Phoenix CXXXVI - Coyotes up for sale again

[MNNumbers]

Pagnotta:
2 groups. Both interested. Each waiting to see if they can get an arena deal after purchase. Sounds exactly like IA/LeBlanc not wanting to buy the team unless they had a good lease with COG. We'll just have to wait to see if anyone will build them an arena on THEIR terms. This is fairly simple.

What is new is the apparent admission by someone in the new that the team has 300M in debt. This is about the number we have been throwing around.

 

[Glacial]

Pagnotta:
2 groups. Both interested. Each waiting to see if they can get an arena deal after purchase. Sounds exactly like IA/LeBlanc not wanting to buy the team unless they had a good lease with COG. We'll just have to wait to see if anyone will build them an arena on THEIR terms. This is fairly simple.

What is new is the apparent admission by someone in the new that the team has 300M in debt. This is about the number we have been throwing around.

This is the real substance of late (as insubstantial as it is except for the debt total reporting), what will end the current chapter of the Coyotes Saga (Chapter 57: Barroway Borrows Away!) and usher in the new one (Chapter 58: Meet Your New Owner, Konstantin Chernenko. Long May He Own ), not the Tilt-A-Whirl debate over the past page or so. Well, I guess when a name gets revealed, we'll get a new topic and something to discuss instead of reruns.

 

[aqib]

So should the next thread be: Waiting For Godet (or anyone really) to buy the team

 

[The Feckless Puck]

What is F40?

So is it that the wealthier suburbs are generally on the east side? or is it old money east and new money west?

Whats the outlook on the West side?

F40 = Forum 40 = the HF Coyotes board.

There are wealthy suburbs all around the Valley. The most money and biggest concentration of it is in Scottsdale, but as I posted in another thread a lot of that money is old; not necessarily the hockey demographic. There is a smaller, less monied core of hockey parents that live on the periphery of the Scottsdale money (Paradise Valley, Fountain Hills, etc.); these are the ones most likely to be season ticket holders as many/most of them are transplants (the people who sell out the Blackhawks, Red Wings, Sabres, and Bruins games). Outside of that area, the conditions around the Valley are pretty much the same - new money popping up in the outer sprawl areas (particularly in North Peoria on the west side, Mesa/Gilbert on the east) while the geographic center areas tend to be the ones most prone to decline.

The thinking from the franchise historically has been that the philosophical home of the team is where the most money, the players/coaches, and the loud minority of hockey parents and transplants live. Whatever initiatives Jerry Moyes had planned to undertake to market the team to his Glendale/West Side peers evaporated when Westgate met the recession and he soured on being a sports team owner. Everyone since him has basically elected to look at Gila River Arena as a long field trip from where the team should be, rather than tapping into the rather large available base of potential fans closer to where they play. IceArizona basically sealed that philosophy in figurative blood by torching every bridge they could with Glendale and getting the NHL to side with them in the pro-subsidy movement, first in Tempe and now on the reservation.

 

[awfulwaffle]

So should the next thread be: Waiting For Godet (or anyone really) to buy the team

Or no thread at all until there is news to actually talk about.

 

[TheLegend]

Had I mentioned or asked for reasons why the attendance dropped then all of these mitigating circumstances you keep bringing up to explain it would matter. I only commented at face value. Because of how people treat/talk about the Coyotes previously you just assume its someone jumping on the "relocation bandwagon".

I can see now anything not overtly positive or negative mentioned about this team is going to be spun that way by either the pro relocation side or the pro keep em in Arizona side. Its been an illuminating experience.

Cheers

Most people in BoH are here to dig into the bowels of a business issue rather than waste time looking at nothing but the face value of it. There are a few who want just that to spin things (as you say) into their own narrative.

I really don't care what side someone is on.... I've argued on both sides of IA's ownership of the Coyotes (pre-Barroway). Same with how Glendale has interacted with them.

 

[JimAnchower]

Pagnotta:
2 groups. Both interested. Each waiting to see if they can get an arena deal after purchase. Sounds exactly like IA/LeBlanc not wanting to buy the team unless they had a good lease with COG. We'll just have to wait to see if anyone will build them an arena on THEIR terms. This is fairly simple.

What is new is the apparent admission by someone in the new that the team has 300M in debt. This is about the number we have been throwing around.

