IceArizona - Year One: Performance Evaluation

[Llama19]

The first year under the IceArizona ownership group is now complete.

There is just a few clean-up revenue items left to report which are the last four (April) game's parking revenue and the supplemental ticket surcharges which have not been calculated and will barely bump up the current totals.

Overall, the City of Glendale has spent $14,002,055 and
received, in revenue*, from IceArizona $5,580,073, (i)
bringing Glendale's deficit to $8,421,982.

(i)
As of May 15, an additional $95,126 was posted to Sales Tax Collections
As of May 24, Quarterly Management Fee corrected (prorated), April Monthly Arena Report released (all 43 games), Security Costs-Fire changed
As of June 18, Security Costs for Police and Fire and Sales Tax Collections changed
As of July 17, Supplemental Surcharge, parking revenue changed
As of July 29, Supplemental Surcharge, parking revenue, sales tax changed

Next season, will be the official 'rebirth' of the Phoenix Coyotes,
per the arena management agreement, to become the Arizona Coyotes.

Figures and areas of discussion are:

Attendance and Ticket Sales:
Total Attendance: 564,798 (578,825 includes pre-season)
Average Attendance: 13,775 (excludes pre-season)
Average capacity: 80.4% (excludes pre-season)
Sellouts: 7 of 43 games (includes pre-season)
Game Promotions: 38 out of 43 games (includes pre-season)
NHL ranking: 30 of 30 (excludes pre-season)

Concerts & Other Eventshttp://www.jobingarena.com/events.aspx:

Number of Events (this budget year): 8 (a)
11/10/13 - Winter Jam 2013 Tour
11/19 - Pearl Jam
12/01 - Trans-Siberian Orchestra (two shows)
01/03/14 - Joel Osteen
01/24 - Nitro Circus Live!
02/08 - Harlem Globetrotters (two shows)
02/15 - Demi Lovato
03/08 - CanadaFest (charity event)

Number of future events (next budget year): 5
08/09 - Justin Timberlake
08/30 - Marc Anthony
08/31 - Ed Sheeran
09/25 - Katie Perry
10/01 - Eagles

(a) Revenue reported, total non-hockey parking ($183,479) and ticket surcharges ($308,254)

Parking Revenue:
Initial estimate (5,500 controlled parking spaces): $2.5 million
Reported* parking revenue: $669,192 (b)
Phoenix Coyotes unveil parking charges to boost revenue

(b) Possibly due to lack of attendance, parking enforcement ahead of game times, free parking at other areas of Westgate/Tanger Outlet Mall, undercutting pricing by UoP Stadium authority, [insert your excuse here]

Advertising:
Coyotes partner with Fanatics Retail Group to run team store at Jobing.com Arena (coming next year)
Phoenix Coyotes shop naming rights deal; ink 12-year TV contract with FSAZ

Promotions:
Phoenix Coyotes to offer Tim Horton's coffee at games
Phoenix Coyotes pick Levy Restaurants for arena concessions, replacing Aramark
Phoenix Coyotes lay out tailgating plans for fans
Q&A with Coyotes co-owners George Gosbee and Anthony LeBlanc
Phoenix Coyotes CEO Anthony LeBlanc eyes better attendance, community involvement
Town Hall Meeting: Key Quotes

Marketing:
Glendale, GPEC hope Coyotes can lure more Canadian tourists, businesses
Glendale, GPEC using hockey as economic development tool in Canada trip
Phoenix Coyotes tickets cheapest in the NHL on secondary market
New ads for Phoenix Coyotes (Hungrier than Ever campaign, next year's is Together, We're Full Strength)
Phoenix Coyotes pick Cramer-Krasselt as new ad agency
New Phoenix Coyotes owners stress belief that hockey can work as a business in Glendale
Big issue for Phoenix Coyotes post-sale to IceArizona will be boosting fan base
Global Spectrum partners with Renaissance to try and close Coyotes deal
Broke overall regular season ticket revenue record, which has stood since 1997

Team Performance (see Coyotes thread):
Too many offsetting streaks (wins vs losses)
Didn't 'pull the trigger' to spend enough to make the playoffs
Other player(s) causing locker room/on ice issues
Aging team
No signings of other RFAs and UFAs
CAP space spending - http://capgeek.com/coyotes

