Phoenix CVII: Can yet the lease of my true love control

[madhi19]

The city suspect that IA was going to run out in three years anyway. So they went to all this trouble to cancel a deal that did not generate $15 million back. Fine it all made sense, but then they negotiate a even shorter deal that still cost them pretty much what they were making on the previous deal but gave up two revenue streams. So you can pretty much guarantee they still lose a 2 or 3 millions for the next two year.

Nobody can pretend this is not a divorce, but it going to be a ugly two years. Have you ever heard of a couple that decide to divorce a few years in the future, but live in the same house until they do? It never end well.

 

[MNNumbers]

OK. So, I haven't seen the agreement, and I am posting this in a time constraint (there are some fish to catch with a buddy on Big Marine tonight )

Do I have it right?

1- Team. Team stays 2 years. No option to move after one.
500K rent for each year.

2- Arena Manager. IA manages for one year. City pays 6.5M/yr. Manager gets all revenue, but also all responsibilities. No surcharges to city. No parking fees. Manager gets Naming Rights in year 1.
City has right to change Arena Managers in Year 2. Should they exercise said right, new management contract is negotiated (the 6.5M does not necessarily transfer). New manager must allow team to remain. Team would pay 500K rent, and retain all revenue for hockey events (concessions, tickets, etc). QUESTION::: Who gets naming rights in the event the City chooses this course? The New Manager? or the Hockey Team?


If so, I would say that the city has done pretty well. The often quoted figure of 8+M coming back to the city always included the sales tax within the arena. That has been about 1.3M/yr. Since the team stays for 2 years, the city still gets that. Since the team stays, the city also has the fans in the Westgate Area. By my calculations, the city saves about 3M next year, and still gets the team there driving economic activity to the area. Year 2, city might do even better. Smaller AMF, and team still present.

Team got a few bones thrown to it. First, since they have a 2-year contract, they can say 15-16 is NOT a lame-duck year. They can still market this as: We are staying. Second, they have opportunity, if they really drive the non-hockey events, of coming out near equal in year one compared to the prior lease.

League does very well, all things considered. Team stays 2 years, giving time to work behind the scenes to find a landing spot. (Obviously, to us here, Portland and Seattle are the likely places). In the end, they will be able to claim the city tossed them out, rather than that the NHL just left. That is a selling point (although perhaps such a good one if anyone does due diligence) for negotiations with Seattle or Hamilton. And, losses more or less covered by expansion fees.

I have been saying that I like to see people make good choices. Bravo for Glendale. They did well here.

 

[ucanthanzalthetruth]

For the people saying this leaves the option for them to leave after 1 season, it doesn't, the Coyotes are in Arizona till June 30th, 2017. After that though, I'm not sure what Coyotes fans can bank on. This just feels like 2 lame duck seasons instead of one.

Although I've learned to never count the Coyotes out, Phoenix doesn't seem realistic and they've never been able to find real ownership in Glendale.

 

[Melrose Munch]

For the people saying this leaves the option for them to leave after 1 season, it doesn't, the Coyotes are in Arizona till June 30th, 2017. After that though, I'm not sure what Coyotes fans can bank on. This just feels like 2 lame duck seasons instead of one.

That is pretty clearly a voluntary end date next year with notice. This deal would not be signed without it.

 

[Glacial]

Practically speaking, though, you have to figure the $6.5 million AMF (even with additional revenues) is a recipe for a bloodbath on the team's balance sheets. The team also looks to have not one, but two lame duck seasons, and if news starts to leak out of Seattle... welp. Two weeks replaced by two years and then just maybe we'll finally have an outcome to this saga.

This, I think might take some time to sink in for some folks... two years of lame duck seasons and relocation chatter reaching a fever pitch at times. Sure, it's a new lease, but these might be the two ugliest seasons for the Coyotes for the fans. 2 years before their team pulls up stakes and goes elsewhere barring major developments on the Phoenix arena front (seemingly a hail mary), likely staggering losses on the team's side, which may cause more sell-offs and other money-hemorraghing-stemming moves and even if they are terrible enough on ice and draft the local kid coming up, what good will it be if the team looks like it's guaranteed to relocate? Heck, who knows how long IceArizona can maintain it. Wasn't there some kind of lending limit from the NHL's credit line per team?

It seems like the NHL is willing to take an ugly, prolonged bath for 2 years because they don't want anything to interfere in the expansion fee money from Quebec & Vegas. LOL if it ends up costing the NHL more in these 2 years than they collect in expansion fees. It's really wild to think the highwire act went on this long and had so many twists and turns that didn't make it fall.

