Coyotes still owe rent for 2019/2020 UPD - Post #217 (Reconciled)

[TheLegend]

Err.... I think you're confusing moose with goose.

I'm the silver one; he's the mighty one.

There's other ways to tell us apart, but I'm too modest ....

Oops!! I got loose with my Moose and Goose there.

 

[ItsFineImFine]

Are you just not familiar with Alex Meruelo, his business history, or anything he's done at the head of the Coyotes organization over the past year. I highly suggest you read about him, you definitely need it.

What is keeping them there is the potential to become a team like Dallas, where they are a fairly popular team in a huge metro area. An organization like that makes more money than any Canadian hockey market not named Toronto or Montréal. That isn't Bettman's pride. That is realizing market potential. Alex Meruelo saw it and is well on his way to fulfilling it.

Oh please. You're defending Meruelo as being a good owner after this.

Dallas moved back in the 90s, they had success since the 90s. The Coyotes moved there soon after and have never had ounce of that fan/financial success that Dallas had. It's been 25 years now, I could understand waiting for it to happen even a decade ago but by around 2010 it became clear that it wasn't happening. Bettman just did not want to allow for this team to be moved because he seemed to have taken his own interest in forcing it to work in a location where it doesn't and thinking it would have an affect on TV deals which I'm pretty sure it doesn't.

I wasn't one of those people on here saying the team should have been moved like others a decade ago. But it's 2020, if you still believe in this fantasy of them suddenly turning into a successful hockey market then I don't know what to say. Fool me for the 20th time...

 

[Stephen]

Are you just not familiar with Alex Meruelo, his business history, or anything he's done at the head of the Coyotes organization over the past year. I highly suggest you read about him, you definitely need it.

What is keeping them there is the potential to become a team like Dallas, where they are a fairly popular team in a huge metro area. An organization like that makes more money than any Canadian hockey market not named Toronto or Montréal. That isn't Bettman's pride. That is realizing market potential. Alex Meruelo saw it and is well on his way to fulfilling it.

Feels like I’m reading the original 90s sales pitch on Phoenix. Due to a number of factors that have been covered over and over, I think the ship sailed on Phoenix becoming a Dallas market a long time ago. Would also dispute the idea that Dallas pulls in more money than teams like Vancouver and Montreal in Canada.

 

[TheLegend]

Feels like I’m reading the original 90s sales pitch on Phoenix. Due to a number of factors that have been covered over and over, I think the ship sailed on Phoenix becoming a Dallas market a long time ago. Would also dispute the idea that Dallas pulls in more money than teams like Vancouver and Montreal in Canada.

Except there was never a pitch made on Phoenix in the 90’s.

¯\_(ツ)_/¯

 

[Stephen]

Except there was never a pitch made on Phoenix in the 90’s.

¯\_(ツ)_/¯

Not literally...

 

[TheLegend]

Not literally...

Then there’s no reason to compare Dallas to Arizona.

 

[WeaponOfChoice]

Then there’s no reason to compare Dallas to Arizona.

He didn't. He compared Arizona to Dallas.

 

[Headshot77]

The Coyotes, and most NHL teams, will severely be hampered by an entire regular season with no fans. Every team is going to take a massive L. It'll just be a somewhat larger L than usual for the Coyotes next year.

 

[Stephen]

Then there’s no reason to compare Dallas to Arizona.

I didn’t. I was responding to another poster who made the argument that the NHL is staying in Phoenix because the market has a Dallas type upside. And both cities were sun belt relocations in the 90s.

 

[TheLegend]

He didn't. He compared Arizona to Dallas.

I didn’t. I was responding to another poster who made the argument that the NHL is staying in Phoenix because the market has a Dallas type upside. And both cities were sun belt relocations in the 90s.

Okay thanks to both of you.... I had it backwards.

Arizona has been a living example of how not to enter a market. That's not a criticism of the market, but how it was handled.

