Group offered $500 million for Hawks/Philips Arena/Thrashers on May 20

[AtlantaWhaler]

Not only that, but there's still the matter of the team having operating losses due to massive erosion in its STH base and almost no playoff revenue in its history. The new ownership group would have been looking at a minimum of 2-3 years recovery time, assuming all went well. Probably more like 5-7 years given how long it takes to develop a competitive team and then wait for the STH bump to take effect.

So they would be looking at a horrible lease arrangement, massive short-term operating losses, and still the matter of paying $100m up front for the privilege.

The only way to make it work would be to buy the operating rights to the arena (thank you Jeffrey93 ) and that was prevented by the exclusivity agreement. Checkmate, ASG.

Yup.

 

[Positive]

Not only that, but there's still the matter of the team having operating losses due to massive erosion in its STH base and almost no playoff revenue in its history. The new ownership group would have been looking at a minimum of 2-3 years recovery time, assuming all went well. Probably more like 5-7 years given how long it takes to develop a competitive team and then wait for the STH bump to take effect.

So they would be looking at a horrible lease arrangement, massive short-term operating losses, and still the matter of paying $100m up front for the privilege.

The only way to make it work would be to buy the operating rights to the arena (thank you Jeffrey93 ) and that was prevented by the exclusivity agreement. Checkmate, ASG.

Yep that's pretty much the sum and end of the thread there.

 

[kdb209]

The arena is OWNED by the 'Atlanta Fulton County Recreation Authority'.

In many cases - including Atlanta, AIUI - it is more lucrative to own the operating rights to a publicly funded arena rather than owning a privately funded one. ASG receives all revenues and is responsible for covering the bond payments via arena generated revenues and taxes - but the cost of public borrowing via bonds is significantly lower than private financing would have been. A privately owned arena would face a significant property tax bill - but a venue owned by a gov't agency (AFCRA) is exempt.

 

[Kevbeau]

Sort of a tangent, but I wonder who's on the hook for maintaining said arena?....Because Philips is already dated and falling apart.

 

[DungeonK]

Sort of a tangent, but I wonder who's on the hook for maintaining said arena?....Because Philips is already dated and falling apart.

Don't confuse a broken wall of TVs or lack of decoration as "falling apart"

There is nothing wrong structurally or utility-wise. If ownership cared in the slightest then superficial details could be easily handled.

 

[kdb209]

Sort of a tangent, but I wonder who's on the hook for maintaining said arena?....Because Philips is already dated and falling apart.

AIUI, normal maintenance is an operating expense and is covered by the operator (ASG). Capital improvements are covered by the owner (AFCRA).

When they refinanced the bonds to lower rates last August, ASG committed $7.7M of that future savings to help fund some overdue capital improvements.

 

[DungeonK]

To clarify Jeffrey93's post, yes, we all know that ASG doesn't own the arena, but they do own the operating rights. When anyone talks about the "sale of the arena", they are talking about the operating rights.
The NHL could not do anything to "fix" the Thrashers. Unlike the problems that have crept up over the past five years in Pittsburgh, Tampa, St. Louis, Nashville and Phoenix, the entire issue here is the "other tenant". The group that owns the NBA's Hawks owned the operating rights to the arena. This second tenant made it impossible to force a sale. Within the list I just rolled off, there weren't second tenants of the building, and the groups that ran the NHL franchises also owned the operating rights to the arena.

The Thrashers couldn't be saved with the arena rights and the NBA Hawks still being run by ASG. The only place the Thrashers could play was run by ASG. In hindsight, we know that ASG ran the Thrashers into the ground and out of town.

After all, to hear one of ASG's members state that he isn't interested in selling his share of ASG should all point to one thing, especially after entering into an exclusive period to sell the Hawks and arena rights, which expired quickly: ASG is interested in running an NBA team, and only an NBA team in Atlanta.

So unlike any of the other situations, the NHL couldn't "force" anything. ASG held all of the cards. And in order to finally pay for their buyout of their partner, they had to come up with about $125 million that was borrowed from the NBA. Now where was ASG going to come up with that kind of money?

I think that's the key to it all. When Gearon Jr was crying on TV it was because he felt terrible about having to sacrifice the Thrashers so that they could keep the arena and the Hawks, but they had no other choice. The honorable thing to do would've been to sell the whole package, but Levenson is now the majority stakeholder and would have none of that. What a terrible situation for everyone.

