IceArizona - Year One: Performance Evaluation

[TheLegend]

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?

Which means IA hasn't had a full year to work with., so attempting to compare their "Year One" performance against full-year numbers is misleading.

IIRC.... the $15M management fee was to be pro-rated for this fiscal year. Might be wrong on that though.

Next year will be the true test with a full 12 months under their watch.

Team name change will take effect at the 2014 entry draft.

 

[Killion]

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.

Ya. Easy to forget, over~look that fact. Some seriously daunting numbers, amounts of money involved. Unfortunately its not just the arena & the management fee's their dealing with, Camelback & other sports related debt of some serious magnitude. Frankly Im beyond pessimistic they make it, able to meet their obligations much past 2016 if even that far. Unsustainable. Untenable. Their nowhere near making the kinds of cuts & off-loading of properties via sale/lease~backs required to meet these obligations and even if they did do all of that it likely wouldnt be enough & leave them in an even bigger hole coming out of BK in reorganization.

 

[Killion]

Which means IA hasn't had a full year to work with., so attempting to compare their "Year One" performance against full-year numbers is misleading.

Next year will be the true test with a full 12 months under their watch.

Its close enough TL. Were not Accountants here, Actuaries (though some are professionally). Our calendar year is based on the length of the hockey season so working within that 9 month time~frame perfectly kosher. Were not dealing nor taking these numbers as being absolutely definitive, literal. Close enough is good enough for the purposes of this Board & for this thread. No way were off by by five or ten million or whatever. Close does win you a Cigar.... As for year end roundup number 2, 24 Months Later (wheres Robert Carlyle when you need him?) no, I disagree TL. Thats not going to be enough time to truly gauge IceArizonas' performance. The hockey end of the equation personally, as in my own opinion & I guess others, is that the Coyotes will fair well, ticket sales continuing to increase, more sell~outs in 2014/15 & beyond. NHL hockey can work in Glendale no problem. Absolutely....

No, its everything else thats of grave concern. Even with 41 sell~outs & fully paid parking, Play~Off's, its just not going to be enough to cover the AMF & the debt service fee's on the arena bonds. It takes 12-24-36mnths to build momentum & up-ticks to increase non~hockey bookings, be it Concerts, Consumer & Trade Shows or what have you. Those crops dont come in for 2-3-4yrs. Your always planning, working & selling years in advance. Long sales cycle. Very long. 24mnth Review next year at this time I can guarantee you we'll be looking at the same anemic results in terms of non-hockey revenues going to Glendale. Slight increase sure but not even close to covering their end. Far Side of the World stuff Man. Like were in the 16th Century and its going to take those Galleons 4-8yrs to reach South America & plunder the continent of Incan Gold, then make the return journey home. Whats happened here though is that the cost to sponsor that fleet of Treasure Hunters has guaranteed the Bankruptcy of the Government Sponsors. Glendale isnt 15th Century Spain, IceArizona's certainly not Cortez Cortez but the parallels, that movie, weve all seen it before. Its not hard to see where this is all headed & to ignore it, pretend its not going to happen? Not on my watch Mister....

www.youtube.com/watch?v=m-b76yiqO1E

 

[Howler Scores]

Pretty good numbers for the first year. Was hoping they would come close to their projections. Obviously, the $50 million losses will be hard to hit unless they totally tanked.

 

[OthmarAmmann]

The non-hockey appears to be shaping up a bit


Aug 9: Justin Timberlake
Aug 30: Marc Anthony
Aug 31: Ed Sheeran
Sep 25: Katy Perry
Oct 1: The Eagles


http://www.jobingarena.com/

 

[Killion]

^^^ Ya thats not bad. 3 of those 5 should be total sellouts.

 

[mesamonster]

LLama, incredible compilation of Franchise and local city factoids! These numbers are not materially different than earlier year results in terms of gate receipts and overall team revenues. We were all led to believe that new ownership would spend liberally on marketing, staff, coaches and players all with the intent of generating renewed fan interest and community support. Dare i say, the first year was not a financial success for IA or the COG! The COG will need to find the shortfall monies somewhere in the general budget, at the expense of more city services and the potential for future ratings downgrades below their already precarious level. The city is in trouble, the hockey franchise is tethered to the city, so by default that puts the Coyotes in harms way!

