Phoenix XIXth: Nervous Breakdown

[goyotes]

So in one sentence can someone tell me why this deal has not gone through yet? Why hasn't the COG or Hulsizer come out with a message or interview saying that this deal with finally close on such and such date?

Glendale doesn't know what the ******* they are doing.

 

[goyotes]

Don't you get the feeling that if the bonds don't go to market within then next two weeks that the NHL might tell the COG that it's over. Time is over. They've had since mid December to finish this. However, there's more than meets the eye to this situation and that might be the sticking point to the deal. I say, they have 2 weeks to finalize, then all bets are off.

I think the outside time limit is maybe more like two months, but I agree. Time in not on the side of the CoG. I believe they are facing significant pressure to work out a deal. I am still somewhat hopeful that a deal will be done before the end of this month, but I have seen nothing public from the CoG to justify that optomism.

 

[edog37]

That's fairly bizarre. I always thought their best option was to purchase the team. No gift laws, no $100m checks to outside parties, hire AEG to run the arena.......

then try to sell the idea to the taxpayers.....

 

[RAgIn]

I think the outside time limit is maybe more like two months, but I agree. Time in not on the side of the CoG. I believe they are facing significant pressure to work out a deal. I am still somewhat hopeful that a deal will be done before the end of this month, but I have seen nothing public from the CoG to justify that optomism.

For sure the drop dead date isn't in 2 weeks, but if the NHL notices that things aren't progressing as well as they should, then they just might pull the plug earlier than anticipated. The bonds have to sell asap.

 

[Dado]

So in one sentence can someone tell me why this deal has not gone through yet?

No owner wants to risk their own money on the franchise, and Glendale hasn't figured out how to subsidize the risk away.

 

[PitbulI]

What's even more interesting is that there is really nothing but rumors surrounding the issuing of the bonds. They haven't even been attempted yet. Or is there that much work that needs to go into issuing these or getting these approved?

Bettman will not give them a concrete date until once the season is over. Bettman doesn't want Winnipeg to get the team back.

I'm also starting to think that if the Coyotes do announce the deal falling through, that Bettman will try to get another US city to buy the team like KC, Seattle, Las Vegas. Winnipeg is the last place Bettman wants a team in. That would be very crushing to his ego.

 

[Whileee]

What's even more interesting is that there is really nothing but rumors surrounding the issuing of the bonds. They haven't even been attempted yet. Or is there that much work that needs to go into issuing these or getting these approved?

Bettman will not give them a concrete date until once the season is over. Bettman doesn't want Winnipeg to get the team back.

I'm also starting to think that if the Coyotes do announce the deal falling through, that Bettman will try to get another US city to buy the team like KC, Seattle, Las Vegas. Winnipeg is the last place Bettman wants a team in. That would be very crushing to his ego.

I think you have read the situation vis-a-vis Winnipeg entirely incorrectly. I think Bettman knows that his only short-term solution for purchasing and relocating an ailing franchise is the TNSE and Winnipeg. Cities don't buy teams (except Glendale), private owners do. Right now, there is a dearth of owners. There are several teams looking for investors and/or owners now, with minimal success. That is precisely why he is so motivated to have the Hulsizer deal in Glendale work. If it falls through he will be compelled to sell to the TNSE, and will then still have to deal with the Atlanta Thrashers' situation. There are increasingly loud murmurs in many media outlets about the sale and relocation of the Thrashers (with Winnipeg being the rumoured destination). Now, we have public acknowledgement by the Thrashers' owners that they do indeed want to sell the team and that they have performed poorly financially in Atlanta. The most efficient solution to the Phoenix and Atlanta problems is Hulsizer buying and keeping the Coyotes in Glendale, and Atlanta selling to the TNSE for relocation. Note that the NHL has been publicly very equivocal about their support for the Atlanta market, in contrast to their evident support for Phoenix.

 

[RAgIn]

What's even more interesting is that there is really nothing but rumors surrounding the issuing of the bonds. They haven't even been attempted yet. Or is there that much work that needs to go into issuing these or getting these approved?

Bettman will not give them a concrete date until once the season is over. Bettman doesn't want Winnipeg to get the team back.

I'm also starting to think that if the Coyotes do announce the deal falling through, that Bettman will try to get another US city to buy the team like KC, Seattle, Las Vegas. Winnipeg is the last place Bettman wants a team in. That would be very crushing to his ego.

Maybe, but there's no viable arenas in both Seattle and Las Vegas. Plus, keep in mind there's no person(s) that have spoke out about wanting a team there. Especially the last 3-5 years.

 

[Hawker14]

Then I suggest you go back about 3 pages & start reading.

I know. I was joking about the debate your comments caused, but forgot the smiley.

sry.

 

[Einstein Theory]

I have a question for those brave enough to attempt an answer

Question: Would it not be in the best interest of this franchise to have this ownership issue settled BEFORE this year's trade deadline?