 

[Ward Cornell]

So instead of paying $500M for the arena, the B-ball team, and the hockey team... they will end up paying $499.99M for just the arena and B-ball team.

Yesterday, Daly said the BoG vote to allow the transfer and sale to TNSE is a no-brainer. They are voting on this, not what's happening with ASG ( which has the right to sell thier assests as they see fit )

Short of someone suing ASG to stop the sale of the hockey team, the vote will pass, and the asset will be sold.

Could you imagine the fallout if they do decide to sell and tell Thomson to take a hike. Then in a cpl weeks when this latest deal falls through they tell Thomson..."Hey....we were only joking"

Reneging on the original would be suicidal for any other future deals.
Face it....Atlanta isn't worth the hassle.

(I never read all 10 pages of posts...just posted something that came to mind)

 

[PitbulI]

Could you imagine the fallout if they do decide to sell and tell Thomson to take a hike. Then in a cpl weeks when this latest deal falls through they tell Thomson..."Hey....we were only joking"

Reneging on the original would be suicidal for any other future deals.
Face it....Atlanta isn't worth the hassle.

I agree. Alienating Thomson would be bad at this point. The NHL knows they have stable ownership and a sure thing with TNSE. Stopping the deal to attempt to try to make another deal with group that may or may not be successful wouldn't be smart.

Like it or not, this team is going to play in Winnipeg this fall.

 

[Ward Cornell]

They would rather have Bar Mitzvahs than Thrasher games?
Are you kidding?
WHY

Unless the attire for Bar Mitzvahs is parkas, balaclavas and mukluks the cost of set-up and taking down
of the boards, ice and cooling of the arena (plus all kinds of miscellaneous items) is very very expensive.
I've read somewhere (and going by memory) that it's in the $75,000 to $100,000 range.
Maybe someone else can give a more accurate dollar figure.

 

[Kevbeau]

Don't confuse a broken wall of TVs or lack of decoration as "falling apart"

There is nothing wrong structurally or utility-wise. If ownership cared in the slightest then superficial details could be easily handled.

I beg to differ. The roof leaks like a sieve, many simple fixtures are broken or missing, not to mention the number of burned out lights.....in an arena named after a company that makes light bulbs. I'm not saying the place is falling down and the wear and tear on any arena is extreme, but these are issues I've noticed for years.

 

[knorthern knight]

... okay... So the motivation for ASG selling for re-location over selling locally is what then? If it is greed as your premise indicated before, how is the route that provides less dollars constitute greed? It would constitute stupidity. if given the choice, the way to go would be to keep the team local and generate revenue from a long-term lease.

You've just described the situation between WEC (Winnipeg Enterprises Corporation) and the Winnipeg Jets in the 1990s. We all know how well that worked out

I don't believe the ASG had any option in the matter. There wasn't a credible offer to buy the team and keep it local.

That statement is vacuously true. It is financially impossible for anybody to break even, let alone make a profit in such a situation. Today's NHL business model DEMANDS that the team owner and the arena owner/manager be one and the same. A standalone NHL franchise with an "arms-length" lease CANNOT operate successfully... period... end of story.

 

[Jeffrey93]

In many cases - including Atlanta, AIUI - it is more lucrative to own the operating rights to a publicly funded arena rather than owning a privately funded one. ASG receives all revenues and is responsible for covering the bond payments via arena generated revenues and taxes - but the cost of public borrowing via bonds is significantly lower than private financing would have been. A privately owned arena would face a significant property tax bill - but a venue owned by a gov't agency (AFCRA) is exempt.

I agree and I understand why it is arranged like this. Regardless, Philips Arena still isn't ASG's to sell. I'm sure they can sell the operating rights to it.....just tired of hearing people saying that the arena was up for sale.

 

[knorthern knight]

I agree. Alienating Thomson would be bad at this point. The NHL knows they have stable ownership and a sure thing with TNSE. Stopping the deal to attempt to try to make another deal with group that may or may not be successful wouldn't be smart.

Like it or not, this team is going to play in Winnipeg this fall.

As I said before, the NHL will probably be looking for a new home for at least the Coyotes by next spring. If somebody even remotely acceptable (ABB ==> Anybody But Balsillie) does buy Phillips Arena off of ASG, and wants an NHL team, Bettman will be falling all over himself to unload the Coyotes for 2012-2013.

