Phoenix CII: Oh, the pain the pain

[beepeearr]

A 50/50 split can work like in Dallas, but not sure if that can happen in Phoenix, does this ownership group have enough cash to buy into helping fund a new Arena though?

 

[DopeyFish]

Uh.... big difference between negotiating a multi-million dollar lease agreement and putting together a promo package.

But don't let me spoil the moment.

Procurement of events falls under the lease due to the arena management stuff.

that is what makes it a violation.

 

[SunDancer]

I'm picking on you because you're the most recent person to mention this but by far not the only one.

I can understand the awkwardness of all of this moving forward but why is this an actual issue moving forward for COG's ability to secure business? Assuming this goes through...

Business X: Ya so just one more thing about this contract. You know that whole thing with the NHL and going back on that deal after two years has left us just a bit skiddish.

COG: Yeah I can understand that but here's the thing. The NHL was only time we did something like that and the only reason we were forced to do it is because THEY VIOLATED STATE LAW. So, we have no intention of doing that, however if you want to be sure it doesn't happen, just don't hire anyone who worked for the COG during the deal and ya know, VIOLATE STATE LAW.

Yes I know it's a bit wishy washy this whole thing but at the end of the day the law is the law.

I think you've got a good point here. We'll see how things turn out but this case could give notice to any contractor that thinks they could easily take advantage of the city and milk them for whatever they're worth.

 

[madhi19]

I think you've got a good point here. We'll see how things turn out but this case could give notice to any contractor that thinks they could easily take advantage of the city and milk them for whatever they're worth.

It not a bad thing to have the swindlers try to screw over somebody else for a change.

 

[tony d]

Going to be interesting to see what happens. A downtown arena in Phoenix could work but is there enough hockey interest in Arizona to make this the best permanent option?

 

[SunDancer]

Considering all the bad blood flowing, I wonder what kind of mischief Glendale could get up to if the city just lost outright in court and were forced to uphold the lease as is.

I mean, wouldn't it be unfortunate if the Public Works Dept had to undertake some major construction on all of the roads leading up to the arena during the season? God knows how long those projects can take. Or the water main in the neighborhood could be shut off for maintenance for much longer than anticipated. Sometimes things just get delayed ... even on a game night. Or, "What's that, Tony? Your garbage wasn't collected again this week? So sorry. We'll send a truck over as soon as we have one available. No later than Friday. We promise."

You can't expect too much from a city struggling with cutbacks, right?

 

[Govment Cheese]

And while I doubt this would actually happen, the best and in my opinion only likely scenario for success in Arizona would be for Sarver to buy them since a lot of the overhead costs would be easily absorbed by owning the arena and having the system in place to manage it and manage it properly.

The big question is would any right minded businessman pay the inflated valuation for the team to keep them in the Phoenix area.

The NHL had to raise the valuation of the team so that the FIG debt could be transferred to the NHL LOC. Barroway bought 51% of the team for around 150M, so the NHL values the team at 300M give or take. There is no way the Coyotes are worth 300M in the Phoenix market.

 

[Wheathead]

I looked at the Gila River Arena calendar and I see that few events are penciled in to be playing this summer.

I looked at the Rexall Place calendar and there are more booked days than empty.

The Coyotes have been screwing over Glendale while managing the arena. I can see why Glendale wants out of their agreement. 15M a year for that?

Unacceptable. They could pay a real arena manager half of that and probably have way more use out of the arena.

 

[GuelphStormer]

They aren't going to get anything now.

They nuked themselves.

And not just with the Coyotes and NHL.

obviously five Council members and the majority of glendale residents dont feel that way. and not that it matters, but neither does the majority of folks here.

yours posts may reflect the concerns of IA and the NHL, but you seem to be intentionally ignoring one very simple truth ... the city of glendale would be better off if the team left. the city spends much more on the $15M AMF that it receives back, both in terms of revenues and services.

include all of the team related, direct revenues like ticket surcharges and parking (now seen to be considerably less than promised by leblanc in 2013). gosh, you can even toss in all of the indirect revenues from spillover activities (sales tax on ticket holders going out for dinner in westgate before the game) and it still doesn't add up to enough. remember when he said to council, "if we fail, you fail"? ... well ...

