Phoenix CXIX: We're Just Not Executing

[Whileee]

RE: Who required the out clause.....

Just speculation here MNN but FIG may have not required the out clause, however they probably needed some sort of protection in place.

If IA had come up grossly short early and a sale and relo took place FIG would have wanted to be made whole before anything else. If there were no out clause then and the losses kept coming beyond year five with no way of getting out and setting debts then we're probably headed towards BK again.

I doubt the NHL would want to go through that.

Why would FIG require the out clause? Their loan was secured against the City of Glendale's arena management fee. Not much risk there (how could they know LeBlanc would screw up the lease).

The out clause was required by IA as a safety net. If they didn't turn the operation around, sell for relocation and make everyone whole. I thought that was the plan at the time and still believe that. It was very clear early on that they were struggling financially, hitting the out clause loss condition early. I think that the COG saw that IA wasn't going to make a go of it and lost confidence that they would stay for the long term. IA's behavior intensified suspicions and spoiled the relationship so Glendale pulled the plug and cut their losses before the Coyotes could take more public funds and then leave an empty arena after five years.

Maybe they really do think they have a viable arena plan, but my guess is that tgey know it's a real longshot and they are mostly playing for time with fans and sponsors until the NHL finds a suitable new location for them. The main thing in their favor is that there might be another franchise or two that needs a new market even more than the Coyotes. That's probably helped save them in 2011.

 

[MNNumbers]

Why would FIG require the out clause? Their loan was secured against the City of Glendale's arena management fee. Not much risk there (how could they know LeBlanc would screw up the lease).

The out clause was required by IA as a safety net. If they didn't turn the operation around, sell for relocation and make everyone whole. I thought that was the plan at the time and still believe that. It was very clear early on that they were struggling financially, hitting the out clause loss condition early. I think that the COG saw that IA wasn't going to make a go of it and lost confidence that they would stay for the long term. IA's behavior intensified suspicions and spoiled the relationship so Glendale pulled the plug and cut their losses before the Coyotes could take more public funds and then leave an empty arena after five years.

Maybe they really do think they have a viable arena plan, but my guess is that tgey know it's a real longshot and they are mostly playing for time with fans and sponsors until the NHL finds a suitable new location for them. The main thing in their favor is that there might be another franchise or two that needs a new market even more than the Coyotes. That's probably helped save them in 2011.

Whileee,

See my earlier post. The risk for Glendale was not that the team left.

It was that they would stay.

Glendale paid 10M net a year for two years. If IA left, they would only pay 10M altogether for the next 3 years, because the out clause required that. If they stayed, even with increasing performance to a cost of 8M/yr, it would cost the city more.

Now, it's probably true that the city council could not believe that the team would actually leave the market, and therefore, cancelling the 15 yr lease would increase their bargaining power.

But financially, the risk under the old lease was that they would stay.

 

[GuelphStormer]

i thot we settled it a couple of years ago that IA wanted the 5yr out clause. i recall statements made at that time, non? yes of course, now it is clear that EVERYBODY benefits if the team leaves, but at the time the 15yr deal was negotiated, Glendale had been led to believe - by both IA and the league itself - that its $15M AMF was money well spent because at least $9M would be flowing back to the City and the residual $6M was not an unreasonable management fee.

at that time, Glendale and Fortress were thought to actually benefit from a longer stay (glendale had a tenant that drove westgate, and fortress scored scads of interest on the loan). only IA would have benefited by being allowed to leave if losses got too high.

i still have many questions about the FIG loan. how much was it actually for? was it actually paid off, in full, in part? by whom? and was there a penalty (for the massive amount of lost interest)?

 

[Whileee]

Whileee,

See my earlier post. The risk for Glendale was not that the team left.

It was that they would stay.

Glendale paid 10M net a year for two years. If IA left, they would only pay 10M altogether for the next 3 years, because the out clause required that. If they stayed, even with increasing performance to a cost of 8M/yr, it would cost the city more.

