Phoenix LVII (or MDCCLXXVI): Declarations of (In)Dependence

kdb209 · Jul 5, 2012

"When in the Course of human events, it becomes necessary for one people to hope to dissolve the political bands which have connected a team with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and what-cities-they-think-deserve-a-team entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all cities are created equal (although some are more equal than others), that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Franchises."

Killion · Jul 5, 2012

dennilfloss · Jul 5, 2012

In-Depend aunts? I've got a couple of those. :sarcasm:

barneyg · Jul 5, 2012

Tommy Hawk said:
This is not a subsidy at QC but it is at Jobing.

The province is never getting its money back, therefore part of the deal is a subsidy. Contrary to Glendale however, there is no subsidy for operating the arena or a team.

Tommy Hawk said:
Do you have the link to the agreement without the NHL team?

French-only:
http://www.ville.quebec.qc.ca/temp/amphitheatre/docs/20110906_faits_saillants.pdf

Summary C&P from a Quebec thread:

barneyg said:
25-year lease with Quebecor

With NHL team:
Rent $4.5-5.5M/yr
10% of non-hockey event profits
Ticket surcharge $4-5/ticket (hockey and non-hockey events)
Naming rights $63.5M total (schedule unclear)

Without NHL team:
Rent $2.5-4M/yr
15% of non-hockey event profits
Same ticket surcharge
Naming rights $33M total

..but this is all for Quebec City, as for something relevant to the Phoenix thread:

pacerhimself said:
Nice cross forum trolling.

Jesus this place is a cesspool.

Sometimes it is. People who disagree with the general opinion are seen as trolls. This is true in the BOH megathread and in the Phoenix Ownership Cluster**** thread. It's sometimes very hard to cut through the crap here (i.e. posts that have nothing to do with business and nothing to do with hockey).

rj · Jul 5, 2012

I find any discussion of Quebec, Seattle, Kansas City, Las Vegas, etc. incredibly beside the point and meaningless. They are only relevant if the NHL decides the team should move. The team is going to move if both the money paid to the NHL by the city and the ownership group is too low for the NHL to justify staying combined with the team's revenue and expenses. So that's where the focus should be.

On those fronts where do we stand? That's all that matters and the most competent poster on this thread on these fronts is Killion historically. You can wax poetic on expansion of the game, or TV contracts, or climates, or whatever: it's all BS. All that matters is dollars and cents and looking at it like an accountant with no emotion attached, because that's how the NHL looks at it. If the team loses money hand over fist with no prospect of profit to where they're unable to attract long-term ownership, the team's going to move: be it the summer of 2012 or the summer or 2017. End of story.

Dado · Jul 5, 2012

Killion said:

The founding fathers wore panty hose?

Tommy Hawk · Jul 5, 2012

The lease agreement with GJ provides ZERO profits of the events to the CoG therefore the CoG providing an AMF to GJ without receiving events profits or any other revenues looks way different than than other AMUL agreements and that is the argument that GWI could be making.

The arena in QC is being built and several on here call that a subsidy same as the situation at Jobing. It is clearly NOT a subsidy (at this point) but a business venture. IF the QC receives 15% of the profits of events at the arena and the profits are $20 mil a year, that's another $3 mil a year to the city.

What does CoG get if GJ books additional activities and reaps profit of $20 mil per year? He still gets his management payment and he gets all the profits.

blues10 · Jul 5, 2012

Tommy Hawk said:
The lease agreement with GJ provides ZERO profits of the events to the CoG therefore the CoG providing an AMF to GJ without receiving events profits or any other revenues looks way different than than other AMUL agreements and that is the argument that GWI could be making.

The arena in QC is being built and several on here call that a subsidy same as the situation at Jobing. It is clearly NOT a subsidy (at this point) but a business venture. IF the QC receives 15% of the profits of events at the arena and the profits are $20 mil a year, that's another $3 mil a year to the city.

What does CoG get if GJ books additional activities and reaps profit of $20 mil per year? He still gets his management payment and he gets all the profits.

The COG does receive $$$$ from ticket surcharges but nothing else. Giving away $100 million worth of parking rights.

cutchemist42 · Jul 5, 2012

At this point, we are simply waiting to see the signatures collected? How quickly would news change once the signature count is known you think?

Dado · Jul 5, 2012

blues10 said:
Giving away $100 million worth of parking rights.

How are those parking rights worth $100M if nobody is going to the games?

blues10 · Jul 5, 2012

Dado said:
How are those parking rights worth $100M if nobody is going to the games?

Hocking came up with the numbers. He also has a set of numbers for non-hockey events which is not $100 million but greater than 0. Parking has value and is a gift. I would really like to see this thing go to court. Hours of enjoyment. :laugh:

Nordskull · Jul 5, 2012

Tommy Hawk said:
The lease agreement with GJ provides ZERO profits of the events to the CoG therefore the CoG providing an AMF to GJ without receiving events profits or any other revenues looks way different than than other AMUL agreements and that is the argument that GWI could be making.

