $$$ will probably happen in the long term as old contracts expire and new ones come up.

 

[CHRDANHUTCH]

I'm going to try to explain my logic from a different direction, Melrose.....

Let's say you and I bought the team with no debt, and wanted to play at Toyota Center. And, let's say that Fertitta was nice enough to not charge us rent. "Nope use it 43 nights a year, more if there are playoffs. No problem." And, all we have to pay is our own staffing for game nights. And, in turn, we get the following:
Whatever %age the Rockets get of concession profits, we get for game nights.
We get all ticket revenue.
We get our own local TV income
We get our own local sponsorship money.

What we don't get is 'Naming Rights" income. Or, arena sponsorships in general. Or, anything whatsoever associated with running the arena. Nothing. We just get our own stuff from game nights - Aeros (???) income only.

Now, could we make it like that? I'm not sure. I know we couldn't in Minneapolis at Target Center, and that's why there is a team in Arizona. I know we couldn't in Arizona. I know we couldn't in KC. So, I don't know if we could in Houston.

And, our situation there is EXACTLY what Fertitta would have if he purchased the Yotes, or an NHL team. The presence of the NHL team doesn't increase his arena sponsorships much, nor Naming Rights. None of that. There is a slight discount he would have in labor costs in staffing the arena, if the Rockets fill more nights than they scare away. And, perhaps a slight overlap in sales staff. But, mostly, owning both teams is a matter of treating the 2nd one as if they were simply playing with free rent.

I don't blame Fertitta for being careful with that.

the above scenario is what the Wild or their corporate parent entity (MSE) and to a lesser extent Chuck Watson accomplished in Houston, MNN, tbth, and that was the exact same premise the Aeros had with Alexander until he, as is his right to do so, upped the price when the lease was due, HENCE the flip to Iowa, something the Wolves did when they bought the existing tenant @ the Wells Fargo Center in Des Moines.....

 

[Melrose Munch]

The thing is with the NBA though, its easier to break even in on a higher cost due to the national TV deal with espn/tnt. A NBA franchise is worth way more than a NHL team. NHL is a gate driven league NBA isn't hence the higher cost difference.

Agreed.

Oh ya, for sure there are creative ways to finance these transactions. That deal in Dallas with the Stars quite the piece of work. Tampa as well. However Arizona so far off the charts.... and based on what we know its saddled with a very very heavy debt to equity load as it is so it starts getting complicated, expensive whereby a sizeable amount of cash would be required to retire the debts, outstanding lines of credit, one of which is riding at a rather high level of interest.

But sure MM, could be done but why do it if the numbers dont add up in making the service payments on that new debt youd incur in financing the purchase, the franchise valuation over-inflated so youd still have to come up with cash & lots of it.... Last time I looked Fertitta had a net worth of somewhere around $2.5B (which is mind boggling for what is essentially a restaurateur though he has expanded into resort/hotel ownership & so on, quite the amazing story) and he's already "in" Big Time with the NBA & Toyota Ctr.

That's why I think he should have waited for the rockets price to drop as well. But I agree. I think he wants in, but not to lose money for 10 years.

I'm going to try to explain my logic from a different direction, Melrose.....

Let's say you and I bought the team with no debt, and wanted to play at Toyota Center. And, let's say that Fertitta was nice enough to not charge us rent. "Nope use it 43 nights a year, more if there are playoffs. No problem." And, all we have to pay is our own staffing for game nights. And, in turn, we get the following:
Whatever %age the Rockets get of concession profits, we get for game nights.
We get all ticket revenue.
We get our own local TV income
We get our own local sponsorship money.

What we don't get is 'Naming Rights" income. Or, arena sponsorships in general. Or, anything whatsoever associated with running the arena. Nothing. We just get our own stuff from game nights - Aeros (???) income only.

Now, could we make it like that? I'm not sure. I know we couldn't in Minneapolis at Target Center, and that's why there is a team in Arizona. I know we couldn't in Arizona. I know we couldn't in KC. So, I don't know if we could in Houston.