Now, it's probably true that the city council could not believe that the team would actually leave the market, and therefore, cancelling the 15 yr lease would increase their bargaining power.

But financially, the risk under the old lease was that they would stay.

Financially, I think you're right. The deal was a bad one for Glendale regardless.

Politically, it would have also been a disaster if they had continued to pay the AMF and then have the Coyotes waltz out after 5 years, using the out clause that Glendale had agreed to.

I think that Glendale realized that IA was not a good business partner in any way, shape or form. Luckily, LeBlanc was dumb enough to violate a clause in the contract and they were able to cancel the deal early.

 

[MNNumbers]

i thot we settled it a couple of years ago that IA wanted the 5yr out clause. i recall statements made at that time, non? yes of course, now it is clear that EVERYBODY benefits if the team leaves, but at the time the 15yr deal was negotiated, Glendale had been led to believe - by both IA and the league itself - that its $15M AMF was money well spent because at least $9M would be flowing back to the City and the residual $6M was not an unreasonable management fee.

at that time, Glendale and Fortress were thought to actually benefit from a longer stay (glendale had a tenant that drove westgate, and fortress scored scads of interest on the loan). only IA would have benefited by being allowed to leave if losses got too high.

i still have many questions about the FIG loan. how much was it actually for? was it actually paid off, in full, in part? by whom? and was there a penalty (for the massive amount of lost interest)?

There are some good questions in this post.

How much was the FIG loan? We saw 2 different numbers in these threads. At first, it was advertised as 125M. This seemed to make perfect sense, because 125M amortized over 15 years is 15M/yr at 9%. Effectively, that would have meant that Glendale bought IA the team with their AMF. Later, it was reported that the loan was only 85M. I'm still not sure, and I don't think we will ever know for sure.

Paid off? Yes. In full. There is a legal document floating around here from FIG, basically absolving IA of any further requirements.

By whom? It was IA's loan, so IA must have paid it off. Although I think that CF might tell us that Glendale was actually on the hook some way, too. It seems to me that they paid it off with a combination of new funds from Barroway, and with a new loan at much lower interest from CitiBank, working through the NHL line of credit.

Was there an early payment penalty? I am sure there was.

All of which is really water under the bridge now, except for wondering how Barroway actually fits into the picture. And, we likely won't ever know that either.

 

[Killion]

... I recall Shoalts of the G&M reporting the FIG Loan as being $120M (and thats the number Ive been using despite reports to the contrary that it was really only $85M & so on), the NHL lending IA $85M, Gosbee, LeBlanc & the rest of the minority contributing app $45M towards the purchase price.... Secondly, Fortress was quite familiar with the Coyotes extremely precarious financial position having earlier lent Moyes & Ellman funds, and, that as a financier of seriously distressed assets it would be highly unusual, completely unbelievable to think that they they themselves would take a subordinate position to the NHL's $85M (also due within 5yrs of signing - circa 2013).

That it was FIG, not IA, not the NHL who insisted on the 5yr out which as you'll recall only required that IA show a cumulative $50M loss during that time-frame. Something that was obviously inevitable, with $50M being a highly conservative number. FIG essentially hedged their bet in lending IA the money which went directly to the NHL, insisted on receiving the AMF's directly from the COG which covered the interest without paying down any of the principal.

That if within 5yrs the principal hadnt been paid down (SPECULATION based on some familiarity with such transactions, FIG's modus operandi) Id be willing to bet dollars to donuts clauses & mechanisms within the Loan Agreement which would have seen Fortress legally laying claim to that club, calling in their marker. Demanding a Relocation Sale.

Bill Daly in the aforementioned Shoalts columns denied that the NHL was subordinate to Fortress, and that IA & the League insisted on the 5yr out clause which through negotiations with Glendale & for public consumption is no doubt true, however, its my belief they were doing so at the behest of Fortress who were insistent upon that clause and insistent that the Cities payments be made directly into their accounts. Remember... totally distressed asset, no takers... of course Fortress is going to dictate terms.