With these two groups still running around chasing their arena dream, I bet you can hear Yakety Sax faintly playing on a still night in Arizona.

 

[PredsHead]

Or no thread at all until there is news to actually talk about.

Confirmation of the teams losses and that the arena runs in the red even without the subsidy, don't qualify as news in the business forum? A reporter stating that there are two parties interested in buying the Coyotes also not news in this forum?

 

[MNNumbers]

Confirmation of the teams losses and that the arena runs in the red even without the subsidy, don't qualify as news in the business forum? A reporter stating that there are two parties interested in buying the Coyotes also not news in this forum?

Well, they are kind of news, but not really in the sense that we already knew it. It's been well documented that, since the BK, there has never been enough activity in the arena to make the arena itself run in the black. It's been a gamble on the part of Glendale from the beginning that the arena would pull business and be a catalyst to better things, and it hasn't worked out that way, actually.

Coyotes losses: We have all calculated it up ourselves, and know it's about that number.

Two parties interested if they can get the right arena deal? Also not really news. If Barroway could get the right arena deal, HE could keep the team. Problem is: He is out of cash.

 

[Montrealer]

Two kind of related questions:

-If team debt is at the $300M level, how much higher can it go?
-At what point does Barroway basically sell the team for nothing, since the new owner will need to assume that debt? Or is that already the case?

 

[PredsHead]

Well, they are kind of news, but not really in the sense that we already knew it. It's been well documented that, since the BK, there has never been enough activity in the arena to make the arena itself run in the black. It's been a gamble on the part of Glendale from the beginning that the arena would pull business and be a catalyst to better things, and it hasn't worked out that way, actually.

Coyotes losses: We have all calculated it up ourselves, and know it's about that number.

Two parties interested if they can get the right arena deal? Also not really news. If Barroway could get the right arena deal, HE could keep the team. Problem is: He is out of cash.

We ASSUMED that was the around the amount of the losses, I have only seen the somewhat sketchy numbers cited by Forbes being tossed around or your very well reasoned and apparently very close to accurate "back of the napkin" calculations, but this was a reporter basically confirming that those are true. Also I would think going from 0 to 1 to 2 potential buyers in this saga would qualify for news, not stop-the-presses news, but at least worthy of some discussion.

 

[Tom ServoMST3K]

We ASSUMED that was the around the amount of the losses, I have only seen the somewhat sketchy numbers cited by Forbes being tossed around or your very well reasoned and apparently very close to accurate "back of the napkin" calculations, but this was a reporter basically confirming that those are true. Also I would think going from 0 to 1 to 2 potential buyers in this saga would qualify for news, not stop-the-presses news, but at least worthy of some discussion.

I was probably the most vocal person against the decision to close the Megathread - Due to selfishness and nostalgia mostly - But even I have to admit every reason for closing the Megathread is still valid.

I spent a good couple hours working on a "Where are we now" post for the Megathread before it closed, summarizing the situation, and outlining a couple possibilities. I could repost that statement today with no editing.

I'd have no problem with the Megathread going on hiatus this time.

 

[JimAnchower]

I was probably the most vocal person against the decision to close the Megathread - Due to selfishness and nostalgia mostly - But even I have to admit every reason for closing the Megathread is still valid.

I spent a good couple hours working on a "Where are we now" post for the Megathread before it closed, summarizing the situation, and outlining a couple possibilities. I could repost that statement today with no editing.

I'd have no problem with the Megathread going on hiatus this time.

Without names of the groups, there really is nothing to discuss. For all we know, there could be 0, 1, or 2 groups. The fact that these groups have been looking into the team and a new arena for two months and we don't have names is important. And there isn't isn't any news as to who they've talked to. Originally, they were supposed to be revealed at the end of 2018, but now the can has been kicked to the end of the season. Who knows if we'll find out anything more other than "they're still interested, but still looking for an arena."

 

[cbcwpg]

Pagnotta:
2 groups. Both interested. Each waiting to see if they can get an arena deal after purchase. Sounds exactly like IA/LeBlanc not wanting to buy the team unless they had a good lease with COG. We'll just have to wait to see if anyone will build them an arena on THEIR terms. This is fairly simple.

What is new is the apparent admission by someone in the new that the team has 300M in debt. This is about the number we have been throwing around.

