Phoenix CXXXII: The Upside Down Franchise

[Llama19]

(Original Thread Title: esihcuarF uwoD episdU ehT :IIXXXC xiueohP)

Dedicated to the upside down nature of this franchise in ownership, attempts to getting a new arena, and general finances...

To carryover from the previous thread: Phoenix CXXXI: Looking for the Barroway Necessities

Wants:
- New or remodeled arena...
- Liberal lease agreement (i.e., subsidy)...
- Winning product on the ice...

Desires:
- See above

Recent Events:
- None worth noting but per this article:

“When we get to the point of having something to say (about the arena search), we will say it,” he (Team President and CEO Steve Patterson) said."

Click to read more...

 

[awfulwaffle]

They don't want a remodeled arena, they just want a new location. Stop pushing your agenda here.

 

[Llama19]

They don't want a remodeled arena, they just want a new location. Stop pushing your agenda here.

I am not pushing anything...TL did in his original post from the previous thread...

And...you had originally liked his post...

 

[Fairview]

They don't want a remodeled arena, they just want a new location. Stop pushing your agenda here.

I agree with you that they would like a new arena but what they would like even more than a new location is a newly subsidized location. Remember the ridiculous operating cost for the new arena that they had written into their proposal with ASU?

 

[TheLegend]

I agree with you that they would like a new arena but what they would like even more than a new location is a newly subsidized location. Remember the ridiculous operating cost for the new arena that they had written into their proposal with ASU?

That “ridiculous operating cost” included more than just an arena. There were, in fact, two arenas and a hotel involved. Plus retail.

BTW.... in order to clear up an apparent misconception about a “renovated arena” (since someone deemed it necessary to include me into that). That was in regards the current discussion within the city of Phoenix over TSRA. Which is still unknown since nobody is talking about what that report contains either.

Carry on.....

 

[MNNumbers]

That “ridiculous operating cost” included more than just an arena. There were, in fact, two arenas and a hotel involved. Plus retail.

BTW.... in order to clear up an apparent misconception about a “renovated arena” (since someone deemed it necessary to include me into that). That was in regards the current discussion within the city of Phoenix over TSRA. Which is still unknown since nobody is talking about what that report contains either.

Carry on.....

Legend,

I can understand you feeling persecuted on this thread because there are many here who have already decided that the franchise is sunk and cannot be profitable no matter what happens (and there are 2 who seem to revel in that).

Trying to set aside that argument for actual, reasoned discussion...

My figures go something like this:
We don't know but it seems very reasonable to assume this franchise loses 20M/yr.
Attendance figures suggest that approx 550K fans attend games every year. (With about 4000 empty seats on average at GRA).

So, I'm thinking like this:
Let's move the franchise to the East Valley, with a new arena of exactly the same size. My first thought would be that if you can fill the place, it's not going to be with 4000 new fans who are all STHs. That's ridiculous to assume.
So, let's go for this: Every one of those 4000 fans buys a $50 ticket and $20 of some kind of merchandise every game. And, the merchandise has a 50% markup, so even on concessions, the Yotes organization makes a $10 profit every night.
That would be $60 * 4000 or 250K a night. Times 40 games for easy math and you have 10M a year.
Now, from your earlier 550K who already attend, you need to get the remaining 10M/yr. That means getting $20 more out of every one of them every night.

I personally see that as being quite a stretch.

Does your math match this in any way?

And, this is the reason that many of us suspect that the location or the arena itself is not the problem, but rather the problem is that the team really requires a subsidy.


ETA: Personally, I'm done even thinking about the ASU situation. I have my opinion about what was happening there, and I put the whole thing on LeBlanc's shoulders. From the fact that he oversold it to the media, to the fact that I am not at all sure that the highest level at the University really knew his plans, to the idea that, knowing how he did business, a 24M/yr subsidy in that plan would no surprise me at all. But, that was LeBlanc. He is out of the picture now, so anything he did is a moot point.