The arena in QC is being built and several on here call that a subsidy same as the situation at Jobing. It is clearly NOT a subsidy (at this point) but a business venture. IF the QC receives 15% of the profits of events at the arena and the profits are $20 mil a year, that's another $3 mil a year to the city.

What does CoG get if GJ books additional activities and reaps profit of $20 mil per year? He still gets his management payment and he gets all the profits.

It's not totally accurate.

Not a single person on this board takes into account that 45% of Quebecor shares belongs to a public corporation named La Caisse de dÃ©pÃ´ts de placements du Quebec which is a 100% public corporation, belonging to the people of the province.

Part of the private profits themselves will get back to the peoples pockets.

With the web these days, its so easy to elaborate and express yourself without knowing all the facts.

I am not blaming, just mentionning for the X time that fact that nobody seems to understand.

Dado · Jul 5, 2012

blues10 said:
Hocking came up with the numbers.

I was under the impression that the consensus here was Hocking is full of ****. And CoG has been routinely mocked in the past for using their numbers.

Yet here you are using their numbers as if they have meaning.

So which is it? Is Hocking right and CoG is giving away something valuable for free, or is Hocking wrong and the city is only giving away something of dubious value?

No Fun Shogun · Jul 5, 2012

I still can't get over how fast these topics keep chugging along despite the fact that nothing's happening....

Dado · Jul 5, 2012

QcBlizzard said:
Not a single person on this board takes into account that 45% of Quebecor shares belongs to a public corporation named La Caisse de dÃ©pÃ´ts de placements du Quebec which is a 100% public corporation, belonging to the people of the province.

That is incorrect. I have in fact brought up the fact that the company involved isn't even a proper private company, and one whose income streams are significantly dependent on gov't sanctioned monopolies or near-monopolies.

This makes the effective subsidy bigger, not smaller.

Hey, I have an idea - why doesn't the Province of Quebec buy the team?

blues10 · Jul 5, 2012

Dado said:
I was under the impression that the consensus here was Hocking is full of ****. And CoG has been routinely mocked in the past for using their numbers.

Yet here you are using their numbers as if they have meaning.

So which is it? Is Hocking right and CoG is giving away something valuable for free, or is Hocking wrong and the city is only giving away something of dubious value?

Hocking is brilliant with numbers. Polllack is great at using Hocking's numbers and Hocking is the COG's most trusted consultant on retainer.

Hocking's numbers are what they are.

Walker's parking analysis does appear to be be the BOH standard when applying a value to parking rights but some people drank the Hocking Kool-Aid and stand by his numbers.

I just want to see a court case over the gift clause. A judge can determine the values once and for all.

yotesreign · Jul 5, 2012

Dado said:
I was under the impression that the consensus here was Hocking is full of ****. And CoG has been routinely mocked in the past for using their numbers.

Yet here you are using their numbers as if they have meaning.

So which is it? Is Hocking right and CoG is giving away something valuable for free, or is Hocking wrong and the city is only giving away something of dubious value?

You know if Glendale's deal with GJ included $100 million upfront cash for that revenue stream they'd all be laughing at how much COG were overpaying, with their own off the cuff analyses of the actual present worth of their projected revenue stream, and snicker at the number. You know it.

I ignore that number and ignore the posts of those who wrap their arms around that number. But let them continue to show the same attributes they fiercely criticized Hocking for concluding to and Glendale for relying on that number last year - it's funnier that way for those of you who still read them.

Mungman · Jul 5, 2012

Dado said:
I was under the impression that the consensus here was Hocking is full of ****. And CoG has been routinely mocked in the past for using their numbers.

Yet here you are using their numbers as if they have meaning.

So which is it? Is Hocking right and CoG is giving away something valuable for free, or is Hocking wrong and the city is only giving away something of dubious value?

I always assume when people use hocking numbers that they forgot the sarcasm smilie :sarcasm:

on their posts.

Kinda like whenever someone uses Forbes' numbers for pretty much anything NHL related.

barneyg · Jul 5, 2012

Tommy Hawk said:
The arena in QC is being built and several on here call that a subsidy same as the situation at Jobing. It is clearly NOT a subsidy (at this point) but a business venture. IF the QC receives 15% of the profits of events at the arena and the profits are $20 mil a year, that's another $3 mil a year to the city.

I'm unsure whether you include me in "several" but you have clearly ignored my post. I have never implied that the QC situation is the same as the Glendale situation. However, the arena financing terms and the lease with Quebecor imply that the province contributes 50% of the cost of the arena without directly getting a single penny back. That is a subsidy. Whether the arena+lease will end up a positive NPV project to the city, we don't know, and I wouldn't call that part a subsidy.

QcBlizzard said:
Not a single person on this board takes into account that 45% of Quebecor shares belongs to a public corporation named La Caisse de dÃ©pÃ´ts de placements du Quebec which is a 100% public corporation, belonging to the people of the province.

Part of the private profits themselves will get back to the peoples pockets.