- I'm certain the short form answer is 'Yes. The sooner the better'. But this team has two big name UFA's to deal with, Ilya Bryzgalov and Jovanovski.

I'm certain neither player can be re-signed without an owner. In Bryzgalov's case, we are likely looking at a multi-year mega-million dollar contract. And in Jovanovski's case, he certainly has some value if traded prior to the trade deadline (Feb 28).

Is it likely that some point BEFORE the trade deadline has to be a hard-deadline for the ownership issue to be resolved? Otherwise, its likely this franchise loses major opportunities at the trade deadline.

Anyone care to take that issue on?

 

[OthmarAmmann]

then try to sell the idea to the taxpayers.....

Taxpayers as a whole don't seem too concerned with the currently contemplated deal.

I have a question for those brave enough to attempt an answer

Question: Would it not be in the best interest of this franchise to have this ownership issue settled BEFORE this year's trade deadline?

- I'm certain the short form answer is 'Yes. The sooner the better'. But this team has two big name UFA's to deal with, Ilya Bryzgalov and Jovanovski.

I'm certain neither player can be re-signed without an owner. In Bryzgalov's case, we are likely looking at a multi-year mega-million dollar contract. And in Jovanovski's case, he certainly has some value if traded prior to the trade deadline (Feb 28).

Is it likely that some point BEFORE the trade deadline has to be a hard-deadline for the ownership issue to be resolved? Otherwise, its likely this franchise loses major opportunities at the trade deadline.

Anyone care to take that issue on?

Out of curiosity, is that situation different than it was last year?

 

[cbcwpg]

Question: Would it not be in the best interest of this franchise to have this ownership issue settled BEFORE this year's trade deadline?

- I'm certain the short form answer is 'Yes. The sooner the better'. But this team has two big name UFA's to deal with, Ilya Bryzgalov and Jovanovski.

I think most people will say ASAP, but not because of the trade deadline. I think just getting the deal done ASAP ( if it is going to stay in Glendale ) is where we are at.

Not to go off topic in a business forum, but just quickly speaking about Bryzgalov and Jovanovski, IMO they are both gone next season. Jovanovski because he is getting long in the tooth and the Coyotes do have some youth coming up. Bryzgalov because this is the perfect time in his career to try and get the most money he can, and that means, unless Hulsizer opens the wallet big time, a different team.

 

[RR]

So they only can act at the 2 COG meetings each month. I guess there was only 1 meeting in December because of the holidays?
I gather this meeting (Tuesday) is behind closed doors.

In general the Council meets every week, alternating between public and private sessions.

The private meetings are informational only and no action (votes) can be taken.

The public meetings are the ones open to the public, can be watched online, and action can be taken with discussion and votes in public.

Council can call a special meeting (public or private) at any time with 24-hour notice by posting an agenda on its website.

 

[Killion]

Bettman doesn't want Winnipeg to get the team back.
I'm also starting to think that if the Coyotes do announce the deal falling through, that Bettman will try to get another US city to buy the team like KC, Seattle, Las Vegas. Winnipeg is the last place Bettman wants a team in. That would be very crushing to his ego.

This is just so wrong on so many levels Pitbull I hardly know where to begin. As you know, Bettmans' on record as stating that both Wpg/QC are markets he personally feels are deserving of another chance. Secondly, through the BK & over the past 18mnths, TNSE has provided the league with one very handsome & attractive insurance policy, quietly & professionally, that should the Coyotes & or likely any other team be unable to break from let alone survive its misguided out of control flight path through a maelstrom, Winnipeg will enthusiastically & wholeheartedly provide a soft landing & blue skys'. The bona-fides of the owners & operation are 2nd to none, absolutely World Class; a died in the wool & rabid fan base. For sure numerous members of the BOG's would prefer a Seattle, Portland or Houston insofar as the league footprint, however, none of those places have the requirements in either an owner or arena or both so there out. Your just dreaming in tecnicolor, CinemaScope, if you think their be an "auction" of some sort taking place for the Coyotes, Thrashers or any other team at this time.

And Vegas?. Great spot.
Elvis Country....

a little less conversation a little more action please
all this aggravation aint satisfaction me
a liitle less bite a little more bark
a little less fight a little more spark
close your eyes and open your heart and satisfy me

Vegas. Gimme a break.

 

[Jesus Christ Horburn]

Question: Would it not be in the best interest of this franchise to have this ownership issue settled BEFORE this year's trade deadline?

I think it would make sense, but I could see them going past the deadline if COG is close to closing the deal.

