Phoenix LXVIII - "Watch out for that Tree"

[Whileee]

I'll admit my bias upfront and state that I'd prefer that the Coyotes were relocated to QC, preferably tomorrow if at all possible. My suspicion however is that the NHL don't want to walk away from the COG subsidy if at all possible and will probably facilitate the financing of JEG's bid as a last resort - at arms length or otherwise, whatever it takes. If the league is eventually able to pull off having a civic government essentially underwriting a portion of club operations under the guise of "arena management", to such an overt extent, then that sets a great precedent from their perspective with regard to dealing with other civic governments going forward.

Ex the obvious risk of owning that club in that market, the COG subsidy represents free money regardless, period. Free money is appealing to many of us.

Investment usually implies a return on investment, one way or another. So even if an investor has to invest "only" $100 million, he must be thinking whether owning the Coyotes is a better economic proposition than other ways that he could invest that money. That excludes the "vanity owners" and "schemers". The "vanity owners" are more interested in the fun and prestige of owning a professional sports team, and don't mind losing money for their hobby. "Schemers" are usually in it for the prestige as well, but they don't have the money. So they come up with a scheme to get ownership even though they don't have the money. That usually ends up badly. The NHL has some experience with this.

 

[Slashers98]

Coincidently, my birthday is on February 1st, a relocation to Quebec City would be a hell of a birthday gift

 

[Killion]

Why do I get the feeling that Jamison is doing this with all his investors this week...

No need for the pdf cbc, here ya go...

 

[Killion]

I'll admit my bias upfront and state that I'd prefer that the Coyotes were relocated to QC, preferably tomorrow if at all possible. My suspicion however is that the NHL don't want to walk away from the COG subsidy if at all possible and will probably facilitate the financing of JEG's bid as a last resort - at arms length or otherwise, whatever it takes.

Ya, Im sorry Gump, just dont see the BOG's going along with that, some "creative financing" dealeo with Greg Jamison locked into a 20yr no-relo agreement with the COG. Youve got some seriously hurtin units in this league. Why would the NHL in conjunction with Glendales largesse basically just "gift" a franchise to Greg Jamison? Youd have probably 25+ owners calling for Bettmans immediate dismissal. Theres just no way that happens.

 

[CasualFan]

My suspicion however is that the NHL don't want to walk away from the COG subsidy if at all possible and will probably facilitate the financing of JEG's bid as a last resort - at arms length or otherwise, whatever it takes.

Putting up a $90MM-or-so unsecured revolver is an awfully big bite. Will the NHL facilitate that? Keep in mind "the NHL" is a set of 29 entities that are not proponents of losing money. But it certainly seems like there will need to be some critical decision making, and that right soon.

*This of course assumes that the tea leaves are accurate and JIG is short

 

[GF]

Investment usually implies a return on investment, one way or another. So even if an investor has to invest "only" $100 million, he must be thinking whether owning the Coyotes is a better economic proposition than other ways that he could invest that money. That excludes the "vanity owners" and "schemers". The "vanity owners" are more interested in the fun and prestige of owning a professional sports team, and don't mind losing money for their hobby. "Schemers" are usually in it for the prestige as well, but they don't have the money. So they come up with a scheme to get ownership even though they don't have the money. That usually ends up badly. The NHL has some experience with this.

Agreed. No one is in the business of losing money. Right now, the Coyotes are bleeding money. The asking price is not the problem (well it is to some point) but the return on investment is negative. The amount of money needed to turn the market around will take years to recoup and that's if the market can turn. The worst of it all is, even with the subsidy, this team will lose money, and the GWI still hasn't spoken yet. Oh my, if GJ buys the team, this is FAR from over.

 

[powerstuck]

I'll admit my bias upfront and state that I'd prefer that the Coyotes were relocated to QC, preferably tomorrow if at all possible. My suspicion however is that the NHL don't want to walk away from the COG subsidy if at all possible and will probably facilitate the financing of JEG's bid as a last resort - at arms length or otherwise, whatever it takes. If the league is eventually able to pull off having a civic government essentially underwriting a portion of club operations under the guise of "arena management", to such an overt extent, then that sets a great precedent from their perspective with regard to dealing with other civic governments going forward.

Ex the obvious risk of owning that club in that market, the COG subsidy represents free money regardless, period. Free money is appealing to many of us.

I cannot agree with this for one and only one reason. Why would you want to cash in $300M over 20 years when you can get the same amount of money in about 2 weeks if you tell Seattle, Quebec and Hamilton groups that Coyotes are moving after their 48th game of 2012-2013 season.