Looking Ahead:
Winter Classic game unlikely
Revenue projections for next year
New advertising, suite leases
Tickets - Concert/Hockey bundling, pricing packages, other freebie's

The Financial State of Glendale (grim) and all things related:
Glendale fiscal forecast grim
Jobing.com Arena’s promise unrealized in Glendale
Standard & Poor’s dings Glendale’s bond rating
Glendale and Goodyear pay spring-training ballpark debt (Quoted in article, could be first city in Arizona to file for bankruptcy due to sports-related bond debt)
Glendale's lax contract oversight lets millions slip past council
Our View: City tossed money around like Mardi Gras baubles
Ex-Glendale city attorney Tindall disputes ethics complaint
Tindall sought $1 million escrow release (to Coyotes) in September
Attorney General probe of Glendale deals begins in earnest
Joyce Clark's Blog (related Coyote/Glendale spending topics)

* Revenue and other sources:

Follow Your MONEY - http://www.glendaleaz.com/FollowYourMoney/index.cfm
Monthly Arena Reports - http://www.glendaleaz.com/finance/
Coyotes Related Information - http://www.glendaleaz.com/CoyoteArchive/index.cfm

Click to read more...

 

[Fugu]

The first year under the IceArizona ownership group is now complete.

There is just a few clean-up revenue items left to report which are the last four (April) game's parking revenue and the supplemental ticket surcharges which have not been calculated and will barely bump up the current totals.

Overall, the City of Glendale has spent $13,182,215 and
received, in revenue*, from IceArizona $4,386,553,
bringing Glendale's deficit to $8,795,662.

Next season, will be the official 'rebirth' of the Phoenix Coyotes,
per the arena management agreement, to become the Arizona Coyotes.

Just to get everyone up to speed, what was the projected amount? The deficit shown is what was spent, but curious as to the projection to sell COG on the deal.

Figures and areas of discussion are:

Attendance and Ticket Sales:
Total Attendance: 564,798 (578,825 includes pre-season)
Average Attendance: 13,775 (excludes pre-season)
Average capacity: 80.4% (excludes pre-season)
Sellouts: 7 of 43 games (includes pre-season)
Game Promotions: 38 out of 43 games (includes pre-season)
NHL ranking: 30 of 30 (excludes pre-season)

How do these compare to the prior 1-2 seasons? If anyone is bored, to the Moyes/Elman peak years and last 2 seasons?

 

[MaskedSonja]

To quote the late Jackie Gleason: "and awwwayyy we go...."

My First reaction to the numbers-ouch. Not necessarily surprising but "ouch" nonetheless.

Now is that number in read (8 mil loss) the number to watch in regards to the "50 million in losses" opt out number?

I will say I'm a little surprised the over year attendance wasn't a higher (for whatever reason, I was thinking it would have been somewhere over 14)

Only 7 sellouts? Again I was expecting a little more than that, at least in double digits.

On the arena shows front, that's probably the positive to be taken out of this, the number of acts is up (mind you under NHL it was almost non-existent, so anything is a plus here)


And parking (we talkin about parking?)-out of 2.5 million possible only 600 and change-was I wrong to think we should have seen at least a million here?


Overall, yes grim. Now, however, is where things really begin. We will need to see where we are standing at this time next year with all these numbers as a comparison. No question IA has A LOT of work ahead of them, and will need to make the most out of this offseason when it comes to season ticket sales (speaking of which, no season ticket number for this past season?)

BTW sorry, Llama, you're treading on kdb's link territory, better watch yourself Seriously, good job on that! (we're missing some sort appropriate song verse though)

 

[Llama19]

Just to get everyone up to speed, what was the projected amount? The deficit shown is what was spent, but curious as to the projection to sell COG on the deal.

The thought was $9 million on top of the $6 million 'arena management' base fee, so essentially a wash.

It still would not cover the $9 million a year Jobing.com construction debt (see article Jobing.com Arena’s promise unrealized in Glendale).

How do these compare to the prior 1-2 seasons? If anyone is bored, to the Moyes/Elman peak years and last 2 seasons?