I'm more trying to see how Barroway thinks he can might this work, even with a new arena in the East Valley.

 

[TheLegend]

MNN....

I'm not feeling any sort of persecution at all. What I was addressing was the continued twisting of context in regards to things we've already chewed on to death. I'm with you as far as even worrying about all that crap but nevertheless some continuously seem to feel the need to bring it up.

It's late and I really wasn't in the mood to haggle over numbers but..... you're probably in the ballpark. I would say though that an east valley arena location would probably get a bump in STH sales. I see a lot of people on social media who dropped their FT STH status because getting out to the arena for 41 nights got to be too much of a chore. Many claim they would jump back in if the Coyotes moved over there, but of course saying it is one thing.... doing it is another.

 

[awfulwaffle]

I am not pushing anything...TL did in his original post from the previous thread...

And...you had originally liked his post...

Yet you failed to include the most important part, the location.

 

[mesamonster]

They don't want a remodeled arena, they just want a new location. Stop pushing your agenda here.

Have to ask once again, "with whose money?"

 

[mesamonster]

The idea of a new arena is nothing more than a ploy by AB to keep that "hot potato" alive as long as anyone is willing to listen. In reality, AB cannot afford a new arena without it being gifted to him with a massive subsidy attached. So, why continue to push the narrative that a new arena is the panacea for this ailing franchise? As MNN suggested above the economics do not add up in the East Valley or any other location without an awful lot of help from sources that presently do not seem to exist. I find it fascinating that some people want to believe that a new venue will instantly transform this franchise into money machine? I think a case could be made that even with a new arena and a full house every night at $100 ATP they would still be unable to post a profit? When ownership shows the hand that AB has with a massive amount of debt it eats up his ability to do anything. Player payroll is only one example of what gets short changed when ownership is short of cash. The idea that an owner, in todays sports, world can make a go of it without hundreds of millions in reserve is upon us. AB obviously does not have the money to carry this out and thus the product suffers as a result. If you can only make the lower end of the payroll and have to cut back on your other expense items how in the world are you going to pay forward the expenses of a new arena while buying time in a venue that is costing you and the league so much money each year?

 

[TheLegend]

The idea of a new arena is nothing more than a ploy by AB to keep that "hot potato" alive as long as anyone is willing to listen. In reality, AB cannot afford a new arena without it being gifted to him with a massive subsidy attached. So, why continue to push the narrative that a new arena is the panacea for this ailing franchise? As MNN suggested above the economics do not add up in the East Valley or any other location without an awful lot of help from sources that presently do not seem to exist. I find it fascinating that some people want to believe that a new venue will instantly transform this franchise into money machine? I think a case could be made that even with a new arena and a full house every night at $100 ATP they would still be unable to post a profit? When ownership shows the hand that AB has with a massive amount of debt it eats up his ability to do anything. Player payroll is only one example of what gets short changed when ownership is short of cash. The idea that an owner, in todays sports, world can make a go of it without hundreds of millions in reserve is upon us. AB obviously does not have the money to carry this out and thus the product suffers as a result. If you can only make the lower end of the payroll and have to cut back on your other expense items how in the world are you going to pay forward the expenses of a new arena while buying time in a venue that is costing you and the league so much money each year?

Why do you continue to put words into other's mouths??

You might find a very small number of people on social media who would think that a new arena downtown or east valley would suddenly blow sunshine up everyone's kazoo, but not here (or in F40 for that matter). But the only people who have continuously pushed a narrative around here are yourself and Llama. You both keep digging up every obscure thing you can find (past, present and whatever future universe) and act like it's all figured out. At least Llama can come up with facts and references to go along with his posts and THAT actually gives him some real street cred in my book..... even if I feel he skews things at times.

