Part II. Potential owners of NHL's Phoenix Coyotes

[Jeffrey93]

Sorry if this has been posted already...maybe it could be the start to 'Part II'?

Globe & Mail Article

Here are the obstacles facing these would-be NHL owners:

- The NHL, which paid $140-million (all currency U.S.) for the Coyotes in a U.S. bankruptcy court auction, wants $160-million for the team in order to recoup at least some of the money the league has spent propping it up this season.

- Bankers are balking at financing this venture after they learned financier Jeffrey Vinik paid only about $100-million in cash for the Tampa Bay Lightning. They are asking hard questions about why the Coyotes would be worth 60 per cent more.

- The Ice Edge principals will not discuss their finances in detail, but a banking source says they have only a relatively small amount to put into the proposed deal. As a result, bankers are not queuing up to lend money.

- A bill introduced in the Arizona legislature last month, which would have created a special tax zone around the Coyotes' home arena to subsidize the team, died quickly from a lack of support.

- A Phoenix real-estate development company that was supposed to help Ice Edge get financing pulled out of the venture.

MOD: Link to Part I.

Click to read more...

 

[Killion]

Should make for another interesting week ahead folks. Stay tuned.

 

[Brodie]

I do have a question for you, Brodie: you say someone isn't being truthful. But would you agree that it's possible financing is contingent on a lease being finalized? Therefore, financing could be viewed, technically, as an issue at this point? Seems to me no one may be wrong, as you assert.

Of course that's possible... but it would go totally against the NHL and Daly's MO to apply pressure on Ice Edge in that scenario. I think if the only real problem was Glendale, the NHL would be making all kinds of threats of relocation like they always have, not opining on what's wrong with the IEH bid.

 

[ps241]

Of course that's possible... but it would go totally against the NHL and Daly's MO to apply pressure on Ice Edge in that scenario. I think if the only real problem was Glendale, the NHL would be making all kinds of threats of relocation like they always have, not opining on what's wrong with the IEH bid.

Yea Brodie I agree if the financing was in place the NHL would be working VERY HARD with Ice Edge right now to get this deal into the end zone. maybe they are but to me it doesn't have that vibe.


this was a portion of a post from Part 1 that was siting an article in the Az Paper:

Saying that the sides are very close in settling the issue, LeBlanc noted that there has been an agreement on the items "in principle," but several steps need to follow, starting with putting it into a document.

"The city's lawyers have to bless it, our lawyers have to bless it, and then most importantly, the City Council has to ratify," he said. "So you could technically say, 'Well, your financing is not in place,' because our financing is contingent on the lease … so technically I guess that's a fair point, well, no, it's not a fair point; technically, it's correct, but in theory it isn't.

"I think my colleague (COO) Daryl Jones, said … 'Look, I've got a raft of term sheets sitting on my desk from a variety of banks. Banks like fees, we like hockey, but we can't do a bad deal.' "


this quote has the vibe of double talk......i think what LeBlanc is saying is that both sides have agreed to a lease deal in principle pending approval of lawyers, and ratification of city council (am i correct).....to me that means the negotiations are done with Glendale and they are in the approval process

but then when discussing financing LeBlanc is much more vague siting his partner, Daryl Jones, who is COO (note not CFO) and Jones is saying he has a raft of term sheets in front of him from a variety of banks and "banks like fees, we like Hockey, but we can't do a bad deal"

so if "Ice edge" has a deal done on the lease pending approval its really just about getting the cash in place and getting League approval isn't it? term sheets mean nothing guys a bank could say "Ice Edge" needs to come up with $150 million to purchase the team and we will supply a $40 million dollar line of credit but we will need hard security cross guaranteed by all investors in the venture. or make up any scenario you would like. and yes Banks love fees but there is something they like allot more and its call "performing loans"

if "Ice Edge" had the financing lined up and it was contingent on an agreed to lease, which appears to be close, wouldn't the quote by LeBlanc or another Ice Edge principle be less evasive? To me it feels like they are working on the money side still and maybe they will get it done who knows?