Here are some important dates for February:

February 12: Hockey Day In Canada
February 17: Thrashers @ Coyotes (last game before Coyotes start a 5-game road trip)
February 18: Heritage Classic
February 19: Coyotes @ Predators
February 22: Coyotes @ Flyers
February 23: Coyotes @ Lightning
February 25: Coyotes @ Blue Jackets
February 27: Coyotes @ Blackhawks
February 28: NHL Trade Deadline

IMO, if the NHL makes a final decision on the Coyotes this month, they should (but not necessarily would) make it after the Coyotes last home game and before the trade deadline.

 

[Fugu]

Residential properties in 85305 (job's zip code) within one mile of jobing.com over the last four months, have been selling for a median of $140,000, down 25% from six years ago. Nothing to rejoice over, but not as dire a situation as many neighborhoods in Maricopa County (or Pinal County for that matter).

Seeing that I live in a state that has been trying to weather several of these cycles, I understand what a high foreclosure rate in addition to 25% loss of value (or more) does to governments. They're scrambling. They must make cuts in their budgets (personnel, services). The cannot simply raise the millage to compensate for the loss in value of the assessed rates. You think homeowners aren't feeling squeezed knowing all their equity evaporated, and assuming they're still paying on their underwater mortgages, that they have ZERO option of trying to sell when every third home is in foreclosure? THEN TO ADD TO THAT.... the city is trying to practically double its long-term debt?

What exactly drives that economy down there? Services (e.g., real estate probably was big one). This isn't California or Washington that set themselves apart in high tech. Michigan, in spite of all its losses, still has a large manufacturing base, along with the university and health systems that are well entrenched here.

So you have snowbirds, lots of realtors and financial services folks.... and I'm not sure what else makes that economy "go"... Are these relatively high paying jobs to boot?

As I turn this around to see different angles, I still cannot wrap my head around how/why Glendale is in this gig at all. They are way out of their league, their economy has crumbled, their taxbase is shrinking as we speak, and they want to double their longterm debt? (And we know they will never see that best case revenue projection from parking, so it will have to come from somewhere else if that's even possible.)

then try to sell the idea to the taxpayers.....

See above. It's probably better than MH's deal, but I'd have a hard time selling either one of them.

 

[AllByDesign]

ahhhhh Elvis...

 

[AllByDesign]

What exactly drives that economy down there? Services (e.g., real estate probably was big one). This isn't California or Washington that set themselves apart in high tech. Michigan, in spite of all its losses, still has a large manufacturing base, along with the university and health systems that are well entrenched here.

So you have snowbirds, lots of realtors and financial services folks.... and I'm not sure what else makes that economy "go"... Are these relatively high paying jobs to boot?

It is an extra burden. As I had mentioned before, had the arena been located on Phoenix proper it would be an easier go in regards to a municipality's ability to assist with the financial side of the deal.

These smaller cities that want to play with the big boys dig a hole and keep trying to double down.

The COG would have you believe that the "Sport's and Entertainment' industries drive their economy.

 

[aj8000]

I think it would make sense, but I could see them going past the deadline if COG is close to closing the deal.

Here are some important dates for February:

February 12: Hockey Day In Canada
February 17: Thrashers @ Coyotes (last game before Coyotes start a 5-game road trip)
February 18: Heritage Classic
February 19: Coyotes @ Predators
February 22: Coyotes @ Flyers
February 23: Coyotes @ Lightning
February 25: Coyotes @ Blue Jackets
February 27: Coyotes @ Blackhawks
February 28: NHL Trade Deadline

IMO, if the NHL makes a final decision on the Coyotes this month, they should (but not necessarily would) make it after the Coyotes last home game and before the trade deadline.

I do not think the trade deadline will make any difference, Will any new buyer be in a position to make a trade decision within 10 days of signing a deal? I doubt MH or TNSE are actively involved with the day to day operations and potential trades prior to the trade deadline at the moment.

 

[Fugu]

I believe that the lease agreement explicitly mentions that the "arena management fee" will be renegotiated after the initial 5.5 years and up to $97 million. It seems very likely that Hulsizer will demand and receive continued "arena management fees" for the duration of the lease (i.e. beyond the initial 5 years). The COG have optimistically pegged these costs at $24.4 million, which assumes that there will be essentially NO arena management fees after 10 years. (I guess the cost of running an arena will disappear in the future). Even if the COG is able to convince Hulsizer to forego all future arena management fees beyond ten years, the total projected cost over 10 years is about that amount $121 million. If after 5 years Hulsizer is able to negotiate even a modest $3-5 million over the remaining 25 years of the lease, the total cost over the life of the lease just for arena management fees would be in the range of $180-220 million. So I guess the income from the new Westgate CFD is already spoken for, notwithstanding the costs associated with the $125 million bond issue.

If the City of Glendale wants to give an honest cost-benefit analysis of the Coyotes lease transaction, I think that they need to do the following:

1) Fully cost the $100 million bond issue, based on the interest rate return. They should probably also cost out the additional $25 million in the bond issue, though we are not sure of the purpose of that money.

