Dysfunction in the desert: Finger-pointing, fear and financial woes roil the Coyotes organization

[GindyDraws]

There no issue with the arena. Rockets previous owner Les Alexander wanted no part of an NHL team playing at the Toyota Center. Their "new" owner Tillman Fertitta is open to it and may even be involved at an ownership level.



Rockets owner hasn't given up on dream of Houston NHL team - Sportsnet.ca

But he's a bonehead. That in and of itself is a problem.

 

[MNNumbers]

There no issue with the arena. Rockets previous owner Les Alexander wanted no part of an NHL team playing at the Toyota Center. Their "new" owner Tillman Fertitta is open to it and may even be involved at an ownership level.



Rockets owner hasn't given up on dream of Houston NHL team - Sportsnet.ca

Just reminder that many other articles which came before this one suggested that Fertitta is interested "at the right price", and his price is nowhere near where the NHL wants his price to be.

 

[Voight]

doesn't answer the questions most posters have concluded about Houston, even after what Alexander did to the Rockets' sister team, the Comets(one of the most dominant franchises in the history of the WNBA); and then with the Wild aka MSE by forcing the Aeros to go to Iowa, Voight....

that is why Houston is where it stands today, the concern is how leveraged is Fertitta in Houston after the acquisition of the arena in Houston.... no league has approached them about restarting the Aeros brand, or even if the Wild still have rights to this day over the brand (much like the Avalanche have with the Nordiques, and Carolina does with the Whalers brand)

He's interested in having the NHL in Houston. Straightforward.

But he's a bonehead. That in and of itself is a problem.

How is he a bonehead? I see no issues with him.

Just reminder that many other articles which came before this one suggested that Fertitta is interested "at the right price", and his price is nowhere near where the NHL wants his price to be.

Well of course. I mean he did drop $2bn to purchase the Rockets so I doubt he has a ton of cash lying around.

Yotes are worth about $285mn as per Forbes. Not sure how much a relocation fee is (I have seen some speculate it could be the same as Seattles expansion fee) but its not going to be crazy expensive for him. NHL is better off moving the Coyotes to Houston & charge a lower relocation fee so they can get out of this mess.

(Though this will never happen while Bettman is in charge; he refuses to let his pet project die)

 

[CHRDANHUTCH]

He's interested in having the NHL in Houston. Straightforward.



How is he a bonehead? I see no issues with him.



Well of course. I mean he did drop $2bn to purchase the Rockets so I doubt he has a ton of cash lying around.

Yotes are worth about $285mn as per Forbes. Not sure how much a relocation fee is (I have seen some speculate it could be the same as Seattles expansion fee) but its not going to be crazy expensive for him. NHL is better off moving the Coyotes to Houston & charge a lower relocation fee so they can get out of this mess.

(Though this will never happen while Bettman is in charge; he refuses to let his pet project die)

we're not talking Arizona, here, Voight, it's going to be way more than a simple transfer than what the NHL is asking for an expansion franchise

 

[CanadianCoyote]

He's interested in having the NHL in Houston. Straightforward.

He's interested in having there at a discounted price. That's the problem; the NHL will not discount a team's price just to get a market in, because then they're f***ing the values of the other 31 teams up the ass with a rusty spork, and Fertitta isn't interested in paying full price for a team because he's hemorrhaging money due to the pandemic.

How is he a bonehead? I see no issues with him.

Oh, maybe his whole spiel about hockey being "a tough sell south of the Mason-Dixon line" despite numerous franchises proving that isn't the case? Washington and St. Louis are south of that line and they've had franchises for half a century.

Well of course. I mean he did drop $2bn to purchase the Rockets so I doubt he has a ton of cash lying around.

His franchises have been burning cash like crazy during the pandemic. I don't think he's in the financial shape to consider an relocation fee I'd presume to be at least $60 million (the fee TNSE paid to move the Thrashers to Winnipeg). And last I heard, 'ol Tillman was already leveraged from buying the Rockets.

Yotes are worth about $285mn as per Forbes. Not sure how much a relocation fee is (I have seen some speculate it could be the same as Seattles expansion fee) but its not going to be crazy expensive for him. NHL is better off moving the Coyotes to Houston & charge a lower relocation fee so they can get out of this mess.

(Though this will never happen while Bettman is in charge; he refuses to let his pet project die)

The NHL is not and will absolutely never f*** over franchise valuations by discounting a team's sale price, you're f***ing crazy if you think they would. TNSE had to pay $170M in 2011 to buy the Thrashers and move them and you're thinking they discount fees to move a team afterwards? If anything, the relocation fee is going to go UP from that $170m, not down.