And that is because the Commish himself came out and soiled the Glendale market. No one is going to invest a dime in this team unless someone pays for them to have a new home somewhere else.

 

[Tom ServoMST3K]

And that is because the Commish himself came out and soiled the Glendale market. No one is going to invest a dime in this team unless someone pays for them to have a new home somewhere else.

The league has talked the bleep out of both sides of that issue.

If the CoG offered up a big subsidy, they would start singing their praises again.

 

[TheLegend]

And that is because the Commish himself came out and soiled the Glendale market. No one is going to invest a dime in this team unless someone pays for them to have a new home somewhere else.

That may have contributed heavily to the apparent delays we're hearing in them getting anything done locally to date.

 

[aqib]

Or no thread at all until there is news to actually talk about.

You don't have to join/read a thread if you don't want to. There is a thread about the Winter Classic in South Bend going on right now that I don't care about so I don't click on it

 

[awfulwaffle]

You don't have to join/read a thread if you don't want to. There is a thread about the Winter Classic in South Bend going on right now that I don't care about so I don't click on it

I'm a Coyotes fan, so the "business" is my interest, but much of this talk is about nothing.

 

[awfulwaffle]

Confirmation of the teams losses and that the arena runs in the red even without the subsidy, don't qualify as news in the business forum? A reporter stating that there are two parties interested in buying the Coyotes also not news in this forum?

Confirmation how? What was their support? Because someone says it, it makes it true? I'm not denying that the Coyotes lose money, but what makes their numbers so valid?

 

[jonathan613]

So-I just wan tto confirm that the likely expected amount that would be required to rescue the coyotes is 300 milion (debt) plus 450 million (likely team validation) plus 650 million (new arena) . This equals 1.4 billion by my calculations. Seems to be the same amount they are ponying up in seattle. They potentially have the same issue there if a future SoDo arena for an NBA team was ever built.

I do believe that as a long term investment 1.4 billion is not so outrageous for a team and an arena that would compete with TSRA.

 

[powerstuck]

F40 = Forum 40 = the HF Coyotes board.

There are wealthy suburbs all around the Valley. The most money and biggest concentration of it is in Scottsdale, but as I posted in another thread a lot of that money is old; not necessarily the hockey demographic. There is a smaller, less monied core of hockey parents that live on the periphery of the Scottsdale money (Paradise Valley, Fountain Hills, etc.); these are the ones most likely to be season ticket holders as many/most of them are transplants (the people who sell out the Blackhawks, Red Wings, Sabres, and Bruins games). Outside of that area, the conditions around the Valley are pretty much the same - new money popping up in the outer sprawl areas (particularly in North Peoria on the west side, Mesa/Gilbert on the east) while the geographic center areas tend to be the ones most prone to decline.

The thinking from the franchise historically has been that the philosophical home of the team is where the most money, the players/coaches, and the loud minority of hockey parents and transplants live. Whatever initiatives Jerry Moyes had planned to undertake to market the team to his Glendale/West Side peers evaporated when Westgate met the recession and he soured on being a sports team owner. Everyone since him has basically elected to look at Gila River Arena as a long field trip from where the team should be, rather than tapping into the rather large available base of potential fans closer to where they play. IceArizona basically sealed that philosophy in figurative blood by torching every bridge they could with Glendale and getting the NHL to side with them in the pro-subsidy movement, first in Tempe and now on the reservation.

A downtown, or otherwise centrally located arena would be the perfect solution, even tho if not ideal. Because Westgate+recession has shown that future is hard to predict. You build an arena in Scottsdale and you are stuck there for 20+ years but who's to say that the ''hockey money'' will not have moved elsewhere in the region.

 

[The Feckless Puck]

A downtown, or otherwise centrally located arena would be the perfect solution, even tho if not ideal. Because Westgate+recession has shown that future is hard to predict. You build an arena in Scottsdale and you are stuck there for 20+ years but who's to say that the ''hockey money'' will not have moved elsewhere in the region.

You might get some guffaws from some of the Coyotes fans about the idea that a "Scottsdale swoon" could happen, but I think it's plausible - especially in the southern part of the Scottsdale corridor, which has already seen a couple of big upscale shopping projects crater over the past couple of decades. The most recession-proof area of Scottsdale is up in the northeastern area where all of the higher-end housing and upscale shopping/nightlife is booming - which is why I thought, of all of the reservation-land options on the table, Salt River Fields would have been a great spot for a new arena.

