CXL - UPDATE 12/9 - Coyotes settle bills after unpaid taxes come to light

[Ernie]

If the prospective Houston Aeros don't have an arena, and Kansis City isn't feasible, let alone Portland or SLC or San Diego or wherever, and Quebec is not an option (I believe it should be) then it would seem the Gila River Arena would "welcome" the Coyotes back at a much higher rent? Making the losses likely even higher.

This is so 'If you find yourself in a hole, the first thing to do is stop digging' that it boggles my mind.

There's still probably a deal to be made with a 12-15 year term. But Meruelo would have to put up guaranteed money and agree to a huge break fee.

 

[aqib]

No, the hockey tournament was hosted at where the Utah Grizzlies play now, the Maverik Center, and where BYU plays club hockey, Peaks Ice Center. The then Delta Center hosted figure skating and short track speedskating.

I knew most of the hockey was played at the Maverick Center but I thought the Gold Medel Game was at Delta Center. It's kind of silly because that would be the highest selling event

 

[TheLegend]

Let's say that, in whatever fashion it happens, that Tempe gets approved. (We all have our opinions about it, and about how Tempe should approach things, but, however, just assume......)

It appears that such news won't come quickly.

Would anyone think there is a possibility that they play at Chase for one year only, while they consider the idea of renovating VMC for 3-4 more years?

I ask this because playing at Chase requires avoiding conflicts with the D-Backs, and, while I would be comfortable with the assumption of no Coyote postseason next year, I wouldn't, if I were the team, want to assume that 'We won't need a rink in late April and May for several years."

Thoughts?

While the AVMC seems more practical as a venue, you’re dealing with a state agency as a landlord.

OTOH….. The Coyotes and Diamondbacks have had a great relationship these past few years (and different owners) Including holding several cross promotions with each other.

The Diamondbacks have full control of Chase Field and recently we’re given a huge special taxing district by the state worth $500 million (est.) to fund improvements.

[and the wife of the DBacks majority owner happens to be on the board at Goldwater Institute, so strange bedfellows indeed. ]

But, like always, it’s all still up in the air. We’ll have to wait for Tempe’s next move (re: the consultant’s report)

 

[JimAnchower]

I knew most of the hockey was played at the Maverick Center but I thought the Gold Medel Game was at Delta Center. It's kind of silly because that would be the highest selling event

When it opened in 1991, the Delta Center's hockey capacity was just under 12,000, with a lot of obstructed view seats. Maybe by the time the Olympics came along, they could squeeze in a few more people, but not a lot. Maverik Center's capacity is just over 10,000 with no obstructed view seats.

THE DELTA CENTER: WELCOME: THAT'S THE TERM OWNER LARRY MILLER USES TO DESCRIBE FACILITY.

 

[aqib]

When it opened in 1991, the Delta Center's hockey capacity was just under 12,000, with a lot of obstructed view seats. Maybe by the time the Olympics came along, they could squeeze in a few more people, but not a lot. Maverik Center's capacity is just over 10,000 with no obstructed view seats.

THE DELTA CENTER: WELCOME: THAT'S THE TERM OWNER LARRY MILLER USES TO DESCRIBE FACILITY.

Its weird that the hockey capacity is only like 60% of the basketball capacity. Normally its over 80% in most arenas.

 

[StreetHawk]

Its weird that the hockey capacity is only like 60% of the basketball capacity. Normally its over 80% in most arenas.

Depends on the configuration. The more oval the seating is setup the more hockey capacity you get. If it’s more rectangular setup then it’s going to be less.

a lot of us arenas are not setup for nhl hockey capacity. They can do figure skating and other one off type events but not permanent nhl homes. Maybe lower level hockey since they don’t need as many seats.

 

[aqib]

Depends on the configuration. The more oval the seating is setup the more hockey capacity you get. If it’s more rectangular setup then it’s going to be less.

a lot of us arenas are not setup for nhl hockey capacity. They can do figure skating and other one off type events but not permanent nhl homes. Maybe lower level hockey since they don’t need as many seats.

Yeah its just funny to me they set it up that way. Cleveland's arena can seat almost 19K for hockey and the NHL was never a real possibility there (the Gunds owned the Cavs when it was built and lease essentially made it impossible for any NHL team to go there unless the Gunds owned it and they already owned the Sharks).

