Phoenix CXIX: We're Just Not Executing

[Killion]

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.

.... pretty much TL... the NHL will do as they wish even if it defies logic as we are simply not privy to just a tonne of background inf none of which the league is obliged to share publicly. Have in fact gone out of their way not to starting with Bettmans denials in 2008 that there was nothing amiss with the franchise, nothing to see here folks, move along. Trying to determine what this adventure has cost the NHL since 09... pretty hard to determine... it depends on what one considers "costs" beyond the $12M in Legal Fee's, what they paid for the club, what they "lost" between 2009 & 2013 which granted was somewhat mitigated with Glendales tens of millions thrown at the problem....

... they lost their civil suit vs Moyes, last I heard they were thinking of appealing but nothing since.... they lent IA $85M and no idea how that plays out so I consider that a "cost", retrievable if & when a real owner steps up with deep pockets and lays down cold hard cash be it locally or for Relo... they are backing a pretty hefty LOC for the franchise which would have included paying out Fortress, likely dipped into further to cover operational costs & losses.... no idea if IA is receiving their share of Central & Broadcast Revenues or if that is going directly to service the LOC with Citi-Bank.... no idea what they might be receiving in uncapped Revenue Sharing & or funds from the Commissioners Development Fund though in both of those cases I wouldnt consider those funds a "loss", even with a deep pocketed owner the Coyotes would still be eligible for & entitled to those funds...

.... fact is we just dont know but if I had to "ballpark it" I'd "guesstimate" that the NHL has either sunk cash costs and is also on the hook with its credit providers somewhere in the range of $400M, maybe even $450M since 09.... and the only way they'll ever see it, be made whole in the short-term is through an out of State sale. However, they could also be of the opinion & belief that that doesnt mater, in there for the long-haul, and that eventually with a new building & the growth of the game in Metro Phoenix & the State, with Vegas now on-line, Dallas, that its worth the costs and if that takes another few hundred million & 10yrs+ so be it. There is as much reason to believe the latter as there is the former. Strong cases made for both in terms of motivation, rationale & reasoning.

 

[Fairview]

I wonder how much more cash they advance the team. They must be VERY close to the break even point with a relocation sale.. This could be the last season in Arizona, if the losses continue to mount with no practical solution to the sea of red. The next 6 months are going to be very interesting...a real test of the NHL's resolve.

 

[Killion]

I wonder how much more cash they advance the team. They must be VERY close to the break even point with a relocation sale.. This could be the last season in Arizona, if the losses continue to mount with no practical solution to the sea of red. The next 6 months are going to be very interesting...a real test of the NHL's resolve.

... yeah, if my "guesstimates" correct its do or die time. They can reasonably expect to get app $500M for the club from another market or.... they can just let the meter keep on ticking away though that seems pretty darn risky, destination, date of arrival unknown. Its all league backed credit, the club receiving their normal entitlements regardless but without deep pocketed ownership, Wards of the NHL indefinitely and youve just got to figure that a considerable number of teams & owners would have a real problem with anything like that. What makes Arizona, the Coyotes & these Jokers so special? Bettman promised them this whole dealeo wouldnt cost them a dime & so far he's kept his promise but only if they receive a serious cash infusion, paying everything
off & down within the next 6mnths.

 

[TheLegend]

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.

Stop!!!!

I said it didn't matter what we believed, and the NHL would do what they wanted to do. The does not mean they don't care how much they spend (or lose). Up to this juncture they haven't reached the point that you insist for some strange reason that we should determine for them. So there's no real subject to discuss unless you're into a lot of blathering.

It's simply throwing mud at a wall and hoping some of it sticks.

 

[Killion]

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 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?

