CXLVII - Is this the 'Final Countdown' in Arizona?

[Ciao]

The NHL has so much time, energy, money, and reputation invested in Arizona that it would be nuts to pull out as long as they have a credible, willing owner who is moving the arena issue along reasonably promptly.

Nothing will be solved overnight, and I cant imagine the NHL forcing a sale or relo any time soon.

Now, if the owner wants to sell or relo, that's a whole different situation.

 

[aqib]

Didn’t say that.

Just said people tend to pay more attention to the negative things and ignore the good things.

Kinda like what you’re doing here.

OK so we agree is has a public relations/image problem. We're just disagreeing on whether he being more more public is the right way to solve it.

 

[GKJ]

32 Thoughts pod today:
- Friedman wishes he made clearer on Saturday that there's a possibility that relocation is possible if it becomes apparent on the way to the auction that things they do not control, such as governmental processes, or other bidders, create unknown variables within the process. This is probably the newsmaker here, a tacit admission that the league is not committed to waiting the 10 weeks if they think it's going sideways.

-It's been mentioned here, but even if Merulo has the highest bid for the land, it may not make it what they see as the best bid for the land.

-No guarantee that even if they win it, what the timeline will be to an arena, and anyone who thinks they they know, doesn't. Elliotte's father was a builder and lamented about how he went crazy having to deal with the government.

-Merulo is a prideful person and wants to show he can do this, wants to go through this process, and doesn't want to be embarrassed.

 

[TheGreenTBer]

If he doesn't win this auction then absolutely nothing in his body of work thus far should give anyone (including the NHL) even the slightest bit of confidence that he can secure this franchise's future. TED never should have failed and this shouldn't fail either.

 

[TheLegend]

OK so we agree is has a public relations/image problem. We're just disagreeing on whether he being more more public is the right way to solve it.

Again…. your opinion.

 

[Ciao]

The owner's job is to own. No reason he has to be his own spokesperson -- he can hire people to do that. Professionals probably do a better job of it anyway.

 

[aqib]

The owner's job is to own. No reason he has to be his own spokesperson -- he can hire people to do that. Professionals probably do a better job of it anyway.

When people are successfully able to portray you as a charlatan to the point it's preventing you from getting deals done you can't hide.

Again…. your opinion.

And that of Tempe voters apparently.

 

[No Fun Shogun]

To be fair, Arizonans are pretty historically famous as ardent anti-tax voters. I wouldn't pin that all on public distrust of ownership, that would've been an uphill battle regardless.

Granted, pinning one's hopes on that there seemed like a major misreading of the room even contemporaneously to me.

 

[TheLegend]

And that of Tempe voters apparently.

Tempe voters didn't vote on reputation. They were convinced TED was a type of project they had no interest in and it would cost them in increased taxes.

Keep trying.

 

[Spring in Fialta]

Arguing that Meruelo doesn't have an image problem is up there. Jesus.

 

[TheLegend]

32 Thoughts pod today:
- Friedman wishes he made clearer on Saturday that there's a possibility that relocation is possible if it becomes apparent on the way to the auction that things they do not control, such as governmental processes, or other bidders, create unknown variables within the process. This is probably the newsmaker here, a tacit admission that the league is not committed to waiting the 10 weeks if they think it's going sideways.

Makes a lot more sense now. Securing the land is just one small step.

-It's been mentioned here, but even if Merulo has the highest bid for the land, it may not make it what they see as the best bid for the land.

Just to get this land listed Meruelo had to submit an acceptable plan outline to the board. Otherwise they wouldn't have approved it.

-No guarantee that even if they win it, what the timeline will be to an arena, and anyone who thinks they they know, doesn't. Elliotte's father was a builder and lamented about how he went crazy having to deal with the government.

This is absolutely true. One will have to believe Meruelo has been already talking to city representatives in Phoenix for some time on this. But that is all contingent on the land purchase

-Merulo is a prideful person and wants to show he can do this, wants to go through this process, and doesn't want to be embarrassed.

