Phoenix Part XXXII: Bridge over Troubled Goldwater

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pirate94

Registered User
Mar 18, 2010
1,713
1
Can he even do that? Irrelevant.

Nothing about this situation has been "smart." I don't have any reason to suspect that should, or will, change anytime soon.

Can he do it? i'm sure he's smart enough to figure out that a company of his could possibly purchase the bonds.

Why wouldn't he do it? Because he's smart enough to know that he could lose lots of money
 

Retail1LO*

Guest
Can he do it? i'm sure he's smart enough to figure out that a company of his could possibly purchase the bonds.

Why wouldn't he do it? Because he's smart enough to know that he could lose lots of money

Assuming it's not some sort of conflict of interest...

He's only interested in buying the team if he pays $70M, and someone else raises $100M by selling bonds. If he was going to purchase the bonds, why wouldn't he just buy the team outright?

I guess I don't understand what's to be gained by sinking 100M in bonds instead of the team itself.
 

PitbulI

Registered User
Dec 22, 2010
415
44
Interesting comment. I would think the city has to try and sell the bonds. Afterall they voted on it, by a 4 to 3 margin they decided to go for it. How can they change their minds without voting on it again?

If the COG has washed their hands of this, why would they tell anyone?

If they do, they no longer have that 25 million set for the NHL to collect interest on. It would be smart for COG to hold onto that until the deadline and until prompted for it by the NHL.

Between now and a deadline, many things could happen to change the deal entirely. It's strange that no one else has stepped up to purchase this franchise since they all know what the COG is willing to do to keep losses to a minimum.
 

Retail1LO*

Guest
Which brings us back to the statement...there are no more bonds for sale. Followed a few weeks later by, we have buyers for half of them. Who knows?

No MORE bonds for sale? Or no bonds for sale?

From my understanding, they have to sell all, or none of them. If they have buyers for half of them, they won't actually sell until such time as someone's lined up to buy the other half. There really aren't any bonds TO sell, until such time as there's a contingency in place to move enough, or "all", of them to make up the 100M.

I'm thinking the only people who will ultimately find this to be a good investment, are those who Bettman cons into believing such. I think if the bonds move, there will have been some serious politics involved.
 

Retail1LO*

Guest
If the COG has washed their hands of this, why would they tell anyone?

If they do, they no longer have that 25 million set for the NHL to collect interest on. It would be smart for COG to hold onto that until the deadline and until prompted for it by the NHL.

Between now and a deadline, many things could happen to change the deal entirely. It's strange that no one else has stepped up to purchase this franchise since they all know what the COG is willing to do to keep losses to a minimum.

Is it strange? I don't know why you think this. The fact that Hulsizer, or anyone else, is only interested with the inclusion of massive subsidies, shows that anyone that's interested at ALL, knows this is risky at best. No one's going out of their way to put themself in any kind of grave risk. No one thinks so highly of this as a sound investment to just waltz in and pay the piper. Minus the league's insistence to include the losses they've incurred running the franchise, the asking price is about as stripped down as you could hope to see. And despite the asking price, and the concessions available, there just aren't a ton of people lining up to purchase a team in the desert, that's shown nothing but a propensity for losing money, with no chance of being able to relocate it if it continues.
 

pirate94

Registered User
Mar 18, 2010
1,713
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It's strange that no one else has stepped up to purchase this franchise since they all know what the COG is willing to do to keep losses to a minimum.


Anything that loses $500 million dollars won't exactly create lines of investors out the back door
 

HamiltonFan

bettman's a Weasel
May 4, 2009
655
2
Brand new. The Colorado Rockies paid indemnification fee's when they moved to NJ to the Isles, Rangers & Flyers (broadcasting infringements) and Disney paid McNall a chunk of change when they opened up shop in Anaheim, but thats it, The relo fee would be a new one for the league, an enforceable & acceptable practice. In the case of the Coyotes, complicating matters would be Baum having ruled that any relo fee's derived through off-sale would be allocated to the Moyes' BK'd estate. Im sure "private" arrangements could be made to satisfy all parties, but dont be expecting any largesse' or discounts from the NHL in letting a Winnipeg or QC in at bargain basement prices.

