Balsillie/Phoenix part IV

[mouser]

Can Jim and Gary set aside their differences?

Can Jerry get any return on his investment from the bankruptcy court?

Can Redfield force the NHL to accept new owners and relocation against their will?

Can Luke and Laura save Port Charles from the evil plot of Mikkos to unleash a new ice age upon the earth?


Tune in to the fourth episode of Balsillie/Phoenix:


previous thread: http://hfboards.com/showthread.php?t=643692

Click to read more...

 

[Bitterman]

Then why would Hamilton taxpayers pay $120M to upgrade Copps for just 2-3 years?

Already discussed in later posts. RIM owns the land not JB so unless he buys the land from RIM it's not an option anyway. It could only become an option if JB wins the bid for a movable franchise and Hamilton is rejected as a destination. Kitchener/Waterloo are outside the territorial limits or any current franchise so he'd need somewhere to play while an arena was being built.

 

[BigFatCat999]

I'm rootting for Mikkos on this one. More ice, more skating surface.

 

[Art.Vandelay]

Now, if the Bankruptcy judge rules that the new owner cannot relocate who on earth is going to buy a team that swallowed a poison pill with locals that still can't move? If he rules against relocation the value of the franchise drops like a stone and the creditors get next to nothing unless the NHL picks up the tab... and I can't see the owners agreeing to that.

If the team stays in Phoenix, the only creditor seriously impacted will be Moyes.

The NHL is pushing the Reinsdorf bid of $130mm to keep the team in Phoenix. Does that sound like they are not agreeing?

 

[Jet]

This is the dilemma for the NHL in a nutshell:

There are teams that are failing and may never be viable in their markets for a long time, if ever.

There are a few markets that really want a franchise and have a very good chance to be solid performers.

As I see it, the NHL could contract and then expand, though that would look very bad for the league and I don't think they would go for it.

Solution? Relocation fee. Charge 200 million for a team to move, of course still subject to BOG approval. Seems like a damned simple idea to me. Unfortunately, for my hometown (Winnipeg) this would probably exclude us from getting a team through relocation, as first buying a team and then paying a large relocation fee would be very prohibitive.

 

[HockeyScholar]

Honest question:

What is the logical reason for keeping a hockey team in Phoenix?

Points to consider:
-lost 40 million dollars last year according to the commissioner
-averaged 8000 people per game on their television broadcasts

The old argument was that we need Phoenix for that mythical ESPN deal. Well that is obviously false now that we've seen the numbers.

Enlighten me.

 

[CHRDANHUTCH]

If the team stays in Phoenix, the only creditor seriously impacted will be Moyes.

The NHL is pushing the Reinsdorf bid of $130mm to keep the team in Phoenix. Does that sound like they are not agreeing?

that's what's being decided through mediation----the minute Moyes put the Coyotes into bankruptcy---he was essentially removed as their representative from the Board, and the franchise is staying in Glendale for '09-10 that much is certain.

 

[Bitterman]

If the team stays in Phoenix, the only creditor seriously impacted will be Moyes.

The NHL is pushing the Reinsdorf bid of $130mm to keep the team in Phoenix. Does that sound like they are not agreeing?

My understanding is that the supposed Reinsdorf offer has remained hidden from the court and the public so the question is, did the NHL give Reinsdorf an escape clause to move the team should the losses continue? I've heard he was given an escape clause after 2 years but that's just rumor but the only way the NHL could really make that happen would be for the team to go into Bankruptcy anyway, if only to get out from under the lease agreement.

 

[Egil]

This is the dilemma for the NHL in a nutshell:

There are teams that are failing and may never be viable in their markets for a long time, if ever.

There are a few markets that really want a franchise and have a very good chance to be solid performers.

As I see it, the NHL could contract and then expand, though that would look very bad for the league and I don't think they would go for it.

Solution? Relocation fee. Charge 200 million for a team to move, of course still subject to BOG approval. Seems like a damned simple idea to me. Unfortunately, for my hometown (Winnipeg) this would probably exclude us from getting a team through relocation, as first buying a team and then paying a large relocation fee would be very prohibitive.

The problem is that the overall team in location X is worth say $300 mil. With your fee, the team would then be getting $100 mil, the league $200 mil. So any franchise wanting to sell and move would NOT be too keen on this.