 

[Llama19]

A timeline of news related to a new arena (somewhere in Arizona) and/or State Legislative activity:

Nov 16, 2016 - Coyotes majority owner Andrew Barroway promised a "world-class facility" would be built near ASU

Feb 3, 2017 - ASU pulls out of plan; Sen. Bob Worsley immediately re-tools the bill to make it more location-agnostic

Feb 23, 2017 - Location-agnostic bill on life support; ultimately bill never gets out of committee for a floor vote

Mar 7, 2017 - NHL commissioner: Coyotes 'can't and won't' play in Glendale; threat does not work in getting bill moved forward

Mar 8, 2017 - Gov Ducey calls NHL's Coyotes ultimatum not 'productive'

Mar 23, 2017 - Arizona Coyotes arena-funding bill nearly dead at Arizona Legislature (it was completely dead)

Jul 13, 2017 - Andrew Barroway reaffirms commitment to keeping Coyotes in Arizona

Nov 15, 2017 - Arizona Coyotes on tribal land: Idea making the rounds again

Nov 16, 2017 - Details of Phoenix Suns arena deal still cloudy, but its defeat is becoming clearer (renovations do not appear to include hockey)

Dec 14, 2017 - Phoenix pumps $125K more into research for Suns arena upgrades (still does not appear to include hockey)

Dec 19, 2017 - After threat to move, Arizona Coyotes staying 1 more year in Glendale (Glendale has heard nothing regarding a new arena-funding bill for the 2018 Legislature)

Jan 11, 2018 - Despite poor record, Coyotes trending up in attendance, other figures (Team President and CEO Steve Patterson stated, "When we get to the point of having something to say (about the arena search), we will say it.")

As of today, there is no new arena bill introduced in the Arizona State Legislature which started on Jan 8...

Stay tuned...

 

[JimAnchower]

ETA: Personally, I'm done even thinking about the ASU situation. I have my opinion about what was happening there, and I put the whole thing on LeBlanc's shoulders. From the fact that he oversold it to the media, to the fact that I am not at all sure that the highest level at the University really knew his plans, to the idea that, knowing how he did business, a 24M/yr subsidy in that plan would no surprise me at all. But, that was LeBlanc. He is out of the picture now, so anything he did is a moot point.

I'm more trying to see how Barroway thinks he can might this work, even with a new arena in the East Valley.

If ASU wants a new ice hockey arena in 2019, something Ray Anderson said is a goal, they'll have to start construction this spring. The last two new college hockey arenas, Penn State and Notre Dame, both took about 18 months to construct. Both PSU and ND are both smaller arenas (capacity 5,000 or so), which is what ASU would probably look for.

 

[Llama19]

If ASU wants a new ice hockey arena in 2019, something Ray Anderson said is a goal, they'll have to start construction this spring. The last two new college hockey arenas, Penn State and Notre Dame, both took about 18 months to construct. Both PSU and ND are both smaller arenas (capacity 5,000 or so), which is what ASU would probably look for.

ASU Sun Devils have/are playing these games at Gila River Arena:

November 17, 2017 - ASU vs Penn State (attendance - 2,842)
November 18, 2017 - ASU vs Penn State (attendance - 3,104)
January 20, 2018 - ASU vs Quinnipiac (attendance - 2,696)
January 26, 2018 - ASU vs Boston University (attendance - 3,118)

Note: Updated for Jan 20 game...updated for Jan 26, too...

 

[mesamonster]

Why do you continue to put words into other's mouths??

You might find a very small number of people on social media who would think that a new arena downtown or east valley would suddenly blow sunshine up everyone's kazoo, but not here (or in F40 for that matter). But the only people who have continuously pushed a narrative around here are yourself and Llama. You both keep digging up every obscure thing you can find (past, present and whatever future universe) and act like it's all figured out. At least Llama can come up with facts and references to go along with his posts and THAT actually gives him some real street cred in my book..... even if I feel he skews things at times.