Disney didn't pay McNall anything. In '93, Florida and Anaheim entered the league and both paid $50 million. $25 million of Anaheim's fee was given to LA for territorial fees, so the NHL only saw $25 mil of the Anaheim money. The NHL effectively ate $25 million, as they would have been able to collect the full $50 million from any other city (as they did with florida) that didn't have territorial infringement concerns. Disney simply refused to pay anything over $50 million total. Disney told the nhl to jump, and the nhl asked 'how high?'.
Just another example of preferential treatment to those precious southern US cities.
 

goyotes

Registered User
May 4, 2007
1,811
0
Arizona
Just a thought. IF (and it is a big if) the NHL is so intent on keeping the Coyotes in Arizona. And the NHL cannot lower the price of a franchise without upsetting all the other owners and costing them money as well. But MH isn't going to up his ante to make up the difference because he believes the franchise is already being over-valued.

Would a compromise be to sell the team at the current estimated price of around $200M, but have the NHL purchase the remaining $50M in bonds at a reasonable interest rate of say 6%. The worst case, according to the GWI, is if the deal goes through and the GWI wins in court, the bonds lose their tax-exempt status but the CoG taxpayers still are on the hook for the bonds. So, the NHL doesn't lose its investment and I don't think the deal gets undone so the NHL's big risk is about a 2% interest rate margin on tax-emempt versus taxable investments.

For this, the NHL gets the owners' money back up front on the sale of the team, keeps franchise values high, and maintains control of where it sends its teams.

Putting aside any outrage that the NHL might do this for Phoenix and did much less for Winnipeg and other relocated markets, what is the "objective" opinion on whether this sort of compromise might just fly?
 

Furkmyster

Registered User
May 5, 2007
138
8
Manitoba
Brand new. The Colorado Rockies paid indemnification fee's when they moved to NJ to the Isles, Rangers & Flyers (broadcasting infringements) and Disney paid McNall a chunk of change when they opened up shop in Anaheim, but thats it, The relo fee would be a new one for the league, an enforceable & acceptable practice. In the case of the Coyotes, complicating matters would be Baum having ruled that any relo fee's derived through off-sale would be allocated to the Moyes' BK'd estate. Im sure "private" arrangements could be made to satisfy all parties, but dont be expecting any largesse' or discounts from the NHL in letting a Winnipeg or QC in at bargain basement prices.

Was the relocation fee only driven by Balsillie and infringing on the Leafs/Sabres territories though? Or did Baum specifically rule that the Coyotes moving was going to have a relo fee allocated to the BK estate? I have a very difficult time believing TNSE would be willing to pay $210mill + $? million relo fee.
 

DeathToAllButMetal

Let it all burn.
May 13, 2010
1,361
0
Expansion plans "Southward Ho" were set prior to Bettmans appointment; painting the guy as the one primarily responsible for the relo's out of Winnipeg, QC & Hartford is both revisionist & completely unfair. In wishing for a new Commissioner, be careful, because you could well wind up with one that is truly pro-American in terms of franchise location, possibly a contractionist, leaving Canada with 3 teams, let alone the possibility of 9 some sunny day.

All due respect, that's impossible. The CDN clubs are already sending loads of cash south to keep the NHL afloat through a good chunk of the US. Even if you contracted back to 21 teams, it's hard to imagine any scenario where even a single one of the CDN teams would be scrapped. The US owners would be insane to authorize something like that, no matter how pro-American any Bettman successor might be.

Of course not. Hockey is a MotherHood issue up here as you well know, however, when guys' like Shoalts, Brunt & McCown et al pour on the Kerosene it doesnt help matters for Canada or Canadian fans one little bit. Its absolutely undeniable that these guys along with many other pundits harbor simmering resentments' towards the league in general, Gary Bettman specifically. The medium is the message, they've got their soapboxes, they spew invective & theory that does nothing but lather up a wide swath of the fan base in forming opinion.