Ice Arizona is another issue, if and when they come clean on their real financial loses for this season we will have a better picture of how bad it really was, my guess is that the loses will be in the $15-25MM range. Looking into next year, the cost of running the franchise will increase by a minimum of $8MM as the team will likely need to spend additional funds on player salaries to remain competitive in the ultra difficult WC! Perhaps non-hockey revenue will tick up modestly in year 2, but it is doubtful that seat revenue will increase enough to offset higher operating expense levels. The on-ice product needs an overhaul after missing the PO`s two years in a row, a rebuilding year and potential third year of no postseason play does not augur well for the rookie owners. Gosbee/Leblanc did little in year one to inspire confidence in their ability to revitalize this moribund franchise, if year 2 is similar the final three years will be lame duck!

 

[Killion]

... if year 2 is similar the final three years will be lame duck!

I'd actually cut them a little more slack than that mesa but its your prerogative, a matter of opinion really in how much latitude one does assign the organization; be it 24 months make or break as youve determined or 36 as I favor. The question however may be moot for as youve correctly pointed out the City of Glendales fortunes are inextricably tethered to those of IceArizonas', and Im not confident at all that they can hang on that long, actually find the money to cover their obligations in paying the AMF along with everything else. Provided that $15M keeps rolling in IceAz can effectively coast, and no problem showing losses well in excess of $50M by year 5 if Glendale as we know it even lasts that long. Cold comfort that should the team move the City gets re~imbursed when in all likelihood they dont make it, dont live to 2017/18, ship sunk rendering the Contract null & void I would assume so what does it even matter? But if somehow they do manage to crawl out of the ditch theyve put themselves into by year 3's conclusion (and I mean the 15/16 hockey season) & the buildings non-hockey revenues are up substantially, and I do mean substantially, then there is some hope. Thin, as wildly optimistic as it might be. That being said, Im sorry, I just dont see the COG surviving that long. Very serious, condition critical. I suppose many believing already were watching the Walking Dead. And I say that without humor. This whole situation really isnt very funny at all.

 

[Llama19]

Regarding the sub-topic, Team Performance, here are the 'Coyotes Top 10 lows of 2013-14 season' (read article source for details on each ranked reason listed)

10. Klesla's fall from grace
9. Penalty kill woes
8. No streaking allowed
7. More goals needed
6. The "butt goal"
5. Tough transition
4. Doan and out
3. Blown away
2. Unlucky No.7
1. Sore spot

Source: http://www.azcentral.com/story/spor...oyotes-top-10-lows-of-2013-14-season/9130307/

 

[Llama19]

So, is Glendale trying to stem the tide of bankruptcy by selling city assets?

At the May 20 workshop, Glendale will be taking up the issue of the possible sale of city property and facilities. The city owns over 140 buildings encompassing over two million square feet.

Some of the listed facilities are:

• Glendale Camelback Ranch (spring training home of the Dodgers and White Sox)
• Jobing.com Arena (home to the Coyotes)
• Glendale Expo Hall and Garage (parking for Jobing.com)

Source:
Agenda: http://www.glendaleaz.com/Clerk/agendasandminutes/Workshops/Agendas/052014.pdf
Agenda item #2 http://www.glendaleaz.com/Clerk/agendasandminutes/Workshops/Agendas/052014-W02.pdf

 

[Killion]

So, is Glendale trying to stem the tide of bankruptcy by selling city assets?

Thats an option, absolutely. The old Sale/Lease~Back Trick Chief. Fairly common municipally, State/Provincially & Federally, particularly when faced with massive deficits. Indeed, Ed Beasley after leaving Glendale as you'll recall took a job with Colliers Internationals Phoenix Offices specializing in precisely that field. From Consultation through Sale/Lease~Back.... mention in the pdf the COG looking to hire a Consultant to help identify & map out a strategy and I'll tell ya, if they wind up hiring Colliers & Ed Beasley, my heads gunna spin faster than Linda Blairs in the Exorcist. Tindall going to work for the Coyotes was unseemly enough thanks very much. But for the City of Glendale to hire Beasley? And yet when you think about it, who better placed? He knows all those buildings & properties like the back of his hand....