 

[Egil]

My understanding is that the supposed Reinsdorf offer has remained hidden from the court and the public so the question is, did the NHL give Reinsdorf an escape clause to move the team should the losses continue? I've heard he was given an escape clause after 2 years but that's just rumor but the only way the NHL could really make that happen would be for the team to go into Bankruptcy anyway, if only to get out from under the lease agreement.

I had heard that the Reinsdorf lease was similar to the one in Nashville (escape clause based on Attendance metrics). That is of course speculation.

 

[TaketheCannoli]

Honest question:

What is the logical reason for keeping a hockey team in Phoenix?

Points to consider:
-lost 40 million dollars last year according to the commissioner
-averaged 8000 people per game on their television broadcasts

The old argument was that we need Phoenix for that mythical ESPN deal. Well that is obviously false now that we've seen the numbers.

Enlighten me.

Wow- that's an easy one. The Coyotes are a business. If someone wants to make a bid to buy them, because they believe it is worth it to them to own the team, perhaps because their pro-forma shows they can begin to turn a profit in a time that's acceptable to the bidder, and the court accepts their bid, then voila hockey will be in Phoenix for the forseeable future.

 

[TaketheCannoli]

I had heard that the Reinsdorf lease was similar to the one in Nashville (escape clause based on Attendance metrics). That is of course speculation.

Link?

 

[Jet]

The problem is that the overall team in location X is worth say $300 mil. With your fee, the team would then be getting $100 mil, the league $200 mil. So any franchise wanting to sell and move would NOT be too keen on this.

I'm talking about a relocation fee independant of purchase costs for the franchise.

 

[Bitterman]

The problem is that the overall team in location X is worth say $300 mil. With your fee, the team would then be getting $100 mil, the league $200 mil. So any franchise wanting to sell and move would NOT be too keen on this.

If teams could only move if they paid an expansion fee then you'd just see more teams declare Bankruptcy. Few have the stomach to buy an existing franchise where they are now, let alone pay a huge sum to join the club elsewhere. The NHL was banking on a southern Ontario team paying a huge expansion fee somewhere far down the road and are really fighting to keep that possibility intact.

 

[TaketheCannoli]

I'm talking about a relocation fee independant of purchase costs for the franchise.

This whole relocation fee thing is one of the basic issues the NHL, MLB, the NFL and the NBA will fight tooth and nail to keep. I suspect there is no amount that would be acceptable. The issues are much bigger than this.

 

[Bitterman]

I had heard that the Reinsdorf lease was similar to the one in Nashville (escape clause based on Attendance metrics). That is of course speculation.

I'd like to see a link as well. I'd also be curious if the Attendance metrics include or exclude the number of tickets the team is buying up to qualify for revenue sharing. A major loophole that will surely be fixed in the next CBA.

 

[Gulvorn]

Well I just recently did research project on the city design of Phoenix and really part of the problem with the city is that it's so horizontally built, that it requires so much commuting and it's just basically endless suburbs. I think the NHL generally needs a more urban environment where people can easily get to the arena where it's part of other places to go. Is there really much to do in Glendale around the arena? Are college kids hanging out there? Do people go there even if they aren't going to a hockey game? Part of making a business successful is making yourself part of an atmosphere and environment where people want to watch hockey or watch a sports game. I don't think Glendale works for a sport of growing popularity in the desert.

Still though, they could play in the Diamondbacks Stadium, they'd probably quadruple their profit

 

[Art.Vandelay]

that's what's being decided through mediation----the minute Moyes put the Coyotes into bankruptcy---he was essentially removed as their representative from the Board, and the franchise is staying in Glendale for '09-10 that much is certain.

The mediation is essentially to decide the control issue. However, the control issue has become a moot point. Both the NHL and Moyes agree that the team needs to be in bankruptcy.

The next big date is June 22. That's when oral arguments are presented on the relocation issue.

There has been nothing said concrete that the team will be in Glendale next season yet.

 

[Bad Karma]

I had heard that the Reinsdorf lease was similar to the one in Nashville (escape clause based on Attendance metrics). That is of course speculation.