... yes, but it seems "personal" with LeBlanc. Acts out like a precocious child, Richie Rich had his allowance taken away. No acceptance of responsibility, that its all on Glendale. Having committed to that narrative blinded by pride apparently, lets loose with the arrows at every opportunity even still and no, no backup. TSA is out of the question apparently & why would Sarver even bother to accommodate them? War Vets requiring major capital expenditures to bring it up to NHL snuff as even a temporary venue. Theres no recent word from either Bettman or Daly on this illogical incongruity that exists with LeBlanc's position & posturing. Last thing I recall was seeing a photo of a very furious looking Gary Bettman staring at his Blackberry having just gotten word that Glendale had voided the Lease, some vitriolic comments targeting the Mayor & Council, the Democratic Process itself that appeared shortly thereafter in the press. So I dunno. Dont know what to make of it without thinking the worst for the long suffering fans.... that their just playing everyone with this arena dealeo, orchestrated exit strategy, demonizing the City of Glendale. Leaving, and leaving a stinking steaming pyre of you know what on Glendale City Hall's steps. All their fault.

 

[Llama19]

Hard to believe...we are less than two fortnight's before Christmas...

Need to start on some new thread titles...

Since it appears that it will be all up to the State Legislature...

Phoenix CXX: Will We Be Engrossed, Enrolled, or Relocating?

 

[Montrealer]

Since 2017 is the Year of the Rooster, let me suggest this for the next thread title:

Where will Phoenix choose to roost?

 

[mesamonster]

Stop!!!!

I said it didn't matter what we believed, and the NHL would do what they wanted to do. The does not mean they don't care how much they spend (or lose). Up to this juncture they haven't reached the point that you insist for some strange reason that we should determine for them. So there's no real subject to discuss unless you're into a lot of blathering.

It's simply throwing mud at a wall and hoping some of it sticks.

Amazing TL, you are in a denial mode that refuses to accept the fact that this situation has entered the stage of critical decisions that involve the state legislature. How do you not see the fact that if a bunch of legislators decide that they are not willing to just give money away for little in return that the end of the road is near for this franchise? I have asked you repeatedly, show me the path to profitability for this franchise and then perhaps you will have a modicum of credibility. For now you have shown nothing to refute the probable. Come on step up and tell us how this group survives!

 

[TheLegend]

Amazing TL, you are in a denial mode that refuses to accept the fact that this situation has entered the stage of critical decisions that involve the state legislature. How do you not see the fact that if a bunch of legislators decide that they are not willing to just give money away for little in return that the end of the road is near for this franchise? I have asked you repeatedly, show me the path to profitability for this franchise and then perhaps you will have a modicum of credibility. For now you have shown nothing to refute the probable. Come on step up and tell us how this group survives!

I'm not in a denial mode......

I'm in a "reading continuous rants full of unsubstantiated rhetoric" mode.

I'm fully aware of what the forthcoming legislative session means. The difference is.... I'm not sitting at a keyboard making a bunch of worthless prognostications based upon wishful thinking.

BTW..... I asked you a question above about showing us all where (and how much) the NHL is throwing money at this franchise as you claimed it was. So far I've seen nothing but skirting around it.

 

[Llama19]

Since 2017 is the Year of the Rooster, let me suggest this for the next thread title:

Where will Phoenix choose to roost?

Phoenix CXX: Roost or Get Roasted

 

[powerstuck]

Best longterm solution would be for NHL to invest $300M to $400M of their cash into the Coyotes. Invest by building a state of the art arena in the right neighborhood (that is close to the majority of the fan base) in Phoenix area.

That way you don't owe a dime to no one and can do what pleases you. Since some think a new arena is the magical solution to all woes (I personally do not), why not do this simple task and end with the negative talk that's been going on for 20 years.

 

[Fairview]

Best longterm solution would be for NHL to invest $300M to $400M of their cash into the Coyotes. Invest by building a state of the art arena in the right neighborhood (that is close to the majority of the fan base) in Phoenix area.

That way you don't owe a dime to no one and can do what pleases you. Since some think a new arena is the magical solution to all woes (I personally do not), why not do this simple task and end with the negative talk that's been going on for 20 years.

