Nashville sale thread--Leipold PULLS OUT of sale, Balsillie's bid OUT

[Ted Hoffman]

To answer your valid question, fourier, the correct answer would of course be Mississauga. I remain thoroughly unconvinced that corporate Ontario will be able to convince their clients to go to a game in Hamilton. I have on this board repeated the example of what happens when the Canadian Open is played in a barely decent golf course in Oakville instead of a legendary golf course in Hamilton; for the former, the tickets are a hot commodity for us folks who get comped a fair bit, while for the latter I could have my pick of several people offering me tickets. THe only reason? Hamilton was too far a drive.

It is a solid 75-80 minutes from downtown TO to Copps in rush hour, in good weather. Anywhere in the north end of TO? An even more horrible commute. And that is now, without five thousand extra cars going to Copps on top of the traffic now.

To give people an idea of how narrow-minded people can be about traveling to and living in certain areas:

In St. Louis, there are people who work in downtown who live in St. Charles, O'Fallon, and St. Peters or in the western parts of St. Louis County - easily 45-60 minutes one-way to downtown on a good day. They're driving with tens of thousands of other people who are also headed to St. Louis City to work, and traffic can snarl to a crawl if there's an accident on either I-70 or U.S. 40 (the two main roads ... really, the only two roads) to downtown. Throw on top of this the looming reconstruction of U.S. 40 for about 8-12 miles between the western suburbs and downtown that will take 3-4 years, effectively forcing traffic up to I-70 or on to every available side road and tacking on even more time to the daily commute.

They could live in Illinois around Edwardsville, Collinsville, Troy, Highland, Columbia, Waterloo, or most of the other cities in Illinois near St. Louis not named "East St. Louis", "Granite City", or the clearly run-down, rat-infested, strip-club dependent areas and get just as nice a house (probably nicer) for just as much (probably less) and pay about the same in taxes - but shave 20-30 minutes off their commute daily.

And will they ever move? Nope. Why? Because "I'm not living all the way over there." This kind of refrain surfaced over and over and over when the Cardinals were discussing a new ballpark and St. Louis City was dragging its feet on helping - and when Illinois lawmakers approached the team about putting a new stadium in Illinois, Cards fans in Missouri went berserk and SWORE TO GOD they wouldn't drive across the Mississippi River to see the Cards play in Illinois (even though it would have only been another 12-15 minutes).

 

[PecaFan]

The league rejects Balsillie with a promise of an expansion team. The new, local Nashville group takes over. Leipold is compensated somehow for getting less money on the sale.

Yup. Ultimately, this is the most pleasing solution, and hopefully comes to bear.

 

[LeafErikson]

No, what he's saying is that people who live in the GTA aren't going to drive that far on a regular basis to go to games in Hamilton. And he's absolutely right. People who live in a city/metro area are used to having things relatively close by or convenient to get to. They don't sit in rush hour traffic to drive to a city an hour and a half away to see a hockey game.

Hamilton wouldn't need a single soul to come from the GTA to fill that arena every night. There are plenty of people in Hamilton, K-W, and the surrounding areas to do that, without the help of Toronto hockey fans.

 

[toastman344*]

if it ( Copps Coliseum ) is in a more downtown setting with restaurants within walking distance and such attendance will be a bit better (but still might be below what people are saying in the propaganda). From what I have read on here that would have to be developed but those things would probably happen with an arena.

Yup Copps Coliseum is right down town Hamilton...plenty of places to eat....It's also near the West side of the City...which is closest to TOronto as the Crow flies ...+ near to quick highway access etc...

 

[LeafErikson]

Actually, this may set up a best case scenario for all involved. And right after I finished explaining how the WHL had the same scenario play out just two years ago, and that all was missing was a local owner.

The league rejects Balsillie with a promise of an expansion team. The new, local Nashville group takes over. Leipold is compensated somehow for getting less money on the sale. KC gets the other expansion team, since an odd number of teams is unruly.

Everyone wins. With luck, it will play out exactly as the WHL situation did.

Here's an even better question, how does this stop the Preds from losing money in Nashville?