IA has also failed miserably to live up to its promise to book non-hockey events as an arena manager. the $6M portion generally thought to be the service fee the City is paying IA to manage the arena and book events was crazy high to begin with - recall the other management bids at that time. and now given IA's actual performance in booking events, it's absurd to think the city could not get the same pathetic level of service for considerably less than $1M.

if the City's sole objective is to keep the team in glendale, then yes, this week's vote is harmful to that. if on the other hand, the sole objective is to protect the interests of the taxpayer, and actually get what they paid for, then I would say they hit a home run.

two things will happen: the team will leave or the team will stay and renegotiate terms of the lease. in any universe, both outcomes will benefit glendale financially. and in terms of image, i would suggest that the city will actually come out looking better to outsiders for having stood up to the NHL and a deceptive local team.

 

[GF]

Regarding Barroway stepping down as majority owner, when I put my tinfoil hat this morning I got this crazy idea. Could it be that his role in the team is just over (being majority owner for taxes purposes) and he now needs to step down for the following act: the sale.

If Barroway was just a frontman and never actually put the 150m$, he needs to step down as the real owners don't want to give 51% of the sale to the frontman.

Then I removed my tinfoil hat and figured that Barroway just don't like the medias and doesn't care what happens with his Coyotes and prefer to just sell his shares.

By the way, how bought his shares? For how much? Who is now majority owner? Fun times for sure.

 

[madhi19]

Regarding Barroway stepping down as majority owner, when I put my tinfoil hat this morning I got this crazy idea. Could it be that his role in the team is just over (being majority owner for taxes purposes) and he now needs to step down for the following act: the sale.

If Barroway was just a frontman and never actually put the 150m$, he needs to step down as the real owners don't want to give 51% of the sale to the frontman.

Then I removed my tinfoil hat and figured that Barroway just don't like the medias and doesn't care what happens with his Coyotes and prefer to just sell his shares.

By the way, how bought his shares? For how much? Who is now majority owner? Fun times for sure.

Man, this guy did even last longer than Gosbee.

 

[rj]

Ice Idiots: Why on earth would they decide to employ two former Glendale employees with whom they had dealt with extensively when the one clause in the contract that clearly pointed to an exit strategy for Glendale was related to conflict of interest? Couldn't they find another suitable lawyer or PR firm in the greater Phoenix area?

They or their lawyer didn't know the law or skimmed over that point?

 

[JimAnchower]

By the way, how bought his shares? For how much? Who is now majority owner? Fun times for sure.

Those are the key questions for Barroway. If he really put in money, his bank account will soon have a big deposit soon. If he didn't, as the rumor suggests, then it was just a shell game with no money actually changing hands. The shares of the team might as be 1920's German Papiermarks during hyperinflation, worth virtually nothing.

 

[awfulwaffle]

I looked at the Gila River Arena calendar and I see that few events are penciled in to be playing this summer.

I looked at the Rexall Place calendar and there are more booked days than empty.

The Coyotes have been screwing over Glendale while managing the arena. I can see why Glendale wants out of their agreement. 15M a year for that?

Unacceptable. They could pay a real arena manager half of that and probably have way more use out of the arena.

Gila River Arena is in Glendale. US Airways(and more firepower with money available for booking gigs, and a much easier sell), is in Phoenix. The airport is just down the road from US Airways compared to Glendale. Why wouldn't acts want to go to US Airways to easily sell more tickets since that's where the population lives and can get to easier than the middle of nowhere.

It's not a hard sell for US Airways to say "We are on the light rail, closer to the east side of the valley that has more money, more people, etc." Yes, people will still go to concerts if an artist they like is in town. But I for one don't like going down to Rawhide in Chandler. There have been some DJs that have come through that i didn't go see because it sucks to go down there. I'd much rather go to Marquee Theater or Monarch Theater.

 

[blues10]

A 50/50 split can work like in Dallas, but not sure if that can happen in Phoenix, does this ownership group have enough cash to buy into helping fund a new Arena though?

This group doesn't have enough cash to leave a tip at Denny's

Some guys have bought in for what would essentially be the cost of a suite at the ACC for a few years.

What skin does Leblanc have in the game? 2 million?

Gosbee 39 million?