The issue with that is, once the NHL openly pays for the construction of an arena for one of it's teams, they change the dynamics for any other of their member teams. As it stands now, any team needing a new arena always insists that the host city contributes towards the construction. If you don't ask it of Arizona, how can you ask it in any other market ? The NHL would then be in the business of arena construction. I would be happy with that new NHL directive, the NHL BOD would not likely be as thrilled. They could build 1 or 2 new arenas a year. A team could expect a new NHL funded arena in their market every 20 years or so.
Or did you forget the ???

 

[Killion]

My names Tony. You cant prove anything. Magic is way nicer than my pajamas.

 

[mesamonster]

I'm not in a denial mode......

I'm in a "reading continuous rants full of unsubstantiated rhetoric" mode.

I'm fully aware of what the forthcoming legislative session means. The difference is.... I'm not sitting at a keyboard making a bunch of worthless prognostications based upon wishful thinking.

BTW..... I asked you a question above about showing us all where (and how much) the NHL is throwing money at this franchise as you claimed it was. So far I've seen nothing but skirting around it.

Lets start with the $85MM no interest loan made to IA when they came on board.(2) The NHL artificially inflated the value of the franchise so as to allow IA to access the NHL LOC. The arbitrary boost in valuation without showing the real market value of this franchise is a means of pushing NHL largesse to IA. Both of those loans are hand outs from the NHL! (3) Revenue Sharing has seen the NHL give the Coyotes the max, the NHL has discretion as to where those funds are apportioned, in this case it is being done to help finance a situation that cannot stand on its own financially. These three mechanisms are but a few of the cleverly disguised conduits through which the NHL has been keeping this team afloat.

 

[Ernie]

Have any other franchises benefited from building a new stadium like the Coyotes intend to do? Taking into account a $100m investment in the new stadium, they'd likely need about $20m in additional revenues in order to break even. Is this possible?

 

[TheLegend]

Lets start with the $85MM no interest loan made to IA when they came on board.(2) The NHL artificially inflated the value of the franchise so as to allow IA to access the NHL LOC. The arbitrary boost in valuation without showing the real market value of this franchise is a means of pushing NHL largesse to IA. Both of those loans are hand outs from the NHL! (3) Revenue Sharing has seen the NHL give the Coyotes the max, the NHL has discretion as to where those funds are apportioned, in this case it is being done to help finance a situation that cannot stand on its own financially. These three mechanisms are but a few of the cleverly disguised conduits through which the NHL has been keeping this team afloat.

1). That was the initial loan. You have been implying the league has continually pumped in more than that since. Maybe they have or maybe they haven't.... I don't know. But I'm not going to presume anything either way without knowing for sure.

2). We can agree on the part where the NHL set the value, but the why and how they came to that number is pure presumption. Now by making Barroway the majority holder they avoided paying additional taxes and ridded themselves of a higher interest loan from FIG in favor of the NHLs LOC. Name me any business who would refuse to take the opportunity to lower it's overhead so as to avoid the stigma of being "continually propped up" by an overseer???

3). Coyotes aren't the only team receiving RS. IIRC.... even TNSE has admitted the Jets received some and I think that is a well run organization, don't you??. That's how the system works.

 

[powerstuck]

The issue with that is, once the NHL openly pays for the construction of an arena for one of it's teams, they change the dynamics for any other of their member teams. As it stands now, any team needing a new arena always insists that the host city contributes towards the construction. If you don't ask it of Arizona, how can you ask it in any other market ? The NHL would then be in the business of arena construction. I would be happy with that new NHL directive, the NHL BOD would not likely be as thrilled. They could build 1 or 2 new arenas a year. A team could expect a new NHL funded arena in their market every 20 years or so.
Or did you forget the ???

I did not forget nor is it intended.

Right now, either Arizona legislature is the dumbest bunch of people living on planet earth OR we're expecting something that is not going to happen.

