Phoenix LXXVIII: Know When To Hold 'Em, Know When To Fold 'Em

[farscape1]

http://ca.sports.yahoo.com/news/ap-sources-coyotes-sale-approved-165911771--nhl.html

The NHL has approved the sale of the Phoenix Coyotes to a group of Canadian-led investors, but the deal is contingent on reaching a lease agreement with the city of Glendale, two people familiar with the situation told The Associated Press.

 

[TheLegend]

Right, not your opinion. It's an interpretation. An interpretation that ignores all revenue. A similar interpretation would conclude ExxonMobil should receive $403 billion in subsidies from the Federal government.

For the purposes of the management agreement the costs of construction are sunk. All that matters are incremental costs and revenues.

Revenues don't play into what it costs to operate a facility to a certain degree. I do facility maintenance for a living (35+ years worth) so I am looking at this purely from the costs standpoint.

Yes... you certainly need a return to offset those costs. But the question now becomes are those returns currently good enough.... or can you increase those returns without increasing the costs? Or can a small increase in costs get you a return that far exceeds those costs.

That's a totally different argument.

 

[OthmarAmmann]

Many sites are now stating that the sale is Renaissance is approved by the NHL now

http://espn.go.com/nhl/story/_/id/9...sale-approved-hurdle-remains-according-report

Though still contingent on a lease of course. Anyone know if the BoG did or can give formal approval without the lease or perhaps just its's a misinterpetation from yesterday's events?

Pretty sure they're misinterpreting "agreement" with "approval". That would make them 3 for 4 on agreements to sell, with the only failure IEH v1.0. That was the only case where the acquirer was negotiating a lease with the city before negotiating the acquisition of the franchise from the NHL.

 

[aqib]

What does everyone think of any of Clark's posts?

I didn't like the fact she took a shot at Arthur Thurston. He's been my favorite character throughout this saga. If I had a sports talk show I would have Arthur Thurston on once a week.

 

[OthmarAmmann]

Revenues don't play into what it costs to operate a facility to a certain degree. I do facility maintenance for a living (35+ years worth) so I am looking at this purely from the costs standpoint.

Yes... you certainly need a return to offset those costs. But the question now becomes are those returns currently good enough.... or can you increase those returns without increasing the costs? Or can a small increase in costs get you a return that far exceeds those costs.

That's a totally different argument.

Yes, you do need a certain return to offset the costs, particularly when $6 million of the $12 million total expenses are direct costs related to events. You might want some direct revenues to offset those direct costs.

edit: and some revenue to offset the allocation of Daly's salary and the allocation of the expenses of the war room in TO.

 

[Mightygoose]

One thing that confounds me is most of the Canadian media not giving Quebec much or any chance. Are they following the NHL spin or what? When Atlanta moved, leaks came out of Atlanta but now we have the NHL as the owner. Could the NHL be intentionally waging a war of misdirection? Personally I think yes.

Have noticed that as well. My thought is since the league wants to control message, they want the big Canadian media companies to just tow the party line until it's the right time to announce a move to QC if it happens. Anyone that steps out of line will jeopardizec their chances at the next Cdn TV deal. Just my speculation on that part.

Last thing the leagues wants is pandemonium to break up here early, just for the Yotes stay at the end. Historically, that will create bad PR in Canada which they would also like to avoid.

 

[rt]

I feel like if his is all just an elaborate plot by the NHL to save safe, that they took it a little far with the Maloney contract. Why do that just days prior to pulling the plug? Doesn't add up.

 

[TheLegend]

Funny....

because we all know that maybe the Majority of this council won't vote for this, but if Joyce was still on the council, she would be voting for spending "whatever-it-takes" without question.

Speculation......

She voted against Scruggs and Beasley's $100 million parking rights deal for Hulsizer. And she was on record she was not real keen on the second $25 million ("insurance premium") but felt there wasn't another alternative that would allow the team to remain there, but also added that she would not vote for a third.

 

[Donwood]

I feel like if his is all just an elaborate plot by the NHL to save safe, that they took it a little far with the Maloney contract. Why do that just days prior to pulling the plug? Doesn't add up.

It was probably with the consent of Quebec, if not well then Quebec needs to buy him out. I think it was a reward for having to deal with the NHL as owner in the previous years.

 

[TheLegend]

Sounds about right. I would suggest that the emergency service unions are a more immediate concern than Goldwater Institute. The Council that couldn't shake loose $850k to keep fire stations open is going to exceed $6MM AMF to subsidize hockey operations? Politicians who aspire to long careers generally tread lightly around big labor. Mayor Weiers very much appears to be a politician who aspires a long career.

Weiers was backed by both police and fire unions during the elections.

 

[OthmarAmmann]

I feel like if his is all just an elaborate plot by the NHL to save safe, that they took it a little far with the Maloney contract. Why do that just days prior to pulling the plug? Doesn't add up.

I'm pretty certain they want to stay there. They've said as much dozens and dozens of times. It's a market with a much larger profile in the U.S. and they just moved one franchise to Winnipeg. Whether it's best or not, they clearly want to stick around. The issue of course is that the other 29 owners don't want to pay to stay there. It's the same problem with the league's growth strategy, where the investment to grow the game is concentrated in a just a few franchises that have the least margin for error in their operations.

