Phoenix CVIII: Audits and Losses and RFPs! Oh My!

[aqib]

For context take a look at Beacon Sports Capital's website:

http://beaconsportscapital.com/index.html

 

[blues10]

For context take a look at Beacon Sports Capital's website:

http://beaconsportscapital.com/index.html

Beacon may want to check for spelling! or perhaps they are friends of Hulsizer.

Our staff works as an extension of the client’s personnel to aid in the organization, assembly and management of projects on behave of the owner on a daily basis.

So Beacon are good at behaviour management for owners?

 

[JimAnchower]

Hmmmmm. Is it not in the COG's best interest to know what the RFP process digs up prior to negotiating with IA? It would seem to put some pressure on Tony and the poor boys to bring a reasonable offer to the table. Seems like the prudent thing for the COG to do is send out the RFP. If Tony's feelings are hurt he should look no farther than his actions towards the COG the past several years. Where's the audit Tony?

I wonder if the COG's expectation is that IA will bid thru the RFP since they have Global Spectrum with them now, meaning they would seemingly meet all three criteria to bid. There may not be a back door for IA to bid on their own that is outside the RFP.

 

[blues10]

I wonder if the COG's expectation is that IA will bid thru the RFP since they have Global Spectrum with them now, meaning they would seemingly meet all three criteria to bid. There may not be a back door for IA to bid on their own that is outside the RFP.

If IA bid it would certainly have to bid citing Spectra's track record as I am pretty sure that the COG will not be buying what Tony and the poor boys are selling this time around. COG may not be too impressed with Spectra's performance either at this point. Did Tony not throw Spectra under the bus once when asked about arena bookings?

I expect some side process for IA as they bring an anchor tennant with them that generates gazillions of dollars in tax streams, ticket surcharges and parking revenues for the COG. Oh I forgot no more parking revenue or ticket surcharges for the COG. Sorry for the sarcasm.

Fun times ahead for those who like the business of hockey to play out in real time.

 

[Tommy Hawk]

Beacon may want to check for spelling! or perhaps they are friends of Hulsizer.



So Beacon are good at behaviour management for owners?

Behave is spelled correctly.

 

[TheLegend]

I wonder if the COG's expectation is that IA will bid thru the RFP since they have Global Spectrum with them now, meaning they would seemingly meet all three criteria to bid. There may not be a back door for IA to bid on their own that is outside the RFP.

The RFP didn't stop them from negotiating an outside agreement last time.

IA brought in Spectra because of the RFP.

 

[JimAnchower]

The RFP didn't stop them from negotiating an outside agreement last time.

IA brought in Spectra because of the RFP.

Last time, getting the team was contingent on getting the arena deal approved. There wasn't a chance that they were going to manage the arena without the team. Also, there are fewer members of the council that are friendly to the Coyotes and willing to give them all the money they want. So it seems there are fewer votes in the council that would want to see IA negotiate outside the RFP.

 

[blues10]

Behave is spelled correctly.

Certainly spelled correctly but I believed it to be in the wrong context. Always thought it to be "behalf" when used the way it was.

Even checked here before I posted.

http://community.languagetool.org/rule/show/ON_BEHAVE?lang=en&subId=1


Needles to say Beacon is back. The majority of council must have been happy with what they dug up last time around.

 

[CasualFan]

“It’s sending a message to the Coyotes that we’re more interested in farming this thing out, the arena management deal, than sitting down with them and negotiating something that is fair for both sides,†Sherwood said.

Sure seems like a clear message. Also seems like the city has tried that "negotiate something fair" thing a few times without success. The NHL business model isn't viable in Glendale without a large scale subsidy (you could probably present a strong argument it isn't viable with it either) so there is never going to be something "fair" to negotiate to. Then there is the decade plus of data that reliable shows that the team is not a significant economic driver for the city. The 500k or how many ever visitors simply has not translated into net positive for the city. With those facts in hand, it is perfectly reasonable to close the sole source door and throw it open to RFP, despite whatever objections the perhaps soon-to-be former council member has.