Gee Legend, I`m not sure you have given us anything to refute my beliefs. Lets start with two things we know about: We know that AB is cash strapped by the way he is managing this organization. The team somehow refuses to do the right thing, preferring to go halfway all in the name of saving money. Yessir, money is the commodity that is in short supply, if it wasn`t AB would be handling things quite differently! Perhaps like most other NHL teams have. Secondly. you keep presuming a new arena is in play sooner than later! I have yet to see any sign of that or any indication that AB is willing to go it alone and be more proactive given the fact that investors/legislators or Tribesman have not stepped forth to offer a helping subsidy hand. I don`t think I am far off in believing this franchise is dangling from a precarious string, your suggestions that all is fine is way off the mark.

 

[tony d]

Trending up in attendance has to be seen as a positive given all the turmoil around that team for the past # of years. I still think they don't stay in Arizona long-term but if the attendance keeps up maybe an AHL/ECHL team could go long term.

 

[Dirty Old Man]

... I don`t think I am far off in believing this franchise is dangling from a precarious string, your suggestions that all is fine is way off the mark.

...or, alternately, many of your assumptions about AB could be completely off base (his finances, his character, his intentions, his motivations), and your years long record of being incorrect on here about...well, nearly everything, frankly... will continue...

 

[WildGopher]

That “ridiculous operating cost” included more than just an arena. There were, in fact, two arenas and a hotel involved. Plus retail.

The operating costs were first (and I believe the only time) publicly discussed at the Senate committee hearing on Worsley's bill, when representatives of the Coyotes and their lobbying firm outlined the general proposal. The $24 million operating cost was proposed there in the context of the Worsley arena, not the ASU plan that would have had two arenas.

I thought the $24 million operating cost - to be paid by the municipality where the arena was to be built - was for the new Coyotes arena, nothing else. If you're right that the municipality was expected to be paying operating costs for the Coyotes to manage a hotel and/or retail as part of the deal, that would be even worse! I mean, what business plan, anywhere, ever (other than the deal with Glendale for their $15 million) has taxpayers giving a company free cash to operate a business, in this case a hotel or retail stores? If they were truly proposing that, it would be chutzpah on steroids!

As a skeptic of taxpayer funding of private projects, I read through Worsley's bill pretty carefully last year and saw lots for taxpayers to be wary of, which I reported here - for example, the negating in the fine print of IA's supposed $170 million "contribution" toward construction costs by the mechanism of an annual flow of income back to the Coyotes through the split of the 2% tax. Everywhere else I'm familiar with, such taxes go back to the public coffers. I also pointed out that the testimony in the Senate hearing claiming that $24 million was in the "customary" range because the Minnesota Wild were receiving $24.3 million in their operating deal was disingenuous of IA's lobbyist who stated that, because the Wild operate not one, but three publicly owned facilities for the city - two arenas, and a convention center. If I'd seen anything suggesting the Coyotes were going to get paid to manage private, income-generating assets like a hotel or stores, I would have (no pun intended) howled at that, too. But maybe IA and their lobbyist intended to make such side deals part of the next step - the separate agreement with the municipality who agreed to host the arena. I wouldn't put it past them to try, but like I said, incredible chutzpah if true.

I don't mind cities/states contributing to arenas that have public value beyond the hockey/basketball team's use, but maybe the most prevalent model of an approximately 50/50 split in construction costs is fairest and what the voting public seems willing to accept. But models where the public eventually pays not only 100%, but actually more than 100%, by additionally siphoning other funds owned by the public to a business that can't make it with traditional revenue streams? For every taxpayers' sake, I hope the fine print of such proposals always sees the light of day, so they can be reviewed by the public with eyes wide open.

 

[mesamonster]

...or, alternately, many of your assumptions about AB could be completely off base (his finances, his character, his intentions, his motivations), and your years long record of being incorrect on here about...well, nearly everything, frankly... will continue...

I believe they are a lot closer to leaving than staying!

 

[cheswick]

They don't want a remodeled arena, they just want a new location. Stop pushing your agenda here.