Maybe we will see how it plays out this Tuesday?

 

[Brominator]

http://www.sportsfanlive.com/web/ar...=8449609&team=nhl-phoenix_coyotes&tid=twitter

Ice Edge's LeBlanc addresses rumors, negativity

Phoenix Coyotes update:

Why all the negativity and rumors from Canada regarding the Coyotes?
Anthony LeBlanc, CEO of Ice Edge Holdings and a Canadian, looked at the big picture.
“I think what happens is people see you have two cities,” he said. “You have Hamilton and now the big rumors are Winnipeg. They think, ‘My god, we’re going to get this franchise.’ So there’s an excitement level, which is understandable. Canadians are hockey fanatics. The idea of another hockey team coming to their country is very exciting … and they don’t look at the overarching situation.
“I can say this with all honesty because I still have family that contact me, they read the Canadian newspapers and say why would you guys want to be involved in this franchise?”
LeBlanc looked at the situation realistically from the beginning.
“As I repeatedly point out to people, I’m a sales and marketing guy; my three primary partners are all Wall Street guys, they’ve spent their careers examining companies, and most of the time from an investment perspective, you examine dysfunctional companies.
“We have said this on the record, that the Coyotes, unfortunately, were a very dysfunctional business. You have that aspect, and I’ve said a million times, outside of the Toronto Maple Leafs and maybe the Montreal Canadiens, I don’t think a Canadian franchise would be in any better shape than the Coyotes if they went (since 2002) without making the playoffs.”
...

Sunday, March 14, 2010 at 12:15 PM

 

[Jeffrey93]

@Bromine

I can't believe this guy is flaunting average attendances of 11,500. That average factors in the 50% off season opener sellout....and ticket price reductions since.

He certainly said a lot without addressing very much. People aren't negative because they think these guys are nuts for trying to buy this team.....they are negative because it has taken so long and a pile of reporters with their "sources" are saying this sale is dead.

 

[billy blaze]

“As I repeatedly point out to people, I’m a sales and marketing guy; my three primary partners are all Wall Street guys, they’ve spent their careers examining companies, and most of the time from an investment perspective, you examine dysfunctional companies.

I believe that the principals of Ice Edge are the only people who actually think that at the prices bandied about this makes any sense. Not to disparage the individuals involved, but if this is a case of picking up a distressed company with the potential to turn it around for a profit, i would think more than just Ice Edge Holdings would be sniffing around the Coyotes.

Reinsdorf is a pretty savvy business guy- i think his plan of $130 mil, subsidies from COG to tune of $20mil/year, an out clause after 5 years, was actually where a business person who wanted a break even/ small profit needed to be to remain in Arizona.

 

[Brominator]

@Bromine

I can't believe this guy is flaunting average attendances of 11,500. That average factors in the 50% off season opener sellout....and ticket price reductions since.

He certainly said a lot without addressing very much. People aren't negative because they think these guys are nuts for trying to buy this team.....they are negative because it has taken so long and a pile of reporters with their "sources" are saying this sale is dead.

I agree. It really seems to me that the Ice Edge group is delusional. First, their claim that the Canadian teams, had they missed the playoffs as often as the Coyotes did, would be in a similar situation is ridiculous. The Oilers are by far the worst team in the NHL and they sell out every game at ticket prices more than double the Coyotes. I have a very hard time believing that 3 more years of missed playoffs you could extrapolate to a half-empty Rexall place and losses in the tens of millions.

And I also agree that attendance of 11500 is extremely poor, especially when you consider the rock-bottom ticket prices. When the average ticket price is consistently under $40, they could sell it out every night and they would still have an unsustainable business model.

The value of tickets, through giveaways and promotions, is very, very low. If fans know they can count on getting tickets for $10, why would they spend $80 ever even if the team is in 4th place? The value of tickets has been so low for so long, it will take several years before you can expect fans to shell out big dollars and fill the arena.

