Phoenix CIII: Sue Me, Sue You Blues

[SunDancer]

With a competent arena manager, the number should improve quite dramatically. An example close to my heart is the example of the First Ontario Centre (former Copps Coliseum) in Hamilton. Around about the time of the current lease being negotiated, Hamilton was looking for a partner to manage it's arena. Global Spectrum won the bidding and the results apparently were quite spectacular...

FIRSTONTARIO CENTRE CLIMBS 105 SPOTS UP THE RANKING OF THE TOP VENUES IN THE WORLD

Now I recall kdb (I believe) Pollstar rankings that showed how the GRA fared pre-bankruptcy and post-bankruptcy that showed the arena at one time was a top draw and I believe ranked ahead of America West. After the NHL took over, non-hockey bookings cratered. Now if an arena that is some 20 years older can bounce back, so can Glendale's arena.

I totally agree. Where there's a will, there's a way and IA clearly clearly isn't very interested in booking non-hockey events. That's where Glendale made a critical error in 2013. By not including any sort performance clause in the lease, Glendale left themselves vulnerable to the whims of a less than motivated IA. By tying the AMF to the number of events held, they could've kept the Coyotes and maximized the arena on non-game nights.

 

[snowmobile]

Since you seem to be a fan of the Jets, you of all should be on our side more than other people.

We were not the worst in the league at the gate. And if this was the NFL, our 77%+ attendance would not be an issue.

Jets v. 1.0 didn't work so they moved them

Coyotes v. 1.0 doesn't work so they should move them

 

[BattleBorn]

Detroit is bankrupt, but nobody is batting an eye at the fact that the pubic is paying for a huge portion of their new arena. Why is everyone so concerned with the COG?

{Mod} Personally I'm just "vulturing."

 

[MNNumbers]

I think that in the past the council members were so committed to developing Westgate that they prefered to overpay the arena manager and ensure some tax revenues than to let the team walk and effectively give up on their "vision."

I think this is part of it. Then, I think they not only over payed, but they were misled and manipulated into doing so... See Sherwood/Tindall/Frisoni/Fischer, etc

You are right, generally, however. The prior council(s) were quite taken up with the appearance of an empty arena....

You also have to consider that the shared revenue from the arena decreased the city's payment from $15M to about $8M.

I just want to correct this with proper numbers. In 2013-14, the return from the surcharges and parking fees and naming rights (which were the specific conditions of the Arena Management Agreement and are only part of the Arena Spreadsheet on the Glendale website, unfortunately) were approx 4.6M, leaving Glendale with a net payment to IA of 9.4M (pro-rated. They signed to start in August.) The Glendale website spreadsheet includes arena sales tax, which SunDancer has included in the next part. For 2014-15, through April, the returns were only about 3.8M, leaving Glendale short about 11M (if they pay the July 1 3.75M). Let's be over-generous and assume there is another 1M coming for May and June. That still leaves Glendale short 10M for this fiscal year.

Granted that's still about $4M more than they should be paying an arena manager but if you also take into account the tax revenues from the arena ($1.1M)...

Now, let's add back that 1.1M in Arena sales tax. In fact, let's count it 1.5M to be generous. At this point, considering the arena only (not Westgate), Glendale is paying between 8M and 10M a year net to have the team.

(This calculation discounts the security, police and fire costs which are paid to the team on the Glendale website, because I am sure those are costs the city incurs, and then are reimbursed for. That should be revenue-neutral under any Arena Management.)

and the surrounding area (unknown amount but let's say another $1.1M) then the city is pretty close to recouping its $15M. Yes, still short but at least they get to hold on to the prestige of being home to the NHL and continue their pursuit of a Greater Glendale.

Now, with the real calculation, we see that even with as much as 2M in sales tax (Assume 500K tickets, that is 4$ of sales tax for everyone who goes to every game being spent at Westgate. At 2.9%, count that $133 every fan, every time. Surely that is an upper limit) Glendale is still losing 6 - 8M a year on this expedition. They literally would be better off simply paying the businesses a properly distributed 5M/yr, and telling the team to leave.

Of course, now the council is made up of newbies that aren't tied to past decisions and that has allowed them to take a more practical approach to managing their finances. Nonetheless, has anyone conducted an unbiased study of the economic impact of the team to date? Maybe it's just me but that might help Glendale figure out the value of keeping the team.

Have never seen such a study. I don't believe that 'unbiased' really exists in that field of business.

 

[SunDancer]

Detroit is bankrupt, but nobody is batting an eye at the fact that the pubic is paying for a huge portion of their new arena. Why is everyone so concerned with the COG?

