Glendale and Ice Arizona Agree on New Lease - City Council Passes It.

[MNNumbers]

If I remember, the new arena manager has to allow the coyotes to play for no rent right? Can a new manager say "no you have to pay rent" - or is that in the clause that the coyotes have to play if they sign on to be the arena managers?

For Year 2, Coyotes pay 500K rent and get all hockey event revenue, no matter who is manager.

 

[XX]

If I remember, the new arena manager has to allow the coyotes to play for no rent right? Can a new manager say "no you have to pay rent" - or is that in the clause that the coyotes have to play if they sign on to be the arena managers?

The rent is actually 500k. The AMF helps offset that. They do not lose money on the operation of the arena with the combined AMF + revenue streams, like Leblanc claims. They lose money on the hockey team.

Most every team owns their building outright or the subsidiary that operates it. Some subcontract out to Live Nation, AEG, Global Spectrum etc... but I'm unaware of any hockey team that successfully operates without access to major revenue streams. It'd obviously be an unsustainable situation.

If I were the NHL, I'd use the cover of expansion to forgive the Coyotes outstanding debt that is with the league. Financed over a long period of time, it's a drop in the bucket for the league. Then I'd do the "Barroway shuffle", and "sell" the team to Sarver for "free". IA would have the option of maintaining their diluted ownership share. Sarver assumes the rest of the debt, puts nothing down for the team beyond working capital if it's needed, and heads to the negotiation table with Phoenix with 90 or so guaranteed dates + whatever the Mercury play as majority owner.

I would do this as the owners are busy cashing their $30m+ checks for expansion, in the name of protecting the opportunity to get another one of those fat paydays + solving the Coyotes problem for good.

Too bad Arte Moreno isn't a huge hockey fan. Talk about "the right man for the job."

 

[awfulwaffle]

The rent is actually 500k. The AMF helps offset that. They do not lose money on the operation of the arena with the combined AMF + revenue streams, like Leblanc claims. They lose money on the hockey team.

Most every team owns their building outright or the subsidiary that operates it. Some subcontract out to Live Nation, AEG, Global Spectrum etc... but I'm unaware of any hockey team that successfully operates without access to major revenue streams. It'd obviously be an unsustainable situation.

If I were the NHL, I'd use the cover of expansion to forgive the Coyotes outstanding debt that is with the league. Financed over a long period of time, it's a drop in the bucket for the league. Then I'd do the "Barroway shuffle", and "sell" the team to Sarver for "free". IA would have the option of maintaining their diluted ownership share. Sarver assumes the rest of the debt, puts nothing down for the team beyond working capital if it's needed, and heads to the negotiation table with Phoenix with 90 or so guaranteed dates + whatever the Mercury play as majority owner.

I would do this as the owners are busy cashing their $30m+ checks for expansion, in the name of protecting the opportunity to get another one of those fat paydays + solving the Coyotes problem for good.

Too bad Arte Moreno isn't a huge hockey fan. Talk about "the right man for the job."

I don't know what you do, but whatever you do, you deserve better. What you just said makes a lot of sense.

Although, if the league only kept the Coyotes here because of the AMF that as regularly paid, then who knows. But if the Coyotes have lost so much regularly, why would they care about the AMF? I would have assumed they moved them long ago. Do they really care about keeping the Phoenix market that much?

 

[XX]

I don't know what you do, but whatever you do, you deserve better. What you just said makes a lot of sense.

Although, if the league only kept the Coyotes here because of the AMF that as regularly paid, then who knows. But if the Coyotes have lost so much regularly, why would they care about the AMF?

The AMF usually only offsets the cost to manage and run the arena. It's not meant to be a profit center in and of itself. The revenue is supposed to come from booking the events and earning revenue via those, hence paying someone else - someone better than you are - to manage the arena. This can be quite lucrative in the right market. Owning the right to operate the arena has kept the Panthers afloat through times just as dark as the Coyotes. The Coyotes used their $15m AMF to pay hockey bills.