They wanted the $120M principal back in full within 5yrs "or else". No problem for the NHL, as they'd renegotiated their LOC, slap a new valuation on the club of $305M in order to meet Citi's minimum threshold, brought in Barroway to sign off and Im again willing to bet dollars to donuts with no cash infusion, nothing down whatsoever, not going to be asked to dig up anything with cash calls. 100% financed. FIG principal of $120M paid off by way of the Citi-Bank LOC (like using your Visa card to payoff your Amex card), early exit penalty fee included. Its all a front, paper transaction, IA nothing more than Paper Tigers.

 

[Fugu]

^^

Just adding that there was that income tax clause in Canada that required a Barroway type owner to assume majority control before they could get the LOC.

 

[Killion]

^^

Just adding that there was that income tax clause in Canada that required a Barroway type owner to assume majority control before they could get the LOC.

... yes, Gosbee, Drummond, LeBlanc et al would have been subject to some pretty heavy Capital Gains Tax Assessments from Revenue Canada and they couldnt be having any of that. It was a nice bit of Damage Control, sleight of hand by Bettman. Killed 2 Birds with 1 Stone in stage managing Barroway's entrance. Solved the problem of what would have been an ugly civil suit in New York & put the brakes on the Islander transaction while slapping a bandage, cold compress on the bleeding river of red ink in Arizona albeit one thats still very much temporary. Situation still very much in-flux.... As we all know, Gary Bettman promised the BOG's this whole adventure wasnt going to cost them a dime and he's kept his promise however in doing so he's been running up one Hell of a tab. Something like $12M in Legal Fee's from 2009-13, losses of $108M during the same time frame and thats on top of the $110M they paid for the franchise out of BK Court. Lost the Moyes civil suit, something strategically & financially they were counting on winning. He's told us that the reason theyve gone to this extent is to save the loss of the 12th largest TV market in the US (doubly important after losing the 8th in Atlanta in 2011) amongst other reasons and while that all sounds objectively important, munificent on other levels, I read it as nothing more than spin, PR.

 

[mesamonster]

... yes, Gosbee, Drummond, LeBlanc et al would have been subject to some pretty heavy Capital Gains Tax Assessments from Revenue Canada and they couldnt be having any of that. It was a nice bit of Damage Control, sleight of hand by Bettman. Killed 2 Birds with 1 Stone in stage managing Barroway's entrance. Solved the problem of what would have been an ugly civil suit in New York & put the brakes on the Islander transaction while slapping a bandage, cold compress on the bleeding river of red ink in Arizona albeit one thats still very much temporary. Situation still very much in-flux.... As we all know, Gary Bettman promised the BOG's this whole adventure wasnt going to cost them a dime and he's kept his promise however in doing so he's been running up one Hell of a tab. Something like $12M in Legal Fee's from 2009-13, losses of $108M during the same time frame and thats on top of the $110M they paid for the franchise out of BK Court. Lost the Moyes civil suit, something strategically & financially they were counting on winning. He's told us that the reason theyve gone to this extent is to save the loss of the 12th largest TV market in the US (doubly important after losing the 8th in Atlanta in 2011) amongst other reasons and while that all sounds objectively important, munificent on other levels, I read it as nothing more than spin, PR.

Add it all up Killy and does anyone have any idea the total commitment to date by the NHL/BOG? Top that off with what the IA frat boys have invested? Certainly the number eclipses $300MM or $60MM more than Forbes claims they are worth. Of note, is how many franchises there are today whose theoretical valuation is less than mr. Foleys`s entry fee of $500MM.

Is anyone going to pay $300MM for a relocated franchise? On top of that the cost of a new stadium. I don`t think so and therein lies GB`s economic dilemma. From those numbers where does GB find the funds to make IA whole if a relocation can be accomplished?

 

[TheLegend]

Add it all up Killy and does anyone have any idea the total commitment to date by the NHL/BOG? Top that off with what the IA frat boys have invested? Certainly the number eclipses $300MM or $60MM more than Forbes claims they are worth. Of note, is how many franchises there are today whose theoretical valuation is less than mr. Foleys`s entry fee of $500MM.