 

[Seattle Totems]

Personally, I'd be ok if the NHL were to broker another temporary subsidy from the CoG while they constructed an arena in Seattle or Quebec. I don't see the new council going for it though. Jan 31 is probably it for the Coyotes.

 

[Gump Hasek]

I cannot agree with this for one and only one reason. Why would you want to cash in $300M over 20 years when you can get the same amount of money in about 2 weeks if you tell Seattle, Quebec and Hamilton groups that Coyotes are moving after their 48th game of 2012-2013 season.

The league can angle for more $$$ from those cities and prospective owners if other cities (COG) are subsidizing teams to such an extent, and especially given that the availability of franchises is limited and finite. If they attain that subsidy then the team stays put. Franchise price/value goes up when they become more difficult to obtain. Yes there are a limited number of potential buyers and cities, but the league logically probably prefers to maintain the appearance that availability is at the very least equally as limited.

 

[Gump Hasek]

Putting up a $90MM-or-so unsecured revolver is an awfully big bite. Will the NHL facilitate that? Keep in mind "the NHL" is a set of 29 entities that are not proponents of losing money. But it certainly seems like there will need to be some critical decision making, and that right soon.

*This of course assumes that the tea leaves are accurate and JIG is short

It is an awfully big bite, but if someone like an MSD Capital (for example) can be convinced to lend the money (at a preferable rate to the lender), the risk on that loan to the financier is probably a bit less given that a civic government is theoretically underwriting a portion of the business risk and given that revenue sharing payments could increase with the additional new revenue share welfare funds that came out of the new CBA. That thumbnail risk assessment excludes the possibility of a future civic default of course.

 

[OthmarAmmann]

I'm still a bit surprised with the spasm of interest over the "countdown". If there has been any lesson in the Coyotes' saga, it is that there is no such thing as a deadline. I, for one, would be surprised if there is an ending of any kind by January 31.

Putting up a $90MM-or-so unsecured revolver is an awfully big bite. Will the NHL facilitate that? Keep in mind "the NHL" is a set of 29 entities that are not proponents of losing money. But it certainly seems like there will need to be some critical decision making, and that right soon.

*This of course assumes that the tea leaves are accurate and JIG is short

and compete with the franchise in question

 

[Major4Boarding]

Still though, I believe MSD would still call for the entire Franchise as collateral. Like before and like with the Panthers.

Another thought I had was, wouldn't have GJ gone and done an arrangement with MSD to set the foundation for the purchase costs and perhaps is just struggling to shore up the op costs associated?

Just thinking out loud here

 

[kdb209]

No. And not that either. We're talking the mid 1980's nostalgic throwback tune by Canadian rocker Bryan Adams, harkening back to a simpler time, lamenting how "the times are changing" and "nothing can last forever". You hear that, BOH Coyotes enthusiasts? Nothing can last forever. Or can it?

Phoenix LXIX: The Thread of '69

Great minds think alike (*) - I already had this one ready.

Gary got his first real franchise
Bought it at a five-and-dime
Paid it 'til my ledgers bled
It's now the Thread of LXIX.

DJ and some guys from school
Had a fund and they tried real hard
Reinsdorf quit and Matt got nowhere
We shoulda known Gramps would never get far
Oh when I look back now
Those threads seemed to last forever
And if I had the choice
Ya - I'd always wanna be there
Those were the best threads of my life

(*) Now we just gotta find a couple to prove it.

 

[Whileee]

Putting up a $90MM-or-so unsecured revolver is an awfully big bite. Will the NHL facilitate that? Keep in mind "the NHL" is a set of 29 entities that are not proponents of losing money. But it certainly seems like there will need to be some critical decision making, and that right soon.

*This of course assumes that the tea leaves are accurate and JIG is short

Well, it seems almost by definition that JIG is short, or has been until very very recently.

 

[Killion]

The league can angle for more $$$ from those cities and prospective owners if other cities (COG) are subsidizing teams to such an extent, and especially given that the availability of franchises is limited and finite. If they attain that subsidy then the team stays put. Franchise price/value goes up when they become more difficult to obtain. Yes there are a limited number of potential buyers and cities, but the league logically probably prefers to maintain the appearance that availability is at the very least equally as limited.