That's not true. Detroit got raked for that decision. Tons of media attention like this:

http://www.bloomberg.com/news/artic...res-get-hockey-arena-as-bankrupt-city-suffers

 

[kihekah19*]

Every home win they play it. Coolest ever was their playoff wins in 2011 they had them there live to play it. Totally unexpected.

https://m.youtube.com/watch?v=HaPR9Di-axg

They still doing that? Gave up my sth's last year... good timing eh?

 

[MNNumbers]

Detroit is bankrupt, but nobody is batting an eye at the fact that the pubic is paying for a huge portion of their new arena. Why is everyone so concerned with the COG?

Because COG not only built the arena, but is paying the team a net of about 10M (I did the math in an earlier post) to play in it.

Cities may feel they need arenas for various reasons. Paying the performers to come, after paying to the build the arena, is like paying double.

 

[awfulwaffle]

Jets v. 1.0 didn't work so they moved them

Coyotes v. 1.0 doesn't work so they should move them

Jets 1.0 were just fine, it was the Canada economy that moved them.

And Coyotes 1.0 has been just fine as well. The problem is, the NHL doesn't have the TV deals that the other leagues have. Phoenix is a HUGE market, with lots of transplant fans. Many of which only go to games if their team is playing, they couldn't care less about the Coyotes.

The end goal is a bigger TV contract. Bettman knows that, the owners know that. I will admit the only reason Arizona still has a team is because Glendale would pay $ to have a team, in the end when it comes time to sign a new TV deal, it's good to have the Phoenix market. It will be a black eye on the NHL if it comes time to get a new TV deal to lose both Atlanta and Phoenix(both top 15 markets).

The NHL is a business, and the end goal is money. Yes, the Coyotes moving might make more money at the gate, but realistically, the end goal is a huge US TV contract.

 

[Major4Boarding]

That's not true. Detroit got raked for that decision. Tons of media attention like this:

http://www.bloomberg.com/news/artic...res-get-hockey-arena-as-bankrupt-city-suffers

Waffle means here, SunDancer

 

[awfulwaffle]

Because COG not only built the arena, but is paying the team a net of about 10M (I did the math in an earlier post) to play in it.

Cities may feel they need arenas for various reasons. Paying the performers to come, after paying to the build the arena, is like paying double.

COG isn't bankrupt. And the Coyotes is the least of their worries. They built a spring training ballpark that they earn no money on.

Again, why is a bankrupt city, that is using taxpayer dollars to build a stadium, instead of putting it towards police and fire firefighters any different than the city of glendale outside of they are paying more. Detroit has plenty of more issues than the COG has.

 

[Jeffrey93]

Detroit is bankrupt, but nobody is batting an eye at the fact that the pubic is paying for a huge portion of their new arena. Why is everyone so concerned with the COG?

No general fund city tax dollars are going to that arena.

Also, giving up the land Joe Louis is on was part of their bankruptcy settlement. Got them off the hook for a pile of debt, developer has a limited time frame to develop it after the Joe is gone or the debt remains gone and the city gets the real estate back to sell/use.

A lot of the tax dollars being used for this are part of a downtown development tax that requires they be spent on projects just like this.

 

[wpgallday1960]

You obviously don't know the area. I'll leave it at that.

We may not know the area but as Whileee intimated, any business plan that relys on attendance during 42 games in a sport that isn't native to the area is a poor business plan indeed.

 

[awfulwaffle]

That's not true. Detroit got raked for that decision. Tons of media attention like this:

http://www.bloomberg.com/news/artic...res-get-hockey-arena-as-bankrupt-city-suffers

Whooooopdi - freeeeeeakin - doooooooooooooooooo. News stories! Yet this forum didn't have 30 million different mega threads about it, and people concerned about the citizens that lived there because their tax dollars were for a professional sports team instead of police or fire fighters.

 

[zetajerk]

We may not know the area but as Whileee intimated, any business plan that relys on attendance during 42 games in a sport that isn't native to the area is a poor business plan indeed.

Ok, so lets just get rid of one half (if not more) of the NHL then

{Mod}

 

[Brodie]

Detroit isn't paying for any of the arena, unless you consider a pre-existing state created authority using corporate taxes collected from a small patch of downtown paying down state issued bonds funding the arena.

The city of Detroit is forgoing tax intake that it was going to forgo anyway, not just giving out millions of dollars. It's a disingenuous comparison

 

[MNNumbers]

COG isn't bankrupt. And the Coyotes is the least of their worries. They built a spring training ballpark that they earn no money on.

Again, why is a bankrupt city, that is using taxpayer dollars to build a stadium, instead of putting it towards police and fire firefighters any different than the city of glendale outside of they are paying more. Detroit has plenty of more issues than the COG has.