 

[Whileee]

Last time, getting the team was contingent on getting the arena deal approved. There wasn't a chance that they were going to manage the arena without the team. Also, there are fewer members of the council that are friendly to the Coyotes and willing to give them all the money they want. So it seems there are fewer votes in the council that would want to see IA negotiate outside the RFP.

If the Coyotes' owners don't manage the arena, there is no chance that the Coyotes will be a tenant of the GRA.

 

[Whileee]

Sure seems like a clear message. Also seems like the city has tried that "negotiate something fair" thing a few times without success. The NHL business model isn't viable in Glendale without a large scale subsidy (you could probably present a strong argument it isn't viable with it either) so there is never going to be something "fair" to negotiate to. Then there is the decade plus of data that reliable shows that the team is not a significant economic driver for the city. The 500k or how many ever visitors simply has not translated into net positive for the city. With those facts in hand, it is perfectly reasonable to close the sole source door and throw it open to RFP, despite whatever objections the perhaps soon-to-be former council member has.

Yup.

The clear message is that Glendale has no interest in continuing to lose large amounts of money to entice the Coyotes to stay as a tenant of their arena.

Brain. Dead. Simple.

 

[Killion]

The clear message is that Glendale has no interest in continuing to lose large amounts of money to entice the Coyotes to stay as a tenant of their arena.

Certainly appears so, yes, though when it comes to Glendale... I dunno..... something in the water maybe Whileee?...... How many times have we looked at this & gone "no way no how does a deal get done"?.... Because yeah, I agree with your own & others postings; no AMC for IA = No Hockey Team. Glendale cant have it both ways. Either they know it & are being disingenuous, Weiers et al merely paying lip service with the "golly gee Willikers, we'd really like the team to stay BUT".... or.... their just completely naive', havent got a clue..... One possibility might be that Global-Spectrum fronts a proposal bidding through the RFP which obviously would enjoin the ongoing tenancy of the Coyotes & the guaranteed 41 dates. They capture all of the rev's through the front door but funnel the vast majority thereof to IA through the backdoor.

 

[JimAnchower]

If the Coyotes' owners don't manage the arena, there is no chance that the Coyotes will be a tenant of the GRA.

It seems to me that the COG is perfectly fine with that possibility if IA doesn't give at least a competitive bid.

 

[Whileee]

Certainly appears so, yes, though when it comes to Glendale... I dunno..... something in the water maybe Whileee?...... How many times have we looked at this & gone "no way no how does a deal get done"?.... Because yeah, I agree with your own & others postings; no AMC for IA = No Hockey Team. Glendale cant have it both ways. Either they know it & are being disingenuous, Weiers et al merely paying lip service with the "golly gee Willikers, we'd really like the team to stay BUT".... or.... their just completely naive', havent got a clue..... One possibility might be that Global-Spectrum fronts a proposal bidding through the RFP which obviously would enjoin the ongoing tenancy of the Coyotes & the guaranteed 41 dates. They capture all of the rev's through the front door but funnel the vast majority thereof to IA through the backdoor.

If Global Spectrum wants to subsidize the Coyotes instead of Glendale, I'm sure that the CoG would be thrilled with that arrangent. I just don't see it as being economically viable for the Coyotes.

 

[MNNumbers]

Does anyone have a link or can summarize what the FIRST Arena Management arrangement was between Coyotes/CoG when the team first moved into what is now GRA?

Thanks.

 

[Major4Boarding]

Does anyone have a link or can summarize what the FIRST Arena Management arrangement was between Coyotes/CoG when the team first moved into what is now GRA?

Thanks.

Here you go

http://docs.bmcgroup.com/phoenixcoyotes/docs/azb_2-09-bk-9488_756_1.pdf

 

[TheLegend]

Certainly spelled correctly but I believed it to be in the wrong context. Always thought it to be "behalf" when used the way it was.

