Luxury suites

[Jarqui]

No. The twenty-two teams were the only ones reporting revenue from their arenas. For the other eight teams it says "no arena-related allocations are required."

Here is the section from the Levitt Report:

To perform the benchmarking study, we focused on the 22 teams that play in arenas that are 50% or more owned, operated or controlled by the team, or an affiliated or related-party, and the allocation of arena revenues and expenses between hockey and non-hockey activities. It was not necessary to include the other eight teams in the benchmarking study as the arenas in which they operate are not affiliated, are leased to the teams on an arm's length basis for only hockey activities and therefore no arena-related allocations are required. For purposes of this study, we considered suites and club seats, fixed signage, arena sponsorship arrangements, arena naming rights, and fixed building costs. All other significant revenues and costs can be directly identified with hockey or non-hockey events and therefore are not required to be allocated.​

The question whether the Blackhawks are in the group of 22 or the group of 8 is still open.

First words in the paragraph quoted: "To perform the benchmarking study"

Secondly: "It was not necessary to include the other eight teams in the benchmarking study as the arenas in which they operate are not affiliated, are leased to the teams on an arm's length basis for only hockey activities"

Is owning "half of the United Center", as Forbes reports Wirtz does (at the very least nearly half), "an arm's length basis" ? Doubtful given what was going on here.

Secondly, if a team leases a building for a hockey event and people show up for that event, do they just take a pass on all the luxury box revenue ? Hardly.

One of two things likely has to happen: either the team sees the luxury box revenue as money paid to them or they get a break in their lease costs which is a wash in their net revenue for the game.

Why would Reinsdorf want all of Wirtz's luxury box revenue in his BRI calculation for the NBA or tax calculation on the United Center ? Why would Wirtz want Reinsdorf to get 50% of his luxury box revenue generated by his Blackhawks when he shoves it into the United Center ? All so Wirtz can fake Goodenow out with little personal benefit to himself ? That's absurd and 180 degress off Wirtz's MO.

 

[WC Handy*]

Why would Reinsdorf want all of Wirtz's luxury box revenue in his BRI calculation for the NBA or tax calculation on the United Center ?

40% of money earned by luxury boxes count towards BRI, regardless of whether the team gets .1% or 100%.

 

[Jarqui]

40% of money earned by luxury boxes count towards BRI, regardless of whether the team gets .1% or 100%.

I realize that. And that is the normal and sane was to look at it and always has been.

A key term in the NBA CBA with BRI is "related party" so the absurdity could continue with the Blackhawks are not an NBA "related party" and canl stash their luxury box seats sales money elsewhere. The result would be that those dollars don't get in the BRI.

The point is that if someone is going to try to hide revenue in one place, it will pop up in another with consequences. To have Levitt say his numbers are accurate to within "a fraction of 1%" and then postulate he would arbitrarily overlook 216 luxury suites in Chicago on a technicality that Wirtz only owned 49% of them or whatever because Bob Boughner spun a rumour that has been bluntly denied by Turner ... I find the whole concept of such a thing transpiring rather absurd and grossly far fetched in light of what Levitt and those auditors did.

 

[Weary]

The point is that if someone is going to try to hide revenue in one place, it will pop up in another with consequences. To have Levitt say his numbers are accurate to within "a fraction of 1%" and then postulate he would arbitrarily overlook 216 luxury suites in Chicago on a technicality that Wirtz only owned 49% of them or whatever because Bob Boughner spun a rumour that has been bluntly denied by Turner ... I find the whole concept of such a thing transpiring rather absurd and grossly far fetched in light of what Levitt and those auditors did.

Boughner didn't spin a rumor. He was echoing Forbes magazine, which stated that. Turner did not outright deny it either. Turner only said that "all-hockey related luxury box revenues were included."

 

[me2]

Which are the 8 teams? These are quick guesses (please correct/add/delete if you know better)

probables
Sabres (seconds stage Entertainment?)
Canes (Centennial Authority)
Flames (Calgary/Alberta gov)
CBJ (Nationwide)
Oilers (Northlands Park)
Ducks (H&S Venture)
Pengs (City)

Minny (leased from state/city)
possibles
Devils ??
Preds ?not? (Gaylord does own part of the team)

 

[CGG]

First words in the paragraph quoted: "To perform the benchmarking study"

Secondly: "It was not necessary to include the other eight teams in the benchmarking study as the arenas in which they operate are not affiliated, are leased to the teams on an arm's length basis for only hockey activities"

Is owning "half of the United Center", as Forbes reports Wirtz does (at the very least nearly half), "an arm's length basis" ? Doubtful given what was going on here.

Secondly, if a team leases a building for a hockey event and people show up for that event, do they just take a pass on all the luxury box revenue ? Hardly.

One of two things likely has to happen: either the team sees the luxury box revenue as money paid to them or they get a break in their lease costs which is a wash in their net revenue for the game.

Why would Reinsdorf want all of Wirtz's luxury box revenue in his BRI calculation for the NBA or tax calculation on the United Center ? Why would Wirtz want Reinsdorf to get 50% of his luxury box revenue generated by his Blackhawks when he shoves it into the United Center ? All so Wirtz can fake Goodenow out with little personal benefit to himself ? That's absurd and 180 degress off Wirtz's MO.

We don't know this to be the case, but if Wirtz owns 49.9% of the United Center then any transactions between the Blackhawks and the United Center are in fact at an arms length basis. Wirtz would neither own the majority of the United Center or control it himself. Wirtz would get virtually half of the luxury box revenue for everything -- Hawks, Bulls, concerts, etc. and it never finds its way on to the URO.

This would put the Blackhawks in the group of 8 where no procedures were run on the arenas themselves, no benchmarking studies were done, and the luxury box revenue is not hockey-related income because a 3rd party receives the revenue. Mr. Turner's quote would still hold up.