Phoenix XLVIII: Of Mice and Lieberman

[Cryogenic Man]

Only thing I can say is that 20 year is heck of a long period of time.

If you bought a house today, you cannot estimate how much you will end up paying it in next 20 years unless you sign a 20 year fixed interest rate, and even then.

So going by what you are saying, it's pretty safe to assume that GJ's 20 year AMF will never pass since the same type of arguments will be brought up.

 

[beenhereandthere]

We shall see my friend.... we shall see... but the time is ticking for a local deal...

Don't think there's enough time. 90% plus sure, thanks to the deep playoff wrong, they're in Glendale for at least 1 more year, even if the league still owns them.

 

[doaner]

Actually I'm not driving myself crazy or anywhere for that matter!

I'm just simply trying to throw out the big picture. Every one else seems to be going micro.

There is no speculation of it getting better. That's drivel given to try and justify purchasing a team which is not economically viable.

I'm pretty sure in 2003 people were on these type of boards being as optimistic as some are today. It's 9 year later. 9 years.

As you can tell, a lot has happened in 9 years. Lockout, stocks fall to depression times which led to the current recession, no ASG that was promised. Do I need to go on?

 

[Jesus Christ Horburn]

I think whether or not the team stays in Glendale ultimately depends on whether COG is willing to cover the losses for another year. If COG says no and the NHL isn't willing to cover that ~25 million in losses themselves, it doesn't matter if the Coyotes go on the win the Cup - there would be nowhere for them to play next year.

 

[Undertakerqc]

Don't think there's enough time. 90% plus sure, thanks to the deep playoff wrong, they're in Glendale for at least 1 more year, even if the league still owns them.

If you read the latest Bettman and Daly quotes, and what they have said all along this year, the NHL will not be owner of this team next season...

 

[Cryogenic Man]

As you can tell, a lot has happened in 9 years. Lockout, stocks fall to depression times which led to the current recession, no ASG that was promised. Do I need to go on?

The recession hit everyone in the US. Including many cities that had NHL teams.

Let's rewind 7 years previous to that. 1996. That franchise, even if in PHX at the time, with a good team, never made any profit. Never. So that's 16 years.
People can forecast all they want but it's been proven for nearly 2 decades that economically the NHL will never work there.

I don't mean to go against or piss off anyone, that's not the point of this exercise. I'm sure PHX Coyote fans, Peggers, Quebec Nordiques fans can all go for a beer and get along just fine. There is no hard feelings or that anyone is trying to drive a burning stake throught the hearts of PHX Coyote fans.

I'm just being realistic. This is business, and in business, there is no time for emotion.

 

[NHLfan4life]

The recession hit everyone in the US. Including many cities that had NHL teams.

Let's rewind 7 years previous to that. 1996. That franchise, even if in PHX at the time, with a good team, never made any profit. Never. So that's 16 years.
People can forecast all they want but it's been proven for nearly 2 decades that economically the NHL will never work there.

I don't mean to go against or piss off anyone, that's not the point of this exercise. I'm sure PHX Coyote fans, Peggers, Quebec Nordiques fans can all go for a beer and get along just fine. There is no hard feelings or that anyone is trying to drive a burning stake throught the hearts of PHX Coyote fans.

I'm just being realistic. This is business, and in business, there is no time for emotion.

I'm not taking offense at all, I understand you are trying to be as logical as possible.
GJ has turned an NHL team around financially and brought fans through the gates in the past. That is a fact. That is one of the main reason I think (not feel) the 'Yotes are staying put. He has a proven track record and I doubt he would leave much in place that is there except for the obvious.

I'm not dismissing what you are saying, I'm just relying on the fact that GJ has the know how to do what is needed here in Glendale.

 

[Killion]

So going by what you are saying, it's pretty safe to assume that GJ's 20 year AMF will never pass since the same type of arguments will be brought up.