 

[Brazz]

So what will happen, these guys buy the team, lose lots of money and a few years put the team back off for sale.

 

[nomorekids]

Here's an even better question, how does this stop the Preds from losing money in Nashville?

Because they weren't losing a whole lot more than most teams(Even the Sabres, for example,) because up until he sold the team, Leipold would include his income from Powers Mgmt, the OTHER holding he had which ran the arena, parking, etc and was actually fairly profitable. It wasn't until AFTER the sale(something many Preds fans have noticed and are frustrated by) that he started bemoaning the losses of the TEAM, because it was a well-known fact that the income of PM softened the blow substantially. The team itself, in his words, was losing "12 million dollars a year," when in truth...when his income from PM was included, he was losing at most about 3-4 million, which in the NHL's sad reality, isn't that far outside the norm.

Not to mention, as has often been pointed out, it's not like the Predators attendance\corporate support was EVER declining, in the past 4 years. It's steadily increased, and this year will see the team get naming rights payments to the tune of nearly 5 million dollars...something that wasn't there the past two seasons. Things were on the upswing when all of this happened, no matter how Leipold pandered for sympathy from the fans when he commented on the sale.

 

[LeafErikson]

Yup Copps Coliseum is right down town Hamilton...plenty of places to eat....It's also near the West side of the City...which is closest to TOronto as the Crow flies ...+ near to quick highway access etc...

Copps wouldn't be the long term home of the team, obviously. I don't understand what the worry is about Toronto people supporting the team, it's not needed. Sure, I'd expect a large group of Torontonians to flock down to Hamilton for games against the Leafs, but other than that, I doubt many people would make that trek. London, KW, Cambridge, Guelph, Brantford, and tonnes of smaller communities in that relative area, would do more than well enough to fill up that arena, add onto that, obviously, the people of Hamilton itself. There's more than enough ***** to be put the seats of Copps, and the new arena, when/if it comes.

 

[LeafErikson]

Because they weren't losing a whole lot more than most teams(Even the Sabres, for example,) because up until he sold the team, Leipold would include his income from Powers Mgmt, the OTHER holding he had which ran the arena, parking, etc and was actually fairly profitable. It wasn't until AFTER the sale(something many Preds fans have noticed and are frustrated by) that he started bemoaning the losses of the TEAM, because it was a well-known fact that the income of PM softened the blow substantially. The team itself, in his words, was losing "12 million dollars a year," when in truth...when his income from PM was included, he was losing at most about 3-4 million, which in the NHL's sad reality, isn't that far outside the norm.

Not to mention, as has often been pointed out, it's not like the Predators attendance\corporate support was EVER declining, in the past 4 years. It's steadily increased, and this year will see the team get naming rights payments to the tune of nearly 5 million dollars...something that wasn't there the past two seasons. Things were on the upswing when all of this happened, no matter how Leipold pandered for sympathy from the fans when he commented on the sale.

Link to all of the info you just supplied?

 

[Seth Lake]

Because they weren't losing a whole lot more than most teams(Even the Sabres, for example,) because up until he sold the team, Leipold would include his income from Powers Mgmt, the OTHER holding he had which ran the arena, parking, etc and was actually fairly profitable. It wasn't until AFTER the sale(something many Preds fans have noticed and are frustrated by) that he started bemoaning the losses of the TEAM, because it was a well-known fact that the income of PM softened the blow substantially. The team itself, in his words, was losing "12 million dollars a year," when in truth...when his income from PM was included, he was losing at most about 3-4 million, which in the NHL's sad reality, isn't that far outside the norm.

Not to mention, as has often been pointed out, it's not like the Predators attendance\corporate support was EVER declining, in the past 4 years. It's steadily increased, and this year will see the team get naming rights payments to the tune of nearly 5 million dollars...something that wasn't there the past two seasons. Things were on the upswing when all of this happened, no matter how Leipold pandered for sympathy from the fans when he commented on the sale.

Well said NMK, I'm glad I didn't start writing my own post because you put it perfectly.

Leipold not making money in Nashville (losses are debatable) doesn't automatically mean that no one can make money running an NHL franchise in Nashville.