I know NHL would never commit to building its own arenas, and the less the team/owner can contribute toward construction of a brand new building, the better it is for the league.

 

[madhi19]

The issue with that is, once the NHL openly pays for the construction of an arena for one of it's teams, they change the dynamics for any other of their member teams. As it stands now, any team needing a new arena always insists that the host city contributes towards the construction. If you don't ask it of Arizona, how can you ask it in any other market ? The NHL would then be in the business of arena construction. I would be happy with that new NHL directive, the NHL BOD would not likely be as thrilled. They could build 1 or 2 new arenas a year. A team could expect a new NHL funded arena in their market every 20 years or so.
Or did you forget the ???

Considering how much they sunk in revenue sharing every year. It would probably be cheaper to funnel that money to build arena's in market that won't need RS. Move a team every other year using that scheme and pretty soon you wont need to spend money in revenue sharing. But that would be one hell of reengineering for the NHL.

 

[mesamonster]

1). That was the initial loan. You have been implying the league has continually pumped in more than that since. Maybe they have or maybe they haven't.... I don't know. But I'm not going to presume anything either way without knowing for sure.

2). We can agree on the part where the NHL set the value, but the why and how they came to that number is pure presumption. Now by making Barroway the majority holder they avoided paying additional taxes and ridded themselves of a higher interest loan from FIG in favor of the NHLs LOC. Name me any business who would refuse to take the opportunity to lower it's overhead so as to avoid the stigma of being "continually propped up" by an overseer???

3). Coyotes aren't the only team receiving RS. IIRC.... even TNSE has admitted the Jets received some and I think that is a well run organization, don't you??. That's how the system works.

(1) The initial loan was made with repayment provisions. Until those dollars are repaid we can rightfully assume it was money given to IA!

(2) Regarding the revaluation of the franchise (while in its current location of Glendale) this is an egregious over inflation of this teams real value. a scant two years after the league valued this franchise at $170MM ( which is a joke as well, remember, no private party was will ing to pay even $100MM for this asset in the previous years). So how does a franchise go from being practically worthless to $305MM in the course of two years? Furthermore, the arbitrary valuation was made at the time the team was still receiving $15MM per year from COG. Shouldn`t such loans be marked to the market? Absent the $225MM 20 year subsidy and the newly released and inflated Forbes valuation what was $305MM valuation should now be a fraction of that. The Coyotes as collateral for that loan could be technically in default?


(3) The Coyotes receive max RS, if that is not a subsidy I don`t what is. As for the Jets, why would they have received RS funds? Do you have a source for that? TNSE is owned by the wealthiest man in Canada and the jets have been profitable since day one!

 

[MNNumbers]

(1) The initial loan was made with repayment provisions. Until those dollars are repaid we can rightfully assume it was money given to IA!

(2) Regarding the revaluation of the franchise (while in its current location of Glendale) this is an egregious over inflation of this teams real value. a scant two years after the league valued this franchise at $170MM ( which is a joke as well, remember, no private party was will ing to pay even $100MM for this asset in the previous years). So how does a franchise go from being practically worthless to $305MM in the course of two years? Furthermore, the arbitrary valuation was made at the time the team was still receiving $15MM per year from COG. Shouldn`t such loans be marked to the market? Absent the $225MM 20 year subsidy and the newly released and inflated Forbes valuation what was $305MM valuation should now be a fraction of that. The Coyotes as collateral for that loan could be technically in default?


(3) The Coyotes receive max RS, if that is not a subsidy I don`t what is. As for the Jets, why would they have received RS funds? Do you have a source for that? TNSE is owned by the wealthiest man in Canada and the jets have been profitable since day one!

MESA!!!!!! Calm down and read the CBA provisions about revenue sharing. In the present 30 team league, the bottom 20 in revenue ALL receive some sharing from the top 10. Jets do ok, but they are not in the Top 10.