Absolutely.

 

[Voight]

The NHL has so much time, energy, money, and reputation invested in Arizona that it would be nuts to pull out as long as they have a credible, willing owner who is moving the arena issue along reasonably promptly.

Nothing will be solved overnight, and I cant imagine the NHL forcing a sale or relo any time soon.

Now, if the owner wants to sell or relo, that's a whole different situation.

Sunk cost fallacy.

 

[TheLegend]

Arguing that Meruelo doesn't have an image problem is up there. Jesus.

So is continuing to project it as such but here we are.

 

[Yukon Joe]

Sunk cost fallacy.

So I am a big believer that more people need to understand the "sunk cost fallacy". It's what gets every gambler almost every time - the fact you're down at the table doesn't mean you should stay to win it back. If you've lost money that money is gone - you make your decision from where you are now.

When it comes to Arizona though: they do have a owner who seems willing to invest a lot of money in a new arena. You have a fanbase and a team with almost 30 years in the market. Those aren't just sunk costs - those are actual assets you'd lose by moving the team.

What this means for Arizona - I dunno. I haven't known for a long time. Ultimately the NHL will have to assess how likely the whole land purchase plan is, and how likely Meruelo is able to pull it off.

I listened to the 32 thoughts podcast, mentioned above. When it talks about Meruelo being a "proud" guy who wants to show he can do this, I'm thinking "uh oh". Because sunk cost fallacy applies to Meruelo as well as the NHL.

 

[LPHabsFan]

So I am a big believer that more people need to understand the "sunk cost fallacy". It's what gets every gambler almost every time - the fact you're down at the table doesn't mean you should stay to win it back. If you've lost money that money is gone - you make your decision from where you are now.

When it comes to Arizona though: they do have a owner who seems willing to invest a lot of money in a new arena. You have a fanbase and a team with almost 30 years in the market. Those aren't just sunk costs - those are actual assets you'd lose by moving the team.

What this means for Arizona - I dunno. I haven't known for a long time. Ultimately the NHL will have to assess how likely the whole land purchase plan is, and how likely Meruelo is able to pull it off.

I listened to the 32 thoughts podcast, mentioned above. When it talks about Meruelo being a "proud" guy who wants to show he can do this, I'm thinking "uh oh". Because sunk cost fallacy applies to Meruelo as well as the NHL.

Do they though? The only way there seems to be interest in getting this done is through an ED. That is a very different conversation than saying he wants to invest in a new arena. If he was truly interested in the team and the arena, it wouldn't require the ED. Both this, and Atlanta, aren't sports ventures, they're real estate ventures with the arena taking the spotlight.

Wasn't there a semi recent situation where a similar set up was planned out, but economic situations changed, and then it all went to shit? I can't seem to put my finger on it......Did it possible come up when everything with the TED was playing out? You'll have to forgive me, I'm getting more forgetful in my old age.....

Aside from that, we still don't know what the deal looked like when he purchased the team. We don't know what the deal looks like (in terms of financing) for the ASU annex. What we do know is that the teams is and has been hemorrhaging money for over a decade and that has to be taken care of somehow. If Muruelo is such a smart businessman, he didn't spend a dime on the deal only so far as coming to an agreement on a price if he could pull off the arena deal. If he didn't do that, then he's a dumbass and probably shouldn't be in charge of something like this to begin with.

For the fanbase, what exactly is left? After the decade plus of drama, false hope, and stupidity, what type of fanbase is there? That's only about 35% of a shot across the bow, it's a legitimate question, something which Craig Morgan was kind of touching on in his article from two or three weeks ago.

Attendance aside, the other thing I look at is television ratings. I understand people are going to say that there's been an increase of over 900%!!!!!!! this year but without knowing the raw data, there could, and likely still is, a very small number of people watching at home and in the arena. Plus, the fact that the attendance is so limited means there is still a significant number of people watching when they would otherwise be at the arena. We'd also have to look at the past decade to see where things are at. Point is, where is the fanbase, and what will it take to bring them back? Is it a new arena? Is it a new arena plus other commitments?