... not really, its never safe to "assume" anything here. There is an argument to be made that the cost-to-loss-benefits exceed the latter regardless of whomever's provided the base-line numbers (Hocking). Its arguable, negatives/positives on both sides, a circular argument, and one that'll drive you right round the twist.

It would appear the yea's will outnumber the nays' whenever the budget vote arrives, particularly so in the red hot environment of the Coyotes successful playoff run. What happens thereafter is the $200M question. The NHL's just going to absolutely want a guarantee that the first years AMF is paid to them as there would again be no guarantee that GJ is going to be able to pull this off.

Based on Dalys' comments (Halverstadt in yesterdays paper), not exactly a ringing endorsement of confidence that its going to happen, really hard to say what the leagues going to do. After last years shocker with an almost overnight $25M vote & the drafting of the AMUL, another year in the desert as the league really didnt have any other options at so late a date thanks to ASG, I wouldnt be shocked to see an extension yet again, albeit for $17M as opposed to the full 25. The league holding the paper on the Lease through the AMUL (9yrs left on that) & the Arena Management Fee (10-20yrs). I dunno. Strange days ahead.

 

[cheswick]

If you read the latest Bettman and Daly quotes, and what they have said all along this year, the NHL will not be owner of this team next season...

It'd be helpful if you provided links to said quotes as I've never read them. The closest I've read is something along the lines of Daily saying they don't anticipate owning the team next year. I've personally never read either Bettman or Daily flat out say they won't own the team next year. Saying such a thing woudl be very uncharacteristic of either of them and their lawyer speak. So providing a link would be helpful

 

[Cryogenic Man]

I'm not taking offense at all, I understand you are trying to be as logical as possible.
GJ has turned an NHL team around financially and brought fans through the gates in the past. That is a fact. That is one of the main reason I think (not feel) the 'Yotes are staying put. He has a proven track record and I doubt he would leave much in place that is there except for the obvious.

I'm not dismissing what you are saying, I'm just relying on the fact that GJ has the know how to do what is needed here in Glendale.

The thing that scares me about that statement is that the NHL have owned this team since 09. If there is anyone with the connections, the money, the resources, a top of the line marketing team and the most interest in keeping the team in Glendale it would have beeen them. The NHL.

I really don't think that Greg Jamison has better resources or a better plan than the NHL could have thought of.

And why haven't they done anything? Why did they pull the 2013 All-Star Game from Glendale when they had an opportunity to really help put that area on the map? Bettman's plan. The only thing I can think of is that they wanted to, and the BOG, who puts up and decides where the money goes said no. If they decided it wasn't worth it, then it can't look good for a vote in favor of accepting Jamison and a sale to keep the Coyotes there.

 

[Whileee]

... not really, its never safe to "assume" anything here. There is an argument to be made that the cost-to-loss-benefits exceed the latter regardless of whomever's provided the base-line numbers (Hocking). Its arguable, negatives/positives on both sides, a circular argument, and one that'll drive you right round the twist.

It would appear the yea's will outnumber the nays' whenever the budget vote arrives, particularly so in the red hot environment of the Coyotes successful playoff run. What happens thereafter is the $200M question. The NHL's just going to absolutely want a guarantee that the first years AMF is paid to them as there would again be no guarantee that GJ is going to be able to pull this off.

Based on Dalys' comments (Halverstadt in yesterdays paper), not exactly a ringing endorsement of confidence that its going to happen, really hard to say what the leagues going to do. After last years shocker with an almost overnight $25M vote & the drafting of the AMUL, another year in the desert as the league really didnt have any other options at so late a date thanks to ASG, I wouldnt be shocked to see an extension yet again, albeit for $17M as opposed to the full 25. The league holding the paper on the Lease through the AMUL (9yrs left on that) & the Arena Management Fee (10-20yrs). I dunno. Strange days ahead.