The 'problem' is that not every concert needs 15-20,000 seats, so right off the bat you are drawing on a relatively small pool of acts. Ak-Chin Pavillion actually has a 20k capacity, and is outdoors, and all they do is shows (think unlimited availability). Then you add Talking Stick Arena, which has had uninterrupted service since forever. The lack of stability, interested managers, and historical relationships really undercut GRA's ability to book events. Competition is very high.

I would have assumed they moved them long ago. Do they really care about keeping the Phoenix market that much?

People will say they do, based on historical evidence. However, if you look a little closer, that evidence is pretty suspect. The team was never even originally supposed to be in Arizona, as we all know. The bankruptcy fight was actually about preventing a backdoor acquisition method and defending the league's ability to determine where franchises go. This is important, because teams allowed to move around all willy nilly completely kills expansion. You can't tell someone to pay $500m for an empty shell if there's $250m teams floating around that actually have players and prospects.

Now, we know that the Coyotes were gonzo if the city didn't cough up $25m twice. So to say that the league will do anything it takes to keep the team here is wrong. This latest skirmish occurred too late in the year to realistically move the team, plus there was an ongoing legal battle. Some will say "the league isn't in control, IA is", which is pretty much false. IA doesn't have enough money to pay a relocation fee to operate the team elsewhere, so it's really AZ or a sale for them. It's also pretty clear they're getting help behind the scenes from the league, so they jump when the league asks them to. They're in it for the return on investment, and the novelty of being owners. They have a price point (and a pain point) where they'd be willing to walk away.

To circle back to your point; we'll find out in a year when the Coyotes are probably evicted as managers, and the team remains unattractive to local buyers. At that point, the league will need to step in with debt forgiveness or some other favor to try and generate local interest. There will be plenty of buyers looking to grab the team on the cheap in other markets. If you believe as I do that the league wants at least another round of expansion, they may go to extreme lengths to keep the team in AZ once again. Then again, certain markets will never be expansion candidates, but would be willing to take the team, like Paul Allen in Portland.

Or they could fold like the cheap, sleazy suits that they are and move the team without a second thought. It really depends on the possibility of a downtown arena, Sarver, and if the team is on the upswing on the ice.

 

[RemoAZ]

Sarver is a horrible owner. Moreno would be great but if he had any interest, he would have already bought the team. Same with Sarver actually so that's not going to happen.

Best hope for the team for mayor Weird to get voted out next year. The two recalls would be icing on the cake.

 

[Jakey53]

The surrounding entertainment district would serve as revitalization.

That would be a good selling point to the public.

 

[Jakey53]

The rent is actually 500k. The AMF helps offset that. They do not lose money on the operation of the arena with the combined AMF + revenue streams, like Leblanc claims. They lose money on the hockey team.

Most every team owns their building outright or the subsidiary that operates it. Some subcontract out to Live Nation, AEG, Global Spectrum etc... but I'm unaware of any hockey team that successfully operates without access to major revenue streams. It'd obviously be an unsustainable situation.

If I were the NHL, I'd use the cover of expansion to forgive the Coyotes outstanding debt that is with the league. Financed over a long period of time, it's a drop in the bucket for the league. Then I'd do the "Barroway shuffle", and "sell" the team to Sarver for "free". IA would have the option of maintaining their diluted ownership share. Sarver assumes the rest of the debt, puts nothing down for the team beyond working capital if it's needed, and heads to the negotiation table with Phoenix with 90 or so guaranteed dates + whatever the Mercury play as majority owner.

I would do this as the owners are busy cashing their $30m+ checks for expansion, in the name of protecting the opportunity to get another one of those fat paydays + solving the Coyotes problem for good.

Too bad Arte Moreno isn't a huge hockey fan. Talk about "the right man for the job."

Do you know which teams own their building outright?

 

[rt]

What dog track are we even talking about?

 

[Bonsai Tree]

As I see it, Salt River or GR would love to snag the Suns. It would be quite achievement for one of them to be the first and only Indian nation to have a major league team. It would also drive the Casino business simply by putting 10-15K people within a mile of the casino 40 nights a year.