 

[Barclay Donaldson]

Feels like I’m reading the original 90s sales pitch on Phoenix. Due to a number of factors that have been covered over and over, I think the ship sailed on Phoenix becoming a Dallas market a long time ago. Would also dispute the idea that Dallas pulls in more money than teams like Vancouver and Montreal in Canada.

As long as there is someone willing to own the franchise, the ship hasn't sailed.

I clearly said they don't bring in more money than Montréal, not sure why you quote them as a team again. They made more money than Edmonton, who is still benefiting from an insane arrangement with their arena, Calgary, Ottawa, and Winnipeg.

 

[Barclay Donaldson]

Oh please. You're defending Meruelo as being a good owner after this.

Dallas moved back in the 90s, they had success since the 90s. The Coyotes moved there soon after and have never had ounce of that fan/financial success that Dallas had. It's been 25 years now, I could understand waiting for it to happen even a decade ago but by around 2010 it became clear that it wasn't happening. Bettman just did not want to allow for this team to be moved because he seemed to have taken his own interest in forcing it to work in a location where it doesn't and thinking it would have an affect on TV deals which I'm pretty sure it doesn't.

I wasn't one of those people on here saying the team should have been moved like others a decade ago. But it's 2020, if you still believe in this fantasy of them suddenly turning into a successful hockey market then I don't know what to say. Fool me for the 20th time...

Coyotes had success in the 90s on the ice, but couldn't get over the fact they were pushed into a horrible situation with their arena which they never recovered from. They're not even bottom in attendance. They had about 2000 more people per game show up than the NY Islanders, an immensely successful and very profitable team. As a complete dumpster fire, they only had 1,000 fewer people per game than Winnipeg, which I have been told is hockey-obsessed. They are also in the same realm as Anaheim and New Jersey. That is after one year of not being out of playoffs by Christmas. The league shouldn't and thankfully doesn't give up on such potentially profitable markets as these.

 

[Barclay Donaldson]

what's your source on those losses because at first glance Winnipeg more than doubles the Coytoes for gate receipts, in US dollars. Is that after revenue sharing and NHL credit loans?

The Business Of Hockey

There have also been countless articles published about how TNSE's business model wouldn't be able to work without using the Jets as a loss leader to stimulate other revenues, considering they get gambling revenues from the machines at the Shark Club, they own the arena, real estate holdings near the arena, and everything else.

The general consensus for years has been the team isn't profitable, but ownership still makes money from them.

 

[TheWhiskeyThief]

Coyotes also missed out on payment of signing bonuses.

I know it’s tough to go to a zero revenue business, but if a billionaire doesnt have $6mm in free cash available to cover known payments due after 4 months, then that billionaire is one on paper assets only.

Amazingly, NHL failed to do their due diligence again for the nth time.

Speaking of zero income business affecting NHL owners, it would be ironic that Dallas has a chance to win the cup, yet the owner has to sell up soon after.

 

[GuelphStormer]

Yikes. This isnt good.

 

[Stephen]

Okay thanks to both of you.... I had it backwards.

Arizona has been a living example of how not to enter a market. That's not a criticism of the market, but how it was handled.

The big sell off Phoenix had a few years after relocation was definitely not an ideal way to build a foundation in the market. And I guess the string of bad ownership, league ownership etc. didn’t bring the financial stability to build an Anaheim, Tampa or San Jose.

 

[ItsFineImFine]

Coyotes had success in the 90s on the ice, but couldn't get over the fact they were pushed into a horrible situation with their arena which they never recovered from. They're not even bottom in attendance. They had about 2000 more people per game show up than the NY Islanders, an immensely successful and very profitable team. As a complete dumpster fire, they only had 1,000 fewer people per game than Winnipeg, which I have been told is hockey-obsessed. They are also in the same realm as Anaheim and New Jersey. That is after one year of not being out of playoffs by Christmas. The league shouldn't and thankfully doesn't give up on such potentially profitable markets as these.

Yes and I'm sure their revenue from those tickets is the same as Winnipeg's and the amount of revenue sharing they need is the same. Oh wait it's totally friggin not.

