Phoenix, worst case scenario

Discussion in 'Fugu's Business of Hockey Forum' started by Space Herpe, Jun 21, 2011.

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  1. Space Herpe

    Space Herpe Arch Duke of Raleigh

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    I know we aren't big on "what-ifs" on this board...and I know my time-line is in the neighborhood of a year off...

    ...but...

    Westgate is close to going under. It is supposedly up for auction.
    Communities everywhere are desperate for money.

    Here come the dreaded "what-ifs"

    CoG doesn't fit the bill for the Yotes for the 12-13 season.
    No buyer is found either in the Glendale area or in another city.
    (I'm not sure how Westgate supposedly going bankrupt fits into this.)

    Is the NHL going to be the foster parent for the Yotes for the 12-13 season?
    Can the team fold?

    What other possible scenarios are there and how could they play out?
     
  2. Kebekoi

    Kebekoi Registered User

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    1. Québec (once they agree on the new building this fall)
    2. Houston (if Alexander is still interested)
    3. Kansas City (if AEG can sell its parts in the Kings and sell the market to the BOG)
    4. Hamilton (if Balsillie or another don't do silly antics)
    5. Portland/Seattle (if the NHL could find an ownership to build an arena and/or pay for the team)
     
  3. Hamilton Tigers

    Hamilton Tigers Registered User

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    The NHL retains ownership and moves the franchise themselves to wherever.
     
  4. Mungman

    Mungman It's you not me.

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    Ummmmm no.

    They will not move the team on speculation that a new owner MAY surface in a new location. If no one pops up in PHX the team will stay put draining the CoG dry until a new owner with a location is found, of course the NHL will talk the good talk and say there are potential owners for the team in Glendale the whole time and Scruggs and Co. will eat it up for the duration while filing lawsuit afer lawsuit against the native tribe over the casino and their future attempt to buy Westdale out of BK and turn it into an urban reserve.
    :eek::scared:Oh man this is going to make my head hurt....:help:
     
  5. Fugu

    Fugu Guest


    I think the OP was looking for something that was more concrete, e.g., everyone knew TNSE was waiting for a team and where the team would play.

    Has Alexander been interested in the last year or two? I think there were other obstacles to that location, iirc.

    Quebec City isn't going to be ready in one year.

    That leaves Hamilton, and MLSE and Buffalo, and perhaps an owner who may be more worried about his net worth at the moment than he was 3 yrs ago. I honestly don't remember what happened with Katz and his attempt to control Copps?

    That leaves Vegas, but there's no arena there either!
     
  6. Mwd711

    Mwd711 Registered User

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    And that's the real issue. Everyone mentions Quebec City but without the arena, that leaves it in limbo for now. I don't think Alexander has any interest in putting a team in Houston. That boat sailed years ago. I don't think anything came out of Copps, and besides the Sabres/MLSE issue, the arena is in poor shape. The only city that I see that could take a team ASAP would be Kansas City but we don't know of an owner who wants in there. Perhaps AEG could help broker one since they obviously want a team in there.
     
  7. Pajicz

    Pajicz Registered User

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    Cannot believe that building an arena to Las Vegas would be impossible. As the only major sports team in there, the team could be very successful.
     
  8. Mungman

    Mungman It's you not me.

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    Well, we know in 2007 there were 5 groups in the hunt since there were presentations to the NHL that included TNSE. Does the league try and reactivate one of these.

    I assume one was Alexander in Houston, along with groups from KC, Seattle, and LV.

    KC and Houston are the only ones with arenas, if they can reactivate the ownership they're 2/3's of the way to GB's magic triangle for team ownership, fan support....

    QC has too much of a cloud over it until this arena management situation gets settled one way or the other at the moment, so really they only have one of the three at this moment (you need a building to put the fans in, these two are like chicken and egg). I think once this is settled and: 1) 100% of the funding is in place, and 2) the architectural/engineering plans are well underway that the NHL would let the team play out of Le Collisee for a couple years (balancing the fact that Quebec is not known for getting infrastructure completed on time at the best of times).
     
  9. Dado

    Dado Guest

    QC or contraction, would be my bet.
     
  10. Evil Doctor

    Evil Doctor Cryin' Hank crying

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    That is still in flux as far as I know. Last I heard, there was an audit going on with HECFI, and I doubt anything will get done prior to the release of that report. Any real news on this and you will see Hamilton II pop to the top of the thread list.

    And yea! I'm no longer stuck on post 666....
     