Lastly, the land purchase deal for all we know is anywhere from the first to the eighth (or more) step on this upcoming journey. As was pointed out by Friedman, there could be enough obstacles put in the way before the auction that makes the NHL pull the plug. There could be obstacles after the deal that cause the NHL to pull the plug. There could be obstacles that come up that completely shut down the deal and therefore forces the NHL to relocate. That is something we won't know until we know.

 

[Ciao]

Wow.

Take a breath.

 

[TheLegend]

Do they though? The only way there seems to be interest in getting this done is through an ED. That is a very different conversation than saying he wants to invest in a new arena. If he was truly interested in the team and the arena, it wouldn't require the ED. Both this, and Atlanta, aren't sports ventures, they're real estate ventures with the arena taking the spotlight.

ED's are the future. Just throwing up a barn and selling tickets doesn't cut it anymore.

Wasn't there a semi recent situation where a similar set up was planned out, but economic situations changed, and then it all went to shit? I can't seem to put my finger on it......Did it possible come up when everything with the TED was playing out? You'll have to forgive me, I'm getting more forgetful in my old age.....

If you consider 2007-08 to be "recent."

Aside from that, we still don't know what the deal looked like when he purchased the team.

So?? Rarely does any purchase of a sports franchise involve letting everyone know those details.

We don't know what the deal looks like (in terms of financing) for the ASU annex.

It was paid for up front. And it was reported and posted here numerous times.

What we do know is that the teams is and has been hemorrhaging money for over a decade and that has to be taken care of somehow. If Muruelo is such a smart businessman, he didn't spend a dime on the deal only so far as coming to an agreement on a price if he could pull off the arena deal. If he didn't do that, then he's a dumbass and probably shouldn't be in charge of something like this to begin with.

He bought the franchise at $300 million in 2019 with a current value of $500-650 million (depending on if you believe Forbes or Sportico.) There's a rumor he was offered $1 billion by the SLC group and turned it down. Forbes even indicated the franchise netted a profit in 2022-23 (for which the new TV contract with TNT and ESPN can be the only explanation).

For the fanbase, what exactly is left? After the decade plus of drama, false hope, and stupidity, what type of fanbase is there? That's only about 35% of a shot across the bow, it's a legitimate question, something which Craig Morgan was kind of touching on in his article from two or three weeks ago.

Craig's article was based upon asking a very small group of hardcore fans in a Discord chat what they were feeling. What the rest of the market thinks is an entirely different animal, so I'm not going to speculate except there would be some similar feelings.

Attendance aside, the other thing I look at is television ratings. I understand people are going to say that there's been an increase of over 900%!!!!!!! this year but without knowing the raw data, there could, and likely still is, a very small number of people watching at home and in the arena. Plus, the fact that the attendance is so limited means there is still a significant number of people watching when they would otherwise be at the arena. We'd also have to look at the past decade to see where things are at. Point is, where is the fanbase, and what will it take to bring them back? Is it a new arena? Is it a new arena plus other commitments?

The 900% represented potential reach (going from cable only to OTA/Cable/Streaming model.) I think 700% is more realistic. The streaming element came just recently (it wasn't even planned for this season) and Scripps hasn't supplied any real numbers yet. But last I checked their news releases on their website they seem happy with the situation.

Lastly, the land purchase deal for all we know is anywhere from the first to the eighth (or more) step on this upcoming journey. As was pointed out by Friedman, there could be enough obstacles put in the way before the auction that makes the NHL pull the plug. There could be obstacles after the deal that cause the NHL to pull the plug. There could be obstacles that come up that completely shut down the deal and therefore forces the NHL to relocate. That is something we won't know until we know.

Agreed.

 

[awfulwaffle]

Do they though? The only way there seems to be interest in getting this done is through an ED. That is a very different conversation than saying he wants to invest in a new arena. If he was truly interested in the team and the arena, it wouldn't require the ED. Both this, and Atlanta, aren't sports ventures, they're real estate ventures with the arena taking the spotlight.