Barroway?????

The rest of the crew seems linked to the oil and gas industry in Alberta. Probably not good times for them right now.

This is old but is the original group of wanabees. Perhaps someone else has an updated list with amounts invested.

http://www.bizjournals.com/phoenix/news/2013/08/05/new-coyotes-owners-mostly-canadian.html

 

[CasualFan]

Earlier this week, on the evening of June 10,2015, after thoughtful, passionate, and eloquent pleas by an assembly room full of Glendale residents and business owners imploring the City Council of Glendale not to cancel Glendale's Professional Management Services and Arena Lease Agreement (the "Agreement") with Plaintiff

What's more disingenuous, that they were eloquent or that they were residents? It's a tie, right? They go to shootout?​

Defendants abused their discretion in approving the cancellation of the Agreement or agreeing to cancel the Agreement because, among other reasons, they ... (b) provided unreasonable notice of the June 10, 2015 Special Voting Meeting;

That's strange. Calling emergency Council sessions did not seem to be unreasonable when it was done to approve the agreement. I guess there's a certain flexibility in how IA wants that standard to be applied.​

--------------

For whatever it's worth, I didn't see anything that I thought moved the needle in either direction. I didn't do any type of deep dive on the cites because this is almost certainly going to settle. I did see that IA went with Security Gen. Life Ins. Co for proving "significant involvement". It doesnt seem overly convincing. ER 1.11 appears open for alternate interpretations.

There's another case line (Turbin; Romley) for disqualification upon just the appearance of impropriety. But you really don't even have to leave Security Gen. to see some of the potential pitfalls for this case. ER 1.11 rule is... "intended to prevent conflicts of interest that arise in the "revolving door" between government and private practice." Further "..."substantial responsibility" requires the official to become personally involved to a material degree in the investigative or deliberative process regarding the transactions in question." (emphasis added)

Still just going off of the one email that is in the public domain, there would seem to be a valid argument that Mr. Tindall was personally involved in the deliberative process. He's obviously gone through the revolving door.

I wouldn't get bogged down in the specific words ("drafting, negotiating, creating") though I believe they are met. The statute's intent is to throw a wide net around everybody who influenced the contract, and Tindall fell in that group.

Of all the helpful insight in the ZTS post, this probably stuck out to me the most. The court may not even be interested in drilling down to the precise timeline or the precise definitions. Obviously, IA would want the bench to draw strict and specific lines. But there is no guarantee that they will. The court may prefer to cast that wide net. The NHL still has well documented financial interests in IA. How big of a stretch is it to say that Mr. Tindall was significantly involved in persisting the NHL's existence in Glendale, whether the league owned the franchise out right (2009-2013) or by proxy (Trust Deed Aug 5, 2013 - Present), so he could personally benefit from the revolving door later? There was a lot of coercion that went into getting the lease votes passed. The leases were all lopsided in favor of the team and Mr. Tindall was right in the middle of it all. Now he works for them. If a judge pivots to the appearance of impropriety standard, IA is screwed.

And that's just Tindall. Frisoni is still out there. I wouldn't get too hung up on her titles with the city. It's going to be her actions, regardless of they were part of her job description, that likely will become center focus.

Ice Idiots: Why on earth would they decide to employ two former Glendale employees

Because that's how corruption works?

 

[BattleBorn]

I think a lot of us (myself included) are forgetting the new model of sports franchise ownership. This is not a business, it's an investment.

These guys don't have to make money in the short term, they have to survive/not lose a lot of money in the short term and stick it out long enough to make it to the next US TV deal and sell.

I know we've all heard it before, but the next TV deal is almost going to have to be significantly higher just based on the way TV viewership is going and the idea that sports and live events with an actual conclusion that can't be "spoiled" have to be watched in real time or near real time. Sports programming values have been climbing and are very likely to continue to climb as more and more people choose to consume television entertainment at their leisure versus when it is actually broadcast. Sports is somewhat immune to this phenomenon due to its very nature.

The optimal situation is to make lots of money on the business end of the franchise and also have the ability to sell your portion of the league when the time comes, however both parts are not required for the Coyotes to still be a sound investment.

I've been asking myself why the owners are fighting this instead of using this as a quick way to sell and relocate, and this is the only thing I can think of that makes sense outside of stupid pride and ego.