Is anyone going to pay $300MM for a relocated franchise? On top of that the cost of a new stadium. I don`t think so and therein lies GB`s economic dilemma. From those numbers where does GB find the funds to make IA whole if a relocation can be accomplished?

Why don't we wait and see if a reloçation is in order before packing the moving vans.

 

[madhi19]

... yes, Gosbee, Drummond, LeBlanc et al would have been subject to some pretty heavy Capital Gains Tax Assessments from Revenue Canada and they couldnt be having any of that. It was a nice bit of Damage Control, sleight of hand by Bettman. Killed 2 Birds with 1 Stone in stage managing Barroway's entrance. Solved the problem of what would have been an ugly civil suit in New York & put the brakes on the Islander transaction while slapping a bandage, cold compress on the bleeding river of red ink in Arizona albeit one thats still very much temporary. Situation still very much in-flux.... As we all know, Gary Bettman promised the BOG's this whole adventure wasnt going to cost them a dime and he's kept his promise however in doing so he's been running up one Hell of a tab. Something like $12M in Legal Fee's from 2009-13, losses of $108M during the same time frame and thats on top of the $110M they paid for the franchise out of BK Court. Lost the Moyes civil suit, something strategically & financially they were counting on winning. He's told us that the reason theyve gone to this extent is to save the loss of the 12th largest TV market in the US (doubly important after losing the 8th in Atlanta in 2011) amongst other reasons and while that all sounds objectively important, munificent on other levels, I read it as nothing more than spin, PR.

This should be partially reassuring to Yotes fans. Because of all that sunk cost the NHL will relocate out of Arizona only after some serious kicking and screaming. So how much farther will Gary go to justify that bad decision?

On the other hand sunk cost fallacy usually does not survive a new administration. Nobody want to be stuck with the problems that the old administration created. The team better be fixed on it future before the power shift around on the the executive committee.

 

[MNNumbers]

... I recall Shoalts of the G&M reporting the FIG Loan as being $120M (and thats the number Ive been using despite reports to the contrary that it was really only $85M & so on), the NHL lending IA $85M, Gosbee, LeBlanc & the rest of the minority contributing app $45M towards the purchase price.... Secondly, Fortress was quite familiar with the Coyotes extremely precarious financial position having earlier lent Moyes & Ellman funds, and, that as a financier of seriously distressed assets it would be highly unusual, completely unbelievable to think that they they themselves would take a subordinate position to the NHL's $85M (also due within 5yrs of signing - circa 2013).

That it was FIG, not IA, not the NHL who insisted on the 5yr out which as you'll recall only required that IA show a cumulative $50M loss during that time-frame. Something that was obviously inevitable, with $50M being a highly conservative number. FIG essentially hedged their bet in lending IA the money which went directly to the NHL, insisted on receiving the AMF's directly from the COG which covered the interest without paying down any of the principal.

That if within 5yrs the principal hadnt been paid down (SPECULATION based on some familiarity with such transactions, FIG's modus operandi) Id be willing to bet dollars to donuts clauses & mechanisms within the Loan Agreement which would have seen Fortress legally laying claim to that club, calling in their marker. Demanding a Relocation Sale.

...snip...

They wanted the $120M principal back in full within 5yrs "or else". No problem for the NHL, as they'd renegotiated their LOC, slap a new valuation on the club of $305M in order to meet Citi's minimum threshold, brought in Barroway to sign off and Im again willing to bet dollars to donuts with no cash infusion, nothing down whatsoever, not going to be asked to dig up anything with cash calls. 100% financed. FIG principal of $120M paid off by way of the Citi-Bank LOC (like using your Visa card to payoff your Amex card), early exit penalty fee included. Its all a front, paper transaction, IA nothing more than Paper Tigers.

Killion,

A little more there.