Even checked here before I posted.

http://community.languagetool.org/rule/show/ON_BEHAVE?lang=en&subId=1


Needles to say Beacon is back. The majority of council must have been happy with what they dug up last time around.

Speaking of "needling" about spelling context.......

 

[TheLegend]

Last time, getting the team was contingent on getting the arena deal approved. There wasn't a chance that they were going to manage the arena without the team. Also, there are fewer members of the council that are friendly to the Coyotes and willing to give them all the money they want. So it seems there are fewer votes in the council that would want to see IA negotiate outside the RFP.

Maybe....

But also recall that Anthony LeBlanc had approached Glendale a year or so prior to that, with a proposal (a "plan B" if you will) of an arena lease that gave the possibility of hosting an AHL franchise.

My tin foil hat suggests LeBlanc knew of the pending move of AHL franchises out west and might have been looking to get one of them housed in Glendale. Possibly one of the CA teams. So there was an alternative floating out there.

We'll have to wait and see if Glendale requires IA to have Spectra submit their own bid. But I suspect they won't.

If IA bid it would certainly have to bid citing Spectra's track record as I am pretty sure that the COG will not be buying what Tony and the poor boys are selling this time around. COG may not be too impressed with Spectra's performance either at this point. Did Tony not throw Spectra under the bus once when asked about arena bookings?

I expect some side process for IA as they bring an anchor tennant with them that generates gazillions of dollars in tax streams, ticket surcharges and parking revenues for the COG. Oh I forgot no more parking revenue or ticket surcharges for the COG. Sorry for the sarcasm.

Fun times ahead for those who like the business of hockey to play out in real time.

Spectra also operates UoP Stadium next door. Why would Glendale be unhappy with them??

IIRC... LeBlanc mentioned late lat year that it was Spectra who suggested they try and get the ticket surcharges lowered for some non-hockey events to get more dates filled. That's hardly throwing them under the bus.

The only thing we know for sure is sometime late in 2014, IA began talking to Glendale about making some changes to the arena lease to help get more dates filled. Between then and the time Glendale decided to drop a Fat Man on the process we know absolutely nothing as to what they talked about. They only thing that did happen publicly was Barroway coming on board with IA. Whether that changed things in Glendale's mind is anyone's guess.

 

[Killion]

If Global Spectrum wants to subsidize the Coyotes instead of Glendale, I'm sure that the CoG would be thrilled with that arrangent. I just don't see it as being economically viable for the Coyotes.

Perhaps I wasnt clear enough...... GS enters a bid through the RFP process with a base of app $6.5M (or more) which includes capturing all other revenue streams & so on & so forth, essentially what IA has right now through June 2016. That they basically just "front" IA, skimming maybe $2M in total from the retainer & all other revs'. Their proposal includes retention of the Coyotes, the rent @ $500K, 41 (minimum) guaranteed home/event dates.... So rather than being a sub-contractor under IA as they are right now, they become the Official Contractor / Arena Manager in name & title only with IA still receiving the Lions share of all revenues. In presenting their bid they'll have a serious leg up on SMG & anyone else as they can state quite honestly that if you hire us, the Coyotes stay put. Obviously, they dont share, not obligated to share whatever details & financial arrangements theyve made with IA. Black operation. Diabolical really. Lets say a 5yr deal. NHL buys themselves another half a decade. Glendale can look good, pat themselves on the back for having gotten rid of those useless, bloodsucking Holy Terrors in IceArizona only thing is, they really havent. Ha? Sounds like a plan to me Whileee.