 

[checkerdome]

I feel like if his is all just an elaborate plot by the NHL to save safe, that they took it a little far with the Maloney contract. Why do that just days prior to pulling the plug? Doesn't add up.

I was struck by how Don Maloney used the word "franchise", as opposed to "the Phoenix Coyotes", in his official statement after signing his contract.

"I am grateful to continue working for this franchise," Maloney said in the statement. "We have a strong core of talented people, both on and off the ice, who are committed to building a championship team and a first-class organization. I would like to thank NHL Commissioner Gary Bettman and Deputy Commissioner Bill Daly for their tremendous support these past few years."

What he said was generic enough in nature as to apply to an NHL team in any city.

 

[wpgallday1960]

Revenues don't play into what it costs to operate a facility to a certain degree. I do facility maintenance for a living (35+ years worth) so I am looking at this purely from the costs standpoint.

Yes... you certainly need a return to offset those costs. But the question now becomes are those returns currently good enough.... or can you increase those returns without increasing the costs? Or can a small increase in costs get you a return that far exceeds those costs.

That's a totally different argument.

Unfortunately for the COG, they can't afford to focus solely on just the costs.

 

[farscape1]

Since this is pretty much a done deal, I kind of feel bad for Quebec. Don't see the league expanding right now to only 1 team. So it will be a while for Quebec and that's sad.

Even with solid ownership, will the team still make enough money in Phoenix and get enough fans to games?

 

[Ugmo]

Since this is pretty much a done deal, I kind of feel bad for Quebec. Don't see the league expanding right now to only 1 team. So it will be a while for Quebec and that's sad.

Even with solid ownership, will the team still make enough money in Phoenix and get enough fans to games?

Ummm.... maybe you should read the last few pages of the thread. Almost no chance that the CoG will offer more than 6 million in arena management money, thus the Coyotes are all but gone.

 

[Nordskull]

One thing that confounds me is most of the Canadian media not giving Quebec much or any chance. Are they following the NHL spin or what? When Atlanta moved, leaks came out of Atlanta but now we have the NHL as the owner. Could the NHL be intentionally waging a war of misdirection? Personally I think yes.

Not that strange.

Half of the media owned by PKP enterprises... therefore, cannot campaign for Quebec on Bettman's order.

The other half controled by Bell media, PKP's enterprises arch rival. They dont want to see a team in Qc as they will loose monopoly.

 

[wpgallday1960]

Since this is pretty much a done deal, I kind of feel bad for Quebec. Don't see the league expanding right now to only 1 team. So it will be a while for Quebec and that's sad.

Even with solid ownership, will the team still make enough money in Phoenix and get enough fans to games?

I wouldn't call this a done deal at all. Lets see what kind of lease/AMF Gosbee wants from the COG before we jump to any conclusions.

 

[Acesolid]

Since this is pretty much a done deal, I kind of feel bad for Quebec. Don't see the league expanding right now to only 1 team. So it will be a while for Quebec and that's sad.

Even with solid ownership, will the team still make enough money in Phoenix and get enough fans to games?

Oh oh oh! I'm remembering that comment for a future laugh!

 

[farscape1]

Oh oh oh! I'm remembering that comment for a future laugh!

Nah im sure the league has talked to COG and probably have that lease pretty much wrapped up. Why go thru this mess and let the little details like the lease to break it all up.

 

[Donwood]

Not that strange.

Half of the media owned by PKP enterprises... therefore, cannot campaign for Quebec on Bettman's order.

The other half controled by Bell media, PKP's enterprises arch rival. They dont want to see a team in Qc as they will loose monopoly.

Excellent Point

 

[xzchief]

Weiers was backed by both police and fire unions during the elections.

If Weiers wants to keep that backing, he won't support more subsidies for the Coyotes at the expense of police and fire. Otherwise, the unions will find somebody else to support.

 

[xzchief]

Nah im sure the league has talked to COG and probably have that lease pretty much wrapped up. Why go thru this mess and let the little details like the lease to break it all up.

Nine million dollars (the difference between the $6-million AMF currently budgeted and the $15 million Team Gosbee supposedly wants) is not a little detail.

 

[madhi19]

I was struck by how Don Maloney used the word "franchise", as opposed to "the Phoenix Coyotes", in his official statement after signing his contract.

"I am grateful to continue working for this franchise," Maloney said in the statement. "We have a strong core of talented people, both on and off the ice, who are committed to building a championship team and a first-class organization. I would like to thank NHL Commissioner Gary Bettman and Deputy Commissioner Bill Daly for their tremendous support these past few years."

What he said was generic enough in nature as to apply to an NHL team in any city.

Well Don is not stupid he even viewed as one of the best GM in the league. It would be a shame to lose him if PKP decide to get somebody else but I have a feeling that not the case.

 

[farscape1]

Nine million dollars (the difference between the $6-million AMF currently budgeted and the $15 million Team Gosbee supposedly wants) is not a little detail.

So let me get this straight. Team Gosbee wants COG to give them a lease for free and also pay $15M/yr.

Well thing is, if the team leaves, how much will COG be on the hook for?
Sorry I don't keep up with all of this and not sure what AMF means or any of that.

How much does it cost COG a year to run the Arena?

 

[JB52]

How much does it cost COG a year to run the Arena?

See, it took you 10 minutes to come up with that question.

It took Glendale 4 years.