Phoenix CXIX: We're Just Not Executing

[Tom ServoMST3K]

Thinking back to the breaking of the lease with Glendale, the coyotes got way to close to having to answer difficult questions with reporters in the same room

 

[MNNumbers]

Legend,

I'm not sure that's the note. That note seems to suggest that Fortress still had some say in the matter, because Fortress is telling CoG where to put the money. Does it not make sense that, if the Fortress loan were satisfied, that Fortress would no longer be engaged at all in the process, and it would be LeBlanc alone who would be directing the placement of the cash?

But, thanks for the time line.

And, yes, one of the great mysteries in the whole saga to me was how the 125M loan from Fortress in Aug of 2013 became and 85M loan later.

Let me ask you a question:
Do you really think Barroway invested 155M of real cash into IA?

 

[Agalloch]

 

[Whileee]

I'm going to bet that if they do have an announcement it will be aspirational, rather than a completed agreement. It will probably depend on a lot of uncertain contingencies, including public financing in some form. At that point, the attention will turn once again to government to decide whether they are willing to subsidize a professional sports team.

 

[Fugu]

<snip>

The Fortress loan was reported to be around $85 million at the time Barroway bought the majority interest in IA on the last day of 2014. The buy in was based on a valuation of $305 million for the franchise, reportedly set by the NHL. So figure he put in roughly $155 million (when all was said and done, given his percentage of ownership is supposed to be at around 54%.)

It was thought that Barroway's influx of money/assets would cancel out the FIG loan but nobody could confirm it. So YMMV.

Only point above that is questionable is the fact that Barroway was brought in so IA could take the Citi LOC, which was around $100 MM, if reports were correct. That means the Citi money replaced the FIG money, at roughly half the interest rate, and Barroway bought in so he'd have at least controlling interest.

Legend,

I'm not sure that's the note. That note seems to suggest that Fortress still had some say in the matter, because Fortress is telling CoG where to put the money. Does it not make sense that, if the Fortress loan were satisfied, that Fortress would no longer be engaged at all in the process, and it would be LeBlanc alone who would be directing the placement of the cash?

But, thanks for the time line.

And, yes, one of the great mysteries in the whole saga to me was how the 125M loan from Fortress in Aug of 2013 became and 85M loan later.

Let me ask you a question:
Do you really think Barroway invested 155M of real cash into IA?

I don't think Barroway put in that much cash, but we really have no way to find out.

On the topic of FIG, I'm fairly certain they insisted on an agreement directly with COG regarding that $15 MM, so the letter TL posted is the formality needed to advise them there is no longer a financial relationship between them.

 

[Llama19]

I'm going to bet that if they do have an announcement it will be aspirational, rather than a completed agreement. It will probably depend on a lot of uncertain contingencies, including public financing in some form. At that point, the attention will turn once again to government to decide whether they are willing to subsidize a professional sports team.

That is very, very close to the truth...

 

[tony d]

Sounds promising for the team and its future in Arizona but there's been so much around this team before that until it actually happens excitement should be kept very low.

 

[The Feckless Puck]

Yeah. One of two major NASCAR weekends hosted out at the Phoenix Speedway in Avondale; Sprint Series in town and thats a huge deal. Major "event". Overshadows everything else going on, capturing the more casual sports fans attention & dollars. A demographic shared with NHL hockey in fact... which leads me to ask... did IA get together with Phoenix Speedway & NASCAR, creating mutually beneficial cross-promotional platforms including Coyote/NASCAR tickets & licensed apparel giveaways etc etc etc? Like really seriously spending the money on doing things like this, total no brainer, things like this that they should have been doing since 2013 when they were supposedly all set to hit the ground running? Did you see any Sprint cars parked around GRA? Signage? Anything on the airwaves? In the newspapers? On-line?

They have cross-promoted in the past. One year, Dale Earnhardt Jr. debuted a new paint scheme by bringing his car and crew out onto the ice. He did so in front of about 8,000 people (this was pre-game and most of the rest of the crowd were out getting nachos), and there was little to no cheering. I was sitting with some former colleagues from AP and USA Today and they were shaking their heads. I told them what I tell you - in Arizona, it's the EVENT that brings people out, not the pre-show hype.

