Phoenix CXXXII: The Upside Down Franchise

[Bookie21]

Where is the transparency with the fans, the media etc. There is none and therefore hiding under these clouds of secrecy are more unanswered questions about the future of this franchise?

What the hell are you talking about? Transparency? They've been very transparent: "It won't work in Glendale". "We're working on moving to the other side of the Valley". End of story. AB isn't Leblanc, and isn't talking about possible sites for the new arena. He specifically said "We will report on something when it is a done deal". How can that not be transparent? It might take a year, it might take 5 years, it might take 10 years. As long as they're icing a team, I'll go to the games when I'm in town. They've managed to cover losses for the last 20 years, they will continue to cover losses

 

[mesamonster]

What the hell are you talking about? Transparency? They've been very transparent: "It won't work in Glendale". "We're working on moving to the other side of the Valley". End of story. AB isn't Leblanc, and isn't talking about possible sites for the new arena. He specifically said "We will report on something when it is a done deal". How can that not be transparent? It might take a year, it might take 5 years, it might take 10 years. As long as they're icing a team, I'll go to the games when I'm in town. They've managed to cover losses for the last 20 years, they will continue to cover losses

Before you get too bent out of shape, I see that you are new to the discussion. Perhaps you should go back about a year ago and start from there. That was when AB said they could not remain at GRA because of financial considerations. What does he do he sends Tony out to basically spin a series of lies regarding their progression to procuring a new arena deal, all of which were sanctioned by none other than the majority owner at the time Andy Barroway. Fast forward, to today, AB`s silence speaks volumes to many of us, sorry if you can`t hear him.

 

[Bookie21]

AB's silence is exactly what he said he was going to do when he bought out the clowns. He will keep his mouth shut until he has something concrete to report. He might be silent for 5 years, no one knows exactly how long. It is a nice and welcome change to Leblanc who was always spouting off about piles of dirt. He is not in a hurry as he knows the losses will be covered.

 

[mesamonster]

AB's silence is exactly what he said he was going to do when he bought out the clowns. He will keep his mouth shut until he has something concrete to report. He might be silent for 5 years, no one knows exactly how long. It is a nice and welcome change to Leblanc who was always spouting off about piles of dirt. He is not in a hurry as he knows the losses will be covered.

Wrong again! NOBODY believes this team can survive in perpetuity at GRA, go back a few posts to MNNumbers back of the napkin sketch of what the financial picture looks like. With losses in the AB self proclaimed ten of millions GB is not going to fund this train wreck forever!

 

[Mightygoose]

I agree that the Barroway/Patterson plan on keeping the arena plan silent is the best plan as opposed to LeBlanc's two weeks - two weeks madness.

But I don't believe for a second that Barroway has all of the time he needs. His purchase of the IA guys was financed heavily so with the continued losses plus interest, he can only hang in for so long. The inability to recruit new investors will compound this.

So if he can't continue and maybe on some level he isn't, it's the other 30 owners now paying the bills. A cut of a 650 expansion fee will help for another season...maybe 2...but then that well runs dry.

Considering they nearly moved the team to Winnipeg on a couple of occasions, tells me their patience is not indefinite.

 

[mesamonster]

AB's silence is exactly what he said he was going to do when he bought out the clowns. He will keep his mouth shut until he has something concrete to report. He might be silent for 5 years, no one knows exactly how long. It is a nice and welcome change to Leblanc who was always spouting off about piles of dirt. He is not in a hurry as he knows the losses will be covered.

I don`t recall him saying that at the time he bought out the clowns last summer? I do recall the first person to utter those words was Patterson in the late fall, you may want to check up on that.

 

[Bookie21]

Wrong again! NOBODY believes this team can survive in perpetuity at GRA, go back a few posts to MNNumbers back of the napkin sketch of what the financial picture looks like. With losses in the AB self proclaimed ten of millions GB is not going to fund this train wreck forever!