 

[GindyDraws]

He's interested in having the NHL in Houston. Straightforward.

A trend that will only continue to go forward is the increase in franchise rates. Tillman Fertitta wants to get his team at a discount with various excuses justifying said reasoning ("I own my arena", "Are the Coyotes that valuable?", "It's a relocation, not an expansion", and so forth) that only will exasperate the process. It also doesn't help that the Toyota Center is barely NHL compatible. The league was willing to put up with Brooklyn for a while since it was a brand new arena, but Houston's arena is nearly 2 decades old that likely will require either lengthy renovations to make it suitable for the relocated Coyotes long term (which would cost money), or to build a new arena that would support both the NHL and NBA (which would cost a lot of money), and I don't think that sniglet has passed through Tillman's synapses.

How is he a bonehead? I see no issues with him.

Investing in the restaurant/entertainment industry before the pandemic wasn't the most brilliant move, but we didn't expect it to be this bad, so let's give him the benefit of the doubt. What we can address that works against him is his comments that Houston isn't a hockey town despite decades of people supporting various levels of minor league hockey, as well as his assertion that hockey doesn't work in the South. He wants an NHL team not for the sake of building Houston as a hockey town or discovering untapped potential, but rather it being another asset to own that he likely can't support.

 

[TheLegend]

There no issue with the arena. Rockets previous owner Les Alexander wanted no part of an NHL team playing at the Toyota Center. Their "new" owner Tillman Fertitta is open to it and may even be involved at an ownership level.



Rockets owner hasn't given up on dream of Houston NHL team - Sportsnet.ca

18 month old article that’s pre-pandemic.

Things have changed a ton since that article was written.

 

[Melrose Munch]

He's interested in having there at a discounted price. That's the problem; the NHL will not discount a team's price just to get a market in, because then they're f***ing the values of the other 31 teams up the ass with a rusty spork, and Fertitta isn't interested in paying full price for a team because he's hemorrhaging money due to the pandemic.


Oh, maybe his whole spiel about hockey being "a tough sell south of the Mason-Dixon line" despite numerous franchises proving that isn't the case? Washington and St. Louis are south of that line and they've had franchises for half a century.


His franchises have been burning cash like crazy during the pandemic. I don't think he's in the financial shape to consider an relocation fee I'd presume to be at least $60 million (the fee TNSE paid to move the Thrashers to Winnipeg). And last I heard, 'ol Tillman was already leveraged from buying the Rockets.


The NHL is not and will absolutely never f*** over franchise valuations by discounting a team's sale price, you're f***ing crazy if you think they would. TNSE had to pay $170M in 2011 to buy the Thrashers and move them and you're thinking they discount fees to move a team afterwards? If anything, the relocation fee is going to go UP from that $170m, not down.

Alright.

Here's my response: Where in the NHL's current financial makeup is their price justified? This is a league that was talking about skipping the season. This is not even about the Coyotes at this point. If someone asks me if the NHL's price is justified, I will point to the TV ratings and ask, where? A league where many teams, south or not have lost money recently and relies so heavily on ticket sales, should not be so quick to turn down owners. Franchise values are already down and we don't know what they truly are anyway since all the books are closed. If the NHL wants to continue to raise fees, they need a bigger TV contract to justify it. End of story.

 

[MNNumbers]

Alright.

Here's my response: Where in the NHL's current financial makeup is their price justified? This is a league that was talking about skipping the season. This is not even about the Coyotes at this point. If someone asks me if the NHL's price is justified, I will point to the TV ratings and ask, where? A league where many teams, south or not have lost money recently and relies so heavily on ticket sales, should not be so quick to turn down owners. Franchise values are already down and we don't know what they truly are anyway since all the books are closed. If the NHL wants to continue to raise fees, they need a bigger TV contract to justify it. End of story.

MM -

I definitely see your point, and I agree with the logic. However, I don't think that logic will apply here. What I think will actually happen is something like this:

Meruelo will keep ownership of Arizona, because we are starting to come out of the pandemic. If that is true, then there is no problem anywhere, and there is no other franchise which is distressed enough to consider for a relo to Houston. In that case, it doesn't matter what the price is, because no one is selling.