 

[Llama19]

Thats an option, absolutely. The old Sale/Lease~Back Trick Chief. Fairly common municipally, State/Provincially & Federally, particularly when faced with massive deficits. Indeed, Ed Beasley after leaving Glendale as you'll recall took a job with Colliers Internationals Phoenix Offices specializing in precisely that field. From Consultation through Sale/Lease~Back.... mention in the pdf the COG looking to hire a Consultant to help identify & map out a strategy and I'll tell ya, if they wind up hiring Colliers & Ed Beasley, my heads gunna spin faster than Linda Blairs in the Exorcist. Tindall going to work for the Coyotes was unseemly enough thanks very much. But for the City of Glendale to hire Beasley? And yet when you think about it, who better placed? He knows all those buildings & properties like the back of his hand....

So with the timing of this agenda item, has Mr. Beasley been working quietly behind the scenes?

To quote:

"Beasley, 54, was named a vice president of the company’s Government Solutions section in January and will work in the Phoenix office.

The position follows 10 years of service for the city, a tenure marked by the development of three major professional sports facilities — University of Phoenix Stadium, which is anchored by the Arizona Cardinals and Fiesta Bowl; Jobing.com Arena, which is home to the Phoenix Coyotes; and Camelback Ranch Glendale, which is the spring-training site for the Chicago White Sox and Los Angeles Dodgers.

In his new role, Beasley advises state, county and municipal governments on issues relating to economic development, asset management and public-private opportunities, said Kurt Stout, executive vice president of the Government Solutions section for Colliers."

Source: http://www.azcentral.com/community/...ormer-city-manager-takes-real-estate-job.html

Is this one long game of Stratego?

 

[CasualFan]

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

Overall, the City of Glendale has spent $13,182,215 and
received, in revenue*, from IceArizona $4,481,670, (i)
bringing Glendale's deficit to $8,700,5362.

(i) As of May 15, an additional $95,126 was posted to Sales Tax Collections

The year isn't actually complete yet but I get where you're going on this. There's a lot of different funds and accounting in play, so the numbers can be presented in a variety of ways. For example, the "Monthly Arena Finance Reports" list Sales Tax Collections. I find that somewhat odd because the taxes are allegedly pledged to debt service. I always found the easiest way for me to calculate this was the Follow Your Money site.

General > Arena Fees provides a snapshot of the rent, tickets, and parking.
General > City Sales Tax > Arena Special Revenue provides a snapshot of taxes collected in the building and the surrounding complex.

They did $3.8MM in Arena Fees. But about half a million of that is reimbursement for security and fire operations. The building did $3.3MM in revenue for the rent, tickets, parking. However, there will probably be some trickle in revenue (not that there are any non-hockey events actually booked) and the city will tap the reserve account, so that's around another $1MM. Roll it all up and call it $5MM for simplicity. The cost on that is the pro-rata $13MM AMF. So the city loses about $8MM on that side of the coin.

Over on the debt service side, the annual payment on the arena is about $10MM. It's all mixed up in MPC and refinancing but $10MM works for discussion (not meant to be exact). To date, Arena Special Revenue is about $5.1MM. Again for simplicity, since there's still a month plus left in the FY, roll that up to $6MM and call it a year. Whoops! Another $4MM down the hole.

Between lease and debt service, Glendale is down roughly $12MM for the year.

There's also that escrow account though. So eyes on the prize!

07-26-2013

C'mon Othmar, stay visionary:

- $9MM doesn't materialize
- Instead, hypothetically, it's more like $5MM
Net Budget Effect: -$4MM ($15MM AMF; $5MM Revenue; $6MM Budget)

- NHL dissolves 2011 escrow account ($20MM). League takes $5MM annuity, releases $15MM back to Glendale.
- Under Fund 1780 Arena Revenue, create a new line item for "Special Lease Revenue". Call the $15MM from escrow "Special Lease Revenue" then indignantly present it as actual consideration rather than fund transfer shenanigans.
New Net Budget Effect: +$11MM

Sample Press Release: "New Coyotes Lease Produces Highest City Revenues Ever"
Sample Sherwood Quote: "We knew this deal was going to work out."

 

[Fugu]

So, is Glendale trying to stem the tide of bankruptcy by selling city assets?

At the May 20 workshop, Glendale will be taking up the issue of the possible sale of city property and facilities. The city owns over 140 buildings encompassing over two million square feet.