The way Leblanc is putting it, he makes it seem like the gap between the current massive losses and breaking even is small. It is not.

 

[MaskedSonja]

http://www.sportsfanlive.com/web/ar...=8449609&team=nhl-phoenix_coyotes&tid=twitter




Sunday, March 14, 2010 at 12:15 PM

Maybe it's just layman me, but I read this and I too see alot of talking that without saying much. Interesting that Leblanc mentions he's in sales and marketing-in which case he's doing his job right now(in my own cynical view); selling to the public the idea that this is all going to come together for Phoenix(whether it actually does or now we'll see what Tuesday brings). But I guess he is the liason, and he's not going to come out and say(if there are problems) "we have problems right now" to the general public. That(to me) makes just good business sense in my limited understanding of how business works.

Myself, I'm really leaning, at least with as much as I know, towards the idea as well that time is running for the Coyotes(I certainly hope not for their fans).- As I said in part 1, whatever the decision is made, let it certain one way or another-either they're staying for the forseeable future, or they're going-the Coyotes fans deserve better than another year of uncertainty and innuendo.

 

[Jeffrey93]

whatever the decision is made, let it certain one way or another-either they're staying for the forseeable future, or they're going-the Coyotes fans deserve better than another year of uncertainty and innuendo.

If I were a Coyote fan I'd take another year of a competitive team with bargain basement ticket prices and room to put my feet up. I'd rather have another year of uncertainty than not have another year at all.

 

[Jesus Christ Horburn]

When did Anthony LeBlanc become the spokesperson for this group over Daryl Jones?

It seems like every time LeBlanc says anything, it raises more questions than provide answers.

 

[Brodie]

When did Anthony LeBlanc become the spokesperson for this group over Daryl Jones?

LeBlanc said it himself when he talked about his marketing and sales experience. He sees the group being beaten up in the press so it's his natural inclination to spin it... Jones is just letting things play out.

 

[Brominator]

If I were a Coyote fan I'd take another year of a competitive team with bargain basement ticket prices and room to put my feet up. I'd rather have another year of uncertainty than not have another year at all.

When the Jets were announced to be staying for the 95-96 season, Winnipeggers were very happy. IIRC, the announcement that they were gone for good was shortly after that. Still, we were happy that we had another season to say goodbye.

That said, the NHL won't have another season like this, where they own the team and are looking for a buyer while racking up tens of millions in losses. If IEH can't close the deal, they are gone. We will know whether they're staying or not within the next month.

 

[Dado]

If the NHL really and truly believes in the viability and importance of the Phoenix market, why don't they just reduce the price to $95M and get this deal done without having to worry about lease re-negos, expensive financing, etc etc etc?

 

[LadyStanley]

If the NHL really and truly believes in the viability and importance of the Phoenix market, why don't they just reduce the price to $95M and get this deal done without having to worry about lease re-negos, expensive financing, etc etc etc?

Pricing the Coyotes for sale is an issue that the BOG would need to approve, as it would mean a $50m or so loss *to the league*.

 

[Pegger5]

Pricing the Coyotes for sale is an issue that the BOG would need to approve, as it would mean a $50m or so loss *to the league*.

Add to that the possibly getting themselves into the same situation all over again.. A weak IEH owner(s) that need to be bailed out again within a few years..

 

[Dado]

Pricing the Coyotes for sale is an issue that the BOG would need to approve, as it would mean a $50m or so loss *to the league*.

Sure. I guess that's what I'm asking - what is the dollar value to the NHL of having a franchise in Phoenix? Is $50M too much? $25M? $5M?

Is even one red cent too much?

Because I think we can all agree that there is a price at which local owners would be lining up to get a piece of the action, regardless of the state of the Glendale lease.