I would be extremely surprised if the NHL just extended their ownership by a year while accepting a reduced arena management fee (to $17 million). I also wonder if Glendale city council would have the votes for the fee if there is no positive movement on the Jamison ownership bid in advance.

As CF would note, we still haven't seen any documents on the Jamison bid, so we are still at a very early stage over all. It might all go down very fast, but there are some rather tricky issues. So far, all the City of Glendale is being asked to approve is $17 million in next year's budget for an arena management fee. However, to close the deal, there will be at least a couple of important details to be negotiated.

1) What will be the arena management fee over the life of the lease agreement? We have heard rumors about what this might look like, but until it is in an MOU or draft lease agreement, this will remain an important unresolved issue for city council members.

2) Will Jamison demand an "out clause" after a period of time? There have been some suggestions of this, but again, nothing has been seen in writing. Obviously, the appetite of Glendale city council to put forward $100-200 million or more in arena management fees will be balanced against their security with respect to the long-term commitment of the Coyotes to Glendale expressed in the lease. For example, would Glendale be willing to commit to $100 million in arena management fees if the team is able to get "out" in 5-7 years? What about $150 million with a 10-year out clause? Previous subsidy deals negotiated with prospective owners (except Reinsdorf's) expected that Glendale's subsidy would be balanced against the long-term commitment of the team. My guess is that Beasley, Colson and company are trying to maneuver City Council to consider that an arena management fee of $17-20 million per annum is worth it, even if the Coyotes leave at any time since this is balanced against arena management costs and various revenue which accrue to Glendale each year that the Coyotes stay.

 

[Killion]

I really don't think that Greg Jamison has better resources or a better plan than the NHL could have thought of.

And why haven't they done anything?

Why indeed?. The Coyotes front office, sales & marketing staff's been cut to the bone. Up until this past Feb/Mar, no expenditures on advertising/promotions short of press releases, their website. Zip, zilch in aggressively marketing the building itself, from sponsorship to concert & event bookings. The NHL was/is a reluctant owner as you know. They arent set-up to run one of their franchises. They havent loaned any Brainiacs' from within their ranks or drafted talent from amongst the various teams personnel to help out. They've just parked the vehicle on the curb, slapped a sign in the window, 4Sale, digital counter with a price that just keeps on going up.

Of course a guy like Jamison, even the woeful Matthew Hulsizer would have a "plan" to kickstart the machine, get er' going. The only "plan" the NHL had/has is to sell the franchise without taking a hit. The credit for the franchises' modest success leading the Yotes into the Playoffs, its Pacific Championship, Round 2 & possibly the Semi's rests with Maloney, Tippet & the players, whose jobs' have been made all the more difficult with the uncertainty surrounding the team. Imagine Maloney being told "two weeks, next month" for 2.5yrs now and he's supposed to put together a team with no guarantees & short-term contracts?. Its a miracle, a testimony to the character of hockey players themselves that their where their at, playing on pride.

Im afraid I have to completely disagree with & refute your suggestion that the NHL would be equal to let alone surpass a Jamison or really whomever in rolling up their sleeves & getting down to the business at hand. Thats just not the leagues forte', their mandate. Hypothetically, they should have done so of course, worked hard to justify what is clearly an over-priced & much distressed commodity but no, they've done diddly-do in that regard.

 

[JMT21]

The thing that scares me about that statement is that the NHL have owned this team since 09. If there is anyone with the connections, the money, the resources, a top of the line marketing team and the most interest in keeping the team in Glendale it would have beeen them. The NHL.

I really don't think that Greg Jamison has better resources or a better plan than the NHL could have thought of.

And why haven't they done anything? Why did they pull the 2013 All-Star Game from Glendale when they had an opportunity to really help put that area on the map? Bettman's plan. The only thing I can think of is that they wanted to, and the BOG, who puts up and decides where the money goes said no. If they decided it wasn't worth it, then it can't look good for a vote in favor of accepting Jamison and a sale to keep the Coyotes there.