In the event that I am wrong about that, and some of the rumors about Meruelo already having the team on the selling block are true, then I expect one of 2 things to happen.....
1- There is another owner in Arizona, and the franchise just stays there, as it has for the past 6 years now....
2- No one wants to buy. At this point, the BOG will have 2 options. Either they can allow a sale for relo at a reduced price, or they can demand the buyer pay a relo fee which maintains artificially high franchise values (say, the total of the sale price and the relo fee is near 600M). If no one wants to buy to relocate at the price, the BOG simply buys the team themselves (again), and waits.

Personally, I think Meruelo is in for the long run.

 

[Melrose Munch]

MM -

I definitely see your point, and I agree with the logic. However, I don't think that logic will apply here. What I think will actually happen is something like this:

Meruelo will keep ownership of Arizona, because we are starting to come out of the pandemic. If that is true, then there is no problem anywhere, and there is no other franchise which is distressed enough to consider for a relo to Houston. In that case, it doesn't matter what the price is, because no one is selling.

In the event that I am wrong about that, and some of the rumors about Meruelo already having the team on the selling block are true, then I expect one of 2 things to happen.....
1- There is another owner in Arizona, and the franchise just stays there, as it has for the past 6 years now....
2- No one wants to buy. At this point, the BOG will have 2 options. Either they can allow a sale for relo at a reduced price, or they can demand the buyer pay a relo fee which maintains artificially high franchise values (say, the total of the sale price and the relo fee is near 600M). If no one wants to buy to relocate at the price, the BOG simply buys the team themselves (again), and waits.

Personally, I think Meruelo is in for the long run.

You are correct, but that's the problem: no one wants to buy. And why should they? In what university is Ottawa worth 600 million? It's closer to 400 and I am being nice here. The NHL has no justification for asking what they are asking for, so they can just keep the coyotes where they are because no one is going to bail them out of this besides Merulo. Same with expansion. No one has any money, so if they aren't willing to reduce prices, people will get a cheap MLS team instead.

 

[CanadianCoyote]

Alright.

Here's my response: Where in the NHL's current financial makeup is their price justified? This is a league that was talking about skipping the season. This is not even about the Coyotes at this point. If someone asks me if the NHL's price is justified, I will point to the TV ratings and ask, where? A league where many teams, south or not have lost money recently and relies so heavily on ticket sales, should not be so quick to turn down owners. Franchise values are already down and we don't know what they truly are anyway since all the books are closed. If the NHL wants to continue to raise fees, they need a bigger TV contract to justify it. End of story.

The league having the appearance of financial instability would impact TV deals, is the thing. If Seattle pays $650m to get an expansion and then Houston ends up paying a firesale price for the Coyotes just a few seasons later, that automatically drags down the values of the other 31 teams and makes the league's financial standing just that little bit unsure enough to leave TV companies a bit wary.

The NHL is quick to turn down owners after years of having idiots like Balsillie trying and failing to nab multiple clubs after getting in good with the BoG or Spano literally lying about the amount of money he had to buy the Islanders.

They keep teams in markets because they consider relocation the nuclear option, the thing they only do in absolutely dire situations where there's no chance to keep the team in its current market. They want franchise stability coming out of this, not a repeat of the mid 90's where three different franchises all f***ed off at practically the same time.

Meruelo, for better or worse, is the most stable owner this team has had since it relocated from Winnipeg. He and the NHL would be foolish to yeet it to Houston just because of a pandemic neither party could've controlled.

Selling the Coyotes doesn't benefit Meruelo, who could use them to get an arena which would be profitable. Relocating a team in the middle of getting a new TV deal done certainly doesn't help the NHL's case any. Moving the Coyotes right now benefits literally nobody besides letting the crowd who've spent years crying about it sling dirt at the fanbase in Arizona.

Arizona has a city willing to foot the bill for the Coyotes to play in their arena and an owner willing to keep the team in the market. Unless it gets really bad pandemic-wise, I don't think there's much trouble.

 

[Mightygoose]

MM -

I definitely see your point, and I agree with the logic. However, I don't think that logic will apply here. What I think will actually happen is something like this:

Meruelo will keep ownership of Arizona, because we are starting to come out of the pandemic. If that is true, then there is no problem anywhere, and there is no other franchise which is distressed enough to consider for a relo to Houston. In that case, it doesn't matter what the price is, because no one is selling.

In the event that I am wrong about that, and some of the rumors about Meruelo already having the team on the selling block are true, then I expect one of 2 things to happen.....
1- There is another owner in Arizona, and the franchise just stays there, as it has for the past 6 years now....
2- No one wants to buy. At this point, the BOG will have 2 options. Either they can allow a sale for relo at a reduced price, or they can demand the buyer pay a relo fee which maintains artificially high franchise values (say, the total of the sale price and the relo fee is near 600M). If no one wants to buy to relocate at the price, the BOG simply buys the team themselves (again), and waits.