They'll survive at GRA as long as they need to. Either they'll get a new arena, or AB will sell. They've survived since 2003 at GRA. Somebody will cover the losses, that has be proven a fact over the last 15 years at GRA. Time is definitely on ABs side, not sure why you think anything has changed in that regard

 

[Llama19]

They'll survive at GRA as long as they need to. Either they'll get a new arena, or AB will sell. They've survived since 2003 at GRA. Somebody will cover the losses, that has be proven a fact over the last 15 years at GRA. Time is definitely on ABs side, not sure why you think anything has changed in that regard

Barroway (supposedly) became a 51% owner of the franchise at the end of December 2014...then...not six months later...step down in a lesser role...

To quote LeBlanc: ""Andy put tens and tens of millions of dollars into the team, as well as taking on his share of the obligation for the outstanding debt," LeBlanc said. "I guess the way you could look at it is, well, he has outstanding debt. But Andy, he made a sizable investment that was real cash. I have no expectation that he would walk away, nor would any of our partners.""

Fast forward to June 2017, Barroway buys out the IceArizona rabble...

I do not think that time is on Borroway's side...

 

[Bookie21]

Fast forward to June 2017, Barroway buys out the IceArizona rabble...

I do not think that time is on Borroway's side...

I think AB has nothing but time....If he can't cover the losses the NHL will. Why do you believe time is not on his side?

 

[mesamonster]

They'll survive at GRA as long as they need to. Either they'll get a new arena, or AB will sell. They've survived since 2003 at GRA. Somebody will cover the losses, that has be proven a fact over the last 15 years at GRA. Time is definitely on ABs side, not sure why you think anything has changed in that regard

AB has already said they can`t survive at GRA? Who is going to pay for the new arena, and where is it going to be? Who is AB going to sell to? The last time they tried nobody would buy it, finally the league bought it and basically gave it to the Ice Clowns for about $45MM. And you think somebody is going to come in and pay 10 times that for roughly the same situation as five years ago? Why have they survived at GRA? How do you spell subsidies? Who is going to cover the losses in perpetuity? You seem to think money grows on trees, not in Arizona, just ask the legislature. You say time is on AB`s side, how much time, month , maybe two? If he has so much money why has he not committed more to the payroll and committed some of that largesse to anew pile of dirt? Much has changed, to operate these days in the NHL you need far more money than Andy Barroway has.

 

[Bookie21]

Who is going to cover the losses in perpetuity?

The NHL will cover the losses, what is this amateur hour?

 

[MNNumbers]

I think AB has nothing but time....If he can't cover the losses the NHL will. Why do you believe time is not on his side?

Simply because, from my prior post, they are currently about 300M in debt on this franchise. There is a limit to what they can borrow. And, even if CitiBank doesn't give them a limit to their credit, they surely will in regard to the value of their collateral. The collateral in this case is the team itself.

Here's a question: What is the team worth in a sale for relocation? What do you think, Bookie? How much?

I simply ask because, if I am bank, that's my limit. When they reach that, something has to give.... That seems to me to be the financial fact. The BOG aren't going to pay themselves, so the operating losses being incurred must be on a loan, and you can be sure that the NHL won't want that loan called in....

 

[Bookie21]

K

Here's a question: What is the team worth in a sale for relocation? What do you think, Bookie? How much?

..

I'd never speculate on a sale price. I do know the price has been set with Vegas paying $500 million and Seattle poised to pay $650 million. So if Houston wants in, they will pay between $500-$650 million TOTAL. The NHL will fudge the numbers to get to that total, be it $250 million to AB and $250million relocation fee. The NHL can play with the numbers to keep franchise values on the up and up

 

[MNNumbers]

K

I'd never speculate on a sale price. I do know the price has been set with Vegas paying $500 million and Seattle poised to pay $650 million. So if Houston wants in, they will pay between $500-$650 million TOTAL. The NHL will fudge the numbers to get to that total, be it $250 million to AB and $250million relocation fee. The NHL can play with the numbers to keep franchise values on the up and up

I agree completely on that. And, in my opinion, it doesn't matter how it's broken down, because the NHL is guaranteeing Barroway that he won't lose anything for his time.