Awful....

I feel sorry for you and the real fans in the Valley. I am sure you feel personally criticized and affronted. I am sure you are anticipating the hurt if/when the team is forced to move. It must be awful.

And, perhaps the answer is... Detroit is perhaps no different. Start a thread on it and see if you can get people interested.

The reason we all are drawn to the Glendale saga is that it is a small city to start with, which was not in bad shape at all 18 years ago or whenever this started. And, many, many predicted that they would end up with financial difficulties. Which they did and have. Moody's rated there bonds just above 'junk' status not too long ago.

And, we are drawn because of the deception, the falsehoods, the role Bettman has played in preserving the status quo... All of which suggest to us that something is happening behind the scenes. People are simply drawn to observe that express their opinion.

Detroit's thing is out in the open. That's a different case. If you want, dig around. See if you can find
1) A poor lease with a major city
2) A purchase by a financial developer to use the hockey team as a piece of his pie rather than a straightup investment.
3) a negotiation gone bad with a near-by suburb
4) A hasty decision by another suburb to sell bonds to build an arena
5) A bankruptcy case
6) An attempted takeover and move to Canada
etc....

All those things add intrigue, and draw us to the Phoenix/Glendale situation.

We are human. Sorry.

 

[kihekah19*]

Okay, so yes, we all agree on the above. What is the source of the acrimony and your general disagreeableness towards the discussions here then?

Thanks for the tip. The trick will be in my remembering.

I have no bitterness, the bitterness is seen on these boards from those who revel in the possibility of the team leaving the desert.

As far as disagreeing? I disagree with whatever it is that I may disagree with, just like anyone else.

 

[Jeffrey93]

Whooooopdi - freeeeeeakin - doooooooooooooooooo. News stories! Yet this forum didn't have 30 million different mega threads about it, and people concerned about the citizens that lived there because their tax dollars were for a professional sports team instead of police or fire fighters.

It's a downtown rink, surrounded by major development, for a team that will fill the place every night and the city isn't paying someone $15M a year to operate it.

I think the tax dollars being used in Detroit are an investment....in Glendale they're more of a handout/allowance.

 

[Jeffrey93]

Thanks for the tip. The trick will be in my remembering.

As far as disagreeing? I disagree with whatever it is that I may disagree with, just like anyone else.

Seems like you're disagreeing/angry with the discussion itself....but yet, still partaking in it.

Bold move sir, gotta respect that.

 

[wpgallday1960]

Ok, so lets just get rid of one half (if not more) of the NHL then

{Mod}

So you're saying 1/2 the NHL franchises are located near suburban malls and are relied on for their economic existence?

 

[SunDancer]

I think this is part of it. Then, I think they not only over payed, but they were misled and manipulated into doing so... See Sherwood/Tindall/Frisoni/Fischer, etc

You are right, generally, however. The prior council(s) were quite taken up with the appearance of an empty arena....



I just want to correct this with proper numbers. In 2013-14, the return from the surcharges and parking fees and naming rights (which were the specific conditions of the Arena Management Agreement and are only part of the Arena Spreadsheet on the Glendale website, unfortunately) were approx 4.6M, leaving Glendale with a net payment to IA of 9.4M (pro-rated. They signed to start in August.) The Glendale website spreadsheet includes arena sales tax, which SunDancer has included in the next part. For 2014-15, through April, the returns were only about 3.8M, leaving Glendale short about 11M (if they pay the July 1 3.75M). Let's be over-generous and assume there is another 1M coming for May and June. That still leaves Glendale short 10M for this fiscal year.



Now, let's add back that 1.1M in Arena sales tax. In fact, let's count it 1.5M to be generous. At this point, considering the arena only (not Westgate), Glendale is paying between 8M and 10M a year net to have the team.

(This calculation discounts the security, police and fire costs which are paid to the team on the Glendale website, because I am sure those are costs the city incurs, and then are reimbursed for. That should be revenue-neutral under any Arena Management.)



Now, with the real calculation, we see that even with as much as 2M in sales tax (Assume 500K tickets, that is 4$ of sales tax for everyone who goes to every game being spent at Westgate. At 2.9%, count that $133 every fan, every time. Surely that is an upper limit) Glendale is still losing 6 - 8M a year on this expedition. They literally would be better off simply paying the businesses a properly distributed 5M/yr, and telling the team to leave.



Have never seen such a study. I don't believe that 'unbiased' really exists in that field of business.

Thanks for all the data. (You're not called MNNumbers for nothing ) I think I made a mistake with the arena taxes and counted them twice. I grabbed the $8M number from this article:

http://www.azcentral.com/story/news/local/glendale/2015/06/10/coyotes-glendale-arena-lease/71019238/

There she states that Glendale lost $8.1M last year and $8.7M this year but I guess she must've already deducted the arena taxes to arrive at those figures.