Ive wondered about this as well. We know the NHL's inflexible in its price & terms for a local sale, losses last year (09-10 @ $25M) and in staying put as they did for 10-11 with the COG providing $25M to cover losses, now reportedly as high as $40M, were looking at app. $205M. The league likes to claim franchise value is roughly $200M so either they get $205M from Hulsizer/COG or the same plus a $15-$25M relo fee from TNSE. Though I put no credence in Atlanta moving, hypothetically if they did, Im sure the NHL would charge TN whatever the difference in sale price might be with a relo fee in order to clear the bar of $200-$225M. Based on franchise values elsewhere, Id say thats actually a pretty reasonable & equitable price for Winnipeg or QC to pay for a relo'd team.

But that's crap. Tampa went for something like $110 million. Buffalo went for $175 million. The NHL can claim approximate franchise value of $200 million, but good luck getting it for about 75% of the teams in the league.

Also, the NHL can't just slap a tax on owners looking to sell clubs for relocation. It would wind up in a huge legal battle and put a chill on the franchise marketplace. Look at it this way. Atlanta Spirit sells to TNSE for $170 million, after it gets offers of half that to keep the team in the city. The NHL steps in and says no way, or maybe way, if you give us $100 million for a relocation fee to get up to what the league deems a franchise value to be. The deal then collapses.

Who's happy with this scenario? You've enraged the Atlanta owners and TNSE, and are also possibly forcing another bankruptcy scenario as the best way for the owners to escape. In the end, the NHL cannot force owners to operate with huge losses just because it wants to decide what teams are worth, or even what markets it wants to deal with. At some point, an existing owner is going to up and sell to a TNSE or Quebecor and force the issue. Then we'll see the NHL quietly cave.

Based on all of that, how comfortable would you feel buying an NHL club? Why sink money into a team outside of the core money makers like Toronto, Montreal, Philly, etc. if you would be forbidden by the league from even getting your money back if the only buyer during a sale demanded relocation?

The NHL has to be really careful with this sort of thing. You don't want a ton of uncontrolled relocation, but you can't hamstring the right to move, either, because that will incense some current owners and make possible new investors think twice. It's not like the NHL is working from a huge position of strength here, either. The league has at least six clubs in serious financial trouble, and more on the bubble.
 

DeathToAllButMetal

Let it all burn.
May 13, 2010
1,361
0
Just a thought. IF (and it is a big if) the NHL is so intent on keeping the Coyotes in Arizona. And the NHL cannot lower the price of a franchise without upsetting all the other owners and costing them money as well. But MH isn't going to up his ante to make up the difference because he believes the franchise is already being over-valued.

Would a compromise be to sell the team at the current estimated price of around $200M, but have the NHL purchase the remaining $50M in bonds at a reasonable interest rate of say 6%. The worst case, according to the GWI, is if the deal goes through and the GWI wins in court, the bonds lose their tax-exempt status but the CoG taxpayers still are on the hook for the bonds. So, the NHL doesn't lose its investment and I don't think the deal gets undone so the NHL's big risk is about a 2% interest rate margin on tax-emempt versus taxable investments.

For this, the NHL gets the owners' money back up front on the sale of the team, keeps franchise values high, and maintains control of where it sends its teams.

Putting aside any outrage that the NHL might do this for Phoenix and did much less for Winnipeg and other relocated markets, what is the "objective" opinion on whether this sort of compromise might just fly?

Still a subsidy no matter who buys the bonds, I would imagine. I don't know how there is any way you could structure this deal with a bond sale via Glendale that wouldn't violate the AZ constitution. Also, I can't see the NHL BoG committing 50 cents more to this deal, let alone $50 million.

With everything quieted down now, I'd imagine this whole deal was killed officially as of Apr. 1. The last gasp was the PR stunt by Hulsizer, McCain, and the AG. When GWI turned that away, that was it. Only thing that makes sense now. If anything was happening behind the scenes with Glendale still trying to sell the bonds, or change the deal, we'd be hearing some leaks in the press.