Do you some knowledge that FIG was demanding their money back in 5 years? I just did a quick amortization, and it seems that, on 120M at 9% over 15 years, the quarterly payment would be 3.66M. That would leave IA with 90,000 each quarter extra. To me, that seems to say that in 5 years, some of the principal would have been paid. And, in 15 years, if IA could resurrect the market, the whole thing would be paid, and IA would have itself a team without paying hardly a dime themselves. It was a scam designed to get Glendale to buy the team for IA.

As to FIG demanding the out clause, that would make sense to me in the event of major losses. If the matter were headed to BK, I am sure that FIG would have been the top of the chart to receive anything that came out of bankruptcy. Demanding the out clause would have secured themselves even more.

I do think, however, that the out clause is also in the interest of whoever is paying the bill. Either IA or NHL.

With regard to the 85M from NHL. Totally different from the restructured debt that closed the FIG account. That 85M was reported to be interest-free and payment-free for 5 years, I think.

We'll see how that all comes out.

And, to me, this is all relevant because I think that IA is going to be looking for the same kind of subsidy from Tempe, ASU and the state of Arizona here.

 

[BattleBorn]

Here's my real question. IceArizona obviously has a plan and they're moving toward that plan, they want a new arena in the Tempe area.

What I don't understand is why they're selling out to get it. There's got to be a backup plan in case it doesn't work. The obvious backup plan is to stay in Glendale, yet they seem to be publicly burning those bridges since the temporary agreement. Why?

If you're going for the place in Tempe, just go for it. There's no reason to say you can't survive in Glendale or even diminish the possibility of a long-term Glendale solution. It's not like Glendale's going to oepn the checkbook again, so you don't need to plan those seeds by saying Glendale is unsustainable.

Seeing as how Glendale doesn't appear to be the backup plan...what is the actual backup plan?

 

[Killion]

Killion,

A little more there.

Do you some knowledge that FIG was demanding their money back in 5 years? I just did a quick amortization, and it seems that, on 120M at 9% over 15 years, the quarterly payment would be 3.66M. That would leave IA with 90,000 each quarter extra. To me, that seems to say that in 5 years, some of the principal would have been paid. And, in 15 years, if IA could resurrect the market, the whole thing would be paid, and IA would have itself a team without paying hardly a dime themselves. It was a scam designed to get Glendale to buy the team for IA.

As to FIG demanding the out clause, that would make sense to me in the event of major losses. If the matter were headed to BK, I am sure that FIG would have been the top of the chart to receive anything that came out of bankruptcy. Demanding the out clause would have secured themselves even more.

I do think, however, that the out clause is also in the interest of whoever is paying the bill. Either IA or NHL.

With regard to the 85M from NHL. Totally different from the restructured debt that closed the FIG account. That 85M was reported to be interest-free and payment-free for 5 years, I think.

We'll see how that all comes out.

And, to me, this is all relevant because I think that IA is going to be looking for the same kind of subsidy from Tempe, ASU and the state of Arizona here.

No no, I dont have any "secret knowledge" of precisely how financing through FIG was to play out, purely conjecture on my part and yes, as for the bolded... they could've gone for the short-con (5yrs), the long con (15yrs) or something in the middle... but as IA & the NHL were quite adamant that the 5yr out was a requirement of their lender (FIG - and something they told the COG & the media on numerous occasions)... well... sends up all kinds of Red Flags... at least to me it did/does. Their obviously out of the picture now, and note that when IA wanted to "renegotiate the Lease" in 2013 (in order to waive surcharges & taxes in order to attract smaller events) Mayor Weiers suggested theyd be willing to look at that provided IA gave something back, like eliminating the 5yr out clause. We know how that went.

Here's my real question. IceArizona obviously has a plan and they're moving toward that plan, they want a new arena in the Tempe area.

What I don't understand is why they're selling out to get it. There's got to be a backup plan in case it doesn't work. The obvious backup plan is to stay in Glendale, yet they seem to be publicly burning those bridges since the temporary agreement. Why?

If you're going for the place in Tempe, just go for it. There's no reason to say you can't survive in Glendale or even diminish the possibility of a long-term Glendale solution. It's not like Glendale's going to oepn the checkbook again, so you don't need to plan those seeds by saying Glendale is unsustainable.