 

[JimAnchower]

Perhaps I wasnt clear enough...... GS enters a bid through the RFP process with a base of app $6.5M (or more) which includes capturing all other revenue streams & so on & so forth, essentially what IA has right now through June 2016. That they basically just "front" IA, skimming maybe $2M in total from the retainer & all other revs'. Their proposal includes retention of the Coyotes, the rent @ $500K, 41 (minimum) guaranteed home/event dates.... So rather than being a sub-contractor under IA as they are right now, they become the Official Contractor / Arena Manager in name & title only with IA still receiving the Lions share of all revenues. In presenting their bid they'll have a serious leg up on SMG & anyone else as they can state quite honestly that if you hire us, the Coyotes stay put. Obviously, they dont share, not obligated to share whatever details & financial arrangements theyve made with IA. Black operation. Diabolical really. Lets say a 5yr deal. NHL buys themselves another half a decade. Glendale can look good, pat themselves on the back for having gotten rid of those useless, bloodsucking Holy Terrors in IceArizona only thing is, they really havent. Ha? Sounds like a plan to me Whileee.

Why wouldn't IA make this offer instead of GS and keep the retainer or whatever fee GS would charge in this situation? Is it simply because you think there are members of the COG who will simply not deal with IA anymore directly no matter the circumstances? If this is what happens, I would figure those same members of the COG would figure out that IA is behind this and go with someone else because of that just by asking "How can you guarantee that the Coyotes will stay if we go with you?". In addition, I think the COG is going ask questions like "Why does IA keep the ticket and parking surcharges?" and will say that can't continue anymore, costing GS/IA some revenue (around $2M, IIRC) if they do deny them that. Plus, if SMG still offers $500K w/o the Coyotes, but GS/IA offers $6.5M with Coyotes, the COG will have to ask if the Coyotes are worth that $6M difference. Of course, this question has remained unanswered for a while and perhaps this COG isn't any better equipped to find the answer. Until the COG ever says no to the Coyotes, we shouldn't assume they ever will.

 

[Killion]

Why wouldn't IA make this offer instead of GS and keep the retainer or whatever fee GS would charge in this situation? Is it simply because you think there are members of the COG who will simply not deal with IA anymore directly no matter the circumstances? If this is what happens, I would figure those same members of the COG would figure out that IA is behind this and go with someone else because of that just by asking "How can you guarantee that the Coyotes will stay if we go with you?".

Pure speculation on my part of course but yes, youve answered your own question there Jim. I dont see how the COG justifies re-awarding an Arena Mgmnt Contract to IA directly given their abysmal record to date... not to mention all of the acrimony engendered. Id say that relationship pretty much fractured. Global-Spectrum is a reputable firm, not "promoters" per se like a LiveNation or AEG Live, but neither is SMG who are likely to be the only serious option or alternative the COG will have. So if GS submits a bid & included in that bid is a letter, documentation from IA that yes, we back this bid & have worked out a satisfactory agreement insuring & guaranteeing our non-relo for XXXXX years then GS can build on those numbers of guaranteed event dates (41) while simultaneously projecting XXXXXX number of non-hockey event dates. I dont see how SMG can compete with that. Now, thats provided of course GS presents an intelligent, well thought out & conservative, non-usury & reasonable proposal/bid. What "deal" theyve cut with IA, not Glendales problem. They get a new Arena Manager, get to keep the Coyotes.

 

[JimAnchower]

Pure speculation on my part of course but yes, youve answered your own question there Jim. I dont see how the COG justifies re-awarding an Arena Mgmnt Contract to IA directly given their abysmal record to date... not to mention all of the acrimony engendered. Id say that relationship pretty much fractured. Global-Spectrum is a reputable firm, not "promoters" per se like a LiveNation or AEG Live, but neither is SMG who are likely to be the only serious option or alternative the COG will have. So if GS submits a bid & included in that bid is a letter, documentation from IA that yes, we back this bid & have worked out a satisfactory agreement insuring & guaranteeing our non-relo for XXXXX years then GS can build on those numbers of guaranteed event dates (41) while simultaneously projecting XXXXXX number of non-hockey event dates. I dont see how SMG can compete with that. Now, thats provided of course GS presents an intelligent, well thought out & conservative, non-usury & reasonable proposal/bid. What "deal" theyve cut with IA, not Glendales problem. They get a new Arena Manager, get to keep the Coyotes.