Fair enough. Part of the province's subsidy will come back to them through QMI profits. The remaining part is a subsidy, i.e. a negative NPV project when only direct cash flows are included, but that the government still undertakes because of its indirect benefits, societal benefits, electoral pandering, etc.

Dado said:
That is incorrect. I have in fact brought up the fact that the company involved isn't even a proper private company, and one whose income streams are significantly dependent on gov't sanctioned monopolies or near-monopolies.

This makes the effective subsidy bigger, not smaller.

That's a lazy ideological argument. You've been concerned with the net direct cost to governments all along and now you're switching to the benefit to the private entity stemming from regulation. For completeness, there are 2 verifiable facts here:

1) 45% public ownership of a company that receives subsidies effectively makes those subsidies smaller, not larger.
2) the public's biggest subsidy to Quebecor is that the CDP grossly overpaid for that 45% share of QMI, and the current value of their investment (assuming they could sell off such a huge block without negatively impacting share price, which is obviously unlikely) is still 900 million below its initial cost. You could argue that the province's involvement in arena construction cost is in part to save face regarding this monumental loss by the CDP.

Killion · Jul 5, 2012

Dado said:
So which is it? Is Hocking right and CoG is giving away something valuable for free, or is Hocking wrong and the city is only giving away something of dubious value?

blues10 said:
Hocking is brilliant with numbers. Polllack is great at using Hocking's numbers and Hocking is the COG's most trusted consultant on retainer.

...well, see, what they did there was to assign a value to the "untapped potential" of the parking revenues as we all know. Not a question of where theyve been, where they are now, but "where they could be", giving mass to matter. No need to employ the Giant Hadron Collider in order to do so. TL Hockings a lot cheaper, always available with his Apostolistic Stylings, recklessly swinging around in his Higgs Boson Chair 78 stories' up.

CasualFan · Jul 5, 2012

Dado said:
I was under the impression that the consensus here was Hocking is full of ****. And CoG has been routinely mocked in the past for using their numbers.

Yet here you are using their numbers as if they have meaning.

So which is it? Is Hocking right and CoG is giving away something valuable for free, or is Hocking wrong and the city is only giving away something of dubious value?

You seem confused, perhaps I can help you:

1- Hocking
The consensus that Hocking is full of crap was formed by those who relied on his projections, not BOH. Hocking botched projections for the original forecast of Jobing.com; TL botched the forecast for Camelback Ranch baseball complex; TL is a defendant in a suit in Prescott for intentionally misleading that entity on projections for their arena.
Hocking is discredited based on the results of his work, not based on BOH consensus.

2- Parking
Hocking forecasts for parking are crap in both scenarios. $100MM with team was garbage (OA can point you to the prospectus) $0 without team is equally garbage.
There is no contradiction. Hocking projections are not credible in either scenario. I am not aware of anyone using Hocking numbers as if they have meaning.

3- Walker Study
The Walker study attempts to value parking at non-hockey events. The projection was arena parking is worth about $3MM per year, net of expenses, not adjusted for NPV.

In an attempt to justify the JIG Lease, Hocking created the assumption that without the Coyotes, parking and naming rights values drop to $0. I have routinely mocked those assumptions. I routinely mocked Hockings $100MM parking valuation with the team.

So much for your "which is it?" moment. Have a good day, Dado

GuelphStormer · Jul 5, 2012

I cannot help but think that this whole "yeah, but the Quebec arena is subsidized" argument is pretty much the same as the previous "yeah, but look at the empty seats in Columbus or Dallas (or even Hamilton or St. John's)" arguments.

They are nothing more than convoluted and meaningless deflection.

Dado · Jul 5, 2012

CasualFan said:
Hocking is discredited based on the results of his work, not based on BOH consensus.

Yes. And? I didn't claim otherwise.

I am not aware of anyone using Hocking numbers as if they have meaning.

As you were so kind to offer assistance to me, I will offer some back in return: a closer, more critical reading of the posts here at HF will reveal them to you.

Have a good day, Dado

Thanks! I usually do.

Dado · Jul 5, 2012

I'm not really clear on how an argument can be "lazy" or "idealogical". I understand how someone making an argument can be "lazy" and/or "ideological", but the argument itself? Don't see it. Are you suggesting I'm lazy?

Anyway, we are all here making arguments, ideologically. Ain't one us here unbiased. From some perspectives, a state-run company mandated to invest pension funds for state employees (badly, of course, but that's another thread), investing in a company whose very existence as an enterprise is dependent on "distinct" treatment from the state, that in turn is investing in an enterprise whose very existence depends on subsidized access to state-funded facilities - well, from some perspectives that looks like subsidy lathered upon subsidy lathered upon subsidy. A veritable pyramid of subsidies, if you like.

From other perspectives, it looks like arms locked on a Paris barricade. Solidarnosc, without the ugly shoes and cigarettes tasting of left-over communism.

Chacun au son gout.

SCP Guy · Jul 5, 2012

If the COG had a harbour the tea would be flying right now LMAO

Phoenix LVII (or MDCCLXXVI): Declarations of (In)Dependence

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