I wouldn't be surprised if that rumour about the large transaction with the NHL were true.
 

MAROONSRoad

f/k/a Ghost
Feb 24, 2007
4,067
0
Maroons Rd.
Expansion plans "Southward Ho" were set prior to Bettmans appointment; painting the guy as the one primarily responsible for the relo's out of Winnipeg, QC & Hartford is both revisionist & completely unfair. In wishing for a new Commissioner, be careful, because you could well wind up with one that is truly pro-American in terms of franchise location, possibly a contractionist, leaving Canada with 3 teams, let alone the possibility of 9 some sunny day.

There are many problems with that, but there is one I've mentioned before although it hardly ever gets considered. Let's suppose that Calgary, Edmonton and Ottawa are removed. All 3 markets are capable of hosting pro hockey at the highest level.

Now this is all hypothetical and a more thought exercise in response to your post than reality. However, if you remove those 3 Canadian markets from the NHL, you also present and create the opportunity for a rival league. Add Winnipeg (TNSE), Quebec City (Quebecor), Hamilton (Balsillie), perhaps a team in Toronto at some point and a few select USA cities, and you have the basis for a rival WHA-type league.

Make no mistake. The NHL needs the Canadian markets not only for the TV dollars and merchandise sales, etc., but as a means of maintaining their defacto monopoly on pro hockey at the highest level.

Ive wondered about this as well. We know the NHL's inflexible in its price & terms for a local sale, losses last year (09-10 @ $25M) and in staying put as they did for 10-11 with the COG providing $25M to cover losses, now reportedly as high as $40M, were looking at app. $205M. The league likes to claim franchise value is roughly $200M so either they get $205M from Hulsizer/COG or the same plus a $15-$25M relo fee from TNSE. Though I put no credence in Atlanta moving, hypothetically if they did, Im sure the NHL would charge TN whatever the difference in sale price might be with a relo fee in order to clear the bar of $200-$225M. Based on franchise values elsewhere, Id say thats actually a pretty reasonable & equitable price for Winnipeg or QC to pay for a relo'd team.

I doubt TNSE will pay any price for an NHL team. I'm sure they have a bottom line figure whatever that may be.

In regards to the Thrashers, they will need somewhere to play if they are to remain in Atlanta. The situation in Atlanta is very different from the situation in Phoenix in terms of the Arena, ownership and the lease. My opinion: someone will need to purchase the arena lease, Hawks and Thrashers very soon if the Thrashers are to stay in Atlanta. Otherwise, relocation or some temporary arrangement would likely have to be made for next season.

GHOST
 

BigFatCat999

First Fubu and now Pred303. !@#$! you cancer
Apr 23, 2007
18,813
3,004
Campbell, NY
This thing has had more chapters than my 130K book I'm half way done writing. My God.

I'm shocked we haven't seen any James Bond themed titles. Bonds, Sold Bonds.
 

headsigh

leave at once!
Oct 5, 2008
9,867
0
Atlanta
ofthesouth.blogspot.com
Things I have done since the previous thread was opened and closed:
-Played through both Drakengard 1 and 2. Two of the most depressing games I've ever played. Not what I needed after this whole debacle. :scared:
-Went to Wrestlemania 27. The Rock was there so that was pretty cool.
-Shaved and grew a beard, then shaved again. Twice.
-Made sure that "two weeks" is completely and utterly out of my daily vernacular.
 

Larabee

Registered User
Mar 10, 2011
2,761
3,325
Winnipeg
Would a compromise be to sell the team at the current estimated price of around $200M, but have the NHL purchase the remaining $50M in bonds at a reasonable interest rate of say 6%. The worst case, according to the GWI, is if the deal goes through and the GWI wins in court, the bonds lose their tax-exempt status but the CoG taxpayers still are on the hook for the bonds. So, the NHL doesn't lose its investment and I don't think the deal gets undone so the NHL's big risk is about a 2% interest rate margin on tax-emempt versus taxable investments.