But I honestly don't see a lot of crossover between the NHL and NASCAR fanbases in the Valley. You'd think there would be - but as with everything else in this state, there are some queer quirks of personality and nature that tend to defy the curve.

Transient population base. Thats a huge problem. Same thing with Vegas. Just another Way Station, Stagecoach Stop on lifes road for millions who come & go. Impermanence. Stepping stone.... lots of part-time residents as well. All kinds of elements of a resort town about it, all kinds of infrastructure built to accommodate & cater to precisely that. Arizona State Tourist Authority with its "sports destination" platform... serious struggle.

I don't see Vegas' and Phoenix's issues being the same. Vegas' population could be termed "transient," but Phoenix's is "transplant." That's a pretty key difference. The issue for Arizona is laid out well below:

 

[The Feckless Puck]

But to be clear, when you see 60/40 attendance for the opponent the vast majority of that 60% is locals.

Unless IA can figure out a way to get those local Bruins, Wings, Hawks, Habs, Leafs, Rangers, Hawks, Caps, and Flyers fans to more games this market will always have problems. Fatal? Perhaps. At least for now it's obvious they're not willing to buy in.

For me, in cities with large transplant populations, you need two things.

First, you need competent management on both the business side and the hockey side. Two of our best examples of non-traditional markets in terms of business success are Tampa and Nashville. Both have large transplant populations, Tampa from the NE and Nashville from the midwest, Detroit and Indianapolis in particular. Both have been competently managed on both sides. Nashville, in particular, is a stark contrast of what it looks like when business management is not competent vs when it is.

The second element is a second generation of fans. You're going to get some natives. But you're also going to get the kids of those transplants. If a kid born in 2005 in Nashville to Detroit-born parents, he/she is going to have a soft spot for the Red Wings, but will be a Predators fan.

The second one doesn't do you any good unless the first one is in place.

Point is, it's impossible to know if Phoenix is a viable hockey market or not, since they haven't really had enough of element #1 to make that kind of judgment.

I've seen a lot of snarky posts from people who say, "YEAH GIVE 'EM ANOTHER 20 YEARS HAW HAW HAW THEY'RE STILL A CENTURY AWAY FROM WINNING OVER THE MARKET HAW HAW HAW" etc. But Tawnos laid it out pretty succinctly. If your goal is to build a generation of fans of a sport, you need about 20 years of solid groundwork to do it before you can start expecting payoff. That number could probably be reduced if you have success and good marketing/management.

Given that many kids in the Valley have literally grown up with the Coyotes bankrupt or lacking ownership or an arena, the process of building that indigenous fanbase has been set back at least a decade - and that may be too much for the franchise to overcome, if I'm being blunt. In the 20 years the Coyotes have been here I would say they've been actually "stable" for maybe one stretch of about five years, when they first got to the Valley.

That Auston Matthews exists is as close to a sports miracle as anything I've ever seen.

Do you really think Barroway invested 155M of real cash into IA?

I don't think so. That whole business of him pulling back and getting back in and the power struggle and everything else leads me to believe that we all have very little intel on what has actually happened with Barroway.

 

[Agalloch]

We will hear about it, today.

 

[Tom ServoMST3K]

How lacking will the details be?

Will we get ANY funding information!

This is so exciting!

Me on this thread today:

 

[mesamonster]

Legend,

I'm not sure that's the note. That note seems to suggest that Fortress still had some say in the matter, because Fortress is telling CoG where to put the money. Does it not make sense that, if the Fortress loan were satisfied, that Fortress would no longer be engaged at all in the process, and it would be LeBlanc alone who would be directing the placement of the cash?

But, thanks for the time line.

And, yes, one of the great mysteries in the whole saga to me was how the 125M loan from Fortress in Aug of 2013 became and 85M loan later.

Let me ask you a question:
Do you really think Barroway invested 155M of real cash into IA?

My understanding is that Barroway never put in anything close to the $150MM number, in fact the real number was closer to $20MM! Remember, if in fact he did put that amount into the team and subsequently was superseded by Drummond in terms of management control. How the difference in $150MM and $20MMM was accounted for I can`t answer. But I can`t imagine that had he actually put up the entire amount that Drummond would become the major decision maker without taking Barroway out of his equity position? My research into Drummond suggests that he is a relatively successful oil man, but not capable of putting up a sizable sum of money into the Coyotes.