For Phoenix to keep the Suns after the lease expires they will need to provide a new building. As noted previously by many people here, a dual use arena dilutes the fixed costs of arena construction and maintenance at the minimum and nearly doubles the booked days. I expect the mayor or Phoenix to be a driving force to develop a new dual use arena as home for both the Suns and the Coyotes.

We'll need to get those old PHX patches out of the drawers.

 

[Mosby]

Do you know which teams own their building outright?

Out of curiosity, I looked this up the other day. About half of the arenas are publicly owned, whether it be by a municipality, county, or some sort of publicly-funded "arena authority". The other half of the arenas were held by team ownerships.

 

[Jakey53]

Out of curiosity, I looked this up the other day. About half of the arenas are publicly owned, whether it be by a municipality, county, or some sort of publicly-funded "arena authority". The other half of the arenas were held by team ownerships.

Do you know if any of the buildings owned by the team are the newer arenas?

 

[Bonsai Tree]

I just read the AZCentral article on who wins and loses what, and to me this appears to be a consensual divorce. I don't see much the city gaining much financial relief as financially is was just a rearrangement of the deck chairs. The only major change that I see is the end of the 15 year term.

 

[MNNumbers]

I just read the AZCentral article on who wins and loses what, and to me this appears to be a consensual divorce. I don't see much the city gaining much financial relief as financially is was just a rearrangement of the deck chairs. The only major change that I see is the end of the 15 year term.

Hi Bonsai,
Don't know if you want to do the math yourself or if that doesn't interest you. Here is the link to the Arena Report for last June (end of Year 1). http://www.glendaleaz.com/finance/documents/FY14MonthlyArenaReport-20140630.pdf

The part that changes (which deck chairs get re arranged) are the 3rd through 7th lines. All the rest stays the same. Sales taxes still go to the city. Naming Rights still split the same way, etc.

Those 3rd through 7th lines amount to about 3.6M.

Thus, if all events, tickets, parking and attendance, as well as numbers of non-hockey events are identical next year to the year we are looking at...

IA would get their 6.5M AMF (under the new amendment). Plus IA gets the 3.6M that was going to the city before. That's 10.1M. In other words, 5M less than the 15M/yr they got before.

City gets (we'll add this differently). Before, a 9M deficiency, as listed on that link. Now, the city would pay 6.5M + 500K Capital Expenditures, and get back:
1.1M Sales Tax
500K Rent
300K Naming rights (new contract)
500K Miscellaneous items on the bottom of the list
That adds to a 5M deficiency. City comes out 4M ahead (The 5M for the team and 4M for the city don't match, because we are using the pro-rated year of 2013-14. The 5M for the team is the one that holds.)

So, you right. Some deck chairs re-arranged. But, done in a way to the city's advantage.

IA survives by going hard for non-hockey events. It's the only way.

Like I wrote yesterday, I believe that the city hopes they succeed, because I believe the ideal result for the CoG is to have the team there. They just can't give them the $$ to do it.

 

[Mosby]

Do you know if any of the buildings owned by the team are the newer arenas?

Here's the full list by year:

 

[rt]

I just read the AZCentral article on who wins and loses what, and to me this appears to be a consensual divorce. I don't see much the city gaining much financial relief as financially is was just a rearrangement of the deck chairs. The only major change that I see is the end of the 15 year term.

I don't know. It seems the city got a 20% discount for this season, at least. They also get to see what a highly motivated arena manager can do with that building.

 

[Jakey53]

I don't know. It seems the city got a 20% discount for this season, at least. They also get to see what a highly motivated arena manager can do with that building.

I called the COG council a bunch of two faced redneck politicians. After all the talking was done, they won this round. Maybe the COG are not so dumb after all? AL and their lawyer Woods got a good kick in the nuts.

 

[kihekah19*]

I called the COG council a bunch of two faced redneck politicians. After all the talking was done, they won this round. Maybe the COG are not so dumb after all? AL and their lawyer Woods got a good kick in the nuts.