  11. Mungman

    Mungman It's you not me.

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    Just thinking out loud, what other substancial cities support hockey. I checked the AHL attendance for the past season, this is the stats from TheAHL.com:

    http://theahl.com/stats/schedule.php?view=attendance&season_id=34

    Hershey avg 9,800
    Manitoba avg 8,404
    Chicago avg 7,453
    Providence avg 40 7,324
    Grand Rapids avg 7,241
    Lake Erie 0 avg 6,568
    San Antonio avg 6,411
    W-B/Scranton avg 6,360
    Houston avg 6,326
    Charlotte avg 6,312

    The bolded markets look to have decent levels of support for AHL level hockey, and all have arenas that would be NHL sized as they host NBA teams (all three AHL teams are in these buildings so I assume they would have a decent hockey layout). So, there are buildings and existing fan support one level below the NHL, if an owner can be scared up in these locations there may be a possibility of making a go of it (I personally have a soft spot for San Antonio, I really like that city).
     
  12. Hamilton Tigers

    Hamilton Tigers Registered User

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    But in the OP's worst case scenario, there might be a need by the NHL to move the team so as not to lose tens of millions more.

    Again, the OP presented a worst case scenario where no owner is found after the next season the the COG's $25m has been used up and will not foot the bill for 2012-2013.
     
  13. hatterson

    hatterson Registered User

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    Being a city where a ton of tourist dollars are spent, I'm not entirely convinced the season and game to game ticket base would be great. Thus the key to a team working in Vegas would be luxury boxes and having companies buy them for clients coming in for the Vegas experience.

    The problem with that is if you're trying to sell luxury in Vegas you've got some pretty stiff competition.
     
  14. Hamilton Tigers

    Hamilton Tigers Registered User

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    Something seems a little funny with this Katz group thing. They've been sniffing around Copps Coliseum for a while now with deadline after deadline being pushed back and now everything is almost eerily quiet. It's as if they're waiting for something to happen or play out. Might Ozanian be on to something? (Yes, yes, yes...we can chalk it up to wishful thinking)
     
  15. Mwd711

    Mwd711 Registered User

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    Nobody has the money to build one. There has been a movement to put a tax issue on the ballot and it appears that it will be on next year's ballot. MGM is fighting hard to kill it, since it would be competition for their two arenas and the tax would be on the Strip businesses. It's going to court, as MGM is among those suing, saying the proposal is illegal. If this was still the high rolling days of Vegas, I'm sure an arena would've been built, but the city and it's companies have been hammered by the recession.
     
  16. Buck Aki Berg

    Buck Aki Berg Done with this place

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    Worst case scenario is that the team goes to the highest bidder, with possible cutsies for people wanting to keep it local.

    Right now the league can afford to charge an inflated price for the team since someone else is covering most of the losses. The second COG stops writing cheques, the league will just take what they can get and wash their hands of the situation.

    Quebec isn't the firegone conclusion that some people make it out to be until there're at least some shovels in the ground for the new stadium. The league might let them play out of Le Colisée for a few seasons, but if they move to Quebec and the new barn doiesn't get built, all they've done is moved the turd to another pocket.
     
  17. Mungman

    Mungman It's you not me.

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    Didn't CoG pass the new deal to be renewable at the NHL's discretion for a ten year term? They'd be on the hook, that's what I recall (at least for the arena lease, not sure about the 25MM I think that was left a little fuzzy in the conversation about that).
     
  18. Grudy0

    Grudy0 Registered User

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    Let's say that it is somewhat shocking that a league owns one of their own franchises. Then we remember the NBA did take control of the New Orleans Hornets just this past year, and that Major League Baseball took control of the Montreal Expos and relocated them to Washington DC before selling the team...

    The issue is if the City of Glendale (CoG) can no longer fund the NHL with $25 million management fee to run the Jobing.com Arena, or as the rest of us see it, subsidize the NHL in order to keep the Coyotes in Glendale. All bets are off if CoG decides not to subsidize the Coyotes. And remember, although the lease is renewable over the next ten years, it is the CoG that must renew the $25 million management fee in order to keep the Coyotes in Glendale. No approval, and the NHL has to foot the bill...

    So if the CoG decides not to pay the NHL the management fee, there are only three scenarios:

    1) keep the status quo, meaning the NHL can foot the bill by remaining in Glendale, and this isn't likely at all
    2) sell the team to the highest bidder (can be relocated)
    3) relocate the team themselves and wait for a "higher bidder", just like Major League Baseball did with the Expos/Nationals.