How will they get a new location absent a new arena? They want to move downtown with the Suns?

 

[The Feckless Puck]

Trending up in attendance has to be seen as a positive given all the turmoil around that team for the past # of years. I still think they don't stay in Arizona long-term but if the attendance keeps up maybe an AHL/ECHL team could go long term.

Unfortunately, Arizona is a "big leaguer" market. They won't support a minor league franchise, as has been proven time and again by the multitude of minor league hockey franchises that have failed here. I used to think otherwise but I think that a lot of that had to do with my fan passion obliterating my reason.

 

[TheLegend]

The operating costs were first (and I believe the only time) publicly discussed at the Senate committee hearing on Worsley's bill, when representatives of the Coyotes and their lobbying firm outlined the general proposal. The $24 million operating cost was proposed there in the context of the Worsley arena, not the ASU plan that would have had two arenas.

I thought the $24 million operating cost - to be paid by the municipality where the arena was to be built - was for the new Coyotes arena, nothing else. If you're right that the municipality was expected to be paying operating costs for the Coyotes to manage a hotel and/or retail as part of the deal, that would be even worse! I mean, what business plan, anywhere, ever (other than the deal with Glendale for their $15 million) has taxpayers giving a company free cash to operate a business, in this case a hotel or retail stores? If they were truly proposing that, it would be chutzpah on steroids!

As a skeptic of taxpayer funding of private projects, I read through Worsley's bill pretty carefully last year and saw lots for taxpayers to be wary of, which I reported here - for example, the negating in the fine print of IA's supposed $170 million "contribution" toward construction costs by the mechanism of an annual flow of income back to the Coyotes through the split of the 2% tax. Everywhere else I'm familiar with, such taxes go back to the public coffers. I also pointed out that the testimony in the Senate hearing claiming that $24 million was in the "customary" range because the Minnesota Wild were receiving $24.3 million in their operating deal was disingenuous of IA's lobbyist who stated that, because the Wild operate not one, but three publicly owned facilities for the city - two arenas, and a convention center. If I'd seen anything suggesting the Coyotes were going to get paid to manage private, income-generating assets like a hotel or stores, I would have (no pun intended) howled at that, too. But maybe IA and their lobbyist intended to make such side deals part of the next step - the separate agreement with the municipality who agreed to host the arena. I wouldn't put it past them to try, but like I said, incredible chutzpah if true.

I don't mind cities/states contributing to arenas that have public value beyond the hockey/basketball team's use, but maybe the most prevalent model of an approximately 50/50 split in construction costs is fairest and what the voting public seems willing to accept. But models where the public eventually pays not only 100%, but actually more than 100%, by additionally siphoning other funds owned by the public to a business that can't make it with traditional revenue streams? For every taxpayers' sake, I hope the fine print of such proposals always sees the light of day, so they can be reviewed by the public with eyes wide open.

IIRC.... The $24M was to be generated by the special taxing district they were asking the legislature for.

Where the legislators had issues with it was ASU already had their own special district in place. Their concern was keeping the two separate. It’s a legitimate concern on their part in spite of the IA proposal of an oversight committee being established (with I believe ASU, IA and City of Tempe representatives).

But... all of that was my own interpretation of what was presented. I would have loved to have seen the fine print myself.

 

[TheLegend]

I believe they are a lot closer to leaving than staying!

And you’ve said that for going on nine years now. Who knows... that broken clock might end up right yet??

 

[Llama19]

How will they get a new location absent a new arena? They want to move downtown with the Suns?

There is no location for a new arena...not without someone else providing Barroway sweet tax breaks and subsidies to manage it...and that has not changed since his last attempt in 2016...

 

[Dirty Old Man]

(and speaking of people that have been wrong for going on nine years...)

...except now Bettman and Silber have been rumoured to be talking with the Suns, and after 2016 (if that 2016 attempt could even be counted as "his(AB)" attempt)...