Forbes: Atlanta Thrashers Will Likely Be Sold For $110 Million

[Fugu]

An internet source is reporting that a mysterious figure from Hamilton, whom he has named "The Mailman", has made an offer to buy the Dallas Stars, presumably to move them to the Steel City.

Spread the word.

I will agree that the price is the price, and the owner can dictate that. However, it would appear that this valuation approach will result in nothing more than the franchise becoming a ward of the NHL. Why a prospective owner would pay such a premium for a product that doesn't appear to be financially viable in the short-term is beyond me. Bettman is negotiating from a position of extreme strength and power while standing on a boogie board in the middle of an open ocean squall.

Lest it be lost in the howling noise of the gale's winds, the point stands that the price is what the NHL paid in BK + all subsequent losses, currently a price of $200+ MM to Hulsizer. This has nothing to do with the reality of the situation in Phoenix, which is emphasized by the sheer amount of subsidy required by an owner to consider making the purchase. This has generally been only $70-100MM of the prospective owners' own money, then a rather substantial annual payment from COG (~$20 MM/yr).

It's rather telling that similarly distressed or unwanted franchises have recently sold for 50% or more below peak franchise values achieved after the lockout.

 

[Fugu]

I have a feeling that if we put each pro sports franchise up for auction, we'd be shocked at their true market value. Sports-entertainment was a bit of a racket to begin with, but these days it's plain to see that the financial structure of these leagues is a house of cards.

Kind of like the US economy. When capital is cheap, or perhaps too cheap, it invites rampant speculative 'investment' with no self-regulation because the damage would be borne by others, not the speculator.

 

[tarheelhockey]

Kind of like the US economy. When capital is cheap, or perhaps too cheap, it invites rampant speculative 'investment' with no self-regulation because the damage would be borne by others, not the speculator.

Exactly. When I see the $250,000 house down the street being sold for $160,000, then turn on the news and see an NHL franchise being sold for $110m, it seems like part of the same storyline.

What I hope is that, much like the housing industry, these pro sports leagues go into a stabilizing period where marginal owners are no longer allowed to get in over their heads. The NHL has always had a problem with that kind of thing, but it's time for the league to put on its big boy pants and find serious ownership... even if that means teams have to be sold at a short-term loss. Enough is enough with the parade of clowns.

 

[Dado]

Kind of like the US economy. When capital is cheap, or perhaps too cheap, it invites rampant speculative 'investment' with no self-regulation because the damage would be borne by others, not the speculator.

At some point, we're going to hit Peak Sports. Perhaps these NHL franchise troubles are a sign that we already have.

 

[Grudy0]

Already been done, via the NHL and Bettman, and with the NHL's blessing, but an offer has been made none the less. Don't kid yourself. ASG knows exactly how much money TNSE has offered to buy the Thrashers.

But like I said, TNSE is playing by the NHL rules. The offer has been made via Bettman, so if nothing local happens Bettman has a Plan B, and TNSE is not taliking to the press.

why do you believe that TNSE is not working closely with the NHL on this transaction?...they are not negotiating with ASG behind the NHL's back with the intent presenting their scheme to the BOG after the fact.....TNSE's strategy all along has been to play by the NHL's rules....i can assure you that has not and will not change, no matter what the outcome.

they will not be trying to force the NHL's hand in any way....that is a given....if ASG sells the thrashers to TNSE it will have the blessing of the NHL long before they even enter into negotiations.

Because there is a team without a real owner or a lease that can be moved in a matter of weeks.

If the Coyotes situation collapses, then yes, I agree TNSE would be working with the NHL and ASG to procure the Thrashers.

However, my point remains two-fold:

1) all those wonderful reports from last year stating that the NHL and TNSE had an agreement regarding the Coyotes until the City of Glendale stepped up to the plate to fund the losses this year. The Coyotes are portable. And because the tentative agreement between City of Glendale and the prospective owner, Mr. Matthew Hulsizer, appears to be roadkill as there aren't any bonds to sell, I seriously doubt a savior can be found in a such a miniscule amount of time.

2) this thread. Seriously. It is about offers to buy the Thrashers for $110 million. And TNSE has yet to have a real mention, but there does appear to be interest from others.

It confounds me to no end how the Thrashers end up being the talk of relo bandwagon when there is true distress within another market and people are simply choosing to ignore that the Coyotes situation is now worse than it was even one month ago.

If the Coyotes franchise ends up staying in the Copper State, then I'll even agree that this talk regarding the Thrashers may in fact hold water. However, with the rumors that have been swirling, I'm more apt to believe that the Coyotes to Winnipeg for the upcoming season is pretty much a done deal.

 

[peter sullivan]

^ you might be right....it is possible, if not likely that the deal in glendale will collapse, rendering the thrashers situation moot for the time being, but there is a substantial amount of evidence that the NHL will sell its soul to keep the coyotes in glendale...for whatever reason.

personally, i dont think we've heard the last of them.

because of the short timeline however, it is somewhat likely that ASG, TNSE and the NHL have been preparing the way for them to hit the ground running if need be....i doubt that if glendale saves their team suddenly that the thrashers negotiations will be starting from zero......it is likely that the NHL knows how the story in glendale will end.