Some of the listed facilities are:

• Glendale Camelback Ranch (spring training home of the Dodgers and White Sox)
• Jobing.com Arena (home to the Coyotes)
• Glendale Expo Hall and Garage (parking for Jobing.com)

Source:
Agenda: http://www.glendaleaz.com/Clerk/agendasandminutes/Workshops/Agendas/052014.pdf
Agenda item #2 http://www.glendaleaz.com/Clerk/agendasandminutes/Workshops/Agendas/052014-W02.pdf

Am I understanding this correctly? That the city would consider/attempt selling its properties, including those listed above (and namely, Jobing.com)?

 

[CasualFan]

Am I understanding this correctly? That the city would consider/attempt selling its properties, including those listed above (and namely, Jobing.com)?

Hi Fugu, hope you're doing well.
The city staff is basically taking a pulse check on if the council would like to pursue selling city-owned buildings as a way to raise revenue. The agenda item lists all city properties, so the stadium and arena are included only for that reason.
If a majority of the counsel wants to explore raising some cash by selling buildings, staff will then - and only then - issue an RFQ to find a company that will serve as a defacto real estate agent. That real estate type company will determine which buildings, of everything in the inventory, are most appealing and issue a report.
Staff would then return to council with the report that estimates how much they could get for each of the appealing properties and ask if the council wants to put them on the market. There's approximately 0% chance the stadium or arena would be on that list - but, depending on how desperate the city is at that point - selling some other public buildings might sound like a really good idea to the visionaries.

Like Othmar said up thread, the crap is going to hit the fan in around 36 months. Staff can see it coming, so they're presenting options

 

[Llama19]

Am I understanding this correctly? That the city would consider/attempt selling its properties, including those listed above (and namely, Jobing.com)?

Yes, my understanding is that all options are on the table.

Remember the 06/23/13 article, Glendale may leverage City Hall, when they were talking about paying the millions owed the NHL?

But, the council agenda item got tabled (no vote taken) and instead, the council just used other funds to shuffle the debt around.

To quote:

"Glendale leaders are considering using City Hall as collateral to borrow $30 million to help pay off other loans the city gave itself to cover sports-related debt."

Source: http://www.azcentral.com/community/glendale/articles/20130624glendale-may-leverage-city-hall.html

There just isn't enough revenue coming in and the massive debt bills are coming due...

 

[Fugu]

Hi Fugu, hope you're doing well.
The city staff is basically taking a pulse check on if the council would like to pursue selling city-owned buildings as a way to raise revenue. The agenda item lists all city properties, so the stadium and arena are included only for that reason.
If a majority of the counsel wants to explore raising some cash by selling buildings, staff will then - and only then - issue an RFQ to find a company that will serve as a defacto real estate agent. That real estate type company will determine which buildings, of everything in the inventory, are most appealing and issue a report.
Staff would then return to council with the report that estimates how much they could get for each of the appealing properties and ask if the council wants to put them on the market. There's approximately 0% chance the stadium or arena would be on that list - but, depending on how desperate the city is at that point - selling some other public buildings might sound like a really good idea to the visionaries.

Like Othmar said up thread, the crap is going to hit the fan in around 36 months. Staff can see it coming, so they're presenting options

Hi CF. Nice to see you back, as always. Just wish you'd poke your nose into the Clippers-Sterling-NBA issue. I've been playing lawyer in there, which is never a good idea.


Thanks for the info, and Llama as well.

 

[knorthern knight]

Don't know if if this question belongs here, in the Seattle thread, or its own separate thread. When, not if, Glendale eventually goes under financially (US Chapter 9 bankruptcy), due in part to massive sports spending, how badly will that affect politician and voter willingness to finance sports facilities elsewhere in North America? Was Bettman's visit to Seattle an attempt to get Sodo going before Glendale implodes? While we've been following the woes of Jobing.com Arena here, Camelback Ranch is its own financial can of worms.

Broward County is getting impatient. Seattle is reluctant to amend the MOU. What about a badly-needed new arena in Milwaukee?

 

[sipowicz]

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.

If the Coyotes could exclusively play only the Wings, BlackHawks, Wild, Jets, Oilers and Flames in Jobbing attendance could be pretty high on the other hand most would be cheering for the visiting team!