 

[nomorekids]

Link to all of the info you just supplied?

I do not have the time or patience to go digging back for articles that were written as long as 3 years ago, but there's enough Predators fans(and probably others) who have read them at the time they were posted. It's not my job or concern to convince you of the validity of my statement...but if you'd like, I'm sure if you googled Powers Management, you could find information as to how much they netted over the past couple of years. It's simply something that's well known, if you've been following threads on the Preds board even going back to only the day they were sold. In particular, look up the thread, "Leipold's letter to season ticket holders," and notice the disgust at what he was claiming to be losing.

 

[Resolute]

Here's an even better question, how does this stop the Preds from losing money in Nashville?

That is for the owner of the team to decide. The key to remaining in Nashville is an owner committed to the market while it grows.

 

[Seth Lake]

Link to all of the info you just supplied?

Go to the Predators website...Powers Management is a sister company of the Predators and is responsible for running the day to day operations of the Sommet Center and they collect a lot of the game revenues the Predators generate.

There are multiple stories over the past year in the Tennessean that talk about the money that Powers Management has made and the fact that still Metro has to pay the bill for all improvements at the Sommet Center. As a matter of fact, we are getting a new scoreboard and sound system at the Sommet Center this season paid for by Metro Nashville.

The $238 million purchase price was for both the Predators and for Powers Management. I think that is something that is overlooked by many and must be factored into the purchase price since the second entity is a very profitable one with an extremely favorable deal with the City of Nashville.

 

[LeafErikson]

Well said NMK, I'm glad I didn't start writing my own post because you put it perfectly.

Leipold not making money in Nashville (losses are debatable) doesn't automatically mean that no one can make money running an NHL franchise in Nashville.

Sure it could, NHL teams can survive anywhere, if the people, and the corporate support in that area wants it enough. I know you do, you're a fan, love your team, that's awesome. But are there enough people in the Nashville area that feel the same way as you, and the other Preds fans on this board? If there are, great, I hope you guys prove yourself right, if not, I'm sorry for your loss.

 

[kdb209]

Do you know what Versus would get?

I haven't seen any numbers for Versus, although it would be in the odd situation on the largest US cable carrier - Comcast would be basically paying subscriber fees to itself.

But for comparison, some numbers I've seen (per subscriber per month):

$0.30 - Cartoon Network
$0.33 - ESPN2
$0.40 - WTBS/ MTV
$0.50 - Nick / FX
$0.60 - CNN / NFL network
$0.80 - USA / Fox News
$1.00- Disney
$1.25- TNT
$1.90- Fox Sports (I'm not sure which market, but I beleive LA)
$2.90- EPSN

As for RSNs, I've only seen a few numbers, but they seem to be in the $1-$2/mo range per subscriber.

http://www.multichannel.com/article/CA6325187.html

Fox News 'Bucks’ the Odds
Top-Rated Newser Floating a Steep License-Fee Hike
By Mike Reynolds -- Multichannel News, 4/17/2006

Is Fox News Channel worth a buck? Affiliates will decide. Officials at the network are floating a proposal seeking a license fee of $1 per month per subscriber.
...
Should Fox News get its price, only ESPN and regional sports networks would command higher rates in ad-supported cable.

Talking about Action Sports Cable Network (ASCN) a fledgeling RSN started by Paul Allen for the T-Blazers:

http://findarticles.com/p/articles/mi_m0DIZ/is_12_14/ai_84593510

Hutt says the network costs well under 85 cents per subscriber--the lowest fee he knows of any regional sports net. ASCN may be a bargain, says Michael Thornton, DirecTV SVP-programming acquisitions, but it's "also got the least amount of professional product out there. Does one team make a network?"

http://www.multichannel.com/blog/1810000181/post/640007464.html

Cable said that same thing to ESPN several years ago before caving into fears of a subscriber revolt if it moved the very expensive, sports juggernaut to a sports tier.

But times are different now. Cable operators have very limited analog bandwidth, and they’d rather allocate it to new technologies such as high-definition channels or video-on-demand programming, to help sell digital subscriptions.