NHL Ownership (strike shorten 2013 season)
Average Attendance – 13,924
Average percentage capacity – 81.3
Sellouts: 4 out of 24 games
NHL Ranking: 29 of 30

NHL Ownership (2012 season)
Average Attendance – 12,421
Average percentage capacity – 72.5
Sellouts: 3 out of 43 games
NHL Ranking: 30 of 30

Other years:
2010-11 = 12,188, 71.2%, 29 of 30
2009-10 = 11,989, 70.0%, 30 of 30
2008-09 = 14,875, 86.9%, 28 of 30
2007-08 = 14,820, 86.5%, 29 of 30

 

[GuelphStormer]

is there a breakdown on the $13,182,215 spent by Glendale?

isnt the AMF itself $15,000,000?

 

[Llama19]

is there a breakdown on the $13,182,215 spent by Glendale?

isnt the AMF itself $15,000,000?

Yes, a full year would be $15 million.

However, the current year amounts are prorated based on an August 5, 2013 effective date of IceArizona taking over ownership.

It's all in the various source reports.

 

[MaskedSonja]

The thought was $9 million on top of the $6 million 'arena management' base fee, so essentially a wash.

It still would not cover the $9 million a year Jobing.com construction debt (see article Jobing.com Arena’s promise unrealized in Glendale).



NHL Ownership (strike shorten 2013 season)
Average Attendance – 13,924
Average percentage capacity – 81.3
Sellouts: 4 out of 24 games
NHL Ranking: 29 of 30

NHL Ownership (2012 season)
Average Attendance – 12,421
Average percentage capacity – 72.5
Sellouts: 3 out of 43 games
NHL Ranking: 30 of 30

Other years:
2010-11 = 12,188, 71.2%, 29 of 30
2009-10 = 11,989, 70.0%, 30 of 30
2008-09 = 14,875, 86.9%, 28 of 30
2007-08 = 14,820, 86.5%, 29 of 30

Am I reading this comparison right? They actually had more average attendance in strike shortened season than they did this year? They actually go worse-am I reading that right?

 

[Killion]

Wow! Monumental task & well done Llama. Tonnes of inf there and lots of it new, much to digest before even commenting.

 

[cheswick]

Am I reading this comparison right? They actually had more average attendance in strike shortened season than they did this year? They actually go worse-am I reading that right?

Not unexpected. Phoenix traditionally draws better in the latter half of the season as more snow birds migrate in the Jan to feb time frame. Since the lockout shortened season eliminated the lower drawing months, its not terribly surprising that the attendance was down on average.

 

[mouser]

Not unexpected. Phoenix traditionally draws better in the latter half of the season as more snow birds migrate in the Jan to feb time frame. Since the lockout shortened season eliminated the lower drawing months, its not terribly surprising that the attendance was down on average.

I think that's generally true for all the teams that don't consistently sell out. Attendance moves up in the spring after pro and college football seasons are done.

 

[GuelphStormer]

Wow! Monumental task & well done Llama. Tonnes of inf there and lots of it new, much to digest before even commenting.

yes, sorry i dug right in without even thanking Llama for preparing and serving it all up fur us. thanks Llama. those of us starving for this stuff will surely feast on it for a while. would be most interesting to ask councillors to comment on such a summary.

do we have any sense as to how many non-hockey events were held out as a last minute carrot for the vote last year?

 

[Acesolid]

Ouch, I dont think Glendale can go on forever with deficits like this.

 

[Mightygoose]

Well done Llama indeed! Yes, it doesn't look like it's off to a good start for Glendale.

My question on Year One is how far along IceAz is to the 50 mil in the red. Guess we'll find out in 4 years or 104 fortnights.

 

[MNNumbers]

Just a few comments. There will be about $1M more to the city yet. That is because the supplemental surcharge is not yet included, and also because the lease only allows IceArizona an average of 1000 non qualifying tickets per game. That decreases the deficit to about 7.7M. There is, however, a little more AMF that is not accounted for yet, so that will increase to about 8.1M. The city had budgeted for 6M.

Next year the AMF will go to the full 15M, for the same work, because there is nothing booked in the arena in July. So, assuming the same results, that 2.1M shortfall will become 3.6M.

For those who love the team, I would like to comment that there are 2 parts to theM staying in Arizona.
1....Whether the team makes money. We don't know about that, but the lease requires a report to Glendale sometime soon.
2...Whether the city stays out of bankruptcy.