 

[StreetHawk]

Yeah its just funny to me they set it up that way. Cleveland's arena can seat almost 19K for hockey and the NHL was never a real possibility there (the Gunds owned the Cavs when it was built and lease essentially made it impossible for any NHL team to go there unless the Gunds owned it and they already owned the Sharks).

I believe that the Houston lease agreement works the same way. Only the owner of the rockets can own an nhl club in the Toyota Center. That is likely why Tilman F holds firm on a lower price as there is no other way into the Houston market. Barring someone privately building a new arena. Location would be an issue as I doubt the city wants another 18k arena and the associated traffic and public transportation requirements. Would have to be another county or someone close by to do it.

Look around the nba. I don’t believe that the arenas in Sacramento, golden state, Charlotte, Indiana, utah, Miami, Phoenix, Brooklyn, Memphis, etc can accommodate an nhl club right now. We know about the issues with Brooklyn.

 

[MNNumbers]

I believe that the Houston lease agreement works the same way. Only the owner of the rockets can own an nhl club in the Toyota Center. That is likely why Tilman F holds firm on a lower price as there is no other way into the Houston market. Barring someone privately building a new arena. Location would be an issue as I doubt the city wants another 18k arena and the associated traffic and public transportation requirements. Would have to be another county or someone close by to do it.

Look around the nba. I don’t believe that the arenas in Sacramento, golden state, Charlotte, Indiana, utah, Miami, Phoenix, Brooklyn, Memphis, etc can accommodate an nhl club right now. We know about the issues with Brooklyn.

There is a law in Harris County (which governs Houston) which expressly forbids construction of a competing venue to Toyota Center. So, a new arena would have to go to the suburbs, and, while there a lot of money in The Woodlands, they better hurry or there won't be a spot for it.

This is why I think that, if Tempe doesn't work for Meruelo, Quebec is actually a possibility

 

[JimAnchower]

Depends on the configuration. The more oval the seating is setup the more hockey capacity you get. If it’s more rectangular setup then it’s going to be less.

a lot of us arenas are not setup for nhl hockey capacity. They can do figure skating and other one off type events but not permanent nhl homes. Maybe lower level hockey since they don’t need as many seats.

Add to this, the length of a NBA court is roughly half the size of a NHL rink. So the footprint of the arena can be a lot smaller if it is primarily built for basketball with minor league hockey or occasional ice shows being an afterthought. This means the build for the arena would be less expensive. A NHL team can't be an afterthought in the arena's design to be successful.

 

[StreetHawk]

Add to this, the length of a NBA court is roughly half the size of a NHL rink. So the footprint of the arena can be a lot smaller if it is primarily built for basketball with minor league hockey or occasional ice shows being an afterthought. This means the build for the arena would be less expensive. A NHL team can't be an afterthought in the arena's design to be successful.

True. But cities weigh the probability of having an nhl club.
GS Warriors asked the Sharks to join them but once they said no, Chase Center doesn’t accommodate nhl hockey.
Same 30 odd years ago when Coangelo asked Ziegler if the nhl would ever go to PHX and Ziegler said no. Thus the nba only configuration.
Like 10 or so NBA arenas can’t house an nhl team right now. Unless you accept Brooklyn‘a limitations.

 

[OG6ix]

True. But cities weigh the probability of having an nhl club.
GS Warriors asked the Sharks to join them but once they said no, Chase Center doesn’t accommodate nhl hockey.
Same 30 odd years ago when Coangelo asked Ziegler if the nhl would ever go to PHX and Ziegler said no. Thus the nba only configuration.
Like 10 or so NBA arenas can’t house an nhl team right now. Unless you accept Brooklyn‘a limitations.

Did they? That's the first I have heard of this. While they have cultivated a fanbase in SJ I feel like they dropped the ball not moving to a World Class city like San Fran.

 

[StreetHawk]

Did they? That's the first I have heard of this. While they have cultivated a fanbase in SJ I feel like they dropped the ball not moving to a World Class city like San Fran.

Sharks owner sis a multi billionaire. Opted to be the main tenant in the SAP arena instead.

once he said no, he ended all chances of the nhl in SF. One decision impacts decades. As we are seeing in PHX. How the coyotes would have been so different had that PHX arena been built for hockey as well. But that’s life.

 

[aqib]

Sharks owner sis a multi billionaire. Opted to be the main tenant in the SAP arena instead.

once he said no, he ended all chances of the nhl in SF. One decision impacts decades. As we are seeing in PHX. How the coyotes would have been so different had that PHX arena been built for hockey as well. But that’s life.