I agree that deal makes sense for GS and the COG if the COG thinks the difference between SMG and GS is something the Coyotes can make up in their 41 games. But does it make sense for IA? It is still an organization that loses a lot of money every year, and that isn't going to change much until they find new revenue streams. Gila River Arena isn't doing too badly for non-hockey events this year and GS is probably doing a lot to help that. I think they are on pace for about 120K attendees, which is around the top 100 in the Pollstar rankings (a couple Taylor Swift concerts help). I'm not sure how much higher it can reasonably go. By further partnering with GS, that could cost them more money, money they desperately need. If the COG wants changes from the current agreement (more in rent, money from naming rights, cancels the parking/ticket surcharge scheme, etc), that is more money they won't have.

 

[Killion]

We'll have to wait and see if Glendale requires IA to have Spectra submit their own bid. But I suspect they won't.

Yes, its really rather hard to say, my little theory notwithstanding. Entirely possible IA submits through the RFP. Might takea separate track altogether and attempt an end-run. Could be as well TL that its absolutely game over, that the COG has decided to cut its losses, no longer interested in hosting an NHL franchise period despite public protestations & comments to the opposite. That IA & the NHL are aware of it, teams a goner. It seems the more that things have changed since the deal went down in 2013 and all that transpired before & after, the more theyve stayed the same. Still facing an uncertain future, no stability, and as of this date & for several months now, no Majority Owner in place. Just a crazy situation. Its a wonder they average what they do in attendance, a real testament to the hardcore fans in Arizona. It really would be a shame for Glendale (and for the fans) to lose the club given the hundreds of millions in sunk costs to date. A complete, total & utter waste really. But.... unless a deal can be struck thats equitable inside or outside of the RFP process, and... a Majority Owner appears and I mean fast... rather difficult to avoid being pessimistic Im afraid.

 

[Killion]

I agree that deal makes sense for GS and the COG if the COG thinks the difference between SMG and GS is something the Coyotes can make up in their 41 games. But does it make sense for IA? It is still an organization that loses a lot of money every year, and that isn't going to change much until they find new revenue streams...... If the COG wants changes from the current agreement (more in rent, money from naming rights, cancels the parking/ticket surcharge scheme, etc), that is more money they won't have.

Well, they cant afford more rent, if they leave, Glendales gets no rent at all and the naming rights revenues drop by probably 80% as without an anchor NHL or NBA franchise, no way no how does a sponsor pay what their getting now. Parking & ticket surcharges; history. SMG or GS, AEG or whomever will have to be hyper-aggressive & competitive in securing dates, charging for parking & ticket surcharges a drag rope in competing against the other venues in the market. And without an anchor tenant of the NHL or NBA, I do mean hyper-aggressive..... Your first comment there, thats the $300M+++ question. CasualFan & plenty of others here & elsewhere feel that even with all kinds of lush subsidies it just doesnt matter. The market is oversaturated, simply cannot support all of the sports, activities, events & venues. The Coyotes odd men out. They'll just never be in the black and nor will GRA so better the plug be pulled, sell the team for Relocation & be done with it. Really it depends ultimately, that decision the NHL's. To date, beyond obstinate yes but that for only as long as Glendale was paying a huge portion of the freight.... Dunno whats gunna happen here. Waiting & guessing game as per usual.

 

[knorthern knight]

Well, they cant afford more rent, if they leave, Glendales gets no rent at all and the naming rights revenues drop by probably 80% as without an anchor NHL or NBA franchise, no way no how does a sponsor pay what their getting now. Parking & ticket surcharges; history. SMG or GS, AEG or whomever will have to be hyper-aggressive & competitive in securing dates, charging for parking & ticket surcharges a drag rope in competing against the other venues in the market.

Yes, revenues would be down, but if COG can get someone to manage the place at $1.5 million, that's a $5 million saving right there. Think like plus/minus stats for hockey players. It's all about THE NET DIFFERENCE between goals scored and allowed. Similarly, we're talking plus/minus between revenue+expenses. It's THE NET DIFFERENCE that really matters.