Seeing as how Glendale doesn't appear to be the backup plan...what is the actual backup plan?

Dont quite understand what you mean here, that "IA is selling out to get it"? Selling out what? Are you speculating, thinking they might be offering equity & shares in the team, part of the prospectus their pitching to private investors in the arena in order to raise funds?... Because the big question is... where are they coming up with $100M or $200M (moving target, both those #'s have been reported) for this development in Tempe' if not from private placements & what have they promised prospective investors in return for those investments?... Meanwhile not only have they burned their bridges with Glendale, theyve blown up the foundations and from all appearances its really quite personal. At least insofar as Anthony LeBlanc is concerned. That no way no how does the team play in Glendale beyond even this season & then when asked why he hasnt signed an extension with AEG claims its not a priority, could be done in 5 minutes over a fake cappuccino, ham & cheese croissant at Tim Hortons.... yeah... dont tink so & no thanks. Not buying. Fans, people are asking for a full course meal, some answers, he's offring up cups of fake coffee & airy sandwich snax that any grown man could inhale as much as eat theres so little too them. Something else is clearly going on, going down. Plan in motion.

 

[MNNumbers]

Here's my real question. IceArizona obviously has a plan and they're moving toward that plan, they want a new arena in the Tempe area.

What I don't understand is why they're selling out to get it. There's got to be a backup plan in case it doesn't work. The obvious backup plan is to stay in Glendale, yet they seem to be publicly burning those bridges since the temporary agreement. Why?

If you're going for the place in Tempe, just go for it. There's no reason to say you can't survive in Glendale or even diminish the possibility of a long-term Glendale solution. It's not like Glendale's going to oepn the checkbook again, so you don't need to plan those seeds by saying Glendale is unsustainable.

Seeing as how Glendale doesn't appear to be the backup plan...what is the actual backup plan?

That's exactly what we all sit here and wonder BB.

What we know, or think we know....

IA is not interested in playing at GRA for a normal tenancy. Joyce Clark says that AEG made an offer, and were essentially dismissed from the room with no answer. I would assume the offer was something on the order of: 41 dates. No rent. You keep all revenues from game nights. I can't imagine anything better than that being on the table, because it would eat into AEG's bottom line. So, I am assuming IA is not interested in a situation where there is no subsidy.

Because the new soccer stadium is a private finance, I assume that the tribes were not interested in giving a subsidy either.

And, the same for Phoenix and the Suns.

Leaving IA with ASU, Tempe, and the state of AZ. We'll see how this plays out.

However, it seems like the easiest way to put together everything LeBlanc has said and done is to say that he is not playing anywhere if there is no subsidy to play there. And, hence, if this deal doesn't work, then it's a sale out of market. The only thing this doesn't cover is the 2 years they will need a temp place to play if they get a new building built. I suppose they think they can rent GRA for 2 years in that case (plenty of empty dates), or even Phoenix in that case. But, he won't look into that until he has to. That's the easiest.

I can't think of any other... Except that he may think he has to paint Glendale as the problem in order to convince the legislature to finance his arena.

 

[BattleBorn]

...


Dont quite understand what you mean here, that "IA is selling out to get it"? Selling out what? Are you speculating, thinking they might be offering equity & shares in the team, part of the prospectus their pitching to private investors in the arena in order to raise funds?... Because the big question is... where are they coming up with $100M or $200M (moving target, both those #'s have been reported) for this development in Tempe' if not from private placements & what have they promised prospective investors in return for those investments?... Meanwhile not only have they burned their bridges with Glendale, theyve blown up the foundations and from all appearances its really quite personal. At least insofar as Anthony LeBlanc is concerned. That no way no how does the team play in Glendale beyond even this season & then when asked why he hasnt signed an extension with AEG claims its not a priority, could be done in 5 minutes over a fake cappuccino, ham & cheese croissant at Tim Hortons.... yeah... dont tink so & no thanks. Not buying. Something else is clearly going down.