It might have been another Atlanta situation. Once the novelty wore off and attendence dwindled if there was no one willing to own the team in AZ they might have let them move. Part of the rationale for keeping the team in Glendale was not running out on cities that build them arenas.

 

[mouser]

There is a law in Harris County (which governs Houston) which expressly forbids construction of a competing venue to Toyota Center. So, a new arena would have to go to the suburbs, and, while there a lot of money in The Woodlands, they better hurry or there won't be a spot for it.

This is why I think that, if Tempe doesn't work for Meruelo, Quebec is actually a possibility

Not that it matters for this discussion, but I can’t believe any such law would survive the most basic anti-trust challenge.

 

[MNNumbers]

Not that it matters for this discussion, but I can’t believe any such law would survive the most basic anti-trust challenge.

I'm quite sorry. This discussion has compelled me to look more closely into the matter, and I have discovered both that I have had the wrong governmental entity and the incorrect details:

These seem to be the details:

The governmental entity in question is the Harris County Sports Authority, and the document in question is the Rockets' lease on Toyota Center.


Text in red from this website: Toyota Center

Concerning competing venues:
* Upon opening of the Arena, Compaq Center will not be used as commercially competing venue. The City and the Sports Authority agree not to finance any venue for arena-type events which would compete with the Arena. The Sports Authority agrees to assist the NBA Club in obtaining a release from the NBA Club's obligation to play its home games at Compaq Center after the end of the 2002/2003 NBA season

This seems to say that the County won't be offering any help to construct a competing arena. Since Harris County seems to hold jurisdiction over the city of Houston, that seems to mean that any new arena would need to be privately financed.

Concerning hockey in the Toyota Center:
* If NHL hockey comes to Houston, the NHL Team is entitled to play its games in the Arena. The NHL Team to receive game-day revenue, but not naming rights, permanent advertising, suite premiums (other than incremental amounts paid by suite holders attributable to the NHL Team). The NHL Team may be asked to pay the Sports Authority a one-time "buy-in" payment and may receive a to-be determined operating payment from the Sports Authority. An NHL Team brought to the Arena that is affiliated with the NBA Club will not pay rent or receive the operating payment unless otherwise agreed.

This seems to say that the Rockets are entitled to all ancillary monies associated with Toyota Center. An NHL team would have to survive on game night revenues alone, and we all know that is difficult.

Put together, this basically means that, unless someone wants to privately finance a new arena in Harris County, Fertitta is the only available owner for an NHL Houston team.

Now, Montgomery County is the next county to the north, and it is home to The Woodlands, an affluent area which has developed out into its own economic engine. The same lease arrangements with the Rockets would not be in effect there.

And, @mouser ....Thank you for causing me to dig more deeply into this.

 

[aqib]

I'm quite sorry. This discussion has compelled me to look more closely into the matter, and I have discovered both that I have had the wrong governmental entity and the incorrect details:

These seem to be the details:

The governmental entity in question is the Harris County Sports Authority, and the document in question is the Rockets' lease on Toyota Center.


Text in red from this website: Toyota Center

Concerning competing venues:
* Upon opening of the Arena, Compaq Center will not be used as commercially competing venue. The City and the Sports Authority agree not to finance any venue for arena-type events which would compete with the Arena. The Sports Authority agrees to assist the NBA Club in obtaining a release from the NBA Club's obligation to play its home games at Compaq Center after the end of the 2002/2003 NBA season

This seems to say that the County won't be offering any help to construct a competing arena. Since Harris County seems to hold jurisdiction over the city of Houston, that seems to mean that any new arena would need to be privately financed.

Concerning hockey in the Toyota Center:
* If NHL hockey comes to Houston, the NHL Team is entitled to play its games in the Arena. The NHL Team to receive game-day revenue, but not naming rights, permanent advertising, suite premiums (other than incremental amounts paid by suite holders attributable to the NHL Team). The NHL Team may be asked to pay the Sports Authority a one-time "buy-in" payment and may receive a to-be determined operating payment from the Sports Authority. An NHL Team brought to the Arena that is affiliated with the NBA Club will not pay rent or receive the operating payment unless otherwise agreed.

This seems to say that the Rockets are entitled to all ancillary monies associated with Toyota Center. An NHL team would have to survive on game night revenues alone, and we all know that is difficult.

Put together, this basically means that, unless someone wants to privately finance a new arena in Harris County, Fertitta is the only available owner for an NHL Houston team.