Do you have the exact website for Glendale's spreadsheets?

 

[awfulwaffle]

It's a downtown rink, surrounded by major development, for a team that will fill the place every night and the city isn't paying someone $15M a year to operate it.

I think the tax dollars being used in Detroit are an investment....in Glendale they're more of a handout/allowance.

What the hell is the difference? Detroit is in much more turmoil than Glendale is. Yet there isn't a peep about the need for more money for police officers in Detroit. I think everyone would agree it's safer to live in Glendale than Detroit, yet everyone is so concerned about the funds for police and fire in Glendale.....

For the record, I don't live in Glendale. I couldn't care less what happened to that city. I don't live there, and never will. It's personal choice on where you want to live. But the fact that this forum is so hell bent on the Coyotes moving because they don't sell out every game is ludicrous.

 

[Whileee]

I think that in the past the council members were so committed to developing Westgate that they prefered to overpay the arena manager and ensure some tax revenues than to let the team walk and effectively give up on their "vision."

You also have to consider that the shared revenue from the arena decreased the city's payment from $15M to about $8M. Granted that's still about $4M more than they should be paying an arena manager but if you also take into account the tax revenues from the arena ($1.1M) and the surrounding area (unknown amount but let's say another $1.1M) then the city is pretty close to recouping its $15M. Yes, still short but at least they get to hold on to the prestige of being home to the NHL and continue their pursuit of a Greater Glendale.

Of course, now the council is made up of newbies that aren't tied to past decisions and that has allowed them to take a more practical approach to managing their finances. Nonetheless, has anyone conducted an unbiased study of the economic impact of the team to date? Maybe it's just me but that might help Glendale figure out the value of keeping the team.

Let's not forget one crucial issue - IA can't afford to operate the Coyotes in Glendale and have an out clause in 3 years. The Coyotes still don't have a real owner that has the wherewithal to keep operating the team in Glendale for the long term. I think that the CoG realizes that and wants to cut their losses.

The long term economic impact of the Coyotes will be pretty negative if they leave in 3 years, after the CoG had poured about $125 million in subsidies to try to keep them around.

 

[LeafShark]

.... yep. extreme duress kihekah. Helsinki Syndrome. Traumatic bonding, inattentional blindness to the negative in order to achieve a fictional positive.



mesa? Time Traveller.... one who unlike Anthony Leblanc is smart enough to avoid eye contact with someone he passes in his Telephone Box when encountering someone whipping bye into the past when he's traveling into the future. Facial recognition can be a real *****.



Why yes, yes absolutely. By 2047, Glendale should be about even on that $225M contract provided of course they dont pay anything further 13yrs hence. Yep. Every nickle & dime counts. Cuz thats what their gettin back on every dollar spent.



Actually most of us do, anyone who cares about the game of hockey & the NHL. Anyone who's sick up to here of seeing leagues & teams taking the taxpayers to the cleaners.



Un huh... and

when you drive a car off the lot, it appreciates in value
you mail a letter without postage, it arrives anyway
you once had a race with your shadow, and won
once had an awkward moment, just to see how it feels
your shirts never wrinkle

and Glendale subsidizes your Coyotes ticket by an astonishing 100%

I've never thought of it that way before. While not completely accurate, it is more accurate than I am comfortable with.

 

[MNNumbers]

Thanks for the tip. The trick will be in my remembering.

As far as disagreeing? I disagree with whatever it is that I may disagree with, just like anyone else.

My own feeling in the whole matter is that I like to see people..
1- make good decisions, whether it's in business, relationships or ethics
2- conduct themselves honestly

The particular situation in Glendale exists because many, many, many people have failed at these two things (and it has cost the citizens lots of $$, so there are victims). These failures have been on the part of NHL, various owners of the franchise, and many city councilmembers in Glendale.

The only ones who have done well at these are the people in Scottsdale, who did not play Ellman's game, and the councilmembers in Glendale who voted 'no,' whether they had clear analysis or not, and the fans who enjoyed the team and bought their tickets and merchandise.

Now, it appears that a few more people are going to make good decisions. I am waiting, as I have for 4 years as I have followed this saga, to be able to silently applaud such. And, if this carries through as it seems it might, I WILL silently applaud them, while feeling bad for the fans losing their team.

As an addendum to that, there is a rumor they might move immediately to Seattle. That does not seem a wise choice to me, so I will be disappointed if that happens. And, my disappointment will be tempered, because it appears the only victims there will be whoever might own the team.

Thanks for disagreeing.