T.Steen - sure, but I assume that's part of the NHL's long term plan anyway, as the cap system is set up to virtually guarantee there will *always* be at least 2-3 teams flirting with outright bankruptcy or forced relocation.

 

[dkehler]

Sure. I guess that's what I'm asking - what is the dollar value to the NHL of having a franchise in Phoenix? Is $50M too much? $25M? $5M?

Is even one red cent too much?

Because I think we can all agree that there is a price at which local owners would be lining up to get a piece of the action, regardless of the state of the Glendale lease.

T.Steen - sure, but I assume that's part of the NHL's long term plan anyway, as the cap system is set up to virtually guarantee there will *always* be at least 2-3 teams flirting with outright bankruptcy or forced relocation.

I don't agree. There is no price that I would pay for the privilege of losing $20,000,000 a year or more.

 

[Fugu]

If the NHL really and truly believes in the viability and importance of the Phoenix market, why don't they just reduce the price to $95M and get this deal done without having to worry about lease re-negos, expensive financing, etc etc etc?

Pricing the Coyotes for sale is an issue that the BOG would need to approve, as it would mean a $50m or so loss *to the league*.

Sure. I guess that's what I'm asking - what is the dollar value to the NHL of having a franchise in Phoenix? Is $50M too much? $25M? $5M?

Is even one red cent too much?

Because I think we can all agree that there is a price at which local owners would be lining up to get a piece of the action, regardless of the state of the Glendale lease.

T.Steen - sure, but I assume that's part of the NHL's long term plan anyway, as the cap system is set up to virtually guarantee there will *always* be at least 2-3 teams flirting with outright bankruptcy or forced relocation.

Ah, so they can worry about their own losses, and price for local market, but if the loss is too great, they can relocate. Hmmm.

Stupid Moyes. What was he thinking.



(Conflict of interest again.)

 

[Jonas1235]

Why can't the league negotiate a new lease with the city? I think more people would be interested in buying the team if there was a favourable lease already in place.

Negotiations take months, especially when there's millions on the line.

 

[dkehler]

Why can't the league negotiate a new lease with the city? I think more people would be interested in buying the team if there was a favourable lease already in place.

Negotiations take months, especially when there's millions on the line.

I thought they already had a reasonably favourable lease, except for the huge penalty if the team should ever move. Just what are they going to get that they don't have now that is going to make up around $20,000,000 or more?

 

[Brominator]

I thought they already had a reasonably favourable lease, except for the huge penalty if the team should ever move. Just what are they going to get that they don't have now that is going to make up around $20,000,000 or more?

Some will say parking revenue, other event revenue, etc. The reality is they need to make up nearly all of that in ticket revenue. There's simply no way to close that gap.

 

[ps241]

Saying that the sides are very close in settling the issue, LeBlanc noted that there has been an agreement on the items "in principle," but several steps need to follow, starting with putting it into a document.

"The city's lawyers have to bless it, our lawyers have to bless it, and then most importantly, the City Council has to ratify," he said. "So you could technically say, 'Well, your financing is not in place,' because our financing is contingent on the lease … so technically I guess that's a fair point, well, no, it's not a fair point; technically, it's correct, but in theory it isn't.

guys based on the area's above it doesn't appear the lease terms are the issue anymore with Ice Edge pending sign off of lawyers and ratification of the city!!

so if lease terms aren't the issue it is #1 just taking time to get conditional financing put in place since the lease had to fall first.....or.....#2 the financing is not in place and they are still working on that part of the deal

 

[Jesus Christ Horburn]

According to Sportsnet's John Shannon, Jerry Reinsdorf may be back in the picture

If Ice Edge doesn't get the lease it needs, they will walk. There might be a few new ownerships groups in the hunt...including Reinsdorf!

http://twitter.com/jsportsnet

Can someone refresh my memory as to why Reinsdorf withdrew his bid in the first place?

 

[Free Edler]

Can someone refresh my memory as to why Reinsdorf withdrew his bid in the first place?

He didn't get enough from Glendale.