Personally, I think Meruelo is in for the long run.

No question there are allot of scenarios however if it gets to point 2 it only gets to that there if no one wants to buy it from Meruelo should the sale rumour be true.

If no one wants to buy or wants to pay what the league wants with their desired relocation fee then what? The league takes over when there is already a shortage of buyers? The last time they took over the team, they were ready to move the team after one season. Then it's a buyer's market but it's not there right now.

 

[Melrose Munch]

The league having the appearance of financial instability would impact TV deals, is the thing. If Seattle pays $650m to get an expansion and then Houston ends up paying a firesale price for the Coyotes just a few seasons later, that automatically drags down the values of the other 31 teams and makes the league's financial standing just that little bit unsure enough to leave TV companies a bit wary.

We're already past that point. If Seattle didn't have those billionaires, they would be under strain too. On top of that, the current ratings don't really justify an increase or a large one. I apply this to the whole league rather than just the coyotes: values are inflated and most teams aren't worth close to 700 million or even 500m really. If you were willing to cancel the season, you were past the point of appearance.

The NHL is quick to turn down owners after years of having idiots like Balsillie trying and failing to nab multiple clubs after getting in good with the BoG or Spano literally lying about the amount of money he had to buy the Islanders. They keep teams in markets because they consider relocation the nuclear option. They want franchise stability coming out of this, not a repeat of the mid 90's where three different franchises all f***ed off at practically the same time.

Then you get people to buy in at a reasonable price. The best way to get stability to stabilize what you have. Ottawa, Florida, etc. I mean none of those franchises are worth 750m.

Meruelo, for better or worse, is the most stable owner this team has had since it relocated from Winnipeg. He and the NHL would be foolish to yeet it to Houston just because of a pandemic neither party could've controlled.

Relocating the Coyotes right now benefits literally nobody.

We'll we agree for different reasons. They should not move to Houston because the price is not justified. If they want to move, they should come off the 650 million price point, because that's not happening nor should it. Same for expansion to Houston.

 

[oknazevad]

It also doesn't help that the Toyota Center is barely NHL compatible.

I think you may be confusing the Toyota Center with another arena. The place was and is hockey compatible, nothing like the Barclays or other off-center ice arenas.

 

[GindyDraws]

I think you may be confusing the Toyota Center with another arena. The place was and is hockey compatible, nothing like the Barclays or other off-center ice arenas.

It's hockey compatible since the Houston Aeros played there for many years.

But in terms of seating capacity, it was last stated to be around 17,900 (according to Wikipedia) for seating capacity, which would make it... 11th smallest. Not a deal breaker, for sure, and it would have more seats than the current venue in Arizona, but it's been a while since the venue held hockey, and if the Coyotes move there, there would be renovations needed to ensure the arena could handle two teams full-time.

 

[OgeeOgelthorpe]

It's hockey compatible since the Houston Aeros played there for many years.

But in terms of seating capacity, it was last stated to be around 17,900 (according to Wikipedia) for seating capacity, which would make it... 11th smallest. Not a deal breaker, for sure, and it would have more seats than the current venue in Arizona, but it's been a while since the venue held hockey, and if the Coyotes move there, there would be renovations needed to ensure the arena could handle two teams full-time.

Houston is an affluent city with a lot of new money from the energy sector. There's also a lot of transplants to the city, which is the 5th largest metropolitan area in the United States. They could find their fan market to attend games and sell tickets at a ridiculous price in Houston. An 18,000 person arena isn't a dealbreaker.

 

[aqib]

Alright.

Here's my response: Where in the NHL's current financial makeup is their price justified? This is a league that was talking about skipping the season. This is not even about the Coyotes at this point. If someone asks me if the NHL's price is justified, I will point to the TV ratings and ask, where? A league where many teams, south or not have lost money recently and relies so heavily on ticket sales, should not be so quick to turn down owners. Franchise values are already down and we don't know what they truly are anyway since all the books are closed. If the NHL wants to continue to raise fees, they need a bigger TV contract to justify it. End of story.

The NHL doesn't need to do anything to justify the price other than have someone willing to pay it. How does MLS justify its expansion fees?

 

[Ernie]

yeah, the economics of pro sports is more of a reflection of billionaires buying toys than any kind of actual business investment. On a pure income basis, most pro sports teams are overvalued by a factor of 2 to 3.