 

[Killion]

Don't know if if this question belongs here, in the Seattle thread, or its own separate thread. When, not if, Glendale eventually goes under financially (US Chapter 9 bankruptcy), due in part to massive sports spending, how badly will that affect politician and voter willingness to finance sports facilities elsewhere in North America? Was Bettman's visit to Seattle an attempt to get Sodo going before Glendale implodes? While we've been following the woes of Jobing.com Arena here, Camelback Ranch is its own financial can of worms.

Broward County is getting impatient. Seattle is reluctant to amend the MOU. What about a badly-needed new arena in Milwaukee?

While some may in government elsewhere may view Glendales profligate spending on sports facilities in the name of development, growth & tourism, they'll not likely feel that it can ever happen to them. Its always someone else who dies in a plane crash type syndrome. Wont, cant possibly happen here, were too smart for that, way too many checks & balances and in most cases their right. Arizona is quite unique. Its really like another country or planet altogether when it came to building these arenas' & stadiums, Cactus league facilities, entertainment venues with public money. Well beyond anything almost anywhere else has ever dared to contemplate much less attempt.

Seattle or rather Washington State has very strict Laws governing the subsidization of arena/stadium development. Likely the toughest in the US. So no, theyd just look at Arizona & Glendale as being an example of what happens when you dont have any brakes on the vehicle. Wisconsin's a lot more "giving" but even there, an awful lot of blowback & they'll be watched carefully by the developments opponents.... as for Bettman trying to rush King County & Seattle with an NHL 1st proposal, averting their eyes from the Nuclear Mushroom Cloud rising his shoulder in the general vicinity of Glendale; Arizona..... no, I dont think so. The NHL feels no responsibility, no guilt nor really anything towards Glendale. The Council of their own will voted to back them in the Moyes BK case; handed over $50M for a couple of years worth of borrowed time while various suitors tried to get the city to buy the team for them, IceArizona hitting paydirt. What happens in Glendale stays in Glendale.Same thing with Broward County. Not going to affect anything in Seattle, Milwaukee, Hartford or wherever whoever is thinking of building an arena and doing business with the NHL or the NBA.

 

[TheLegend]

Its close enough TL.

Have to disagree here, K.

If you're going to directly compare nine months operation against a full year set of numbers then you are skewing results.

We aren't playing horseshoes or hand grenades here (even if a few of the latter will no undoubtedly get lobbed in from the grandstands ).

 

[MNNumbers]

Have to disagree here, K.

If you're going to directly compare nine months operation against a full year set of numbers then you are skewing results.

We aren't playing horseshoes or hand grenades here (even if a few of the latter will no undoubtedly get lobbed in from the grandstands ).

Just for the sake of correct information, IceArizona signed on August. Hockey season over, no bookings until August. That would be 11 months, not 9.

 

[TheLegend]

Just for the sake of correct information, IceArizona signed on August. Hockey season over, no bookings until August. That would be 11 months, not 9.

Fair enough. I was going by a previous poster who put it later than that (Sept or Oct.). I went back and looked on the team website and the official press release was dated Aug. 5th. Glendale had approved the lease on July 2nd or 3rd. Add the 30-day escrow window in.

 

[Llama19]

If the Coyotes could exclusively play only the Wings, BlackHawks, Wild, Jets, Oilers and Flames in Jobbing attendance could be pretty high on the other hand most would be cheering for the visiting team!

Actually, these are the games/teams that drew better than 90% capacity (15,400+):

2014 - 11 out of 43 - NYR+, WSH, CHI (2), SJ (2), EDM*, PIT, CGY, BOS, MIN
2013 - 9 out of 24 - CHI+, CBJ, CGY, DAL, VAN, DET (2), COL (2)
2012 - 6 out of 43 - WPG+, BOS, CHI, DAL, VAN, ANA

The 2014 games (except two noted) had special promotional activity and were on a weekend (Fri, Sat)
The 2013 games were the strike-shorten season.
The 2012 games were on a weekend (Fri, Sat) except BOS and VAN.

+ Home Opener
* New Year's Eve party

 

[Killion]

We aren't playing horseshoes or hand grenades here (even if a few of the latter will no undoubtedly get lobbed in from the grandstands ).

Wheres the fun in playing straight out Horseshoes TL? Element of danger sure. Thats why this sites Moderated. Bomb Disposal Units Man. Or would you prefer everyone enter this thread heavily dosed on Sleep~eze? Ya its available over the counter non-prescription but I dont think we can force everyone to take it.