Selling out was likely a poor term to use.

I mean going 100% all in to get it. They can go for Tempe or the East Valley without dumping on Glendale anymore.
\

That's exactly what we all sit here and wonder BB.

What we know, or think we know....

IA is not interested in playing at GRA for a normal tenancy. Joyce Clark says that AEG made an offer, and were essentially dismissed from the room with no answer. I would assume the offer was something on the order of: 41 dates. No rent. You keep all revenues from game nights. I can't imagine anything better than that being on the table, because it would eat into AEG's bottom line. So, I am assuming IA is not interested in a situation where there is no subsidy.

Because the new soccer stadium is a private finance, I assume that the tribes were not interested in giving a subsidy either.

And, the same for Phoenix and the Suns.

Leaving IA with ASU, Tempe, and the state of AZ. We'll see how this plays out.

However, it seems like the easiest way to put together everything LeBlanc has said and done is to say that he is not playing anywhere if there is no subsidy to play there. And, hence, if this deal doesn't work, then it's a sale out of market. The only thing this doesn't cover is the 2 years they will need a temp place to play if they get a new building built. I suppose they think they can rent GRA for 2 years in that case (plenty of empty dates), or even Phoenix in that case. But, he won't look into that until he has to. That's the easiest.

I can't think of any other... Except that he may think he has to paint Glendale as the problem in order to convince the legislature to finance his arena.

That must be it. They need to make it seem like Glendale is unsustainable to avoid the powers that be telling them to go work it out with GRA/AEG. Still, what's the backup?

 

[MNNumbers]

...snip...


Dont quite understand what you mean here, that "IA is selling out to get it"? Selling out what? Are you speculating, thinking they might be offering equity & shares in the team, part of the prospectus their pitching to private investors in the arena in order to raise funds?... Because the big question is... where are they coming up with $100M or $200M (moving target, both those #'s have been reported) for this development in Tempe' if not from private placements & what have they promised prospective investors in return for those investments?... Meanwhile not only have they burned their bridges with Glendale, theyve blown up the foundations and from all appearances its really quite personal. At least insofar as Anthony LeBlanc is concerned. That no way no how does the team play in Glendale beyond even this season & then when asked why he hasnt signed an extension with AEG claims its not a priority, could be done in 5 minutes over a fake cappuccino and an airy, tasteless ham & cheese croissant at Tim Hortons.

I think by 'selling out', BattleBorn means "throwing Glendale under the bus...." I think that BB thinks like this:

IA needs a new arena (with subsidies). They are so desperate that they will say anything to discredit Glendale in order to make themselves look good. So, they are really selling out every other opportunity. As if to say, "New arena or bust..." And, they are ignoring the possibility that the legislature won't give them the TIF they want. What then? No relationship with Glendale. No chance with Phoenix and Suns. What next? No where to go. Seems unwise.

 

[Fugu]

I would just like to know who it was that said Canadians were really nice and polite.

 

[Killion]

I would just like to know who it was that said Canadians were really nice and polite.

..... under normal circumstances, yes... but my God.... anything but when it comes to the business side of the NHL and of course looking back down the
years.... not only the Coyotes but any number of teams, situations. League was born in a crossfire hurricane, lots of Canadian fingerprints on those triggers.

 

[mesamonster]

Why don't we wait and see if a reloçation is in order before packing the moving vans.

How much more money do you believe the NHL wants to throw at this organization? Regardless of the size of the marketplace, you can only fund this operation for so long before the losses overwhelm the opportunity.

 

[TheLegend]

How much more money do you believe the NHL wants to throw at this organization? Regardless of the size of the marketplace, you can only fund this operation for so long before the losses overwhelm the opportunity.

Show us where the NHL is "throwing money".... and if so how much.

But if even you manage to come up with that answer from somewhere other than thin air, it really doesn't matter what any of us believe the league will do because they're going to do as they wish to. So it's a useless argument at this juncture.