Wasn't there a semi recent situation where a similar set up was planned out, but economic situations changed, and then it all went to shit? I can't seem to put my finger on it......Did it possible come up when everything with the TED was playing out? You'll have to forgive me, I'm getting more forgetful in my old age.....

Aside from that, we still don't know what the deal looked like when he purchased the team. We don't know what the deal looks like (in terms of financing) for the ASU annex. What we do know is that the teams is and has been hemorrhaging money for over a decade and that has to be taken care of somehow. If Muruelo is such a smart businessman, he didn't spend a dime on the deal only so far as coming to an agreement on a price if he could pull off the arena deal. If he didn't do that, then he's a dumbass and probably shouldn't be in charge of something like this to begin with.

For the fanbase, what exactly is left? After the decade plus of drama, false hope, and stupidity, what type of fanbase is there? That's only about 35% of a shot across the bow, it's a legitimate question, something which Craig Morgan was kind of touching on in his article from two or three weeks ago.

Attendance aside, the other thing I look at is television ratings. I understand people are going to say that there's been an increase of over 900%!!!!!!! this year but without knowing the raw data, there could, and likely still is, a very small number of people watching at home and in the arena. Plus, the fact that the attendance is so limited means there is still a significant number of people watching when they would otherwise be at the arena. We'd also have to look at the past decade to see where things are at. Point is, where is the fanbase, and what will it take to bring them back? Is it a new arena? Is it a new arena plus other commitments?

Lastly, the land purchase deal for all we know is anywhere from the first to the eighth (or more) step on this upcoming journey. As was pointed out by Friedman, there could be enough obstacles put in the way before the auction that makes the NHL pull the plug. There could be obstacles after the deal that cause the NHL to pull the plug. There could be obstacles that come up that completely shut down the deal and therefore forces the NHL to relocate. That is something we won't know until we know.

Why would AM only build an arena? He won't make money off it. He's a businessman too, not an idiot.

 

[LPHabsFan]

ED's are the future. Just throwing up a barn and selling tickets doesn't cut it anymore.

It does cut it if we're talking about an actual market that has a hope for future long term success. Most teams don't rely on entertainment districts, and most teams are in the downtown core.

If you consider 2007-08 to be "recent."

I said "semi" recent, not recent. Still, the comparison is there.

So?? Rarely does any purchase of a sports franchise involve letting everyone know those details.

You're right, we don't normally see the finer details of the agreement. Having said that, logic would at least be able to give us the ability to make some decent educated guesses. Can we confirm them? Obviously not. But they are logical.

It was paid for up front. And it was reported and posted here numerous times.

I mean can you really say that for sure? You just stated right above that we rarely see the finer details, so why are you claiming with certainty that we know the details of this particular agreement? Which makes more sense? That the team decided to make a 20 million dollar donation to ASU in the form of the annex, or that there are certain conditions that make it so that ASU ends up paying for all or part of it depending on the certain conditions? After all, 20 million dollar donation, on top of the other incentives given to ASU for use of the arena, for just the 3 to 5 years they'll be there is kind of a lot of money.

He bought the franchise at $300 million in 2019 with a current value of $500-650 million (depending on if you believe Forbes or Sportico.) There's a rumor he was offered $1 billion by the SLC group and turned it down. Forbes even indicated the franchise netted a profit in 2022-23 (for which the new TV contract with TNT and ESPN can be the only explanation).

Those valuations are never accurate one way or the other. I know you'll then probably point out how recent sales are for more than the public valuations, however all of those sales included the arena in the deal which also includes non hockey events/revenue which significantly props up the sale price.

I don't know how they came up with the valuation. One of my guesses is that they're using other teams sale prices as part of it. Regardless, when you look at the financials for the team, there is no way that the team is worth that. For starters, the debt alone at this point is what, 250 - 300 million? More? We know what the team lost when it filed for bankruptcy (roughly 200 million), you think that's gone down the past 14 years? This is what I mean by educated guesses. If he "paid" 300 million for it, it is very, very possible that all he did was assume the teams debt on paper and didn't spend a dime of his own actual money. Same as previous owners.