Now, Montgomery County is the next county to the north, and it is home to The Woodlands, an affluent area which has developed out into its own economic engine. The same lease arrangements with the Rockets would not be in effect there.

And, @mouser ....Thank you for causing me to dig more deeply into this.

So basically a team could come in there without the Rockets ok while they build an arena elsewhere. If he is willing/able to build and finance a 3rd arena in Phoenix area wouldn't a second arena in the Houston make more sense?

 

[MNNumbers]

So basically a team could come in there without the Rockets ok while they build an arena elsewhere. If he is willing/able to build and finance a 3rd arena in Phoenix area wouldn't a second arena in the Houston make more sense?

That completely depends on availability of property for said arena, correct? I mean, when you think about it, it has taken a long time for Meruelo to find a city who had a parcel that would accommodate an arena.

So, that becomes part of the cost.

 

[Pandemonia]

This seems to say that the Rockets are entitled to all ancillary monies associated with Toyota Center. An NHL team would have to survive on game night revenues alone, and we all know that is difficult.

Difficult? I think most people here would argue that it's completely impossible.

 

[StreetHawk]

So basically a team could come in there without the Rockets ok while they build an arena elsewhere. If he is willing/able to build and finance a 3rd arena in Phoenix area wouldn't a second arena in the Houston make more sense?

An area anywhere would require the city to zone the land for an arena. Houston paid for most of the Toyota Center thus there is no reason for them to ok land for another 18k arena within their jurisdiction.
Would have to be another county or city to want to do that. Then you get into whether that location makes business sense for all parties, otherwise you get another Glendale situation.
It’s worked fine for the Braves who moved out of Atl to Cobb county which is close by.

as for Houston being a temporary home. Not sure. Could be better than the other options in AZ.

 

[TheGreenTBer]

There is a law in Harris County (which governs Houston) which expressly forbids construction of a competing venue to Toyota Center. So, a new arena would have to go to the suburbs, and, while there a lot of money in The Woodlands, they better hurry or there won't be a spot for it.

This is why I think that, if Tempe doesn't work for Meruelo, Quebec is actually a possibility

I've said this before, but one (perhaps uneducated) reason I think Tempe will work out is because it doesn't seem like the Coyotes have any local other long-term option if they're not willing and/or able to work with Glendale. It may not be an understatement to say that is basically has to work, or they either relocate or re-negotiate with a with-a-ton-of-leverage-under-this-hypothetical-scenario Glendale. I mean, they've repeatedly seemingly pulled rabbits out of hats before and I'll believe it only when I see it when it comes to them relocating.

Is Quebec the only currently ready relo option? Those running the NHL want nothing to do with Quebec so I imagine they'll do whatever they can to salvage the Coyotes.

 

[PCSPounder]

A tent, modular “suite structures,” and a few bleachers are all the Coyotes need.

 

[MNNumbers]

A tent, modular “suite structures,” and a few bleachers are all the Coyotes need.

Oh, Chase Field.....

 

[voyageur]

I've said this before, but one (perhaps uneducated) reason I think Tempe will work out is because it doesn't seem like the Coyotes have any local other long-term option if they're not willing and/or able to work with Glendale. It may not be an understatement to say that is basically has to work, or they either relocate or re-negotiate with a with-a-ton-of-leverage-under-this-hypothetical-scenario Glendale. I mean, they've repeatedly seemingly pulled rabbits out of hats before and I'll believe it only when I see it when it comes to them relocating.

Is Quebec the only currently ready relo option? Those running the NHL want nothing to do with Quebec so I imagine they'll do whatever they can to salvage the Coyotes.

That's all speculation. The NHL wanted Seattle. Seattle should have had a team in the 70s but the ground was still shaky in almost every US market. When Lewiecke stepped up that was a done deal. Being the first sports team in Vegas was an easy win for the NHL.