 

[mesamonster]

Here's my real question. IceArizona obviously has a plan and they're moving toward that plan, they want a new arena in the Tempe area.

What I don't understand is why they're selling out to get it. There's got to be a backup plan in case it doesn't work. The obvious backup plan is to stay in Glendale, yet they seem to be publicly burning those bridges since the temporary agreement. Why?

If you're going for the place in Tempe, just go for it. There's no reason to say you can't survive in Glendale or even diminish the possibility of a long-term Glendale solution. It's not like Glendale's going to oepn the checkbook again, so you don't need to plan those seeds by saying Glendale is unsustainable.

Seeing as how Glendale doesn't appear to be the backup plan...what is the actual backup plan?

Pretty easy to answer. They realize this is their last gasp chance, they understand that returning to GRA is not an option. It is Tempe or bust and that is why there has been no mention of a lease extension or "plan B." The Tempe option is replete with the public subsidies they so dearly need to survive. Without the new arena and the the public largesse that supposedly would comes with it, they are finished in Az.

The issue that the deniers have failed to address is MONEY! There is not a deep pocket that wants anything to do with this perpetual money hole. We know full well that the large capital calls are not coming out of IA, why in the world would they sign up for that? No, the league and GB are juggling this mess hoping someway, somehow Tony can pull a rabbit out of the hat. I have yet to hear one logical scenario that keeps this team in the Valley and gives them half a chance to make money. The market and circumstances have spoken, from the start the economics of owning an arena, little debt, full houses and ticket pricing flexibility never came to fruition. Today, the all in capital far exceeds the value of this organization.

 

[aqib]

Financially, I think you're right. The deal was a bad one for Glendale regardless.

Politically, it would have also been a disaster if they had continued to pay the AMF and then have the Coyotes waltz out after 5 years, using the out clause that Glendale had agreed to.

I think that Glendale realized that IA was not a good business partner in any way, shape or form. Luckily, LeBlanc was dumb enough to violate a clause in the contract and they were able to cancel the deal early.

It wasn't so much Glendale realizing it as much as it was the people on council changing. The keep them at all costs members retired or lost and the new council people didn't agree.

 

[mesamonster]

Show us where the NHL is "throwing money".... and if so how much.

But if even you manage to come up with that answer from somewhere other than thin air, it really doesn't matter what any of us believe the league will do because they're going to do as they wish to. So it's a useless argument at this juncture.

Your argument suggests that regardless of where the money is coming from (IA or the League) that somehow either or both do not care how much they lose! I think we can all agree that this franchise is bleeding money and has been for quite sometime. To have it your way, that does not matter in the scheme things! To you, the money will keep coming in to fund the annual deficits, again either from IA or the league, who cares which. The issue is you can`t keep doing that in perpetuity. Somehow you think the losses have no bearing on this situation. I think differently, at the end of the day this is a business and regardless of who is funding it that will not go on I promise you.

Now perhaps you have some theory on how this could be turned around to go from big time loser to cash cow, unfortunately you have never shared your vision for how this newfound prosperity would occur.

 

[Fairview]

Show us where the NHL is "throwing money".... and if so how much.

But if even you manage to come up with that answer from somewhere other than thin air, it really doesn't matter what any of us believe the league will do because they're going to do as they wish to. So it's a useless argument at this juncture.

I agree that the NHL has not invested much into this team/market. They have always relied on someone else to do the heavy lifting and only as an ABSOLUTE LAST RESORT have they put any $$ on the table. Well, it will be interesting to see what will happen if/when the state refuses to pay the team to stay. I would love to see the team stay put...as long as it is the team/NHL/local fan's wallets that pay for it. Charge a realistic price for tickets for once...no BOGOs or freebie with a 6 pack of beer. Let the market determine what happens, instead of trying to sneek the subsidy through in some convoluted tax rebate scam!!
Find some big time sponsors to help pay the bills. We have heard about the massive size of the TV marketplace in Arizona, well find a local TV station that will pay a reasonable amount to broadcast the team. All that supposed potential and in over 20 years not even a blip of increased support for the team...