GJ had the know how to turn the Sharks around but the mountain in Phoenix may be more difficult to climb.

There are questions that can be asked but I don't have the answers.

1) How much money were the Sharks losing annually when GJ took over ?

2) How was attendance for Sharks games? How much did it improve?

3) What was the ST base when GJ took over?

4) Was the city of San Jose already funding team losses and to what degree?

5) How long before the Sharks turned a profit after GJ took over?


I'm not saying GJ can't do in Phoenix what he did in San Jose but I do think it will be a longer and more difficult road to do what he wants done.

 

[Killion]

My guess is that Beasley, Colson and company are trying to maneuver City Council to consider that an arena management fee of $17-20 million per annum is worth it, even if the Coyotes leave at any time since this is balanced against arena management costs and various revenue which accrue to Glendale each year that the Coyotes stay.

... pretty much. They've already telegraphed it, the only dispute being the amount of course, Scruggs weighing in with $11M, Lieberman $6-8M. Arena Management Fee's will have to be paid regardless, Hockings fictions' putting wheels on the wagon in rolling with the upper-end, arguable, and thus justifiable if voting yes. If the NHL is supremely confident that Jamisons' going to be able to pull it off, then ya, I could see them accepting $17M in the interim, because if its' good enough for Greg, gotta be enough for the league yes?. If Jamison craters, theyve got the AMUL & that 10-20yr AMF Contract to try & facilitate a sale with someone else over the next 12mnths. Anytime out clause & a handsome management fee. Nice incentive.

"Bonus Gift with Purchase".

 

[CasualFan]

I'm not saying GJ can't do in Phoenix what he did in San Jose but I do think it will be a longer and more difficult road to do what he wants done.

Referencing San Jose as a model of what Jamison may be able to do in Phoenix is not a particularly wise comparison.

The SF-OAK-SJ combined statistical area is nearly twice as large as Phoenix and has a much higher income, corporate base, etc. The Shark fan base is also demographically and geographically removed from the Warrior fan base. There is no direct competition between NBA and NHL in this market.

It's great that Jamison was involved in making the Sharks the success they are today. However, citing that success as proof positive that the same result is likely to occur in Phoenix is incredibly naive.

 

[Cryogenic Man]

Why indeed?. The Coyotes front office, sales & marketing staff's been cut to the bone. Up until this past Feb/Mar, no expenditures on advertising/promotions short of press releases, their website. Zip, zilch in aggressively marketing the building itself, from sponsorship to concert & event bookings. The NHL was/is a reluctant owner as you know. They arent set-up to run one of their franchises. They havent loaned any Brainiacs' from within their ranks or drafted talent from amongst the various teams personnel to help out. They've just parked the vehicle on the curb, slapped a sign in the window, 4Sale, digital counter with a price that just keeps on going up.

Of course a guy like Jamison, even the woeful Matthew Hulsizer would have a "plan" to kickstart the machine, get er' going. The only "plan" the NHL had/has is to sell the franchise without taking a hit. The credit for the franchises' modest success leading the Yotes into the Playoffs, its Pacific Championship, Round 2 & possibly the Semi's rests with Maloney, Tippet & the players, whose jobs' have been made all the more difficult with the uncertainty surrounding the team. Imagine Maloney being told "two weeks, next month" for 2.5yrs now and he's supposed to put together a team with no guarantees & short-term contracts?. Its a miracle, a testimony to the character of hockey players themselves that their where their at, playing on pride.

Im afraid I have to completely disagree with & refute your suggestion that the NHL would be equal to let alone surpass a Jamison or really whomever in rolling up their sleeves & getting down to the business at hand. Thats just not the leagues forte', their mandate. Hypothetically, they should have done so of course, worked hard to justify what is clearly an over-priced & much distressed commodity but no, they've done diddly-do in that regard.