 

[BobDobolina]

Pay 110 so that you can lose 30 more every year?

 

[SuperDave21]

If the Coyotes franchise ends up staying in the Copper State, then I'll even agree that this talk regarding the Thrashers may in fact hold water. However, with the rumors that have been swirling, I'm more apt to believe that the Coyotes to Winnipeg for the upcoming season is pretty much a done deal.

I hate to be "that guy," but Arizona is called "The Grand Canyon State." I know some still refer to it as the "Copper State," but that's not on our license plates! Just a little FYI!

 

[SmokeyClause]

Lest it be lost in the howling noise of the gale's winds, the point stands that the price is what the NHL paid in BK + all subsequent losses, currently a price of $200+ MM to Hulsizer. This has nothing to do with the reality of the situation in Phoenix, which is emphasized by the sheer amount of subsidy required by an owner to consider making the purchase. This has generally been only $70-100MM of the prospective owners' own money, then a rather substantial annual payment from COG (~$20 MM/yr).

It's rather telling that similarly distressed or unwanted franchises have recently sold for 50% or more below peak franchise values achieved after the lockout.

So Hulzinger has agreed to that claimed losses provision? I did read somewhere that he was trying to use $100M from muni's and that losses up to a certain amount might be covered. Looks like Phoenix just needs a warm body to be the ownership figurehead while the city pays for the team.

 

[dj4aces]

Pay 110 so that you can lose 30 more every year?

The Thrashers lost $8M this year, not $30M.

 

[Fugu]

So Hulzinger has agreed to that claimed losses provision? I did read somewhere that he was trying to use $100M from muni's and that losses up to a certain amount might be covered. Looks like Phoenix just needs a warm body to be the ownership figurehead while the city pays for the team.

Yes, apparently as the reported price he'd pay was $206 MM to the NHL (give or take a couple million). Under the agreement with Glendale, he would cover the losses for this most recent year had the sale closed, taking it from the reported asking price last year of $170 MM. It may still close, but that's why we have the 30-something threads on that topic.

 

[Retail1LO*]

So....

If I understand this correctly...the NHL determines franchise values. Not Forbes. Not the potential owners. The NHL basically says, if you want to sell, you have to sell to who we want you to sell to, and for whatever they're offering. Your only other alternative is to choke to death on your losses.

Am I pretty close?

I want to make sure that I clearly understand that the price of owning a team in the NHL is giving up the right (actually, never possessing the right) to see your team to the highest bidder.

 

[tarheelhockey]

Not Forbes.

Safe to say Forbes has nothing to do with it.

I want to make sure that I clearly understand that the price of owning a team in the NHL is giving up the right (actually, never possessing the right) to see your team to the highest bidder.

A better way to phrase this is that you have the right to sell to the highest bidder within the parameters of league authority. You're right that you don't have access to a wide-open free market if you want to be an NHL owner... nor should you, for the sake of stability.

 

[Freibahlen]

Safe to say Forbes has nothing to do with it.



A better way to phrase this is that you have the right to sell to the highest bidder within the parameters of league authority. You're right that you don't have access to a wide-open free market if you want to be an NHL owner... nor should you, for the sake of stability.

Otherwise I could take my lottery winnings and move the Thrashers to the Kennesaw Ice Forum and rename the club The Kennesaw Ham-Sandwiches. Forwards and goalies would have bread colored jerseys with the bread motif complete with sesame seeds and the defensemen would have uniforms resembling meat and cheese. ....MEAT.... and cheese.

 

[Finlandia WOAT]

why do you believe that TNSE is not working closely with the NHL on this transaction?...they are not negotiating with ASG behind the NHL's back with the intent presenting their scheme to the BOG after the fact.....TNSE's strategy all along has been to play by the NHL's rules....i can assure you that has not and will not change, no matter what the outcome.

they will not be trying to force the NHL's hand in any way....that is a given....if ASG sells the thrashers to TNSE it will have the blessing of the NHL long before they even enter into negotiations.

The NHL wants a team in Atlanta.

They don't want ASG as owners.

TSNE only fits one of these qualifications. So unless there are no local options (which is not the case), then TSNE and the ASG should not be seriously talking.

And besides, why would TSNE talk to the NHL? The NHL does not own the Thrashers. ASG does. If TSNE wants the Thrashers, they talk to ASG, not the NHL.

 

[Finlandia WOAT]

So....

If I understand this correctly...the NHL determines franchise values. Not Forbes. Not the potential owners. The NHL basically says, if you want to sell, you have to sell to who we want you to sell to, and for whatever they're offering. Your only other alternative is to choke to death on your losses.

Am I pretty close?

I want to make sure that I clearly understand that the price of owning a team in the NHL is giving up the right (actually, never possessing the right) to see your team to the highest bidder.

To my knowledge, the NHL determines how much a franchise is worth.

However, owners do not have to listen to it. They can sell it at whatever price they wish.