I'll find it hilarious in the 2030s if they're still in Arizona at which point they'll likely still have issues and people will still be harping on about how thankfully the NHL hasn't quit because it's a potentially profitable market and all they need is stable ownership.

 

[MNNumbers]

Yes and I'm sure their revenue from those tickets is the same as Winnipeg's and the amount of revenue sharing they need is the same. Oh wait it's totally friggin not.

I'll find it hilarious in the 2030s if they're still in Arizona at which point they'll likely still have issues and people will still be harping on about how thankfully the NHL hasn't quit because it's a potentially profitable market and all they need is stable ownership.

To supply some background here.....

It is true that the early years of the Coyotes franchise suffered from ill-prepared ownership. Burke and Gluckstern purchased the team from Winnipeg, and wanted to go to Minneapolis. They were thwarted because Minneapolis City Council, in the end, refused them a subsidy of sorts (Target Center, where the NBA team plays, was the only available arena). So, Phoenix was the only option. It was a bad beginning. Little time for market preparation.

Steve Ellman purchased the team. He was a developer, and had his eyes on Scottsdale. In the end, Scottsdale refused his as well. It was necessary to move from downtown because of lease issues (rent only, no arena income) and arena issues (not designed for hockey). So, Glendale it was.... Ellman brought in Jerry Moyes, a local trucking magnate. Neither of these men had the acumen to succeed in Glendale, where Ellman was trying to make the new arena the centerpiece of a large development. One thing was came up against them was the mid-00's recession. That killed the development. Again, I would say, ill-prepared ownership.

Bankruptcy followed that. IA, under LeBlanc followed that. More ill-prepared ownership.

Fast forward a few years. Meruelo purchased the team, and made good moves considering the market (Hispanic outreach among other things). Really, it was going, slowly, in the right direction.

Until COVID.

It's not quite as simple as "Hockey can't work there." But it is as simple as, "The franchise can't catch a break".

 

[Stumbledore]

Coyotes only had 1,000 fewer people per game than Winnipeg, which I have been told is hockey-obsessed.

Sigh. After all these years, we still get apples vs. oranges...

Let's look at some FACTS, shall we? These numbers are from the 2018-2019 season and come via ESPN which I'm sure will be rabidly attacked by some as unreliable.

Winnipeg arena, configured for hockey, has 15,393 seats. That season, the Winnipeg Jets sold 584,389 seats, about 108.2% of capacity, hence hockey-obsessed.

Gila River arena, configured for hockey, has 18,300 seats. To say they only had 1,000 fewer people per game than Winnipeg is disingenuous at best. Only 3 teams in the league (Panthers, Islanders, Senators) sold a lower percentage of their capacity than Phoenix.

 

[Mightygoose]

To supply some background here.....

It is true that the early years of the Coyotes franchise suffered from ill-prepared ownership. Burke and Gluckstern purchased the team from Winnipeg, and wanted to go to Minneapolis. They were thwarted because Minneapolis City Council, in the end, refused them a subsidy of sorts (Target Center, where the NBA team plays, was the only available arena). So, Phoenix was the only option. It was a bad beginning. Little time for market preparation.

Steve Ellman purchased the team. He was a developer, and had his eyes on Scottsdale. In the end, Scottsdale refused his as well. It was necessary to move from downtown because of lease issues (rent only, no arena income) and arena issues (not designed for hockey). So, Glendale it was.... Ellman brought in Jerry Moyes, a local trucking magnate. Neither of these men had the acumen to succeed in Glendale, where Ellman was trying to make the new arena the centerpiece of a large development. One thing was came up against them was the mid-00's recession. That killed the development. Again, I would say, ill-prepared ownership.

Bankruptcy followed that. IA, under LeBlanc followed that. More ill-prepared ownership.

Fast forward a few years. Meruelo purchased the team, and made good moves considering the market (Hispanic outreach among other things). Really, it was going, slowly, in the right direction.

Until COVID.