Topsy turvy World Gump. The value of a franchise propped up by municipal, state or provincial subsidies, welfare. Those days are over, gone pretty much everywhere. Kansas City could have had a franchise, be it NBA, NHL or both, particularly so with AEG in their corner, yet Mayor Sly James has adamantly refused to entertain any notions of direct subsidies, letting it be known that any pro franchise taking up residency at the Sprint Centre does so on their own dime.

Read any of the local KC papers, blogs or chat boards, and the sports fan's none too happy about it, as like Hamilton & elsewhere, they supported the construction of the building having been led to believe that in doing so they'd be playing in the Big Leagues. Well, the bubbles burst. I think any reasonable official elsewhere, particularly those elected to office winces' at what Glendales willing to provide. Arizona in general really. Realizes its untenable if what their providing is supposed to be the standard. Wont even bother trying to compete for a franchise if & when one does ever become available.... and your bang on about them giving the impression that availability is limited, finite, exclusive, however as I state, the gamesmanship's grown stale. People have woken up to the realities.

 

[CasualFan]

It is an awfully big bite, but if someone like an MSD Capital (for example) can be convinced to lend the money (at a preferable rate to the lender), the risk on that loan to the financier is probably a bit less given that a civic government is theoretically underwriting a portion of the business risk and given that revenue sharing payments could increase with the additional new revenue share welfare funds that came out of the new CBA. That thumbnail risk assessment excludes the possibility of a future civic default of course.

I defer to OA, Barney and the finance guys but I’m with M4B on this. It seems to me that in that scenario an entity such as MSD would be a senior secured debt, which would likely defeat the purpose as the JIG “owners†would be subordinating their position in order to close the transaction. That doesn't seem like a very sound investment strategy. Because when if the franchise tanked again, the music would stop and the JIG investors would be left without a chair.

I'm pretty far out of my depth on all this, so I'll shut up now.

 

[nhlfan79]

Publicly, more than just a few Thrashers' fans suspected the jig was up as early as 2009/10 (some a lot earlier) when it became apparent that ASG was proving impossible to work with in terms of facilitating a local sale, pretty clear they simply wanted the team gone. There was no "long goodbye", ASG maintaining the charade that they hoped to sell locally right through the 2010/11 season. Some first class digging & reporting by the Atlanta Journal Constitution throughout 2010/11 (and earlier) however did expose ASG's duplicity so though suspected what was to come, never publicly confirmed by ASG, the NHL, the season over for the Thrashers by the time any of it really hit the fan (literally & figuratively).

That's pretty much it, Killion. Thank you for being a rare voice of reason whenever the Atlanta situation comes up. We fans knew very well that the owners were actively working to destroy the team and salt the NHL earth here, despite their implausible and repeated denials over the course of many years. We could see it with our own eyes. By the end, it was laughable, as we barely fielded an AHL roster that last half-season. Door giveaways were reduced from bobbleheads, team calendars, posters, etc. to things like cheap Delta luggage tags.

ASG didn't want the team, and furthermore, felt threatened by the possibility of a successful hockey team in another owner's hands because it would compete for the fans' precious winter sports dollars that they hoped the Hawks could corner.

While the Hawks are doing ok on the court, they don't draw flies except for a couple of games when other marquee teams come in. The fanbase here saw what happened and won't give them their business. We all hope and pray they sell. Til then, we're hostages to their arrogance, lies, and general ineptitude.

 

[GuelphStormer]

Unless Jamison closes the deal by Jan 31, nothing will be over. However, if will almost certainly be effectively over. The new city board was put in place, at least partially, due to their stance that the deal currently out there is bad for the city. So you have to figure that any new deal with Jamison will be better for the city. Whether a new proposed deal is for $150 million or $200 million or $75 million, doesn't really matter. The question would then become, if Jamison couldn't close the deal when it was much better for him, why would anyone think he could close a deal that is worse for him?

So the by far the most likely option is that the season goes along and the NHL plays out the string. No one will say much either way until after the season.

well, one thing is for sure ... the subsidy ain't gonna get any better for this hockey team on feb1.

i agree, jan31 is the effective best before date

 

[Killion]

Still though, I believe MSD would still call for the entire Franchise as collateral. Like before and like with the Panthers.... Another thought I had was, wouldn't have GJ gone and done an arrangement with MSD to set the foundation for the purchase costs and perhaps is just struggling to shore up the op costs associated?... Just thinking out loud here

Ya, I just dont see ANY private investment firm, particularly those specialising in sports & entertainment properties touching this deal with a barge pole. Absolutely not. Even if the franchise was put up as collateral it isnt portable under the existing Lease Agreement and thats the only way you might be able to recoup whatever amount of money you'd lent to the JIG. Secondly, if the AMF payments are being used as collateral to service the payments on the loan, an advance against receivables, you take a look at Glendales state of affairs, possibly headed for a municipal bankruptcy even without the added burden of that hugely inflated obligation. They could easily default. So unless your actually counting on that happening in order to move the team, which is a pretty nasty way to be operating.... As for Florida, the Panthers arena operations through SS&E at least have their act together, the building one of the busiest in North America. But Glendale? With whats transpired? Just dont see it as being remotely plausible that MSD or anyone else backs Jamison on that play.

