Jeremy Jacobs sends a strong signal Houston is next but relocation is unlikely

[GuelphStormer]

Wait, Tommy.......

This is what you just said:
OVG will have full operating rights.
The team gets a share of operating revenue (I think that profit is a better term, but ok.....)
OVG owns a small % of NHL Seattle (that's the team, I assume).

What you are telling us is that:
Seattle is such a special case that a hockey team can survive there on less than 50% of the operating profit from the arena, because the area is so nuts for hockey that they will pay high prices to sit in the arena and watch games, and the market is so great that naming rights will sell for sky high prices.
AND>>>>
The arena is going to make so much money that OVG, who will operate it, will profit, even though they are paying servicing costs on 800M of arena remodel debt, but they will profit on a little more than 50% of the profits from running the arena.
AND>>>>>
You have said previously that is NBA comes as well, that they also get about 1/3 of the operating profit. That cuts everyone else's piece of the pie smaller yet.

Let's just say I am really looking forward to seeing how this all works out.

yes, that's one mighty big pie.

i remain sceptical that the Seattle NHL franchise can actually make money but I do appreciate gstommylee keeping us informed. btw MNM, you omitted the actual $650M price of the franchise itself and the carrying costs of financing that. let's just hope they didn't go to Fortress for a loan.

 

[MNNumbers]

yes, that's one mighty big pie.

i remain sceptical that the Seattle NHL franchise can actually make money but I do appreciate gstommylee keeping us informed. btw MNM, you omitted the actual $650M price of the franchise itself and the carrying costs of financing that. let's just hope they didn't go to Fortress for a loan.

I was figuring no financing on the purchase, because Bonderman et al are quite well heeled....

 

[Bookie21]

i remain sceptical that the Seattle NHL franchise can actually make money but

Wanna bet?.....Seattle sold 33,000 season ticket deposits in the first 48 hours

 

[TheLegend]

Wanna bet?.....Seattle sold 33,000 season ticket deposits in the first 48 hours

But you can only get ~18K of them in the arena at one time.

With the high cost of getting the franchise space AND renovating the arena..... coupled with the physical costs of the team itself, it's going to take a LOT to recover all that debt load...... and I think GS has doubts that there's enough revenue to cover all that.

 

[rkhum]

So it doesn't look like Houston will get a team anytime soon?
I may relocate there and that's a drawback

 

[MNNumbers]

I think the actual answer on Houston is:

No one knows. No one knows because of these factors:
1- Fertitta, who runs Toyota Center, has been very coy about what he is really willing to pay. He has said it has to be the right price because hockey struggles south of the Mason-Dixon. Ottawa, seemingly, had a 400M offer which the BOG wouldn't listen to. This MIGHT mean (but doesn't necessarily mean), that Fertitta is low balling them, and he won't pay. But it also MIGHT mean that it's a negotiation.

2- No one know really what is happening in Arizona. Much has been written about that. Suffice it to say that the party line is that they need a new arena further east. But there are also occasional rumblings that there is a possibility of a relocation (which have gone on a long time). Houston is the widely accepted landing spot.

But again. We just don't know.

 

[Bookie21]

But you can only get ~18K of them in the arena at one time.

With the high cost of getting the franchise space AND renovating the arena..... coupled with the physical costs of the team itself, it's going to take a LOT to recover all that debt load...... and I think GS has doubts that there's enough revenue to cover all that.

No too sure about any debt load on this venture. The arena is being privately financed by OVG, and I doubt the ownership group is going into debt on the price tag of the expansion fee. The combined wealth of that group is north of 20 billion

 

[PredsHead]

No too sure about any debt load on this venture. The arena is being privately financed by OVG, and I doubt the ownership group is going into debt on the price tag of the expansion fee. The combined wealth of that group is north of 20 billion

Correct, but if OVG is paying for the renovations and operating the arena, they will need a significant portion of any revenue at said arena to make their money back plus turn a profit. The owners of the team may not have any debt to pay off in buying the team, but they will still need all the revenue they can get in order to not lose money year over year on their investment. There is only so much money a team can generate and with the amount being doled out here, it will be interesting to see how it works. Not saying that it can't just that it will be interesting to watch.

 

[TheLegend]

No too sure about any debt load on this venture. The arena is being privately financed by OVG, and I doubt the ownership group is going into debt on the price tag of the expansion fee. The combined wealth of that group is north of 20 billion

They may have a wealth of 20 billion but that doesn’t indicate what’s in liquid assets (ie:cash on hand)

Even if they have the liquidity, you don’t normally plunk down a billion in cash for a venture like this. It’s not going to be surprising if they’ve financed a large chunk of this venture with whatever liquid assets they have as collateral.