Craig's article was based upon asking a very small group of hardcore fans in a Discord chat what they were feeling. What the rest of the market thinks is an entirely different animal, so I'm not going to speculate except there would be some similar feelings.

Fair enough. As I said, it wasn't entirely a shot at the fanbase, it was a legitimate question based on the past 15+ years of uncertainty and dissapointment.

The 900% represented potential reach (going from cable only to OTA/Cable/Streaming model.) I think 700% is more realistic. The streaming element came just recently (it wasn't even planned for this season) and Scripps hasn't supplied any real numbers yet. But last I checked their news releases on their website they seem happy with the situation.

Doesn't really comment on my comment. Both attendance and tv ratings are a massive issue.

Why would AM only build an arena? He won't make money off it. He's a businessman too, not an idiot.

Thank you for proving my point, which was that he doesn't give a shit about the team, he only cares about the development. He's using the team as a means to an end with regards to the ED. Even if by some miracle he ends up pulling all this off and everything goes to plan, he will sell the team and everything else the second he can. This is a real estate deal. Not a sports one.

 

[TheGreenTBer]

Thank you for proving my point, which was that he doesn't give a shit about the team, he only cares about the development. He's using the team as a means to an end with regards to the ED. Even if by some miracle he ends up pulling all this off and everything goes to plan, he will sell the team and everything else the second he can. This is a real estate deal. Not a sports one.

I'm not intending to defend AM because I think he's a charlatan and a cheat, but this is the case for many markets, not just Arizona. The days of owners like Ed Snider, etc. are going, going, gone.

 

[Boris Zubov]

Why would AM only build an arena? He won't make money off it. He's a businessman too, not an idiot.

Then why bother with the team at all? The market has proven for thirty years they're not profitable on their own, new arena or not.

 

[ponder719]

Thank you for proving my point, which was that he doesn't give a shit about the team, he only cares about the development. He's using the team as a means to an end with regards to the ED. Even if by some miracle he ends up pulling all this off and everything goes to plan, he will sell the team and everything else the second he can. This is a real estate deal. Not a sports one.

If that were purely true, he would never have bought this team in particular. The Coyotes are only a means to an end if you're sure you can reach that end, and as we've seen so far, it hasn't been a slam dunk. If he truly just wanted development, why wouldn't he just do some development deals that don't involve taking on a major money sink for years on end without any guarantee of success? Sure, the maximum potential is lower, but you're a lot more likely to reach that potential without throwing good money after bad with the team involved. There are definitely other factors at play here than pure profit motive. I wouldn't call those factors altruistic, by any means (frankly, most people who own teams are motivated as much by ego as anything rational), but they do exist.

 

[dj4aces]

It does cut it if we're talking about an actual market that has a hope for future long term success. Most teams don't rely on entertainment districts, and most teams are in the downtown core.

I don't think it's about whether or not a team needs the entertainment district to survive. It's about additional revenue streams, more ways to draw fans and keep fans in the area for longer. There's a reason why housing is usually a feature of these districts.

 

[oldunclehue]

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Pretty cool looking plans, not sure if this is from anyone attached to the team. But thats a lot of development. Lots of moving parts.


But I'd definitely plan to take in a vacation and game there when the Jets are in town.

 

[tucker3434]

AM bought the team because it was a bargain. The Preds just recently sold for nearly $900m. What's the difference between Nashville and Phoenix? "Phoenix just isn't a hockey market." Nah. Get them a barn and some trips to the playoffs and they'll do fine.

If he can get them over the hump, he's going to make a killing. Even if you hate the guy, his motivations should be aligned with what's best for the league. I understand why everyone is fighting so hard to make it work there. If this version fails, they'll just have to start all over 15-20 years from now. The NHL can't leave that market vacant permanently. Bigger markets are the future of pro sports.