Downtown isn't going to happen for the Mutts, not so long as Robert Sarver is the owner of the Suns. Nothing in the proposed renovations to Talking Stick Resort Arena has anything to do with making the place more amenable to hockey. So I guess it's new barn or bust.

 

[royals119]

So-I just wan tto confirm that the likely expected amount that would be required to rescue the coyotes is 300 milion (debt) plus 450 million (likely team validation) plus 650 million (new arena) . This equals 1.4 billion by my calculations. Seems to be the same amount they are ponying up in seattle. They potentially have the same issue there if a future SoDo arena for an NBA team was ever built.

I do believe that as a long term investment 1.4 billion is not so outrageous for a team and an arena that would compete with TSRA.

I don't know why someone would pay off the debt, and pay the owners (supposed) market value. If I'm buying a house, and the current owner has a mortgage, I'm not paying off his mortgage, plus paying him full market value. If I'm paying him market value, he is using the proceeds to pay off his mortgage. If I'm assuming his mortgage, I'm only paying him the difference between the loan balance and market value (his equity). Same thing with buying a business.

If a buyer is paying "market value" for the team, then Barroway can use the proceeds of the sale to pay the debts. If the new owner is assuming the debts, then Barroway is only going to cash out for the difference between the debt and whatever the full value of the team is. Either way, I'd assume they will announce the sale price as the full value, regardless of who ends up with the debt.

 

[MNNumbers]

So-I just wan tto confirm that the likely expected amount that would be required to rescue the coyotes is 300 milion (debt) plus 450 million (likely team validation) plus 650 million (new arena) . This equals 1.4 billion by my calculations. Seems to be the same amount they are ponying up in seattle. They potentially have the same issue there if a future SoDo arena for an NBA team was ever built.

I do believe that as a long term investment 1.4 billion is not so outrageous for a team and an arena that would compete with TSRA.

I don't know why someone would pay off the debt, and pay the owners (supposed) market value. If I'm buying a house, and the current owner has a mortgage, I'm not paying off his mortgage, plus paying him full market value. If I'm paying him market value, he is using the proceeds to pay off his mortgage. If I'm assuming his mortgage, I'm only paying him the difference between the loan balance and market value (his equity). Same thing with buying a business.

If a buyer is paying "market value" for the team, then Barroway can use the proceeds of the sale to pay the debts. If the new owner is assuming the debts, then Barroway is only going to cash out for the difference between the debt and whatever the full value of the team is. Either way, I'd assume they will announce the sale price as the full value, regardless of who ends up with the debt.

I'm with Royals on this one.....

I would say that there are 3 things in play:

1- Team valuation if there were no debt involved
2- Team debt
3- Arena cost

If the team sells it will sell for (1). Barroway would use (1) to pay off (2), and if what is left from (1) is greater than what he paid in the first place, then he gets a profit.

If the team sells for (1), then the new owners have no debt involved. And, if they want to build an arena, then they also pay their share of (3). So, we're talking (1)=500M or so. (3) = 400M or so.

Alternatively, Barroway could sell the organization with the debt included. In this case, since the new owners are responsible for the debt, then the price they pay would be {(1) - (2)}. And, same calculation as before as to whether Barroway made profit or not.

 

[powerstuck]

I'm with Royals on this one.....

I would say that there are 3 things in play:

1- Team valuation if there were no debt involved
2- Team debt
3- Arena cost

If the team sells it will sell for (1). Barroway would use (1) to pay off (2), and if what is left from (1) is greater than what he paid in the first place, then he gets a profit.

If the team sells for (1), then the new owners have no debt involved. And, if they want to build an arena, then they also pay their share of (3). So, we're talking (1)=500M or so. (3) = 400M or so.

Alternatively, Barroway could sell the organization with the debt included. In this case, since the new owners are responsible for the debt, then the price they pay would be {(1) - (2)}. And, same calculation as before as to whether Barroway made profit or not.

Well, the only ''unfair'' thing in this is that I honestly don't think Barroway is responsible for all the 300M or whatever millions the debt is rumored to be.

When he bought the Coyotes, he bought the debt that came with it as well.