And, our situation there is EXACTLY what Fertitta would have if he purchased the Yotes, or an NHL team. The presence of the NHL team doesn't increase his arena sponsorships much, nor Naming Rights. None of that. There is a slight discount he would have in labor costs in staffing the arena, if the Rockets fill more nights than they scare away. And, perhaps a slight overlap in sales staff. But, mostly, owning both teams is a matter of treating the 2nd one as if they were simply playing with free rent.

I don't blame Fertitta for being careful with that.

Agreed.

 

[powerstuck]

The increase of sponsorship $$$ will probably happen in the long term as old contracts expire and new ones come up.

Lets see by how much the US TV deal goes up before we base our finances on it shall we ? Yes, sponsorship $ rises but so do the costs of everything else.

 

[KevFu]

^^^^^^^
Kev,
I think you have exactly the right approach here. If Fertitta is actually running any numbers, his equation goes like this:
Hmmm 650M to get in. Let's say I own them for 10 years. I might lose 10M/yr max in those years. That's 100M down in losses. When I go to sell, will someone else pay me 750M or more? That's the thinking...... And, apparently, he is not satisfied with the answer.

Well, we just agreed that “year to year profit” isn’t really important because the value of owning the franchise is: Operating it at a slight loss for tax breaks, while showing the potential to “make money” and then sell the team later, since franchise values always goes up.


I’d wager Frettita’s ultimate goal with saying this is a “hockey struggles in the South, so I’m not buying into the NHL.” So the Houston fans hold rallies and show how much they want a team.

THEN he says “Well, it looks like there’s some interest here… but I’m not sure I could make money on hockey in a 20-year old arena… maybe if I had a new arena for the Rockets & NHL team.”

 

[gstommylee]

Well, we just agreed that “year to year profit” isn’t really important because the value of owning the franchise is: Operating it at a slight loss for tax breaks, while showing the potential to “make money” and then sell the team later, since franchise values always goes up.


I’d wager Frettita’s ultimate goal with saying this is a “hockey struggles in the South, so I’m not buying into the NHL.” So the Houston fans hold rallies and show how much they want a team.

THEN he says “Well, it looks like there’s some interest here… but I’m not sure I could make money on hockey in a 20-year old arena… maybe if I had a new arena for the Rockets & NHL team.”

The houston issue is no longer about the arena. Its about the cost of the NHL franchise.

 

[KevFu]

The houston issue is no longer about the arena. Its about the cost of the NHL franchise.

To an owner, it's always about the arena.

When the NHL was looking at expanding to 30 teams, they had three bids from Houston, but none had arena deals in place with a new, modern venue. Applications were submitted in 1996. The Summit was 21 years old. It took five more years for Houston to get a deal worked out, and seven until the opening of the Toyota Center.

The shelf life of arenas is getting shorter. And the stadiums that are making people say “Already? Your stadium isn’t THAT OLD” are the ones built before the internet & WiFi revolution: The Atlanta Braves and Texas Rangers made headlines for starting on new stadiums to replace ones built in the 1990s.


I don’t doubt that Feritta has reservations about a $650 million NHL expansion fee and wishes it was lower.

But he definitely isn’t paying that fee to host two teams in an old building.

Either he doesn’t want hockey but will use the NHL for arena leverage like Alexander before him.
Or he doesn’t want hockey period.

Because we all know how the NHL views public discussions of internal expansion business.

 

[gstommylee]

To an owner, it's always about the arena.

When the NHL was looking at expanding to 30 teams, they had three bids from Houston, but none had arena deals in place with a new, modern venue. Applications were submitted in 1996. The Summit was 21 years old. It took five more years for Houston to get a deal worked out, and seven until the opening of the Toyota Center.

Houston does not have an arena problem stop creating an issue that does not exist. They do not need a new arena. Its just that the cost of a franchise is way way to much than Frettita wants to pay.

 

[TheLegend]

Houston does not have an arena problem stop creating an issue that does not exist. They do not need a new arena. Its just that the cost of a franchise is way way to much than Frettita wants to pay.

It’s not a matter that you or anyone else thinks Houston doesn’t have an arena problem. It’s what Fertitta thinks.