 

[Killion]

If ownership cared in the slightest then superficial details could be easily handled.

Philips Arena consistently ranks in the top 5 (#2 in 2010) by Pollstar for Events & Concerts in the US (5th Worldwide). There is no excuse for ASG's dereliction in maintaining the building to its' highest standards but again, this is the "ASG Way" of doing things apparently. The Hawks ranked 21st for attendance in the NBA with an avg of 15,800 & change. Id be interested to know how much cross-over there might be between the hockey and basketball audiences, and whether or not ASG can expect any fallout at the gate (or otherwise) for its intransigence & deceit in dealing with the public over the Thrashers?.....

 

[AllByDesign]

Where are you getting the idea that keeping them local would generate more dollars for ASG? The only way that could happen would be for them to bilk the franchise in their lease arrangement, thus making it impossible for the new owners to turn a profit. You can see the conflict of interest there, between ASG's motives and the motives of a potential investor. In order for one to make a little money, the other would have to lose a LOT of money.





Why would any credible businessperson buy into a business model where there is no hope of turning a profit? Even if Bill Gates thought hockey in Atlanta was a nifty idea, he wouldn't have been dumb enough to get tied up in a lease which would torpedo the franchise.

Remember, the firm that I mentioned above advised ASG that they would make more money if they replaced those 41 dates with concerts and other various shows.

So they would only keep the Thrashers if someone would sign a lease that would bring in a hefty profit. Which is essentially equal to kicking the Thrashers out.

Remember, most (if not all, I am not sure) sports franchises have leases that are purposefully geared toward their success. Whether it be a joke amount of rent or a large slice of parking and concessions or even revenue from other events, these teams have great leases.

Do you think that ASG would give up any of the above? They would probably want an Islanders-esque lease, where all concessions and parking goes to them. Probably advertising and TV money as well.

Okay.... I stopped clicking "Multi" because we are all arguing the same point. No business person with any faculties remaining in their being would puchase this franchise and keep it in Atlanta.

My point wasn't to prove that... it is part of general acceptance. My point is to illustrate that you cannot claim a conspiracy if ASG is only left with selling for relocation in selling the team.

 

[Blasto]

...My point is to illustrate that you cannot claim a conspiracy if ASG is only left with selling for relocation in selling the team.

BY A$G's OWN DESIGN. Hard to say that's all they were left with when that's EXACTLY what they wanted from the beginning & then went to the extent of covering everything up & shedding fake tears over it all.


That's the sticking point in most ATL fan's craw. The constant deception, the "deal with it" attitude, the exclusive negotiations for the arena/hawks (ie the c0ckblock for local buyers), and the list goes on.

ATL fans know that certain parties wanted to keep the team local but these parties were either ignored (outright dismissed), or withdrew once they figured out what was going on with A$G. Having the NHL & A$G continue to say "no one wants to keep them in town" only twists the knife in the fan's back deeper.

A$G was NEVER going to sell to someone local. The whole thing was a sham to kick the NHL out of town

IF the NHL ever does come back to the city, all we as fans can hope for are better owner who really, really care this time (really).

On one hand I'm very sad to see them leave. On the other hand, I'm absolutely glad to be rid of the worst owners in the history of the game.

 

[Killion]

Okay...My point is to illustrate that you cannot claim a conspiracy if ASG is only left with selling for relocation in selling the team.

BY A$G's OWN DESIGN. The whole thing was a sham to kick the NHL out of town.

I believe there was a conspiracy, right out of the box ABD, going back to the time they purchased the Thrashers/Hawks & won the arena mgmnt contract. Oh sure, it changed from time to time as they fought each other which ultimately held up the eventual sale of the franchise, but that was the plan all along, get rid of the team. They succeeded. Hopefully, the people of Atlanta can somehow get rid of these idjits before they also completely destroy the Hawks & continue to let the Philips fall into rack & ruin.

 

[Finlandia WOAT]

I believe there was a conspiracy, right out of the box ABD, going back to the time they purchased the Thrashers/Hawks & won the arena mgmnt contract. Oh sure, it changed from time to time as they fought each other which ultimately held up the eventual sale of the franchise, but that was the plan all along, get rid of the team. They succeeded. Hopefully, the people of Atlanta can somehow get rid of these idjits before they also completely destroy the Hawks & continue to let the Philips fall into rack & ruin.