Regardless of how the Coyotes are doing and the people willing to purchase the team from IA now, it's all but guaranteed the Coyotes are going to be worth significantly more after 2020-2021 season when the new US broadcast contract comes out. All they have to do is survive until then.

If they can't survive or the contract is the same as it is now, or there's a modest bump, IA can always sell out to someone willing to buy and are almost guaranteed to get their money (which is the reason many of us can't believe they're fighting now.) There is almost zero downside to trying to stick it out assuming the losses don't start really piling up past the point of expected return from waiting it out.

The team is worth what it's worth now and with the current marketplace it's all but guaranteed that value will stay the same or increase in the future. The chances of the team's value increasing well beyond the sum of the monetary requirements to keep it going until the next TV deal is fairly high and probably worth the risk.

 

[Glacial]

They aren't going to get anything now.

They nuked themselves.

And not just with the Coyotes and NHL.

The question is (under the assumption there is no negotiation, and the court case plays out)- Do they get more money back paying another arena management company to book events for the arena than they got from paying IceArizona for the Coyotes and event bookings?

 

[awfulwaffle]

I think a lot of us (myself included) are forgetting the new model of sports franchise ownership. This is not a business, it's an investment.

These guys don't have to make money in the short term, they have to survive/not lose a lot of money in the short term and stick it out long enough to make it to the next US TV deal and sell.

I know we've all heard it before, but the next TV deal is almost going to have to be significantly higher just based on the way TV viewership is going and the idea that sports and live events with an actual conclusion that can't be "spoiled" have to be watched in real time or near real time. Sports programming values have been climbing and are very likely to continue to climb as more and more people choose to consume television entertainment at their leisure versus when it is actually broadcast. Sports is somewhat immune to this phenomenon due to its very nature.

The optimal situation is to make lots of money on the business end of the franchise and also have the ability to sell your portion of the league when the time comes, however both parts are not required for the Coyotes to still be a sound investment.

I've been asking myself why the owners are fighting this instead of using this as a quick way to sell and relocate, and this is the only thing I can think of that makes sense outside of stupid pride and ego.

Regardless of how the Coyotes are doing and the people willing to purchase the team from IA now, it's all but guaranteed the Coyotes are going to be worth significantly more after 2020-2021 season when the new US broadcast contract comes out. All they have to do is survive until then.

If they can't survive or the contract is the same as it is now, or there's a modest bump, IA can always sell out to someone willing to buy and are almost guaranteed to get their money (which is the reason many of us can't believe they're fighting now.) There is almost zero downside to trying to stick it out assuming the losses don't start really piling up past the point of expected return from waiting it out.

The team is worth what it's worth now and with the current marketplace it's all but guaranteed that value will stay the same or increase in the future. The chances of the team's value increasing well beyond the sum of the monetary requirements to keep it going until the next TV deal is fairly high and probably worth the risk.

You hit the nail on the head. And that is why I feel the NHL wants to keep the Coyotes in Arizona. Phoenix itself is 1.6 million people, if you add in the surrounding cities it's much higher. There is a lot of TVs in this market. While the numbers aren't there now, if hockey catches on, that's a huge market to tap. Not to mention all the transplant fans that are here that are tuning in to watch their own team.

 

[LPHabsFan]

You hit the nail on the head. And that is why I feel the NHL wants to keep the Coyotes in Arizona. Phoenix itself is 1.6 million people, if you add in the surrounding cities it's much higher. There is a lot of TVs in this market. While the numbers aren't there now, if hockey catches on, that's a huge market to tap. Not to mention all the transplant fans that are here that are tuning in to watch their own team.

Nobody here doubts that the NHL would want to keep Arizona as a market due to the potential for it but at what cost? It's been like this for how many years? They've had to be gifted what, 80 million (2x25 and 2x15) dollars from the COG if not more over the past several years and yet they STILL lose tens of millions of dollars and require loans from the NHL and private firms in order to artificially inflate the price?

The Coyotes in Glendale have failed. Period. There is no possibility of success there just like people have been saying for the past 5+ years. And the only chance they have to succeed within the state of Arizona is if every single star aligns at Talking Stick Arena and even then it's questionable as to whether or not they could be profitable due to what I mentioned in an earlier post.