Most everyone thought Key Arena was no good for hockey until OVG stepped in with $900M for renovations. I recall the mantra in Seattle used to be “Nobody will spend over a billion dollars for both building an arena and an expansion team.” Yet here we are with OVG and Seattle now running ticket drives and figuring out a team name and colors.

This is a high stakes poker game being played here and we’re just a bunch of railbirds who only can see the flop and not the hole cards.

 

[gstommylee]

It’s not a matter that you or anyone else thinks Houston doesn’t have an arena problem. It’s what Fertitta thinks.

Most everyone thought Key Arena was no good for hockey until OVG stepped in with $900M for renovations. I recall the mantra in Seattle used to be “Nobody will spend over a billion dollars for both building an arena and an expansion team.” Yet here we are with OVG and Seattle now running ticket drives and figuring out a team name and colors.

This is a high stakes poker game being played here and we’re just a bunch of railbirds who only can see the flop and not the hole cards.

Its not 900m for Key arena. its a total investment cost of 660m 600 for arena + 40m for transportation +20m for community.

it helps to have someone with the $$$ that can make it work. We never had that kind of person until OVG showed up + Bonderman showed up for the $$$ to buy the 650m expansion team.

I still think 650m is way too high for expansion but if Bonderman wants to write that check then he can go ahead. But i don't think the league will be getting that kind of price for relocation or for future expansion.

 

[MNNumbers]

Its not 900m for Key arena. its a total investment cost of 660m 600 for arena + 40m for transportation +20m for community.

it helps to have someone with the $$$ that can make it work. We never had that kind of person until OVG showed up + Bonderman showed up for the $$$ to buy the 650m expansion team.

I still think 650m is way too high for expansion but if Bonderman wants to write that check then he can go ahead. But i don't think the league will be getting that kind of price for relocation or for future expansion.

You miss his point, tommy. And, the point of the other posters.

I'll keep this to Houston and leave Seattle out of it.

Houston: Current situation.....Fertitta owns Rockets and management rights to Toyota Center. His comments suggest that he would like and NHL team as well, but not at current prices. Thus, this conclusion: The problem is how much Fertitta is willing to pay. (Alternatively, we could say the problem how much the team is worth, or how much $$ it generates, but it amounts to the same thing.)

Houston's arena is 20 years old, nearly. I don't know for sure, but I assume it isn't wi-fi ready, nor does it have the same money-making capacity that the new Seattle Arena will have (or the new Edmonton arena - whichever you choose.) Now, since Fertitta is in business to make money, he may well be thinking....."This place works ok for now, but it's going to need upgrades. If I had wi-fi, and more club seating, etc, I could make more money yet." And, now, you will say "It IS an arena problem." And, you would say that because, if he had a new arena to manage, with lots more money making capacity, he might be more interested in an NHL team.

Also, if he thinks TC will need to be replaced soon, then he might assume that some of that cash has to come from himself. Since he doesn't have an endless supply, he maybe isn't in the position to purchase and NHL team right now. Again, the problem is now an Arena problem. Namely, he needs to save money for a new one.

Pertaining to prices for franchises. I think the reality is that Carolina just sold for about 500M, staying in its market. Given that Carolina has one of the 5 worst $$ situation in the league, it makes no sense for anyone to think that they are going to purchase a team for a new market for less than that. Since Seattle is paying 650M, I think that's the new benchmark, with one caveat, and that is that I still have a soft spot for QC, who might get in at 500M USD.

 

[Mightygoose]

In light of Jacob's comments posted today, I'll post my Houston related thoughts here.



I still see this as a negotiation of an existing franchise. Can't see the league expanding to 33 this quickly, if he's saying Quebec is challenged then there's no expansion partner right now. Plus with 2 teams in the west with arena issues (and one of them is ownership related), I can see them holding the line at 32 for the time being.

I think the league OK with Fertitta's view of hockey struggling south of the Mason-Dixon line comment. He likely mentioned it during their meeting(s).

if it's the Coyotes in play and no solution on the arena and ownership front, Jacobs is vocal about the market enough and they'll find a way to make a deal work and present the number they want to present. It's on the back burner now and I think will move front once Seattle is given the official green light.