I was trying to figure this part out too. From what I gather, the deal would be undone. The money would be returned from MH to CoG. The NHL would be stuck with the team again and the CoG would have 100M to do something with. Perhaps the CoG could kick in another 110M and buy the team themselves ?
 

goyotes

Registered User
May 4, 2007
1,811
0
Arizona
I was trying to figure this part out too. From what I gather, the deal would be undone. The money would be returned from MH to CoG. The NHL would be stuck with the team again and the CoG would have 100M to do something with. Perhaps the CoG could kick in another 110M and buy the team themselves ?

As I interpret Darcy Olsen's most recent comments about the taxpayer being on the hook, I'm not sure why there is an assumption the bond sale would be "undone". I believe the concern is that the bond holders would lose the tax-exempt status benefit.

Assuming the sale does violate the gift clause, the down side to the NHL is the 2% interest rate difference between tax-exempt bonds that sell at 6%, and non tax-exempt bonds that might sell for 8% based upon the same credit worth of the issuer.

Can someone please confirm that the bond transaction would be voided. I don't even think the GWI believes that to be the case. And, that has been one of the reasons people have argued the GWI should seek to enjoin the sale of the bonds because once they are sold, the horse has left the barn so to speak and the "taxpayers are on the hook."
 

Melrose Munch

Registered User
Mar 18, 2007
23,546
2,006
There are many problems with that, but there is one I've mentioned before although it hardly ever gets considered. Let's suppose that Calgary, Edmonton and Ottawa are removed. All 3 markets are capable of hosting pro hockey at the highest level.

Now this is all hypothetical and a more thought exercise in response to your post than reality. However, if you remove those 3 Canadian markets from the NHL, you also present and create the opportunity for a rival league. Add Winnipeg (TNSE), Quebec City (Quebecor), Hamilton (Balsillie), perhaps a team in Toronto at some point and a few select USA cities, and you have the basis for a rival WHA-type league.

Make no mistake. The NHL needs the Canadian markets not only for the TV dollars and merchandise sales, etc., but as a means of maintaining their defacto monopoly on pro hockey at the highest level.



I doubt TNSE will pay any price for an NHL team. I'm sure they have a bottom line figure whatever that may be.

In regards to the Thrashers, they will need somewhere to play if they are to remain in Atlanta. The situation in Atlanta is very different from the situation in Phoenix in terms of the Arena, ownership and the lease. My opinion: someone will need to purchase the arena lease, Hawks and Thrashers very soon if the Thrashers are to stay in Atlanta. Otherwise, relocation or some temporary arrangement would likely have to be made for next season.

GHOST

This is all assuming that the dollar stays par for the next ten years. Which it won't. Calgary is expected to stay as it will which 2 million in 2031 by projections. Even then, that is Ottawa and Edmonton gone. One is not a sports city and the other has other problems besides hockey. Losing all the business to Calgary. And who is to say big market like a Toronto would even be interested in that?

The business of the Canadian teams funding the league will not last. That is a necessary evil and not a favorable position for the NHL

Hardly a basis for a rival League.
 

MAROONSRoad

f/k/a Ghost
Feb 24, 2007
4,067
0
Maroons Rd.
This is all assuming that the dollar stays par for the next ten years. Which it won't. Calgary is expected to stay as it will which 2 million in 2031 by projections. Even then, that is Ottawa and Edmonton gone. One is not a sports city and the other has other problems besides hockey. Losing all the business to Calgary. And who is to say big market like a Toronto would even be interested in that?

Hardly a basis for a rival League.

Hardly a good response. The dollar will fluctuate but to pretend you know the CAD will be worth substantially less than the USD in the next ten years is ridiculous. All indications are for a strong CAD vs USD for the foreseeable future. And there are many factors working against a strong USD going forward.

As I said, my post was a thought exercise. It would only be relevant if the NHL ditched those markets, which is highly unlikely for the very reasons I mentioned.