 

[Melrose Munch]

This, I think might take some time to sink in for some folks... two years of lame duck seasons and relocation chatter reaching a fever pitch at times. Sure, it's a new lease, but these might be the two ugliest seasons for the Coyotes for the fans. 2 years before their team pulls up stakes and goes elsewhere barring major developments on the Phoenix arena front (seemingly a hail mary), likely staggering losses on the team's side, which may cause more sell-offs and other money-hemorraghing-stemming moves and even if they are terrible enough on ice and draft the local kid coming up, what good will it be if the team looks like it's guaranteed to relocate? Heck, who knows how long IceArizona can maintain it. Wasn't there some kind of lending limit from the NHL's credit line per team?

It seems like the NHL is willing to take an ugly, prolonged bath for 2 years because they don't want anything to interfere in the expansion fee money from Quebec & Vegas. LOL if it ends up costing the NHL more in these 2 years than they collect in expansion fees. It's really wild to think the highwire act went on this long and had so many twists and turns that didn't make it fall.

Glendale can cut out after 1 year though. Trust this, if Tukwila construction beings in december then this team is gone.

 

[MoreOrr]

Gives Seattle 2 years to get an arena built. Does anyone here think that they can manage that?

Seattle's arena situation is like a little sister to the major fiasco that has been Glendale. The two are made for each other. Just hopefully the one can get resolved by the time the other finally ends. Otherwise, my favor goes with Portland. The 2017-18 Portland Coyotes or Whatevers.

 

[Glacial]

Glendale can cut out after 1 year though. Trust this, if Tukwila construction beings in december then this team is gone.

Yeah, if. The NHL clearly wanted a 2 year window just in case it takes that long. It is one guaranteed lame duck year, one uncertain lame duck year, but still, the new lease is establishing potentially up to 2 years of being lame duck. That's the biggest when you look at this new deal.

 

[MNNumbers]

Glendale can cut out after 1 year though. Trust this, if Tukwila construction beings in december then this team is gone.

Please, Melrose.

I keep reading that CoG can cut with ARENA MANAGEMENT after one. Not with TEAM.

It appears from what I read that the only way TEAM leaves after 1 is through bankruptcy.

 

[ucanthanzalthetruth]

That is pretty clearly a voluntary end date next year with notice. This deal would not be signed without it.

How so? Glendale won't kick the Coyotes out. Deal is 2 years long, no out clause here...

Even if IA is removed as arena management that doesn't preclude the Coyotes from having to play there right?

 

[cutchemist42]

I just hope is awarded their $200mil of damages for losing the World Juniors.

 

[Melrose Munch]

Please, Melrose.

I keep reading that CoG can cut with ARENA MANAGEMENT after one. Not with TEAM.

It appears from what I read that the only way TEAM leaves after 1 is through bankruptcy.

How so? Glendale won't kick the Coyotes out. Deal is 2 years long, no out clause here...

Even if IA is removed as arena management that doesn't preclude the Coyotes from having to play there right?

Do you think the team will stay if IA can' manage the arena? The coyotes will lose too much money if they can't manage. The NHL just wanted to gouge Vegas and Quebec, it was never about keeping the team away from Canada.

 

[JimAnchower]

Please, Melrose.

I keep reading that CoG can cut with ARENA MANAGEMENT after one. Not with TEAM.

It appears from what I read that the only way TEAM leaves after 1 is through bankruptcy.

My original thought matched Melrose's, but after reading the deal and other's opinions, the team will play in Glendale for two years. They just may not be the arena manager in a year.

 

[JimAnchower]

Do you think the team will stay if IA can' manage the arena? The coyotes will lose too much money if they can't manage. The NHL just wanted to gouge Vegas and Quebec, it was never about keeping the team away from Canada.

IA has one year to prove to the COG that they can be a motivated, competent arena manager. IA might be looking at the expansion fees as their cover for any losses incurred over the next two years.

 

[ucanthanzalthetruth]

Do you think the team will stay if IA can' manage the arena? The coyotes will lose too much money if they can't manage. The NHL just wanted to gouge Vegas and Quebec, it was never about keeping the team away from Canada.

Yes because to me owning the team and operating the arena are 2 separate entities, and the agreement mentions nothing concerning 2016 and the Coyotes, just arena management.

 

[Melrose Munch]

IA has one year to prove to the COG that they can be a motivated, competent arena manager. IA might be looking at the expansion fees as their cover for any losses incurred over the next two years.