Operators also can’t continue to absorb pricey sports network licensing fees that range from 75 cent to $2 per subscriber within its basic cable tier. License fee and distribution wars with ESPN left cable operators battle weary, but resolute in their desire not to lose such costly battles again with up-and-coming contenders.

Last year, much of the industry, led by Time Warner Cable and Comcast stood firm against the NFL Network, when it tried to leverage an eight-game package of life football telecasts into distribution on the basic analog tier, with a 75-cent per subscriber fee, to boot.

Comcast instead decided to place the network on a digital cable tier, while Time Warner and Cablevision refused to carry the network at all.

And subscriber fees are not just a US issue - they're why CTV was able to outbid the CBC for Olympic rights in 2010 & 2012.

http://www.umm.ca/sports-cable.php

The most recent major sports broadcasting bid in Canada also went the way of cable. Bidding for the 2010 Winter Olympics in Vancouver and the 2012 Summer Olympics was won by CTV who ended CBC's 12-year reign as the Olympics' broadcaster. CTV's bid was actually a consortium bid led by Bell Globemedia that incorporated Rogers Communication and CTV. One of the reasons the consortium bid of $153M USD was able to beat CBC's bid was the ability to use the cable subscriber fees to offset the cost of buying the rights. Rogers Communications owns Sportsnet and CTV owns RDS and in a joint partnership with ESPN operates TSN. All of these channels will be used during the consortium's nonstop Olympics coverage.

 

[nomorekids]

Sure it could, NHL teams can survive anywhere, if the people, and the corporate support in that area wants it enough. I know you do, you're a fan, love your team, that's awesome. But are there enough people in the Nashville area that feel the same way as you, and the other Preds fans on this board? If there are, great, I hope you guys prove yourself right, if not, I'm sorry for your loss.

The fact that the Predators have averaged what they have with the amount of corporate support they've had is somewhat remarkable. Bettman himself pointed out how high Nashville's fan season ticket base is...in the top tier of the league, actually. It's a wealthy area with a lot of transplants...it's not suprising. The corporate support, I admit, has been perplexing...given how many big companies and even medium sized companies are based in the NMTA. It HAS gotten better, to which Leipold will admit..but not at the pace he hoped. There's been a few articles about various companies ditching their STs not because they were unhappy with the product or lack of interest, but because of frustration with the sales\marketing department of the Predators. We've heard stories of paid tickets that were then unavailable, other unforgivable mixups...perhaps "NOW UNDER NEW MANAGEMENT!" would draw them to give it another shot. I've posted links to articles speaking of the COC and key business leaders going door to door to colleagues to sell packages THEMSELVES, so it's not out of the realm of possibility. We've had a consistent contender for 3 straight years now...it's a different experience for both the fan and the business than when we were losing 4-0 to the Phoenix Coyotes of the world. I honestly believe that if we could get them back...they'd stay back. That's the challenge, it's underway now...with or without Balsillie at the helm. This whole conversation becomes irrelevant..Hamilton and its ticket sales become irrelevant...if the efforts, the ticket drives, the rallies, the stumping by business heads...are successful. If the team averages 14,000...185 than was averaged last season...the lease locks right back up...and contrary to what I'm noticing is popular belief, there can be no contingency plan to "buy out" of the lease in the dreadful event that we make our number. The only way out of it, from Leipold's mouth, is if the escape clause is enacted and the team doesn't make 14K a game.

 

[nomorekids]

this is also noteworthy, going along with the news that a local ownership group is planning a bid in the event Balsillie's bid is rejected,

The LOI expires on June 30. If the league has not voted by then(and according to Bill Daly, today, it will NOT be on the docket for the June 20 BOG meeting), Balsillie's bid becomes just a bid, and anyone else(the Nashville group, AEG\KC) is free to bid again.

 

[Brazz]

just curious, if their interest in hockey/preds in other areas of Tennesee outside of Nashville, For Instance, in Memphis or Knoxville. I went to what I thought were major newspaper websites from these cities and couldn't find anything on the new Preds. Hypothetically if the local guys end up with the team is trying to get other parts of Tennessee intrested in the Preds a good way to grow the fanbase, if not being done already.

Is distant between cities a problem?

