Leblanc: Coyotes losses in year 1 = $16.6 million

[rt]

They may pay a lump into escrow which is drawn from annually. I don't think it is public knowledge how that's actually structured.

 

[rt]

Anyway, I don't really give a fart about out clauses and relocation. This is a hockey team. I want to see it play something resembling hockey sometime in the near future.

 

[Kaizen]

http://www.foxsports.com/arizona/story/coyotes-report-16-45m-in-losses-for-fiscal-year-1-031315

According to Morgan the relevant figure is includes extraordinarily items (buyouts & acquisition costs) - seems strange to me. Ultimately if ownership wants to move they could execute another BO or two and generate the required loss. One would have thought alternatives like these would have been addressed in the out clause .

 

[Thor Savage]

As a former Hartford Whaler fan who lost my team, I understand times are different in the NHL, but in my opinion this ownership group is not behaving like a group who wants to move the franchise. I am optimistic they are going to start turning a profit by the end of next season, it won't be much but it will start chipping away at the 50 million figure in the out clause . . . . which they have said consistently they don't want to exercise.

Also, this draft and FA period (& trading) will be key to putting a more marketable product on the ice which will draw more fans to the arena.

 

[XX]

http://www.foxsports.com/arizona/story/coyotes-report-16-45m-in-losses-for-fiscal-year-1-031315

According to Morgan the relevant figure is includes extraordinarily items (buyouts & acquisition costs) - seems strange to me. Ultimately if ownership wants to move they could execute another BO or two and generate the required loss. One would have thought alternatives like these would have been addressed in the out clause .

The out clause is there due to lender requirements, and money lost is money lost. So yes, ownership could buyout Smith and hit the clause if they want.

I'm personally looking at the draft and if we (somehow) end up with the first pick. That bodes well for how the NHL head office feels about the market. Nobody has to join me in this, but that's how I see it. McDavid or move.

 

[Mosby]

The key to all of this, as mentioned in Morgan's article, is that the losses would need to be $50M or greater after Year 5 during the out clause window. Doesn't matter if they hit -$50M before then.

 

[Grimes]

I think the Cardinals are the perfect example of what can happen if the franchise begins seeing any sort of success. I remember back when the Cardinals were miserable for the good part of 20 years, it seemed like way more people payed attention to ASU/UofA football or went to Cardinal games to see their favorite NFL team not from AZ. To me it seems like such a parallel right now. Hockey is getting much more popular in the US and AZ overall. I go to bars and don't need to ask to turn the game on nearly as much as I used to. Playoff hockey is becoming somewhat of a novelty where the casual fan goes to watch which ever team they are currently drawn to at bars. Attendance looks like it has gone up even with a losing team. I think it's happening and if we can just ice an exciting and competitive team I don't doubt we will have a rabid fan base in the next three years. The boom of popularity the Cardinals received after their Super Bowl year is astonishing. It's amazing what one good season can do for a franchise.

 

[Kaizen]

The key to all of this, as mentioned in Morgan's article, is that the losses would need to be $50M or greater after Year 5 during the out clause window. Doesn't matter if they hit -$50M before then.

Good point although if the losses are within spitting range of $50M it certainly wouldn't be hard to choose the necessary timing and contract to achieve the goal. It boils down to whether or not ownership feels the market has turned the corner and can be viable long term.

 

[Rink Rage]

I have no faith. So are they half way there to the $50 million or is this the $16 million number that counts.

 

[Kaizen]

Morgan indicated that it is the larger figure including the buyout and acquisition costs that matters.

 

[Bondurant]

I don't get it, is LeBlanc trying to drive away the few hardcore fans and STH's left, so they can lose even more money. I mean after hearing this, there's pretty much no chance I'll renew in 2016, after I graduate. That is, unless we get McJesus.

Fulfilling obligations to the City of Glendale. At that point it becomes public record and fit to print. No other way around it. They can spin the numbers anyway they choose but I'd wager LeBlanc would have not liked financials out given the choice.

 

[TheLegend]

Fulfilling obligations to the City of Glendale. At that point it becomes public record and fit to print. No other way around it. They can spin the numbers anyway they choose but I'd wager LeBlanc would have not liked financials out given the choice.

Glendale's audit numbers were going to be public soon.

By announcing this beforehand LeBlanc and the Coyotes can get their side of it out before the media sharks start spinning their own interpretations.

[like the inevitable David Shoalts smarmy article before the end of next week.]

 

[TheLegend]

Weird that they 'haven't talked about it', considering they're now within spitting distance of being able to activate it.

2 1/2 years is a long spit.

 

[TheLegend]

I have no faith. So are they half way there to the $50 million or is this the $16 million number that counts.

The $34.4M all counts.

But as I explained in BoH a while ago, the $16.6M number is the one to focus on.

Their goal in year two is to knock that $20M number down much lower..... say $10M. Then for year three they are hoping to be in the black... although that may get stretched into year four.

That's still a whole year before the out clause can even be activated.

So if they get the operational costs into the profit side by year four. Why would they want to activate the out clause and leave now that they're operating in the black?? They can slowly cut that debt accumulated the first 3-4 years over time.

There's also another thing to consider. NHL is planning to expand within the next 2-3 years (worst kept secret in the world). Expansion fees would end up going to reduced that $34.4M number. With estimated expansion fees hovering at $400-450M per team, you're looking at a potential one time windfall of $25-30M to each team. Knocks that $34.4M number down to size.

 

[Desert Ice 11]

I like that this year I have seen much better and much more concerts rolling through the arena. The NFL also rented out the building for their media day, that probably wasn't very cheap. I think that hockey side won't be as good but I think the concerts and parking for those will show better numbers.

The parking at Westgate and UofP stadium is a problem. I wish that they could offer an incentive for members using the arena parking. Maybe a free hot dog and be entered into a drawing for a four pack of tickets in a new zone they can create. The more you pay the more tickets you get entered to win.