It's not a conspiracy.

ASG admitted in court that their plan for the Thrashers had been to sell them as soon as the lockout had ended. The idea being that the lockout would raise franchise values to the point that it would be some quick cash.

This is one of the points in their court case: that by being the root cause of the court case, Belkin had prevented the sale of the Thrashers and as a result instead of quick cash, ASG had incurred continuous losses.

It is not a coincidence that, as soon as they were able, ASG shipped the Thrashers out of town.

 

[Blasto]

It's not a conspiracy.

ASG admitted in court that their plan for the Thrashers had been to sell them as soon as the lockout had ended.

While it may not fit a definition of conspiracy*, unless they were under a court gag order, the lies perpetuated by A$G surely have cast them in a bad, bad light.

The ATL fans were already pretty sure A$G was lying to them before the court docs came out.

After, there was no doubt at all.



*an evil, unlawful, treacherous, or surreptitious plan formulated in secret by two or more persons; plot.

Synonyms
1. collusion, sedition. 2. Conspiracy, plot, intrigue, cabal all refer to surreptitious or covert schemes to accomplish some end, most often an evil one. A conspiracy usually involves a group entering into a secret agreement to achieve some illicit or harmful objective: a vicious conspiracy to control prices. A plot is a carefully planned secret scheme, usually by a small number of persons, to secure sinister ends: a plot to seize control of a company. An intrigue usually involves duplicity and deceit aimed at achieving either personal advantage or criminal or treasonous objectives: the petty intrigues of civil servants. Cabal refers either to a plan by a small group of highly-placed persons to overthrow or control a government, or to the group of persons themselves: a cabal of powerful lawmakers.

 

[Sunshine36616]

I beg to differ. The roof leaks like a sieve, many simple fixtures are broken or missing, not to mention the number of burned out lights.....in an arena named after a company that makes light bulbs. I'm not saying the place is falling down and the wear and tear on any arena is extreme, but these are issues I've noticed for years.

I have to agree. I was a season ticket holder and was in the building over 150 times in the past three years. You take your life in your hands walking down those retractable stairs. I've stepped on a stair to go down for warm ups and had it sink in. The ushers had to direct people around it. The seats are falling apart. There are dozens of seats that have the backs coming off, the arm rests busted and other issues.

 

[Killion]

It's not a conspiracy.

Execution. Many a Conspiracy takes place in broad daylight with the perpetrators openly admitting what their up to. This one wouldve' likely never had a light shone on it had it not been for the court admissions; or confessions as I prefer to call them.

 

[Killion]

You take your life in your hands.....

Indeed. It would seem to me that the AFCRA has grounds to revoke the Arena Management Contract with ASG, public safety authorities & the fire departments full weight brought to bear on these idiots. Hell, If I could get away with it Id order up a Swarm of Flesh Eating Locusts to descend on their annual softball game & strawberry social this summer.

 

[tarheelhockey]

It's not a conspiracy.

The word "conspiracy" came up in sort of a mocking tone. I don't think anyone is putting on the tin foil hat here.

ASG had absolutely zero interest in hockey, the Thrashers, the Thrashers fanbase, the NHL, the Stanley Cup, or ice that isn't floating in Joe Johnson's drink. But they spent 6 years pretending to care, because that's how you get people to give you their money. We always suspected that, and the court documents confirmed that suspicion.

The truly offensive part comes with the sale of the team. True to form, ASG was never interested in keeping them in Atlanta but pretended to try. They knew damned well that they had designed the "search" to fail. All the while they kept preaching hope, and kept cashing the checks. It wasn't a conspiracy... it was just a lie.

"We're committed to bringing a Stanley Cup to Atlanta." Right.

 

[Killion]

The word "conspiracy" came up in sort of a mocking tone. I don't think anyone is putting on the tin foil hat here.

Various shades of gray, but ya, I was throwing around "conspiracy" perhaps a little more liberally than was appropriate, but whats' a "lie" if not a "conspiracy" of sorts?. Same thing in my book. These guys lied repeatedly in order to cover their ***** in wanting to fill seats at Philips while they surreptitiously moved around behind the curtains looking for a way out, an unlocked window.