I am on the side that says the equity commitment by this entire ownership group is substantially smaller than what we are led to believe. The lions share of financing has come via the NHL and there lies the reason that GB maintains the control that he has been doing his best to hide from prying eyes.


Should I be proven to be wrong in my suspicions then why would`t ownership show the real money in payroll, but more importantly their financial commitment to a new arena? Why not put a down payment on some dirt, why not employ an architectural firm to sketch out their vision for a new venue? None of these seemingly simple actions toward their commitment to the area have happened which leads skeptics to continue to question their honesty and depth of financial wherewithal?

 

[WaveRaven]

Interesting ... I suspect the full court press on the government begins today

 

[mesamonster]

I am waiting with baited breath!

 

[TheLegend]

We will hear about it, today.

Craig Morgan confirmed it so it must be true.

 

[Agalloch]

A little small but it's a good location and most likely having ASU in there too.

 

[Llama19]

A little small but it's a good location and most likely having ASU in there too.

Should have renderings, and lots of finalized details, then...

 

[Skip To My Lou]

A little small but it's a good location and most likely having ASU in there too.

So, what does that mean for the arena in Glendale? It's relatively new, are they just gonna let it sit there until it rots?

 

[Tawnos]

Is the East Valley site in Tempe right near ASU? Or do we not know that yet...

 

[Agalloch]

So, what does that mean for the arena in Glendale? It's relatively new, are they just gonna let it sit there until it rots?

My guess is that Coyotes will use Glendale Arena for 2 more years and after that... white elephant ?

 

[madhi19]

So, what does that mean for the arena in Glendale. It's relatively new, are they just gonna let it sit there until it rots?

If Glendale has any backbone they throw their ass out ASAP. Let them play somewhere else for three years.

 

[Tawnos]

If Glendale has any backbone they throw their ass out ASAP. Let them play somewhere else for three years.

*two. If the arena is ready in 2019-20, then there is only 17-18 and 18-19 to figure out. It wouldn't be possible to throw them out for this year.

 

[mesamonster]

Excuse me, didn`t Tony say essentially the same thing in June? Back then he spoke of a location that they had picked out but could`t comment on any of the details at that time. Perhaps he just recycled that press release because this sounds identical without one iota of detail. Only Tony knows how to be so secretive as to be basically unbelievable!

 

[Killion]

I'm going to bet that if they do have an announcement it will be aspirational, rather than a completed agreement. It will probably depend on a lot of uncertain contingencies, including public financing in some form. At that point, the attention will turn once again to government to decide whether they are willing to subsidize a professional sports team.

Pretty much this, yes. A slow drip of information. Now, if they in conjunction with this initial announcement also tell the public that their so confident in their abilities to get it done that theyve signed a 24-36 month Extension with AEG while they work through the process, get shovels in the ground... go a ways to not only silencing their critics & the skeptics but so too send a very positive message to the community, fan base & sponsors. But if they come out there again tossing marshmallows and expired past best before due date stamped Halloween candy around, well... thats not so good. That its "now up to the State" or whatever. Slow drip then continuing through the winter, and good luck getting any bill of that kind through the Legislature.

I don't think Barroway put in that much cash, but we really have no way to find out.

No, we have no way of finding out unfortunately but on its face then as now I dont believe it for a second. Theres just no way. Doesnt add up. Not credible. Who in their right mind drops $150M for 51-54% of a franchise that the NHL couldnt giveaway at $170M just 14mnths earlier? That IA's performance was so stellar, so spectacularly successful over that period that they doubled its value? The very thought is beyond laughable yet announce it they did. Lied. Figured that if a lie is repeated enough times....

 

[mouser]

Is the East Valley site in Tempe right near ASU? Or do we not know that yet...

Unknown. If it's a partnership with ASU then probably somewhere within the ASU Athletic Facilities District--330 acres of land adjacent to the Tempe main academic campus slated for redevelopment. The main academic campus starts in the SW of this picture and ASU has some additional facilities scattered to the south. This was the preliminary land use plan when the district was first announced. Most of the 330 acres within the district are going to be completely redeveloped, there's a lot of prime real estate in the district.