Yes because to me owning the team and operating the arena are 2 separate entities.

They're not going to sit there and bleed out during 2016-17. Problem is seattle is not ready yet.

 

[blues10]

Yes because to me owning the team and operating the arena are 2 separate entities.

Would it then be financially possible for the Coyotes to pay rent while some other entity managed the arena for the next 10 years?

Doesn't IA need the 6.5 million dollars as arena managers?

 

[Ciao]

Please, Melrose.

I keep reading that CoG can cut with ARENA MANAGEMENT after one. Not with TEAM.

It appears from what I read that the only way TEAM leaves after 1 is through bankruptcy.

Presumably if IA leaves after one year they have exposure for the $500K rent for the second year?

Also, two years does make sense for the NHL to either repair the situation in Glendale or feather it's nest elsewhere. If I had to pick one I'd expect a relo, but wouldn't dismiss the possibility of the team staying either.

This looks like a more rational deal all around.

 

[ucanthanzalthetruth]

They're not going to sit there and bleed out during 2016-17. Problem is seattle is not ready yet.

Would it then be financially possible for the Coyotes to pay rent while some other entity managed the arena for the next 10 years?

Doesn't IA need the 6.5 million dollars as arena managers?

I'm not disagreeing that it doesn't make much sense but then why not just make the deal 1 year? If you say "so it doesn't look like this is a lame duck season" well right now it just looks like 2 lame duck seasons so what's the difference? I think Glendale wants to milk the team as much as they can.

The lease says the termination date regarding the Coyotes is June 30th, 2017 and concerning the arena management

Change of Manager. Notwithstanding what may otherwise be provided in this Agreement or in this Amendment, the City shall have the option to replace the Arena Manager at
any time after June 30, 2016; provided, that the City first delivers notice of such election (the “Arena Management Replacement Notice”) not less than ninety (90) days prior to the effective
date of the replacement of the Arena Manager. Upon delivery of the Arena Management Replacement Notice the City and the Arena Manager shall amend the Agreement as necessary to
reflect such replacement including, without limitation, Exclusive Arena Manager Revenues, Section 1.1.5, Section 9 (Charges and Fees),

has no mention of the team.


Maybe one of the legal minds here can weigh in?

 

[cbcwpg]

It seems like the NHL is willing to take an ugly, prolonged bath for 2 years because they don't want anything to interfere in the expansion fee money from Quebec & Vegas..

This... A Billion times this. This is a one time Billion dollar deal and the last thing Gary needs is to have to relocate the Coyotes ( or anyone else ) to either Las Vegas or Quebec City until those two franchises are underway and the existing owners have all cashed their ~$33MM expansion cheques.

Just me and speculating ....but I would imagine that word came down from up top to IA from the NHL to " do a deal and don't screw this up for expansion. Give the CoG whatever they want and we will have something on the table for you in two years. "

 

[madhi19]

This, I think might take some time to sink in for some folks... two years of lame duck seasons and relocation chatter reaching a fever pitch at times. Sure, it's a new lease, but these might be the two ugliest seasons for the Coyotes for the fans. 2 years before their team pulls up stakes and goes elsewhere barring major developments on the Phoenix arena front (seemingly a hail mary), likely staggering losses on the team's side, which may cause more sell-offs and other money-hemorraghing-stemming moves and even if they are terrible enough on ice and draft the local kid coming up, what good will it be if the team looks like it's guaranteed to relocate? Heck, who knows how long IceArizona can maintain it. Wasn't there some kind of lending limit from the NHL's credit line per team?

It seems like the NHL is willing to take an ugly, prolonged bath for 2 years because they don't want anything to interfere in the expansion fee money from Quebec & Vegas. LOL if it ends up costing the NHL more in these 2 years than they collect in expansion fees. It's really wild to think the highwire act went on this long and had so many twists and turns that didn't make it fall.

I been saying it for a while, the NHL is set on burning this market to the ground. By the time the NHL will be done with Arizona, nobody will want them back in our lifetime. It a complete scorched earth strategy, burn the fields, salt the earth, poison the well and destroy all buildings. About half a decade ago, they decided that the market was never going to be viable, and so they could do pretty much anything in the long run it would not matter. As long as they have a sucker to fleece they will keep it there while they fix more "urgent" problem. Now all pretence is gone.

 

[Melrose Munch]

I'm not disagreeing that it doesn't make much sense but then why not just make the deal 1 year? If you say "so it doesn't look like this is a lame duck season" well right now it just looks like 2 lame duck seasons so what's the difference? I think Glendale wants to milk the team as much as they can.