The Preds attendance agreement was originally written into the lease with the city of Nashville in 97 (I think I'd have to go drag the papers out of whatever hole I hid them in) back when Leipold gained ownership.

It was the purchase agreement that had the attendance and monetary loss provision to sell.

Reinsdorf would assume the current lease.

 

[Art.Vandelay]

My understanding is that the supposed Reinsdorf offer has remained hidden from the court and the public so the question is, did the NHL give Reinsdorf an escape clause to move the team should the losses continue? I've heard he was given an escape clause after 2 years but that's just rumor but the only way the NHL could really make that happen would be for the team to go into Bankruptcy anyway, if only to get out from under the lease agreement.

That's part of the problem. All details on the Reinsdorf offer are speculation including the price and terms.

Even if the NHL gives the prospective buyer a relocation clause, the City of Glendale remains a hurdle there. I can see them given lease concessions to make the team profitable in Glendale, but just cannot see them give up the relocation penalty.

 

[HockeyScholar]

And you honestly think there are businessmen interested in buying the team, keeping it in Phoenix, and losing tens of millions of dollars each year? These benevolent buyers are so concerned about the hockey tradition in Arizona that they'll take yearly $40 million losses and keep the team in Phoenix?

We'll be back in the same situation in a few years.

Wow- that's an easy one. The Coyotes are a business. If someone wants to make a bid to buy them, because they believe it is worth it to them to own the team, perhaps because their pro-forma shows they can begin to turn a profit in a time that's acceptable to the bidder, and the court accepts their bid, then voila hockey will be in Phoenix for the forseeable future.

 

[TaketheCannoli]

And you honestly think there are businessmen interested in buying the team, keeping it in Phoenix, and losing tens of millions of dollars each year? These benevolent buyers are so concerned about the hockey tradition in Arizona that they'll take yearly $40 million losses and keep the team in Phoenix?

We'll be back in the same situation in a few years.

If a buyer believes they can make it work and is willing to put up the money to do it, AND the court and the NHL agree, then it's their business.

 

[Egil]

The Preds attendance agreement was originally written into the lease with the city of Nashville in 97 (I think I'd have to go drag the papers out of whatever hole I hid them in) back when Leipold gained ownership.

It was the purchase agreement that had the attendance and monetary loss provision to sell.

Reinsdorf would assume the current lease.

Nobody is assuming the current lease my friend. Nobody.

http://www.faceoff.com/story.html?id=0752872f-9bd3-42b2-93ad-e9e1a3d3a089

Speculation that Reisndorf's offer is for $130 mil and requiring $15 mil a year in stuff from Glendale vis a vis the Lease.

 

[Bitterman]

That's part of the problem. All details on the Reinsdorf offer are speculation including the price and terms.

Even if the NHL gives the prospective buyer a relocation clause, the City of Glendale remains a hurdle there. I can see them given lease concessions to make the team profitable in Glendale, but just cannot see them give up the relocation penalty.

I agree which is why I have a hard time believing the Reinsdorf offer is factual because it makes no sense for him to put himself in place of Moyes and tied to the city no matter the losses. And there's no chance Reinsdorf will declare Bankruptcy to escape the lease and move either.

The losses in Phoenix from here on out will be staggering so I see no scenario in which the Yotes survive and stay in place long term.

 

[Jake16]

Well I just recently did research project on the city design of Phoenix and really part of the problem with the city is that it's so horizontally built, that it requires so much commuting and it's just basically endless suburbs. I think the NHL generally needs a more urban environment where people can easily get to the arena where it's part of other places to go. Is there really much to do in Glendale around the arena? Are college kids hanging out there? Do people go there even if they aren't going to a hockey game? Part of making a business successful is making yourself part of an atmosphere and environment where people want to watch hockey or watch a sports game. I don't think Glendale works for a sport of growing popularity in the desert.

Still though, they could play in the Diamondbacks Stadium, they'd probably quadruple their profit

Don't know where to start with this as it would take pages to explain, but any attempt to compare metro Phoenix to other cities is a hopeless and futile exercise. We are not a city with a large central downtown. But we are not just endless suburbs. More a collection of small cities. For instance, Scottsdale, is not really a suburb, its a separate city next to Phoenix. The Valley is very unique in the way its structured and it has alot to do with the population explosion post-1950's.