Phoenix CVI: It's good to talk these things out

Major4Boarding · Jul 12, 2015

MNNumbers · Jul 13, 2015

And, per the title, COG will talk it over first.

Llama19 · Jul 13, 2015

Joyce has another blog about GlendaleFirst! and their claim of Glendale's 'disappearing' Coyote's money
as they claim in their recall effort against the councilmembers
who have cancelled the 'arena management agreement'... :laugh:

Source: http://joyceclarkunfiltered.com/the-case-of-the-disappearing-money/

Llama19 · Jul 13, 2015

MNNumbers said:
And, per the title, COG will talk it over first.

Yes, let's give them something to talk about...

madhi19 · Jul 13, 2015

Holy crap, John Oliver does not pull any punch.

Carlzner · Jul 13, 2015

madhi19 said:
Holy crap, John Oliver does not pull any punch.

I had no idea that this stuff was so ****ed up until watching that episode. (Although I say that almost every week...)

Not really sure where I stand on the Phoenix situation now.

Nugey McNugeson · Jul 13, 2015

Here's the John Oliver piece about stadiums. Very eye-opening

aqib · Jul 13, 2015

madhi19 said:
Holy crap, John Oliver does not pull any punch.

I think its a bit overblown. $51 billion nationwide over the course of 20 years isn't a big deal in the grand scheme of things. For example the proposal for the Rams stadium calls on the state to spend $12 million. Off the bat they get $10 million back in taxes on players salaries. The state budget is $36 billion. $12 million should not be the hill to die on.

TheLegend · Jul 13, 2015

MNNumbers said:
And, per the title, COG will talk it over first.

Apparently so.

"Strange things are a foot at the Circle K"

XX · Jul 13, 2015

Nugey McNugeson said:
Here's the John Oliver piece about stadiums. Very eye-opening

I tend to have a problem with this argument as it never really takes into account the social capital that sports generate for a city. The impact of a great facility and a sports team goes beyond just the dollars the city puts in and gets out in revenue/taxes. It would be like arguing the sum total value of a world class restaurant or club to a community consists entirely of the property tax and sales tax it generates. We know that's not true, which is why we build things like parks.

The equation may be tipped in the favor of owners and cities do indeed show too little restraint when it comes to spending on sports. But to pretend like the city gets nothing out of the deal beyond the what the ledger provides is silly.

GF · Jul 13, 2015

Whatever CoG decides, I hope they get IA to drop the out clause. That's the only way to bring some kind of stability to this franchise...

Have we finally reached the last fortnight? :popcorn:

Slashers98 · Jul 13, 2015

GF said:
Whatever CoG decides, I hope they get IA to drop the out clause. That's the only way to bring some kind of stability to this franchise...

Have we finally reached the last fortnight?

Why would they drop the out clause? That's the only way they can make some money out of this risky endeavour.

GuelphStormer · Jul 13, 2015

madhi19 said:
Smart money is on a delayed divorce. IA admit the deal is void, in exchange Glendale does not go after the cash they already paid. One year lease with AMF at half or they move now.

this would seem the simplest, most objective, resolution.

ps, i don't want to start rumours, but i saw yet another coyote on my drive down to hamilton today.

MNNumbers · Jul 13, 2015

GF said:
Whatever CoG decides, I hope they get IA to drop the out clause. That's the only way to bring some kind of stability to this franchise...

Have we finally reached the last fortnight?

Why the obsession with the out clause?

The worst thing that could have happened to Glendale if the agreement stood was if IA stayed the full 15 years.

This action by COG better be about more than that.

SunDancer · Jul 13, 2015

Slashers98 said:
Why would they drop the out clause? That's the only way they can make some money out of this risky endeavour.

There is no way IA can enter a renegotiation with Glendale and even dream of hanging on to the out clause. That's the first thing the city will go after.

Llama19 · Jul 13, 2015

More on the subject...

John Oliver: How Sports Teams Are Ripping Us Off

Source: http://www.thedailybeast.com/articl...iver-how-sports-teams-are-ripping-us-off.html

SunDancer · Jul 13, 2015

MNNumbers said:
Why the obsession with the out clause?

The worst thing that could have happened to Glendale if the agreement stood was if IA stayed the full 15 years.

This action by COG better be about more than that.

Glendale doesn't want to waste money on the trophy wife if she's leaving soon.

Whileee · Jul 13, 2015

Renegotiation position for Glendale?

So, if this deal is headed towards renegotiation, what negotiating stance should Glendale take? From a political and financial perspective, these would be the two key elements I would push for from Glendale's side...

1) Include a Performance Clause. The current agreement has no performance clause, so the risk is all on Glendale if IA fails to perform up to expectations in terms of generating business and revenue. Glendale should propose a substantially lower amount for the base AMF, and then have the rest of the fee based on performance in terms of generating business for the arena. Perhaps they should dust off one of the previous rosy projections for the attendance and parking and say that if IA matches that, they'll get close to the full $15 million, but reduce the AMF for shortfalls from that projected performance. This would put the onus on IA to perform as they had projected, and if not, protects Glendale financially if IA continues to underperform.

2. Eliminate the "Out Clause". If Glendale is able to get a more reasonable AMF, which protects them against dismal performance, they should also push hard to get IA to remove the "out clause". The rationale would be two-fold. First, it would appear that there is no longer an imperative from a lender to keep the out clause. Second, this would put the political pressure squarely on IA and the NHL to commit to a viable long-term solution for the Coyotes in Glendale. If IA and the NHL continue to insist on the "out clause", then I think Glendale can assume that this wasn't going to work out anyway, so they might as well cut their losses now and find another business plan for the arena.