It's not quite as simple as "Hockey can't work there." But it is as simple as, "The franchise can't catch a break".

That's a good background and really shows if there's not a solid foundation to start the franchise will continually have an uphill climb.

It begs the questions is Meruelo more prepared than his predecessors? Covid is hitting all business hard including NHL teams. None of the other teams are behind in rent from this past season despite most of the games are played. No other teams we're behind in paying bonuses and per diem expenses while in hub. This should be expected under IA or Barroway, not for someone worth over 2 billion.

Things we're going in the right direction attendance-wise before Meruelo came on board under Cohen who has good ties to the market and he let him go for one of his own guys. Time will tell if this was a good move.

In regards to a new arena, Meruelo was the first person post LeBlanc to suggest a timeline (end of the year) and a couple of offers raising expectations again after the Barroway/Cohen era did a good job in keeping a lid on things. If the end of the year comes with no progress or no long term lease extension as suggested possible by Gutierrez, there will be questions to answers. If they're having trouble with rent, how will they handle a new arena?

Time will tell how this will shake out, but it's less about the franchise not catching a break but circumstances caused by years of bad decisions.

 

[Mightygoose]

If the financial troubles can't ride out this storm and as a worst case scenario, I wonder if the league and Meruelo would consider 'hibernating' the team and let them sit out a year. If they have to play in bubbles again it would be easier for scheduling to keep it at 30 teams.

Hopefully by for 2021-22 a vaccine will be out, a light at the end of the tunnel is in sight and try and relaunch the franchise with Seattle. Hopefully with a longer window to relaunch and some more experienced people running it.

 

[robertocarlos]

The good news is with Covid-19 you can't be evicted from your arena.

 

[robertocarlos]

The NHL needs to either let them move to another market or contract them. What's happening in Arizona is beyond an embarrassment for the league. It's been tried and hockey simply doesn't work in the desert. That's the reality. People can try to justify keeping the team there (the amount of money invested in the club, the players like it, etc...) but hockey is not successful and it's cost some people everything they have ever owned. If the NHL is intent on keeping them out west, why not move them to Utah? There's a history of hockey there, so why not put a pro club there?

This is mostly the result of the 8 cancelled games. NHL hockey doesn't even work in Winnipeg if no fans are allowed.

 

[TheLegend]

Sigh. After all these years, we still get apples vs. oranges...

Let's look at some FACTS, shall we? These numbers are from the 2018-2019 season and come via ESPN which I'm sure will be rabidly attacked by some as unreliable.

Winnipeg arena, configured for hockey, has 15,393 seats. That season, the Winnipeg Jets sold 584,389 seats, about 108.2% of capacity, hence hockey-obsessed.

Gila River arena, configured for hockey, has 18,300 seats. To say they only had 1,000 fewer people per game than Winnipeg is disingenuous at best. Only 3 teams in the league (Panthers, Islanders, Senators) sold a lower percentage of their capacity than Phoenix.

Not an attack..... just some clarification.

Winnipeg had an outdoor game, hence the 108% capacity number. This year was the first they had games that were officially not sold out. But that isn't a slight on them. Their market is roughly 1/6th the size of the one the Coyotes play in and the average ticket price is much higher.

GRA has an official capacity of 17,125 for hockey. Bell MTS Place has a capacity of 15,321 (from my own Googling, so it's the old YMMV).

 

[PainForShane]

So... according to Forbes magazine (who’s job it is to track this stuff), Alex Meruelo isn’t a billionaire. See for yourself:

Real Time Billionaires

We keep throwing around “worth $2B” because that’s what he tells everyone but they’re all private companies who really knows. All I know is that regardless of his net worth, the bulk of his businesses (casinos etc) are disproportionately hit by COVID and he’s not paying his player’s bonuses on time and the front office recently announced a ton of layoffs... AND the team has a mandate to cut salary this year (specifically salary rather than cap).

Bill Armstrong was a good hire. Not entirely convinced that the owner is in solid financial shape, I hope time proves me wrong about that