GHOST
 

SMoneyMonkey

Registered User
Dec 7, 2009
2,506
0
LA/MTL
I think it's terrible that a bunch of fans might lose their team. And it pains my heart to think of the fans in Winnipeg who still go without, and that they may have to wait longer. It's sad to think of all the kids who might have been just about to get into hockey who will now not be able to if Pheonix moves. It's sad to think of all the jobs lost.

There are a lot of things that are depressing about all of this. But one stands out above all the rest. How many times we've been able to but haven't used the term 'fortnight'. Two weeks this, two weeks that... But never 'A fortnight this'. It's truly depressing that such a wondrous term has been neglected throughout this horrid event.

That is all.
 

goyotes

Registered User
May 4, 2007
1,811
0
Arizona
I think it's terrible that a bunch of fans might lose their team. And it pains my heart to think of the fans in Winnipeg who still go without, and that they may have to wait longer. It's sad to think of all the kids who might have been just about to get into hockey who will now not be able to if Pheonix moves. It's sad to think of all the jobs lost.

There are a lot of things that are depressing about all of this. But one stands out above all the rest. How many times we've been able to but haven't used the term 'fortnight'. Two weeks this, two weeks that... But never 'A fortnight this'. It's truly depressing that such a wondrous term has been neglected throughout this horrid event.

That is all.

I like how you think. Very funny.;)
 

Tommy Hawk

Registered User
May 27, 2006
4,223
104
Still a subsidy no matter who buys the bonds, I would imagine. I don't know how there is any way you could structure this deal with a bond sale via Glendale that wouldn't violate the AZ constitution. Also, I can't see the NHL BoG committing 50 cents more to this deal, let alone $50 million.

With everything quieted down now, I'd imagine this whole deal was killed officially as of Apr. 1. The last gasp was the PR stunt by Hulsizer, McCain, and the AG. When GWI turned that away, that was it. Only thing that makes sense now. If anything was happening behind the scenes with Glendale still trying to sell the bonds, or change the deal, we'd be hearing some leaks in the press.

I wouldn't be surprised if that rumour about the large transaction with the NHL were true.

Simple solution if the NHL decides to step up instead of MH. THe NHL retains the parking and operates the parking and lowers the purchase price to MH. Or the NHL loans the money to MH directly to buy the franchise.



Things I have done since the previous thread was opened and closed:
-Played through both Drakengard 1 and 2. Two of the most depressing games I've ever played. Not what I needed after this whole debacle. :scared:
-Went to Wrestlemania 27. The Rock was there so that was pretty cool.
-Shaved and grew a beard, then shaved again. Twice.
-Made sure that "two weeks" is completely and utterly out of my daily vernacular.

Also, you forgot the word imminent is completely and tterly out of the vocabulary as well.
 

Larabee

Registered User
Mar 10, 2011
2,761
3,325
Winnipeg
As I interpret Darcy Olsen's most recent comments about the taxpayer being on the hook, I'm not sure why there is an assumption the bond sale would be "undone". I believe the concern is that the bond holders would lose the tax-exempt status benefit.

Assuming the sale does violate the gift clause, the down side to the NHL is the 2% interest rate difference between tax-exempt bonds that sell at 6%, and non tax-exempt bonds that might sell for 8% based upon the same credit worth of the issuer.

Can someone please confirm that the bond transaction would be voided. I don't even think the GWI believes that to be the case. And, that has been one of the reasons people have argued the GWI should seek to enjoin the sale of the bonds because once they are sold, the horse has left the barn so to speak and the "taxpayers are on the hook."

We are in agreement that the bond transaction to CoG wouldn't be voided. It's the transfer of payment from CoG to MH that would be voided. So the taxpayers are still on the hook one way or the other. This is what scares CoG the most if GWI wins in court. They have to pay back the bonds PLUS they still loose the hockey team. A double wammy.
 

GKJ

Global Moderator
Feb 27, 2002
185,648
37,443
This thing has had more chapters than my 130K book I'm half way done writing. My God.

I'm shocked we haven't seen any James Bond themed titles. Bonds, Sold Bonds.

Phoenix threads almost need their own separate forum.
 
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