This is a situation that simply put needs to put out of its misery. It's also kind of funny because all the talk has shifted towards legalities and now how the savior of the Coyotes is going to be Phoenix yet we've gone through years of a number of different savior scenarios and all have failed.

 

[kihekah19*]

How big of a stretch is it to say that Mr. Tindall was significantly involved in persisting the NHL's existence in Glendale, whether the league owned the franchise out right (2009-2013) or by proxy (Trust Deed Aug 5, 2013 - Present), so he could personally benefit from the revolving door later? There was a lot of coercion that went into getting the lease votes passed. The leases were all lopsided in favor of the team and Mr. Tindall was right in the middle of it all. Now he works for them. If a judge pivots to the appearance of impropriety standard, IA is screwed.

And that's just Tindall. Frisoni is still out there. I wouldn't get too hung up on her titles with the city. It's going to be her actions, regardless of they were part of her job description, that likely will become center focus.



Because that's how corruption works?

While the law is the law, I believe the COG is banking on a forced renegotiation with this move. Frisoni aside - let's please be realistic here. Would a case not have to be made that Tindall's conflict of interest was somehow of an economic nature? He's legal council, his job was/is to mind legalities..... COG's problem with this lease is of an economic nature. Yes?

While the technicality is most likely there, courts in this country are quite liberal these days and seem more than willing to override the letter of the law.

 

[LadyStanley]

I looked at the Gila River Arena calendar and I see that few events are penciled in to be playing this summer.

I looked at the Rexall Place calendar and there are more booked days than empty.

The Coyotes have been screwing over Glendale while managing the arena. I can see why Glendale wants out of their agreement. 15M a year for that?

Unacceptable. They could pay a real arena manager half of that and probably have way more use out of the arena.

With competition from AWA/PHX. How many shows have they "bid" on only to have them go to PHX?



http://ktar.com/22/1842087/Former-a...-Glendales-claim-in-citys-battle-with-Coyotes

Former Glendale Assistant City Manager Julie Frisoni told Cronkite News on Friday that she was "appalled" by allegations from Glendale lawyers that placed her at the center of the battle over an arena lease agreement between the city and the Arizona Coyotes.
"I've never heard something as ludicrous in my life," Frisoni said in a phone interview. "Their information is completely baseless, untrue, and without any merit whatsoever."

Frisoni could be interested in a liable/slander suit against COG et al herself.

 

[cbcwpg]

Ice Idiots: Why on earth would they decide to employ two former Glendale employees with whom they had dealt with extensively when the one clause in the contract that clearly pointed to an exit strategy for Glendale was related to conflict of interest? Couldn't they find another suitable lawyer or PR firm in the greater Phoenix area?

Not answering this on moral grounds nor asking the question about right or wrong, but IMO.... in the world of high priced million dollar deals and business, I honestly don't think there are many people in this world that wouldn't have done what IA did.... and that is, when having to negotiate a deal with the CoG, hiring "ex-employees" whom might know the inner-workings of the city, and hence might help me get the best deal.

I think this is done by big business every single day in every business in the world. Why else would we have so many lawyers around who's only job is to push the barrier as far as they can without breaking it OR getting caught breaking it.

So again not saying right or wrong or smart or stupid.... IMO IA did what most businesses would have done. They just made the mistake of thinking nobody would notice.

 

[LPHabsFan]

With competition from AWA/PHX. How many shows have they "bid" on only to have them go to PHX?



http://ktar.com/22/1842087/Former-a...-Glendales-claim-in-citys-battle-with-Coyotes




Frisoni could be interested in a liable/slander suit against COG et al herself.

What would the basis of a libel/slander suit be?

 

[sandysan]

Why would the team be opposed to arbitration? Wouldn't that be the best way to get a fair deal for all parties?

because ther yotes are not interested in what's best for all parties, they are interested in what's best for them, even if it bankrupts the COG.

I'm convinced that all of this is just to get IA to renegotiate the subsidy that is disguised as an AMF. that if IA came off their " no negotiations" stance that something could be worked out and after asking and asking for this and getting rebuffed the COG voted to to do the only thing that they thought would force IA to come back to the table.