I guess it's like buying a car privately from someone and assuming the lease payments-sure you paid 3000 grand for the car, but you also assuming another 2 grand in future lease payments.
And actually the car analogy is pretty good, as analogies go around here.
No offense meant Tina (I am a fan of your posts), but the analogy that GSC likes can only be liked for one reason. You analogy would never take place in reality. Much the same that the NHL could never get their price and have the team stay in Glendale without a municipal subsidy of some form. If a lease is being transfered, the current owner will pay $3,000 to a prospective buyer to assume the lessee liability.
Here is a car analogy that applies to the Phoenix scenario.
You want a new car but owe $7,000.00 on your current vehicle. The vehicle you wish to purchase is $20,000.00. Your vehicle is actually $5,000.00. Hmmm.. here's a problem. Banks are taking a risk on the new car loan as it is. If you default they will have to eat the depreciation. They don't want to finance the new car and a portion of your old lien.
No Problem
Trade value - $7,000.00 Lien paid
New car selling price - 22,000.00
Loan approved. Maybe... Lets go further with this.. Shall we?
Here is the problem with phoenix. They want to sell a $20,000.00 Hummer for $30,000.00 and bury negative equity.
They are also are trying to sell a Hummer in a demographic that would prefer to buy Prius's
Reinsdorf says... ok.. I'll buy your $20,000.00 car, but I ain't picking up the remaining 10 grand difference. Bettman says 'but my banker needs the $30,000.00' if I sell. It was the only way I was permitted to purchase the hummer in the first place.. I need 30 grand. The HUmmer is sitting in The COG dealership. Reinsdorf says hey... you need this vehicle to be bought here so you can reap the benefit of the regular maintenance... why don't you kick in the 10 grand difference? You'll be getting money back anyhow?
The dealership can't. They are already paying interest on the lot and can't afford both.
Reisndorf decides to not buy the Hummer.
IEH wants a Hummer... we'll pay 30 grand for it. We have been pre-approved for the loan. The COG dealership is very excited about this. Uh-oh.. the pre-approval sheet is one of those 'citi bank' envelopes with the fake credit card in it saying your could be approved right now!
Mark Chipman tells the NHL Hummer owners.. "Hey Gary.... We have a harsh climate here in Winnipeg and Hummers sell very well. We hardly have any. I tell you what.. we'll pay $40,000.00 for your Hummer because we could sell it for $50 grand here. Gary starts getting calls from many places where Hummer's sell well. He starts seeing the light that his bankers could make more money buy selling Hummers in areas wher there is demand... Hmmmm.... tough call.
Gary has given the dealership a deadline to move the vehicle or he'll sell it through another dealership. Afterall... he only has $2,500 afforded to him by the dealership to cover for all of the rust the Hummer will accumulate while it sits rotting on the lot.