Or maybe this was the plan all along? Let's face it the COG has been very gracious financially. The hiring of Tindall was suspect at best. We could be witnessing a predetermined reciprocation in this charade.

 

[DesertDawg]

What dog track are we even talking about?

3801 E Washington, Now a flea Market. Across from Gateway Community College, close to Skyharbor, and on the rail line.

Years ago, I was thinking that the city should move the rail lines further south and put a hi-way through downtown and connect it to Grand Ave.

 

[rt]

Oh. Right. I'm familiar with that one. Yeah, it's a really bad area that could really use revitalization. But it's an awesome spot. The 10, 202, 143, airport, zoo, etc all right there. Plus the light rail. It's basically in all of Phoenix, Scottsdale and Tempe more or less.

 

[Bonsai Tree]

Hi Bonsai,
Don't know if you want to do the math yourself or if that doesn't interest you. Here is the link to the Arena Report for last June (end of Year 1). http://www.glendaleaz.com/finance/documents/FY14MonthlyArenaReport-20140630.pdf

The part that changes (which deck chairs get re arranged) are the 3rd through 7th lines. All the rest stays the same. Sales taxes still go to the city. Naming Rights still split the same way, etc.

Those 3rd through 7th lines amount to about 3.6M.

Thus, if all events, tickets, parking and attendance, as well as numbers of non-hockey events are identical next year to the year we are looking at...

IA would get their 6.5M AMF (under the new amendment). Plus IA gets the 3.6M that was going to the city before. That's 10.1M. In other words, 5M less than the 15M/yr they got before.

City gets (we'll add this differently). Before, a 9M deficiency, as listed on that link. Now, the city would pay 6.5M + 500K Capital Expenditures, and get back:
1.1M Sales Tax
500K Rent
300K Naming rights (new contract)
500K Miscellaneous items on the bottom of the list
That adds to a 5M deficiency. City comes out 4M ahead (The 5M for the team and 4M for the city don't match, because we are using the pro-rated year of 2013-14. The 5M for the team is the one that holds.)

So, you right. Some deck chairs re-arranged. But, done in a way to the city's advantage.

IA survives by going hard for non-hockey events. It's the only way.

Like I wrote yesterday, I believe that the city hopes they succeed, because I believe the ideal result for the CoG is to have the team there. They just can't give them the $$ to do it.

5 million dollars is a deck chair considering the size of the Glendale budget (and the salary of a top six wing).

"Going hard for non-hockey events" isn't an option. It would be impossible to pry events away from Live Nation, or Talking Stick for that matter.

What changed is the term of the contract. IE may or may not have been able to show enough losses to abrogate the agreement. Glendale had no out. Now both have their out in 2 years. This is a Haitian Divorce. Of course the two principals are going to share a bottle of Chivas.

 

[GiveAFlyingPuck]

Glendale had no out. Now both have their out in 2 years. This is a Haitian Divorce. Of course the two principals are going to share a bottle of Chivas.

You can almost hear this playing in the background...

 

[Bonsai Tree]

You can almost hear this playing in the background...

Funny! Never heard those lyrics before. Ya know, I was considering editing my post to state "and have a goodbye shtup but chose not to for some reason.

 

[Jakey53]

Or maybe this was the plan all along? Let's face it the COG has been very gracious financially. The hiring of Tindall was suspect at best. We could be witnessing a predetermined reciprocation in this charade.

Your giving them too much credit. Both parties are at fault here, and once you get lawyers involved this crap always happens.

 

[kihekah19*]

Your giving them too much credit. Both parties are at fault here, and once you get lawyers involved this crap always happens.

Well in this play the NHL would be the puppet master and the COG and IA the performers. They had a long time to hatch these scenes.

 

[Dirty Old Man]

Greyhound Park is centralized, but man, what a crappy area.

The surrounding entertainment district would serve as revitalization.

^That's the first thing I thought, too. Yes, it's a crappy area *now*, but it does have a couple of things going for it - adjacent light rail stop, if they can bridge the gap to the Gateway area that would work as an entertainment district, ummm, can walk to airport?....really popular park 'n' swap? ...