And, llama, I am actually disappointed. We have PM about this. I think this thread could have waited for the supplemental surcharges and thee last little information about tickets. All of this information is available on IceArizona.org

 

[Killion]

And, llama, I am actually disappointed. We have PM about this. I think this thread could have waited for the supplemental surcharges and thee last little information about tickets. All of this information is available on IceArizona.org

The supplemental surcharge receipts etc not amounting to enough to substantially change or alter the picture, summer breaks close at hand, why wait?

 

[MNNumbers]

The supplemental surcharge receipts etc not amounting to enough to substantially change or alter the picture, summer breaks close at hand, why wait?

My own opinion. For the sake of proper detail. If one is going to post all those links and all that detail, it seems better to wait and have it all there.
And, some would dispute how much difference that 0.5M on the bottom line makes.

That said, I appreciate what llama did here. No complaints...

It's good to have it all here where people can look at the numbers themselves.

 

[OthmarAmmann]

Just to get everyone up to speed, what was the projected amount? The deficit shown is what was spent, but curious as to the projection to sell COG on the deal.

https://www.glendaleaz.com/documents/MemorandumtoDickBowers.pdf

They hit projection on hockey ticket surcharges (even though that projection assumed 12,600 attendance.... hmm), missed by 20% on hockey parking, and missed by like 80% on non-hockey ticket surcharges and parking. The city was supposed to make most of their $ off non-hockey.

Oh well. The poop probably won't really hit the fan for the COG for a few more years. March and April 2017 will be interesting.

 

[CHRDANHUTCH]

nice overview of year 1, considering IA was approved in mid-October...

question though is it guaranteed that the name change as Leblanc/Gosbee suggested will happen on July 1?

 

[Llama19]

question though is it guaranteed that the name change as Leblanc/Gosbee suggested will happen on July 1?

Per the arena agreement (Section 8.6.5(ii)), the name change would be as soon as possible under applicable NHL rules. Mr. LeBlanc announced that the team would officially change its name to Arizona Coyotes during The NHL Draft Weekend (June 27–28).

Source: http://coyotes.nhl.com/club/news.htm?id=714769#&navid=PHX-search

 

[rt]

I wonder how the actual numbers line up with projections.

 

[Llama19]

For those who love the team, I would like to comment that there are 2 parts to theM staying in Arizona.
1....Whether the team makes money. We don't know about that, but the lease requires a report to Glendale sometime soon.
2...Whether the city stays out of bankruptcy.

1...Per section 8.14.1 Requirement – The Arena Manager shall, not later than May 31 of each year, prepare and submit to the City and the Team Owner, for their respective review and approval, a proposed Annual Budget (including expense and revenue projections)...

Will the taxpayers of Glendale see that report?

I certainly hope so because it may give us a better insight on IceArizona's business plan.

2...Based on the various articles, the city has been 'skating' on the thin ice of bankruptcy for several years and is about to fall in (sorry, couldn't resist the analogy).

 

[Llama19]

https://www.glendaleaz.com/documents/MemorandumtoDickBowers.pdf

They hit projection on hockey ticket surcharges (even though that projection assumed 12,600 attendance.... hmm), missed by 20% on hockey parking, and missed by like 80% on non-hockey ticket surcharges and parking. The city was supposed to make most of their $ off non-hockey.

Oh well. The poop probably won't really hit the fan for the COG for a few more years. March and April 2017 will be interesting.

Forgot to link to that resource, OthmarAmmann, thanks!

However, the council didn't approve just the original budgeted 'arena management' fee of $6.5 million, the council upped the ante and 'gave' IceArizona (or should we be saying, gave Fortress) the $15 million yearly fee.

Any shortfall in revenue, Glendale has to pay out of its contingency fund in order to 'balance' their budget.

 

[GuelphStormer]

Glendale still has to pay the mortgage on the shed too, dont they?

 

[Llama19]

Glendale still has to pay the mortgage on the shed too, dont they?

Correct, see original thread links on Jobing.com or my post #4 response.

 

[GuelphStormer]

Correct, see original thread links on Jobing.com or my post #4 response.

Thanks. I just wanted to clarify that Glendale is actually spending $24M a year ($15M AMF + $9M arena debt) and only receiving less than $5M in revenues.