 

[nomorekids]

just curious, if their interest in hockey/preds in other areas of Tennesee outside of Nashville, For Instance, in Memphis or Knoxville. I went to what I thought were major newspaper websites from these cities and couldn't find anything on the new Preds. Hypothetically if the local guys end up with the team is trying to get other parts of Tennessee intrested in the Preds a good way to grow the fanbase, if not being done already

Well, it's tough...because Knoxville is 4 hours from Nashville and Memphis is 3 and a half. I know that both cities DO have fans, I've met some of them at games, but I don't think they're close enough to really be an impact. In fact, I think Knoxville doesn't even get Preds home games, they get Canes games, being closer to Raleigh.

There are a few season ticket holders that live in Chattanooga, however...Handtrick, one of the board'd most respected posters, drives 2 and a half hours with his family for every home game.

 

[Egil]

IF this local bid is serious, then that changes the picture BIG TIME. When Balsille was bidding against AEG, their isn't much the NHL could do to stop him from moving them team since the only other owner would also try to move the team. But, if a local owner can be found, then I think the NHL may try to force the sale to keep the team in Nashville.

IF that local bid doesn't come through, I think the Preds are done. That attendance clause is easy to trigger in ANY Market with sufficiently high ticket prices (heck, sell 13,500 tickets at normal price, and the remaining ones for $100k each for 2 years). The Preds may spend up to 3 years in Nashville (as they may be able to re-set the attendance clause next season), but that would be it. 3 years is probably very annoying if your AEG, but it actually gives Balsille alot of time to get his arena situation in order.

 

[LeafErikson]

this is also noteworthy, going along with the news that a local ownership group is planning a bid in the event Balsillie's bid is rejected,

The LOI expires on June 30. If the league has not voted by then(and according to Bill Daly, today, it will NOT be on the docket for the June 20 BOG meeting), Balsillie's bid becomes just a bid, and anyone else(the Nashville group, AEG\KC) is free to bid again.

Sounds like the league is doing it's best to make sure they stay in Nashville. I guess if the league is that determined to stand in the way of Balsillie, why should he even bother.

 

[MAROONSRoad]

The fact that the Predators have averaged what they have with the amount of corporate support they've had is somewhat remarkable. Bettman himself pointed out how high Nashville's fan season ticket base is...in the top tier of the league, actually. It's a wealthy area with a lot of transplants...it's not suprising. The corporate support, I admit, has been perplexing...given how many big companies and even medium sized companies are based in the NMTA. It HAS gotten better, to which Leipold will admit..but not at the pace he hoped. There's been a few articles about various companies ditching their STs not because they were unhappy with the product or lack of interest, but because of frustration with the sales\marketing department of the Predators. We've heard stories of paid tickets that were then unavailable, other unforgivable mixups...perhaps "NOW UNDER NEW MANAGEMENT!" would draw them to give it another shot. I've posted links to articles speaking of the COC and key business leaders going door to door to colleagues to sell packages THEMSELVES, so it's not out of the realm of possibility. We've had a consistent contender for 3 straight years now...it's a different experience for both the fan and the business than when we were losing 4-0 to the Phoenix Coyotes of the world. I honestly believe that if we could get them back...they'd stay back. That's the challenge, it's underway now...with or without Balsillie at the helm. This whole conversation becomes irrelevant..Hamilton and its ticket sales become irrelevant...if the efforts, the ticket drives, the rallies, the stumping by business heads...are successful. If the team averages 14,000...185 than was averaged last season...the lease locks right back up...and contrary to what I'm noticing is popular belief, there can be no contingency plan to "buy out" of the lease in the dreadful event that we make our number. The only way out of it, from Leipold's mouth, is if the escape clause is enacted and the team doesn't make 14K a game.

It’s great as you say that the team gets a "top tier" fan support. However, the numbers I’ve seen and reported elsewhere are troubling.

Bloomberg recently reported that the Predators had only $46 million in revenues this year. That’s far below the revenues required to operate a profitable franchise even with revenue sharing.