    However, the NHL will be over the proverbial barrel if they aren't talking to anyone and the CoG decides not to renew. I suspect we'll here some clamoring of possible suitors during the season.
     
  19. tarheelhockey

    tarheelhockey Highest Boss

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    I don't see any eventuality where they would contract a team. They'll figure out a way to either keep them in Glendale for another season or relocate them into a less-than-ideal situation if necessary.
     
  20. Jesus Christ Horburn

    Jesus Christ Horburn Registered User

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    It becomes a tale of two Cities (Quebec and Kansas).
     
  21. Fugu

    Fugu Guest

    The real problem for the league right now is that they already own a team, while franchise values have declined dramatically (due to the economy and myriad other factors).


    They were salivating over expansions to Vegas and possibly KC (thought not all governors were convinced about KC, so Lieweke was flying them out there to tour the arena). Salivating because the expansion fee being floated was some ridiculous number like $400 MM. Heck, let's say it was even $200 MM-- about the average franchise price back in 2007, so the good ol' boys of the BOG were saying "Cha ching!" :laugh:

    Instead, they've already sunk about $170 MM, and counting, into Phoenix. Instead of lining their pockets, they're hoping to get their money back.

    I personally doubt they will want to give up one of the more plum locations where a large expansion fee can be garnered someday (unless they really are over the barrel).
     
  22. Space Herpe

    Space Herpe Arch Duke of Raleigh

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    Yes, I was looking for something more concrete.

    So, we are left with:
    1) Leave the team in Glendale, keep searching for a buyer there or elsewhere, while the NHL operates the team and eats the losses.
    2) The NHL moves the team to someplace and goes the Montreal Expos route:
    a) Kansas City: There's an arena there. Try to find fan support and a buyer.
    b) Quebec: Arena on the way...facility to play in in the mean time.
    c) Convince Lee in Houston to buy the team.
    d) Vegas: See Kansas City.
    e) Portland? Being granted a team might jump-start 'new arena' talk since they have an NHL team. The Rose Garden houses the Portland Winterhawks, so, they do have a rink ready.
    f) Seattle? Don't know if they have an arena ready.
     
  23. Mungman

    Mungman It's you not me.

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    You know what, I've been thinking about it. I ALMOST could buy into the move on spec thing.

    I could see this if the league did some market research on two things: 1) shake the trees to see if there is any interest in owning a team, and 2) check the market wrt fan support.

    If both of these were to pan out, the league could run a "Drive to 13" styled on TNSE's program complete with long term commitments. This would provide the team with guaranteed revenue streams intially and would give potential owners confidence to jump in with both feet.

    Potentially this could be the way out if PHX doesn't work out (IMO any owner in PHX should make the purchase conditional on a minimum number of ST subscriptions too).
     
  24. Melrose Munch

    Melrose Munch Registered User

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    Let this be a lesson who thinks suburban areas are good because the city is too dirty.
     
  25. LadyStanley

    LadyStanley RIP Fugu

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    I've lost track of the BOH threads, but there have been some following the saga of trying to get an arena approved.

    First, the UNLV facility is a goodly size, but they host so many events during the year, including year end rodeo in December that would mean any hockey team would traveling most of that month, and probably have horrendous ice and non-weekend schedules.

    Second, there are economic issues way out of proportion to the rest of the country. Vegas is founded on gambling, which is discretionary spending and when the economy tanks in the country, Vegas has drastic reductions in revenue (think penthouse to tin shanty discrepancy).

    Third, there's an issue of a single casino (think MGM Grand, Mirage, etc.) owning the facility. Other casinos, their competitors, may not get the suites, blocks of club seats, which the team/arena would need to support the team (corporate).

    Fourth, there were some city zoning issues IIRC of one proposed (independent) site. And financing issues with the economy flailing.

    Fifth, I have never seen an economic report/analysis that show how a franchise would fill it's arena. Are there enough tourists that would get tickets to come watch a visiting team? Are there enough folks/families who don't work nights willing to come to a game? (ECHL Vegas has only a 3000 seat venue; they have $3 "day of game walk up" seats available.

    Sixth, there's the elephant in the room. Gambling. Another reason casinos wouldn't like it is that their sports book would be prohibited from taking NHL bets. Not to mention the potential for addiction in team personnel that could radically make NHL Security's life a living hell. :sarcasm:

    Well, that's some of the highlights of issues of having a team in Vegas. YMMV. :naughty:
     

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