Since we agree, next question:
How many losses do you think the NHL is willing to fund in Arizona?

 

[mesamonster]

K

I'd never speculate on a sale price. I do know the price has been set with Vegas paying $500 million and Seattle poised to pay $650 million. So if Houston wants in, they will pay between $500-$650 million TOTAL. The NHL will fudge the numbers to get to that total, be it $250 million to AB and $250million relocation fee. The NHL can play with the numbers to keep franchise values on the up and up

If as you believe the NHL is covering AB`s losses you must not genuinely believe he owns the team? If the NHL is paying the bills, what is in for them to keep a loss leader in Arizona?

 

[Fairview]

If as you believe the NHL is covering AB`s losses you must not genuinely believe he owns the team? If the NHL is paying the bills, what is in for them to keep a loss leader in Arizona?

If the NHL is covering losses then they are still the owner of the team. Borrowaway is as suspected...just a puppet.

 

[Killion]

If as you believe the NHL is covering AB`s losses you must not genuinely believe he owns the team? If the NHL is paying the bills, what is in for them to keep a loss leader in Arizona?

... one suggestion thats oft repeated, interesting theory, is that theyve kept that boat afloat because it creates an artificial drag or anchor on the ever escalating CAP. That if they moved the team to a profitable market the CAP would accordingly rise, the tide rushing in, water rising in the basement making it difficult for a number of other teams across the league to compete. Keeping them in Arizona treading water useful to the League on that side of the equation and a couple of others as well.

 

[cbcwpg]

If as you believe the NHL is covering AB`s losses you must not genuinely believe he owns the team? If the NHL is paying the bills, what is in for them to keep a loss leader in Arizona?

That's a good point. IMO if the NHL is covering the losses, even if the losses are covered from a future sale, then they in fact own the team.

IIRC this was the argument the NHL used to try and say that Moyes had no right to put the team into bankruptcy in the first place... because the NHL was covering the losses Moyes didn't really own the team.

 

[cbcwpg]

... one suggestion thats oft repeated, interesting theory, is that theyve kept that boat afloat because it creates an artificial drag or anchor on the ever escalating CAP. That if they moved the team to a profitable market the CAP would accordingly rise, the tide rushing in, water rising in the basement making it difficult for a number of other teams across the league to compete.

Can't remember the increase in the Cap, but when the Thrashers moved to Winnipeg there was an immediate upswing in revenues.

 

[Killion]

Can't remember the increase in the Cap, but when the Thrashers moved to Winnipeg there was an immediate upswing in revenues.

Indeed. This artificial system, Cap & Revenue Sharing, requires some serious maintenance as all things are not equal market~market. Yes the NHL has experienced phenomenal growth of Central Revenues, Franchise Values going through the roof - just look at the Grand Larceny their getting away with in Seattle; got away with in LV - no way no how do those Expansion Fee's pencil out, not in anyones wildest dreams - yet just by "being" the Coyotes as is where is are supposedly worth $305M? Seriously? They are in fact worth less than ZERO where is as is & have been since 09.

Total Money Pit, kind of like Oak Island where its rumored the Templars may have buried the Arc of the Covenant along with billions in gold, silver... some schemers & dreamers over the years & decades while never finding the treasure, if it even exists, did get rich in selling shares based on the dream of finding it, promises of riches beyond imagining for all.... But this situation?... Games are being played, the Coyotes a pawn on the board, useful temporarily but unfortunately for the fans down there & the COG, entirely expendable. Not a question of "will they get a new arena"; its a question of "when will the NHL pull the trigger". Theoretically, they could probably prop it up for another 3-5yrs & still walk in a sale for Relo with a tidy sum.

 

[TheLegend]

Indeed. This artificial system, Cap & Revenue Sharing, requires some serious maintenance as all things are not equal market~market. Yes the NHL has experienced phenomenal growth of Central Revenues, Franchise Values going through the roof - just look at the Grand Larceny their getting away with in Seattle; got away with in LV - no way no how do those Expansion Fee's pencil out, not in anyones wildest dreams - yet just by "being" the Coyotes as is where is are supposedly worth $305M? Seriously? They are in fact worth less than ZERO where is as is & have been since 09.