 

[Fugu]

Have any other franchises benefited from building a new stadium like the Coyotes intend to do? Taking into account a $100m investment in the new stadium, they'd likely need about $20m in additional revenues in order to break even. Is this possible?

I'm not sure I fully understand your question, could just be the wording, but if you're asking do other owners pay for some or all of their arenas, then yes, some have or do. Ilitch is paying over 50% of the Little Caesar's arena cost, as one example. I believe Wirtz and Reinsdorf hold 50/50 interest in the United Center. AEG owns Staples Center. MSG is owned by the Madison Square Garden Company. Delaware North owns TD Garden, iirc. ACC is owned by MLSE. Bell Centre by the Molsons et al. Rogers Arena is owned by the Canucks Sports & Entertainment.

 

[Killion]

...Regarding the revaluation of the franchise (while in its current location of Glendale) this is an egregious over inflation of this teams real value. a scant two years after the league valued this franchise at $170MM ( which is a joke as well, remember, no private party was willing to pay even $100MM for this asset in the previous years)....

That wasnt a "valuation" in the true sense of the word, thats what the league had put into the franchise as you know. Purchased out of BK for $110M with additional cumulative losses from 09~13 of app $60M. In order to be made "whole" again, requiring $170M. The clubs "true valuation" coming out of Baums Court was less than zero as all offers dried up leaving the NHL to buy the club itself followed by 4yrs without any really seriously monied takers willing to pay that price.

MESA!!!!!! Calm down and read the CBA provisions about revenue sharing. In the present 30 team league, the bottom 20 in revenue ALL receive some sharing from the top 10. Jets do ok, but they are not in the Top 10.

Correct. I too made that mistake earlier, couple of years back thinking no way no how do the Jets receive RS only to discover that yes, yes they actually do.

 

[mesamonster]

That wasnt a "valuation" in the true sense of the word, thats what the league had put into the franchise as you know. Purchased out of BK for $110M with additional cumulative losses from 09~13 of app $60M. In order to be made "whole" again, requiring $170M. The clubs "true valuation" coming out of Baums Court was less than zero as all offers dried up leaving the NHL to buy the club itself followed by 4yrs without any really seriously monied takers willing to pay that price.



Correct. I too made that mistake earlier, couple of years back thinking no way no how do the Jets receive RS only to discover that yes, yes they actually do.

My point in all of this regardless of the RS is that I find it extremely difficult to believe that an ownership group like this one is covering the operating losses for their organization. Lets not forget the fact they have intimated by their actions that they do not have the funds to adequately field an NHL roster that can compete in their own division. If you can`t do that I can`t see how they would gladly hand over $20-30MM per year in operating losses to the equity partners to fund?

 

[Glacial]

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.

That is the main point on the side of me that thinks, surely this must be the end of the Ice Arizona road. On the other hand, I don't want to underestimate the Coyotes' staying power. It seems like their legislative effort will inevitably fail. Beyond that, it's not Ice Arizona's move. We should be seeing moves, actions, flights from the NHL and presumably Quebecor if they are the destination.

When is the legislature even going to hear this proposal again?

 

[Ernie]

I'm not sure I fully understand your question, could just be the wording, but if you're asking do other owners pay for some or all of their arenas, then yes, some have or do. Ilitch is paying over 50% of the Little Caesar's arena cost, as one example. I believe Wirtz and Reinsdorf hold 50/50 interest in the United Center. AEG owns Staples Center. MSG is owned by the Madison Square Garden Company. Delaware North owns TD Garden, iirc. ACC is owned by MLSE. Bell Centre by the Molsons et al. Rogers Arena is owned by the Canucks Sports & Entertainment.

No, my question is how much other franchises have seen gate receipts grow by that amount after building a new stadium.

My back of the napkin math suggests that the Coyotes would need gate revenues to basically double in order to be viable. Is there any precedent for this?