So basically what you're saying is that the NHL didn't/couldn't give a **** about what happened with that franchise for the past 2 years. They just want to sell it to someone who does.

Here's what I'm saying. Gary Bettman has been in the spotlight for 16 years with that franchise's troubles. His bosses must have looked at him to say, ''Hey buddy. You want to do something with that? because seriously, it's really starting to be a pain in the ass''

It was in their best interest to handle that **** and quick. They didn't, because you say it wasn't their 'mandate'?. Come on man. No. They didn't want to. There's a reason for that. it wasn't worth it.

No way they are going to sell a franchise just to know they will be on welfare for years to come. In my opinion, i'm positive they'd rather sell it to someone and somewhere they know there will be no problems. Like they did with the thrash to WPG. It's now been proven that it was one wise choice.

 

[Noldo]

Regarding NHL's efforts to promote and develop the Coyotes, it should IMO be kept in mind that the League has always intended to own the team on interim basis. Only in hindsight we can see that they have ended upp owning it for three years. Moreover, without a surefire owner in sight it is to some extend understandable that the League has not made any significant commitments. After all, the team could move if no owner is found and at that point the League definitely does not want to be bound to any longer term agreement in Glendale, and making no commitments can actually appear to be more positive sign ("we are here only as interim owners untill new owner arrives shortly") than making short term commitments ("we believe that we, the team, would not be here for long"). Of course this seems foolish in hindsight, but perhaps the League has truly had reason to believe that any given time the team could shortly be sold.

 

[kdb209]

GJ had the know how to turn the Sharks around but the mountain in Phoenix may be more difficult to climb.

Jamison has been with the Sharks/SVSE since 1993. He was promoted to President/CEO of SVSE in 1996. He became part owner in 2001 when SJSEE (the Sharks current ownership group) bought the Sharks from the Gunds in 2001. There was never really a case of GJ "taking over" the Sharks.

There are questions that can be asked but I don't have the answers.


1) How much money were the Sharks losing annually when GJ took over ?

They were making money. The Sharks did not report losses on the team until ~2002, when they started becoming a top 10 payroll team - and even then they were always precise that the Sharks lost money but were conveniently silent on whether SVSE (the parent organization which owns the Sharks and operates the arena) was profitable (including GJ giving me a sheepish grin when I explicitly asked him about it at a STH breakfast).

2) How was attendance for Sharks games? How much did it improve?

The Sharks have pretty much sold out (97-100%) every year, except for a dip in '03-'04 (after a complete debacle in '02-'03) and '05-'06 (after the lockout).

3) What was the ST base when GJ took over?

Pretty much the same as it is now - capped at the equivalent of ~14K full season STHs with waiting lists.

4) Was the city of San Jose already funding team losses and to what degree?

Nope - zero, nada, zilch - other than contributing to captal improvements to the city owned arena.

5) How long before the Sharks turned a profit after GJ took over?

They were turning profits before he did, and continued to after - when you look at SVSE.

I'm not saying GJ can't do in Phoenix what he did in San Jose but I do think it will be a longer and more difficult road to do what he wants done.

All he really did in San Jose was to continue to shepherd a very successful team and arena management organization - with a diversified set of related outside business interests. He has experience bringing together an large outside set of investors (he was instrumental in pulling together the current group of investors), becoming the public face of that group, and running a successful team/arena organization in that environment.

 

[aj8000]

I'm not taking offense at all, I understand you are trying to be as logical as possible.
GJ has turned an NHL team around financially and brought fans through the gates in the past. That is a fact. That is one of the main reason I think (not feel) the 'Yotes are staying put. He has a proven track record and I doubt he would leave much in place that is there except for the obvious.

I'm not dismissing what you are saying, I'm just relying on the fact that GJ has the know how to do what is needed here in Glendale.

Except he does not have the money to buy the team and then turn it around.