2) Provide a more realistic scenario and/or range of future parking revenues, based not only on Hocking's analysis but also on Walker's analyses.

3) Either make a more realistic projection of the future costs of the "arena management fees", or explicitly negotiate now with Hulsizer the long-term fee schedule to confirm that it will be no more than $24.4 million over the life of the lease after the initial $97 million as they project.

Excellent points, Whileee.

I'll only add that the cap has essentially increased every single year (save one) since the lockout ended. It's very likely that salary floor in 5-10 yrs will be where today's cap maximum is set.

I get the impression that everyone is looking backward, and basing their future costs of doing business on historical data. Given the economic system the NHL has in place, the Coyotes MUST not only catch up to today's figures, but keep pace with the league's growth.

 

[PitbulI]

Killian, I hope I'm very wrong. I'm just trying to ask questions. I'm a die hard Jets fan and I want the Coyotes/Thrashers in Winnipeg.

It's just after living in Winnipeg all my life, going through all the news since the 90's till now with the Penguins, Predators, Coyotes, Coyotes again, Thrashers, back to the Coyotes, I have to look at the worst case scenario for NHL in Winnipeg. I, as many other Winnipeggers feel, If Bettman can screw us over, he will. (In our minds)

 

[roccerfeller]

It is an extra burden. As I had mentioned before, had the arena been located on Phoenix proper it would be an easier go in regards to a municipality's ability to assist with the financial side of the deal.

These smaller cities that want to play with the big boys dig a hole and keep trying to double down.

The COG would have you believe that the "Sport's and Entertainment' industries drive their economy.

But it might be.

Hence the water prices going up and people losing their jobs...

 

[PitbulI]

To this day, I still wonder why the City of Pheonix doesn't help out with this. Do they feel that it's out of sight, out of mind or do they look at this arrangement and know that it's just idiotic?

 

[Killion]

I know. I was joking about the debate your comments caused, but forgot the smiley....sry.

Thanks for clearing that up. I had visions of you too coming at me in the middle of the night & went to bed clutching my Shillelagh.

 

[roccerfeller]

Killian, I hope I'm very wrong. I'm just trying to ask questions. I'm a die hard Jets fan and I want the Coyotes/Thrashers in Winnipeg.

It's just after living in Winnipeg all my life, going through all the news since the 90's till now with the Penguins, Predators, Coyotes, Coyotes again, Thrashers, back to the Coyotes, I have to look at the worst case scenario for NHL in Winnipeg. I, as many other Winnipeggers feel, If Bettman can screw us over, he will. (In our minds)

Sorry, but not all Winnipeggers feel your sentiment.

I think Bettman unfairly became the whipping boy for the loss Winnipeggers suffered when the Jets left. Make no mistake, the Jets were extremely important to a large part of the city, but the attitude was as if Bettman tried to make the Jets leave..

I think at the time he became commissioner, he really wanted to expand hockey into non-traditional markets, which is fair since as the comish of the league he was looking for ways to increase revenues...but there were a lot of things Winnipeg did not have in its control at the time.

First off, I think Susan Thompson was more interested in hosting the Pan Am Games than building a new arena. Secondly, the city was given an extra year and Shenrakow refrained from selling the Jets...AIUI the city covered losses for a year to find other options...hence they didn't move for the 95-96 season. Otherwise, 95 would have been their last season. He really loved the team, but they were simply losing money -- the 60 cent dollar really crippled the revenues (think about it...if some American teams are struggling right now, imagine how they would fare if they were 60 cents to the Cdn dollar, and paying all salaries against the Cdn dollar...) PLUS the arena was atrocious. Sentimental value aside, the Winnipeg Arena was built in the 50's and simply could not support the revenues needed to support an NHL franchise.

If you ask me, the situation Winnipeg is in today, is by far more favourable than what could have happened should the Jets have stayed (the city's new arena option).

Today you have a world class, as Killion stated, ownership group with a very professional attitude and passion for hockey. Not too many ownership groups in the NHL can claim the same thing, an even newer arena than what would have been finished by 97-98, and in a more prime position (on Portage rather than where they were gonna be; where Canwest/Shaw Park is right now)

Plus, the often overlooked fact, that no one wanted to own the Jets, except those with interests to move them.



Phoenix's situation today is very different, although there are similarities here and there. I am personally doubtful it will go through, simply because if at this junction the city has to go after Private bonds as speculated, its not looking good. Not much more time can be wasted.

Garry Bettman recently stated in the Globe & Mail how "if this [current deal in Glendale] doesn't work out, then they will have explored all possible options" - its in the Saturday print edition. Now think about that for a moment. Garry Bettman is admitting the NHL will have explored everything. They are extremely unlikely to drag it out for an extended length of time like you feel they might.