For example, the Lightning sold for 93 million. Forbes has them listed at 145 million in Dec. 2010 (several months after they were sold).

And yes, owning a team in the NHL makes you forfeit the right to sell to whomever you may desire. More specifically, the NHL has the right to select who may own and operate an NHL franchise.

And, pertinent to the conversation at hand, where.

 

[cbcwpg]

So....

If I understand this correctly...the NHL determines franchise values. Not Forbes. Not the potential owners. The NHL basically says, if you want to sell, you have to sell to who we want you to sell to, and for whatever they're offering. Your only other alternative is to choke to death on your losses.

Am I pretty close?

I want to make sure that I clearly understand that the price of owning a team in the NHL is giving up the right (actually, never possessing the right) to see your team to the highest bidder.

Spot on. It has been said that ego buys sports teams, not money. Other then a handful of teams, I don't think anyone buys an NHL franchise because they think they are going to make tonnes of money. They buy them to show them off. Ergo.... ego.

 

[cbcwpg]

The NHL wants a team in Atlanta.

They don't want ASG as owners.

TSNE only fits one of these qualifications. So unless there are no local options (which is not the case), then TSNE and the ASG should not be seriously talking.

And besides, why would TSNE talk to the NHL? The NHL does not own the Thrashers. ASG does. If TSNE wants the Thrashers, they talk to ASG, not the NHL.

Because its thier league. TNSE is not negotiating with ASG ( at this time ). All they are doing is letting the NHL know that they are interested in a team if one becomes available, and here is what thier starting price to buy one is. Besides, Bettman has matched sellers and buyers before. Follow the rules, start with the man in control, see what happens....

 

[Finlandia WOAT]

Because its thier league. TNSE is not negotiating with ASG ( at this time ). All they are doing is letting the NHL know that they are interested in a team if one becomes available, and here is what thier starting price to buy one is. Besides, Bettman has matched sellers and buyers before. Follow the rules, start with the man in control, see what happens....

This is true. In the current situation, this is all that TSNE can do.

I was questioning the post that I quoted on its implication that the NHL and TSNE are working together to get the Thrashers in Winnipeg, which, IMO, is not the case.

Maybe I'm just reading too far into what he has to say.

 

[tarheelhockey]

By the by, I think TNSE has for the most part handled this situation extremely well. In light of the past few years' worth of drama, they're a breath of fresh air.

 

[peter sullivan]

The NHL wants a team in Atlanta.

They don't want ASG as owners.

TSNE only fits one of these qualifications. So unless there are no local options (which is not the case), then TSNE and the ASG should not be seriously talking.

And besides, why would TSNE talk to the NHL? The NHL does not own the Thrashers. ASG does. If TSNE wants the Thrashers, they talk to ASG, not the NHL.

i wouldnt be surprised if chipman has never even met anyone from ASG....but i would also bet that discussions about a potential purchase are much more than preliminary....didnt we just see an article yesterday saying that they would make an offer as soon as phoenix settles?.....since that is likely to happen in the next week or so, are you saying that they will make this offer without performing any due dilligence on the franchise?

or are you saying that you dont believe the article...because you seem to buy into the rest of what was claimed.

i dont think anyone can use difinitive language regarding the NHL's opinion on the matter.

 

[videofarmer]

By the by, I think TNSE has for the most part handled this situation extremely well. In light of the past few years' worth of drama, they're a breath of fresh air.

Yeah, glad to see them playing by the rules. Even though it might not pay off with a relocation this go around, it definitely puts them on the top of the list for expansion one day.

 

[BrianL*]

Yeah, glad to see them playing by the rules. Even though it might not pay off with a relocation this go around, it definitely puts them on the top of the list for expansion one day.

I forget the thread it was in, but didn't some unidentified BoG source say that Winnipeg was not on the list to get an expansion team? In fact, is there any prospect of NHL expansion anywhere even remotely on the horizon?

 

[videofarmer]

I forget the thread it was in, but didn't some unidentified BoG source say that Winnipeg was not on the list to get an expansion team? In fact, is there any prospect of NHL expansion anywhere even remotely on the horizon?

An expansion anytime soon seems unlikely (unless something comes up during CBA) but they should still be at the top of the list!

 

[Krautso]

This is true. In the current situation, this is all that TSNE can do.

I was questioning the post that I quoted on its implication that the NHL and TSNE are working together to get the Thrashers in Winnipeg, which, IMO, is not the case.

Maybe I'm just reading too far into what he has to say.

TNSEhas no business talking with ASG because ASG has no authority to move the franchise from Atlanta. Negotiating with ASG is only valid if you are purchasing the team to remain in their market, with their leases, contracts, sponsors, etc. There is no due diligence required by TNSE on the thrashers or coyotes because their only intention is to uproot and move to Winnipeg. Their due diligence is with the NHL and the Winnipeg market, sponsors, etc which, by all accounts, they have been doing.

TNSE is working with the NHL to arrange for a soft place for a troubled franchise to land if a local solution can't be found. No more, no less.