 

[Killion]

The SF-OAK-SJ combined statistical area is nearly twice as large as Phoenix and has a much higher income, corporate base, etc.

...ya, and the bolded part alone is absolutely staggering in comparison to almost every other market in the NHL, about the only ones that come even remotely close being NYC & Toronto, while demographically, talk of "lunch pail hockey players & fans" is really an antiquated term. The NHL actually leads the pack in terms of comparing average levels of income & education amongst its audience to the other major league sports. Its little wonder Houston, Portland & Seattle continue to pop up on the radar when discussing relocation, expansion, but I digress.

 

[Ciao]

Every day that goes by the NHL backs themselves further into a corner. If they don't do something soon, the only viable option might be to continue with league ownership ointo next season. I'm assuming that winding up the franchise is not, in the eyes of the NHL, a viable option.

 

[OthmarAmmann]

Seems to me you took the easy way out, otherwise, as others have done, why even attempt an answer?

Please explain to me where Hocking's numbers are at? other than the tax increase intake? where. Let's assume you're right and he made that number (the tax intake' which I don't believe is his personally) look even better than it should be, than it's even worse than I thought.

Considering all those numbers, there is no way the Coyotes stay past next season, and If it could be done after this season, it will be.

The incremental sales tax revenue is the COG's finance department's number, and is based on FY2011 sales tax revenues. It most certainly won't be $23 million per year for 20 years due to inflation and economic growth.

I believe the Hocking number is the $6.5 million per year. Could be wrong. I frankly didn't have time to look at the rest of the back of the envelope analysis.

 

[Cryogenic Man]

Regarding NHL's efforts to promote and develop the Coyotes, it should IMO be kept in mind that the League has always intended to own the team on interim basis. Only in hindsight we can see that they have ended upp owning it for three years. Moreover, without a surefire owner in sight it is to some extend understandable that the League has not made any significant commitments. After all, the team could move if no owner is found and at that point the League definitely does not want to be bound to any longer term agreement in Glendale, and making no commitments can actually appear to be more positive sign ("we are here only as interim owners untill new owner arrives shortly") than making short term commitments ("we believe that we, the team, would not be here for long"). Of course this seems foolish in hindsight, but perhaps the League has truly had reason to believe that any given time the team could shortly be sold.

Ok yes, that is possible. It would surprise me, but it is possible. I also do think though, that the NHL has always been aware of the time frame for any potential ownership sale. They could have done a minimum to help during that time. They had money to make which I believe is a huge incentive. But it doesn't seem they tried to hard.

 

[Jesus Christ Horburn]

Every day that goes by the NHL backs themselves further into a corner. If they don't do something soon, the only viable option might be to continue with league ownership ointo next season. I'm assuming that winding up the franchise is not, in the eyes of the NHL, a viable option.

This is my own personal speculation, but I believe that the NHL's plan has always been to announce the relocation of the Coyotes to Quebec City immediately prior to the start of the Stanley Cup finals (assuming COG votes against paying for another year of losses). This was the same period when it happened last year with the Thrashers.

The X factor is whether the Coyotes themselves make it to the Stanley Cup finals - not because it would "save" them for another (whatever the decision, I believe it has already been made behind closed doors) - but because the NHL would want to guarantee every game would be a sellout and not lose a penny more than they already have. In that case, they would hold off making the announcement until after the finals.

 

[Cryogenic Man]

The incremental sales tax revenue is the COG's finance department's number, and is based on FY2011 sales tax revenues. It most certainly won't be $23 million per year for 20 years due to inflation and economic growth.

I believe the Hocking number is the $6.5 million per year. Could be wrong. I frankly didn't have time to look at the rest of the back of the envelope analysis.

There's a projected 0.8% sales tax increase that has been nearly approved, and by the numbers given, what has been projected is supposed to bring the city $23 million back per fiscal year.

The $6.5 million is the number the city district manager Colson gave the council based on a projected Coyotes profit per year.