 

[WildGopher]

That's pretty much it, Killion. Thank you for being a rare voice of reason whenever the Atlanta situation comes up. We fans knew very well that the owners were actively working to destroy the team and salt the NHL earth here, despite their implausible and repeated denials over the course of many years. We could see it with our own eyes. By the end, it was laughable, as we barely fielded an AHL roster that last half-season. Door giveaways were reduced from bobbleheads, team calendars, posters, etc. to things like cheap Delta luggage tags.

ASG didn't want the team, and furthermore, felt threatened by the possibility of a successful hockey team in another owner's hands because it would compete for the fans' precious winter sports dollars that they hoped the Hawks could corner.

While the Hawks are doing ok on the court, they don't draw flies except for a couple of games when other marquee teams come in. The fanbase here saw what happened and won't give them their business. We all hope and pray they sell. Til then, we're hostages to their arrogance, lies, and general ineptitude.

I give credit to fans who don't take the guff bad ownership dishes out. More power to those Atlanta fans who've stopped giving their money to the Hawks/Thrashers owners who played games with their franchises. I understand Coyotes fans staying away from the Job with with the way the NHL has played that city. People ask how Minnesota could have lost an NHL team, but fans there, including me, just stayed away from arrogant owners like the Gunds and later when we realized what Norm Green was up to. There are better things to do with your money than to feed someone's agenda when their greed totally ignores the fans who are supporting them.

 

[sipowicz]

Personally, I'd be ok if the NHL were to broker another temporary subsidy from the CoG while they constructed an arena in Seattle or Quebec. I don't see the new council going for it though. Jan 31 is probably it for the Coyotes.

What would be the point, you would actually make money in Quebec in the old Collisee', sales on merchandise alone in QC would be more than the Coyotes would make on ticket sales. This sheet show has gone on long enough. The fact that the Coyotes made it to the western final seems lost on the people of Arizona, heck I even wonder if you would fill Jobbing if the tickets were free.

 

[Gump Hasek]

I defer to OA, Barney and the finance guys but I’m with M4B on this. It seems to me that in that scenario an entity such as MSD would be a senior secured debt, which would likely defeat the purpose as the JIG “owners” would be subordinating their position in order to close the transaction. That doesn't seem like a very sound investment strategy. Because when if the franchise tanked again, the music would stop and the JIG investors would be left without a chair.

I'm pretty far out of my depth on all this, so I'll shut up now.

I agree with you and am not arguing the merits of the business case whatsoever. The risk that the "owner" can be so easily eventually be subordinated often doesn't stop people from taking such risks however. Not sure why but the prospect of such a large amount of free governmental subsidy money is certainly alluring.

My only position is that the NHL would surely love to retain that COG subsidy in their arsenal for future reference when dealing with others which is why it wouldn't surprise me to see them help things along that path, if at all possible.

 

[halligan10]

Ive been reading everyday for a long time. In the last few weeks, the word "Quebec" has been usef here more than ever. Its also being used by intelligent and regular members....this tells me that commun sense is on the edge of happening. Good Friday to everyone!

 

[viper0220]

What would be the point, you would actually make money in Quebec in the old Collisee', sales on merchandise alone in QC would be more than the Coyotes would make on ticket sales. This sheet show has gone on long enough. The fact that the Coyotes made it to the western final seems lost on the people of Arizona, heck I even wonder if you would fill Jobbing if the tickets were free.

With all the funds(money) Glendale has given to the NHL, I can see why the NHL gives them time.

 

[viper0220]

I agree with you and am not arguing the merits of the business case whatsoever. The risk that the "owner" can be so easily eventually be subordinated often doesn't stop people from taking such risks however. Not sure why but the prospect of such a large amount of free governmental subsidy money is certainly alluring.

My only position is that the NHL would surely love to retain that COG subsidy in their arsenal for future reference when dealing with others which is why it wouldn't surprise me to see them help things along that path, if at all possible.

Totally agree with you.