Total Money Pit, kind of like Oak Island where its rumored the Templars may have buried the Arc of the Covenant along with billions in gold, silver... some schemers & dreamers over the years & decades while never finding the treasure, if it even exists, did get rich in selling shares based on the dream of finding it, promises of riches beyond imagining for all.... But this situation?... Games are being played, the Coyotes a pawn on the board, useful temporarily but unfortunately for the fans down there & the COG, entirely expendable. Not a question of "will they get a new arena"; its a question of "when will the NHL pull the trigger". Theoretically, they could probably prop it up for another 3-5yrs & still walk in a sale for Relo with a tidy sum.

Let's just say the numbers being sloshed around here are purely from speculation and be done with it.

That said.... I'll somewhat agree with your estimate on how long Barroway possibly could hold out (I'm looking closer to 2-3 years).

 

[CHRDANHUTCH]

how much did Barroway put in to acquire Tucson, remember them..... because the Roadrunners are now under his control the last 2 years and setting up the transfer from Springfield into Tucson, and the arena costs there which they are paying, so no, the NHL doesn't own Arizona imho.

 

[Confucius]

... one suggestion thats oft repeated, interesting theory, is that theyve kept that boat afloat because it creates an artificial drag or anchor on the ever escalating CAP. That if they moved the team to a profitable market the CAP would accordingly rise, the tide rushing in, water rising in the basement making it difficult for a number of other teams across the league to compete. Keeping them in Arizona treading water useful to the League on that side of the equation and a couple of others as well.

Seems like a lot of work to save each team less than 1 million dollars per year, but maybe. Afterall even if Arizona magically made an extra 50 million per year in revenue which would be very respectable. The needle would move from 2.3 billion to 2.325 billion an increase of 25 million or about 800,000 per team that spends to the cap.

The cost to the league by keeping Arizona is probably about 800 thousand per team as it stands so it's all a wash anyway.

 

[MNNumbers]

Seems like a lot of work to save each team less than 1 million dollars per year, but maybe. Afterall even if Arizona magically made an extra 50 million per year in revenue which would be very respectable. The needle would move from 2.3 billion to 2.325 billion an increase of 25 million or about 800,000 per team that spends to the cap.

The cost to the league by keeping Arizona is probably about 800 thousand per team as it stands so it's all a wash anyway.

Well done, Confucius. And, the only part that needs to be added is the effect on revenue sharing, which would likely be that about 10-12 teams would get more than they currently do. Everything else would stay the same, except for slight fluctuations which depend on CAD/USD exchange and which vary from year to year anyway.

In short, this league is not sharp enough to figure that out.

I still figure that they are staying for one of 3 reasons:
1- Myopic hope of a TV contract and they think they need the Phoenix market for it, or....
2- There is nowhere else to go because Houston won't pay them enough, and they don't want to go to Quebec, or
3- They yet hope for a new arena with a subsidy in Phoenix area, and they are not maxed out on what they can carry for debt load.

 

[Mightygoose]

Well done, Confucius. And, the only part that needs to be added is the effect on revenue sharing, which would likely be that about 10-12 teams would get more than they currently do. Everything else would stay the same, except for slight fluctuations which depend on CAD/USD exchange and which vary from year to year anyway.

In short, this league is not sharp enough to figure that out.

I still figure that they are staying for one of 3 reasons:
1- Myopic hope of a TV contract and they think they need the Phoenix market for it, or....
2- There is nowhere else to go because Houston won't pay them enough, and they don't want to go to Quebec, or
3- They yet hope for a new arena with a subsidy in Phoenix area, and they are not maxed out on what they can carry for debt load.

I would say reason #3 with a possible reason #4. They know a 650 million so a 1/31 share can keep the losses bearable for another season. But that wouldn't be a long term plan.