The lease says the termination date regarding the Coyotes is June 30th, 2017 and concerning the arena management
has no mention of the team.


Maybe one of the legal minds here can weigh in?

Imo, optics. It looks bad after the whole fight to sign a one year deal. Also gives away the leagues plans. 2 years? Allows the NHL room to see what will happen in Phoenix somewhere else.

 

[gstommylee]

Gives Seattle 2 years to get an arena built. Does anyone here think that they can manage that?

Seattle's arena situation is like a little sister to the major fiasco that has been Glendale. The two are made for each other. Just hopefully the one can get resolved by the time the other finally ends. Otherwise, my favor goes with Portland. The 2017-18 Portland Coyotes or Whatevers.

The idea was that Tukwila arena would be open and done before 2017-18 season.

With Seattle in the relocation destination picture, Portland would have to outbid Seattle, they didn't 2 years ago. They may not now.

 

[MoreOrr]

This... A Billion times this. This is a one time Billion dollar deal and the last thing Gary needs is to have to relocate the Coyotes ( or anyone else ) to either Las Vegas or Quebec City until those two franchises are underway and the existing owners have all cashed their ~$33MM expansion cheques.

Just me and speculating ....but I would imagine that word came down from up top to IA from the NHL to " do a deal and don't screw this up for expansion. Give the CoG whatever they want and we will have something on the table for you in two years. "

All of you make it sound as though these potential owners in Las Vegas and Quebec City are the most naive people on the planet. I've been reading this train of thought for weeks and it still baffles me that any of you or the League thinks that whatever has been transpiring in Glendale is fooling anyone in the know. It's totally ridiculous! If these potential owners in QC and LV want an NHL franchise so bad so as to pay $500mil, the Coyotes being relocated to Portland for half that value isn't going to change a damn thing, because anyone and his dog that have been paying any attention to what's gone on in Arizona should already damn well know that that franchise is a one-legged dog just begging its owners to put it down. And if the Coyotes got relocated to Portland for significantly less than $500mil, and LV and QC then said: OK, we're not paying the League $500mil,.... then the League could just say: OK, you're not get an expansion franchise then, because expansion franchises cost a whole lot more than selling off a one-legged franchise in Arizona. At least QC, if not both, would then come begging: OK, OK, we'll pay your $500mil. But it wouldn't go that way anyway, because those potential owners already know that the Coyotes are a mess.

No, this has zero to do with messing up the expansion bid that has already taken place. But it may have something to do with the League asking Seattle for $500mil to have the Coyotes relocated there. The League now has 2 years to hope that either Seattle or the Toronto area gets an arena ready and is willing to pay close to that $500mil mark (because those may be the only two other locations willing to pay that amount), or else they'll just have to take whatever is being offered by the highest bidder to finally get the Coyotes out Arizona.

End of Rant!

 

[madhi19]

All of you make it sound as though these potential owners in Las Vegas and Quebec City are the most naive people on the planet. I've been reading this train of thought for weeks and it still baffles me that any of you or the League thinks that whatever has been transpiring in Glendale is fooling anyone in the know. It's totally ridiculous! If these potential owners in QC and LV want an NHL franchise so bad so as to pay $500mil, the Coyotes being relocated to Portland for half that value isn't going to change a damn thing, because one and his dog that have been paying any attention to what's gone on in Arizona should already damn well know that that franchise is a one-legged dog just begging its owners to put it down. And if the Coyotes got relocated to Portland for significantly less than $500mil, and LV and QC then said: OK, we're not paying the League $500mil,.... then the League could just say: OK, you're not get an expansion franchise then, but expansion franchises cost a whole lot more than selling off a one-legged franchise in Arizona. At least QC, if not both, would then come begging: OK, OK, we'll pay your $500mil. But it wouldn't go that way anyway, because those potential owners already know that the Coyotes are a mess.

No, this has zero to do with messing up the expansion bid that has already taken place. But it may have something to do with the League asking Seattle for $500mil to have the Coyotes relocated there. The League now has 2 years to hope that either Seattle or the Toronto area gets an arena ready and is willing to pay close to that $500mil mark, or else they'll just have to take whatever is being offered by the highest bidder to finally get the Coyotes out Arizona.

End of Rant!

I think it got to do with the fact that they may already have two more fire to put out. This is Atlanta all over again, they wanted to kick the ball down the road in Arizona because somebody else is moving.