And before people come in and make the point that most owners see a healthy return when they sell the franchise.. that is also driven by billionaires paying a premium for toys.

Aside from the vast wealth inequality that drives this whole ecosystem, I don't really have a problem with it. But it's a little rich when owners cry poverty and demand public subsidies. If you can't afford your toys, sell them.

 

[golfortennis]

yeah, the economics of pro sports is more of a reflection of billionaires buying toys than any kind of actual business investment. On a pure income basis, most pro sports teams are overvalued by a factor of 2 to 3.

And before people come in and make the point that most owners see a healthy return when they sell the franchise.. that is also driven by billionaires paying a premium for toys.

Aside from the vast wealth inequality that drives this whole ecosystem, I don't really have a problem with it. But it's a little rich when owners cry poverty and demand public subsidies. If you can't afford your toys, sell them.

This brings up an interesting thing I read recently. The book is Season Ticket, by Roger Angell, which is about baseball in the 80s. At that time, The Oakland A's were owned by Walter A. Haas, of Levi's Strauss lineage. His son-in-law, who was team president, made a comment about how, if a rich man makes a donation to charity in a large number, they are celebrated, etc., but if they "lose" the same amount of money from owning a franchise, then there is a problem. He asked why they can't be looked upon as a form of charitable donation by making sure people can have sports in their community.

It can go very deep, sure, but I thought it was an interesting point.

 

[Ernie]

He asked why they can't be looked upon as a form of charitable donation by making sure people can have sports in their community

I don't see it as a charity at all. Pro sports is a very viable business. Remove the vanity premium and public subsidies and you'll result in players making a little bit less and owners doing quite well.

 

[Melrose Munch]

The NHL doesn't need to do anything to justify the price other than have someone willing to pay it. How does MLS justify its expansion fees?

And how has the worked out for the MLS recently? They have had like 2 bids fall through. Come on. There is no market.

 

[aqib]

And how has the worked out for the MLS recently? They have had like 2 bids fall through. Come on. There is no market.

Its worked out fine for MLS. Yes the Sacramento bid fell apart partially due to Covid but they are going to get to 29 teams in a couple of years when they were at 18 in 2015. Look at who is buying these teams as well. You have billionaires buying shares in these teams, you think they don't know how to value assets?

People said Karmanos was never going to get $400 million for the Hurricanes and he got $420 million from Tom Dundon. He's a guy who made his living in investments. Now I don't know what you do for a living but do you really thing you can value assets better than him and other billionaires?

 

[Melrose Munch]

Its worked out fine for MLS. Yes the Sacramento bid fell apart partially due to Covid but they are going to get to 29 teams in a couple of years when they were at 18 in 2015. Look at who is buying these teams as well. You have billionaires buying shares in these teams, you think they don't know how to value assets?

People said Karmanos was never going to get $400 million for the Hurricanes and he got $420 million from Tom Dundon. He's a guy who made his living in investments. Now I don't know what you do for a living but do you really thing you can value assets better than him and other billionaires?

This is not about valuing assets. This is about the NHL claiming value where there is none. You're basically saying if someone says something is worth x than it's worth x. I'm not arguing that. I'm saying that if the NHL is saying moving the coyotes or an expansion team is worth x, and people don't want to play, they can't complain. Who is going to pay 750 million right now? Quebec won't.

 

[aqib]

This is not about valuing assets. This is about the NHL claiming value where there is none. You're basically saying if someone says something is worth x than it's worth x. I'm not arguing that. I'm saying that if the NHL is saying moving the coyotes or an expansion team is worth x, and people don't want to play, they can't complain. Who is going to pay 750 million right now? Quebec won't.

People around here act like they know what these investors will and will not do. I said the same thing about Portland. Unless someone has a quote from Jody Allen or a legit source close to Jody Allen then you have no idea what Portland is going to do. Similarly, do you have anything article/statement/source that says what Quebecor will or won't do for an NHL team? If not then your statement is just something you made up.

 

[Melrose Munch]

People around here act like they know what these investors will and will not do. I said the same thing about Portland. Unless someone has a quote from Jody Allen or a legit source close to Jody Allen then you have no idea what Portland is going to do. Similarly, do you have anything article/statement/source that says what Quebecor will or won't do for an NHL team? If not then your statement is just something you made up.

Quebecor pulled out of NHL expansion because of costs. It was widely reported at the time so you know this. Tell me where anyone in Portland is remotely interested in the NHL. Jody has a mess on her hands with the Seahawks anyway.