Does anyone know what kind of debt load the Coyotes are carrying? It was reported that the Coyotes were $300 million in debt at one point, including financing from the league's credit dept. Well in tough times, do you want to be underwriting franchises that are money pits? Do you want to have to step in to take ownership of one of your franchises again? Absolutely not. NHL wants to get the hell out of the nightmare they have got themselves into, because it looks like a romper room league when you have to go to court to keep your franchise from moving, have to negotiate with a county for subsidies, and then have to pick anyone willing to subsidize losses for a few years (the term is usually 3 years max)? Or do you want a stable owner, stable market, and a good arena for hockey? The latter of course. Houston is the NHL's next dream child, having failed in Atlanta and Phoenix. Get those oil, gas, and plastics producers endorsing the NHL brand. That's the dream. Quebec is in the perfect place to get the Ottawa Senators, should Melnyk run out of cash and options. Can't see a Canadian division as much as I like it, because those Original Six teams don't want to be playing in Vancouver or Calgary 3 times a year. Not good for TV in the markets that make the most money (by having the most population). So I think the divisions will stay the same. Attendance is pretty good in the U.S after Covid, minus California, Phoenix, Miami, and Buffalo. Seems to endorse the status quo. Houston should bring more revenue into the league, and that's the objective, to keep revenues growing, which is a post pandemic challenge. I expect a new franchise next year (Houston), also in 2023-24 (Nordiques), and then that should be the end of this pandemic...

 

[MNNumbers]

That's all speculation. The NHL wanted Seattle. Seattle should have had a team in the 70s but the ground was still shaky in almost every US market. When Lewiecke stepped up that was a done deal. Being the first sports team in Vegas was an easy win for the NHL.

Does anyone know what kind of debt load the Coyotes are carrying? It was reported that the Coyotes were $300 million in debt at one point, including financing from the league's credit dept. Well in tough times, do you want to be underwriting franchises that are money pits? Do you want to have to step in to take ownership of one of your franchises again? Absolutely not. NHL wants to get the hell out of the nightmare they have got themselves into, because it looks like a romper room league when you have to go to court to keep your franchise from moving, have to negotiate with a county for subsidies, and then have to pick anyone willing to subsidize losses for a few years (the term is usually 3 years max)? Or do you want a stable owner, stable market, and a good arena for hockey? The latter of course. Houston is the NHL's next dream child, having failed in Atlanta and Phoenix. Get those oil, gas, and plastics producers endorsing the NHL brand. That's the dream. Quebec is in the perfect place to get the Ottawa Senators, should Melnyk run out of cash and options. Can't see a Canadian division as much as I like it, because those Original Six teams don't want to be playing in Vancouver or Calgary 3 times a year. Not good for TV in the markets that make the most money (by having the most population). So I think the divisions will stay the same. Attendance is pretty good in the U.S after Covid, minus California, Phoenix, Miami, and Buffalo. Seems to endorse the status quo. Houston should bring more revenue into the league, and that's the objective, to keep revenues growing, which is a post pandemic challenge. I expect a new franchise next year (Houston), also in 2023-24 (Nordiques), and then that should be the end of this pandemic...

That's all speculation, too. In fact, all of this is really speculation....except that Meruelo responded to the RFP, and his proposal includes a 200M tax district. That is fact. The rest.......?????

Here's some more 'speculation'. I speculate that.....
1- The pandemic is about to end because the Omicron is so easily transmissible that everyone will be exposed to it. It's also very mild, so very few will be very sick, and collectively that will cause government's to decide that it's just like the cold or the flu, and it's time to 'just live with it.'

2- I speculate that Tempe works. That would end all of this talk.

3- I speculate that, if not, the Coyote goes to Quebec, because there is no way to get him into Houston at this time, due to Fertitta only offering a low ball price, and the BOG not being willing for that, as much as the BOG would like to be there. No alignment changes, because these things move slowly.

4- Within 5 years, Ottawa goes away because of Melnyk, and by that time, things have moved in Houston, and the Senators move there. At this point, Houston and trade places in the alignment, and it's a nice neat picture.

Here is a spreadsheet with accumulated investment of Coyote ownership. The right column is at 7% interest.

	Yearly	Cumul	w/ inter
Aug 2013, IA purchases team for 170M (never mind the construction of the loans, this was the cost paid to NHL to purchase the team out of league ownership)		170
2013-14: IA admits to 35M losses, including a one time 15M buyout	35	205	216.9
14-15: No buyout, but perhaps larger losses due to cap increase	22	227	254.083
15-16: Barroway purchases. Original IA lease with Glendale cancelled. This costs another 4M. Plus cap increases	28	255	299.8688
16-17. Arena Management contract cancelled. Another 3M in losses. Plus cap increases. Minus 16M expansion fee	17	272	337.8596
17-18. No expansion fee. Cap increases	33	305	394.5098
18-19: Cap increases. Expansion fee from Seattle	15	320	437.1255
19-20: COVID. This is a total guess, but we'll give the team credit	20	340	487.7243
20-21: COVID effects, and we will again give the team credit	20	360	541.865

[TBODY] [/TBODY]