Here’s a quote:

“NHL franchises had been selling for 2 to 3 times revenue, according to Gordon Saint-Denis, managing director of the sports advisory and finance group of New York-based lender CIT Group Inc. The Predators had $46 million in revenue this season and received an additional $14 million in revenue sharing generated by teams in larger media markets, according to the Nashville team.”

http://www.bloomberg.com/apps/news?pid=20601103&sid=afbADyNPrFMU&refer=news

The TV ratings for playoff games which I previously reported in the TV Ratings thread similarly don’t seem to indicate broad community support.

“Ratings slide: Approximately 13,217 homes in the Nashville television market tuned in to watch Game 1, according to WTVF-5 Program Director Mark Binda. The 1.4 rating was lower than last season's Game 1 rating between the two teams, which hit 2.4 (approximately 22,000 homes).”

http://www.theleafchronicle.com/apps/pbcs.dll/article?AID=/20070413/SPORTS/704130376/1006

GHOST

 

[nomorekids]

Is that 46 million JUST the Predators, or Powers Management as well, because that makes a huge difference, given that all concession revenue, all parking revenue, most merchandising revenue is channeled through Leipold's subsidiary(and as mentioned, part of the purchase price of the team included this entity), Powers Management.

As for the fan support\business support argument, the last I read, Nashville's season ticket base was approaching 10K...of that, about 60 percent is fan tickets(according to Bettman, Poile and Leipold) and 30 is business...leaving much of the lower bowl empty, where normally businesses occupy those seats. In a healthy market, those numbers are transposed. It's the same thing that is hurting Buffalo at the moment(see the recent article\interview with Tom Golisano).

 

[Fugu]

I haven't seen any numbers for Versus, although it would be in the odd situation on the largest US cable carrier - Comcast would be basically paying subscriber fees to itself.

But for comparison, some numbers I've seen (per subscriber per month):

$0.30 - Cartoon Network
$0.33 - ESPN2
$0.40 - WTBS/ MTV
$0.50 - Nick / FX
$0.60 - CNN / NFL network
$0.80 - USA / Fox News
$1.00- Disney
$1.25- TNT
$1.90- Fox Sports (I'm not sure which market, but I beleive LA)
$2.90- EPSN

As for RSNs, I've only seen a few numbers, but they seem to be in the $1-$2/mo range per subscriber.

http://www.multichannel.com/article/CA6325187.html



Talking about Action Sports Cable Network (ASCN) a fledgeling RSN started by Paul Allen for the T-Blazers:

http://findarticles.com/p/articles/mi_m0DIZ/is_12_14/ai_84593510


http://www.multichannel.com/blog/1810000181/post/640007464.html



And subscriber fees are not just a US issue - they're why CTV was able to outbid the CBC for Olympic rights in 2010 & 2012.

http://www.umm.ca/sports-cable.php

Thanks, kdb. It's good to learn something new.

 

[Seth Lake]

just curious, if their interest in hockey/preds in other areas of Tennesee outside of Nashville, For Instance, in Memphis or Knoxville. I went to what I thought were major newspaper websites from these cities and couldn't find anything on the new Preds. Hypothetically if the local guys end up with the team is trying to get other parts of Tennessee intrested in the Preds a good way to grow the fanbase, if not being done already.

Is distant between cities a problem?

Knoxville has a pretty decent sized hockey program with youth recreational and travel teams, high-school teams, and even a college club team (University of Tennessee - www.icevols.com). The main arena in Knoxville, the IceArium, is undergoing a major renovation that has added an indoor inline hockey rink (first one in the state since the late 90's), indoor soccer rink, and major upgrades to their ice venue (I don't remember if it includes a second sheet or not).

Memphis has a smaller, but dedicated and talented hockey program. One of the main problems in Memphis is that they have no ice...as a matter of fact the Memphis RiverKings of the CHL are located just outside of Memphis in Mississippi which is where people have to trek to play ice hockey in Memphis.

There are multiple outdoor inline hockey rinks in the state in various conditions and with varying participation. As I mentioned above Knoxville is getting an indoor inline facility and that will revive and grow their inline hockey program, but prospects are not as bright in Memphis where they play mostly outdoors with a couple of old roller skating rinks allowing them to play indoors.