Whileee · Jul 13, 2015

MNNumbers said:
Why the obsession with the out clause?

The worst thing that could have happened to Glendale if the agreement stood was if IA stayed the full 15 years.

This action by COG better be about more than that.

The "out clause" is a political minefield for IA and the NHL. Refusal to budge on that would reveal them to be uncommitted, which would give Glendale more political juice for their negotiation.

As I suggested above, I think that Glendale would be wise to go after a performance clause and the removal of the "out clause" as their two negotiating points. Both would likely politically supported. One would protect their financial interests, and the other would protect their political interests.

Llama19 · Jul 13, 2015

Warning Signs That Team Values Have Peaked

To quote:

"But with controlling owner Andrew Barroway not fulfilling his equity contribution and reducing his stake in the team the $305 million price he paid seems a lot less bullish for the NHL than it did six months ago."

Source: http://www.forbes.com/sites/mikeozanian/2015/07/08/warning-signs-that-team-values-have-peaked/

SunDancer · Jul 13, 2015

Whileee said:
So, if this deal is headed towards renegotiation, what negotiating stance should Glendale take? From a political and financial perspective, these would be the two key elements I would push for from Glendale's side...

1) Include a Performance Clause. The current agreement has no performance clause, so the risk is all on Glendale if IA fails to perform up to expectations in terms of generating business and revenue. Glendale should propose a substantially lower amount for the base AMF, and then have the rest of the fee based on performance in terms of generating business for the arena. Perhaps they should dust off one of the previous rosy projections for the attendance and parking and say that if IA matches that, they'll get close to the full $15 million, but reduce the AMF for shortfalls from that projected performance. This would put the onus on IA to perform as they had projected, and if not, protects Glendale financially if IA continues to underperform.

2. Eliminate the "Out Clause". If Glendale is able to get a more reasonable AMF, which protects them against dismal performance, they should also push hard to get IA to remove the "out clause". The rationale would be two-fold. First, it would appear that there is no longer an imperative from a lender to keep the out clause. Second, this would put the political pressure squarely on IA and the NHL to commit to a viable long-term solution for the Coyotes in Glendale. If IA and the NHL continue to insist on the "out clause", then I think Glendale can assume that this wasn't going to work out anyway, so they might as well cut their losses now and find another business plan for the arena.

These are both great points and, importantly, neither would significantly impact IA's bottom line. It would be quite difficult for IA to publicly defend a refusal of either of these requests.

GF · Jul 13, 2015

MNNumbers said:
Why the obsession with the out clause?

The worst thing that could have happened to Glendale if the agreement stood was if IA stayed the full 15 years.

This action by COG better be about more than that.

The thing is the out clause is a sure sign of non commitment. If IA is any serious at making this work once and for all they need to drop it. Otherwise the city knows they're not serious and then need to plan their next move accordingly.

The COG won't lose 15m$/yr for the next 15 years. They've wisened up. They will look for a good lease this time around. A good lease and no out clause puts pressure on IA to make things work and be good. Kinda like ***** or get off the pot kind of situation.

I don't believe IA will agree to a long term lease that isn't a subsidy in disguise. IF IA can't/won't work with a lesser AMF, the two likely scenarios are, a one year lease to sort things out or relocation. But a one year lease at this point would be the lamest duck in the history of lame ducks...

:popcorn:

barneyg · Jul 13, 2015

SunDancer said:
These are both great points and, importantly, neither would significantly impact IA's bottom line. It would be quite difficult for IA to publicly defend a refusal of either of these requests.

I don't know -- seems to me like performance standards would significantly increase risk on IA's side. They might stand to lose $3-5M/yr compared to the current deal and would need to work much harder just to get to the same point.

rt · Jul 13, 2015

Nugey McNugeson said:
Here's the John Oliver piece about stadiums. Very eye-opening

I think everyone involved from the start of this entire saga until now must know that building an arena in Glendale and moving the coyotes there was a horrible mistake. Neither side should've ever been involved with each other. We get that. Now that we've all agreed on something, we can sleep soundly except for that one nagging little problem; the arena had been built, and the team has moved there. That's where things get more complicated and require a little more effort than making big sweeping statements. There is a great case for simply undoing this. Unfortunately that's not actually an option. The alternatives are less clear.

SunDancer · Jul 13, 2015

barneyg said:
I don't know -- seems to me like performance standards would significantly increase risk on IA's side. They might stand to lose $3-5M/yr compared to the current deal and would need to work much harder just to get to the same point.

Obviously it would depend on how they structured a new deal but the general idea would revolve around removing the transfer of payments that currently takes place between the two parties. IA could subtract some of the fixed guaranteed income they now get from Glendale and replace it with the income they generate from the various ticket surcharges. That way the lease could be modeled closer to that of a true Arena Manager and, if you believe Leblanc, they are continuing to grow that side of the business.

But you're absolutely right, it would significantly increase the risk on IA's side and whether or not they have any interest in (or room for) that is another question.

Phoenix CVI: It's good to talk these things out

Unfamiliar Moderator

HFBoards Sponsor

Registered User

Registered User

Just the tip!

Registered User

Registered User

Registered User

Megathread Gadfly

Waiting for Ishbia

Registered User

Registered User

Registered User

HFBoards Sponsor

Registered User

Registered User

Registered User

Registered User

Registered User

Registered User

Registered User

Registered User

Registered User

The Kinder, Gentler Version

Registered User

Ad

Ad

Ad