Ya, and it would appear that RSE & the COG may be in a sort of Mexican Standoff. RSE requires app $15M per annum guaranteed by the COG in order to satisfy Fortress that they can service the $120M loan. No guarantee, no $$$, no sale, and no idea what new revenue streams they along with Sherwood & Bowers have identified that will bridge the gap. Talk of a CFD, increased ticket surcharge, paid parking & naming rights to the building bridging the chasm, however, Glendale asking RSE that those projections be guaranteed, so you have to ask yourself: surely in their business plans & prospectus in securing Fortresses loan, they would have included those items, parking, a CFD, naming rights etc, and if it wasnt good enough for Fortress, why should Glendale accept their promises on face value?
Then theres the whole issue of equity to financing. Normally, the NHL requires minimum 50% in cash, 50% in secured credit facilities, and 50% of the total sale price in either cash or further credit facilities in order to cover costs moving forward. Here, the leagues apparently willing to provide an $85M loan, but if you read between the lines, its not really a loan, its RSE servicing $85M in debt shaved from the NHL's line of credit with Citibank that they setup & used to buy & operate the team. Additionally, though unconfirmed, reports that Gary Bettman has promised RSE maximum Revenue Sharing proceeds along with further financial support from the newly created Development Fund. In light of all of this, I frankly have a very hard time believing the NHL Board of Governors are going to have an easy time swallowing this deal, as effectively theyd be selling the team to Fortress, and those guys play rough when payments are late or missed.
Here in BC, weve had plenty of experience in dealing with them, as they financed the Contractors who were building the 2010 Olympic Athletes Village (liens applied months before the games shutting down construction) and theyd bought Intrawest, owners of Blackcomb-Whistler Mountain (along with a dozen other ski resorts throughout North America) where all of the Alpine & Nordic events were staged, again, serious problems Fall 2009 whereby they themselves, Fortress had over-extended themselves, their creditors threatening to lockdown the entire resort, no games, forced bankruptcy; legal nightmare. And it was a close shave. The City of Vancouver in Executive Session had to borrow over $300M to pay off Fortress in order to get them to withdraw the Lien on Athletes Village, and God only knows what the Province had to do to get Fortresses creditors off their backs to insure the Winter Games even took place, and just months away.
I think its far too late to be moving the Coyotes anywhere at this stage, dont see RSE closing, but what I can see happening is the NHL staying parked for another season, either renewing the AMUL and receiving the $6M budgeted for Management of the arena, justifiable as the City receives 41 guaranteed event dates that neither SMG nor Colangelo's group can guarantee, give this thing more time, and if by the end of February still nothing, no serious buyer, then thats it thats all. Sell for Relocation. For whatever reasons, if Quebec was an option at this time, obviously some obstacle there, youd think for the sake of expediency the league wouldve pulled the trigger already. Seattle, same thing. Key Arena or Bust. Monied interest apparently however, whats the dealeo with the new building, Hansen, the NBA? All kinds of loose ends and there just isnt enough time, absolutely no way in Hell to tie them up between now & next week.
Anyhoo. Thats all I got. Im hoping the NHL stays put, also hoping RSE craters, and further hoping that someone, some real group steps up to the plate and gets it done in Glendale, as this is absolutely last call, one more round and then thats it, bars closed. So keep the faith my friends, it aint over yet, of that Im certain.
What was I thinking?
