Phoenix XXI: When will then be now?

[MAROONSRoad]

The reason for the Yotes lack of profitability has to do with the city of Glendale owning the arena (Miami Sports and Entertainment Authority owns US Airways Center). The Oilers lost 10 million last year, despite being in the top 10 in ticket revenue (and probably corporate support) because Darryl Katz doesn't own the arena. Because he doesn't own the arena, he doesn't collect profits from from concession inside the arena and can't offset the Oilers current bad on ice product with other revenue generated from other event held within Rexall place.

IMO, the current deal on the table for Matthew Hulsizer will attempt to make up for the City of Glendale profiting from all the concessions.

If Mark Chipman didn't own the MTS Centre, he wouldn't be in the market for owning a NHL club.

You do realize that most of the teams in the NHL do not own their own arenas and for very good reason. When you own your own arena you generally have to pay for it and if you are debt financing it that means you have to add the interest and principal payments to the cost of running a franchise. In addition, when you own the arena, you generally have to pay a (massive) property tax bills each year.

If you can, it is much better to persuade the public to build you an arena and then hand it over to you as your own personal money generating asset. What happens in many cases is just that. The owner of the NHL team gets to keep the majority of the revenues from hockey and non-hockey events. This is not the current Edmonton model or the old Winnipeg Arena model where the city runs the arena and keeps the revenues from non-hockey events or even concessions, etc. The model that is mostly employed, especially in the newer, non-traditional markets, is that the NHL owner sets up a separate arena management company to run the entire operations. The profits and losses are those of the NHL owner. The public which financed the arena hopes to benefit mainly indirectly by economic spin-offs, tax receipts generated by the team and its fans, the prestige of having a pro team in their community, etc.

GHOST

 

[Confucius]

For as long as it takes. Someone will come along with the vision & savvy to get it right. If we take a scalpel to the money-losers in the league how many teams do you think we'd wind up with?. Including relo's to QC/Ham/Wpg, you'd wind up with maybe 18-20. Personally, I wouldnt mind that one bit & I might even start watching games on a regular basis again. But if we did as you suggest, gone would be Ottawa, Edmonton, Calgary, Vancouver, LA, Anaheim, Dallas, Phoenix, Tampa, Miami, Atlanta, Carolina, Nashville, Columbus, Detroit, Boston, Minnesota, Long Island, NJ, Chicago.........All who in recent history (since 1967) have had serious difficulties.

Well you can only cut a team if the owner is willing to sell. I see that no team in Canada is forsale. If a team in any U S city has an owner willing to keep the team, you can't cut that team either. Now if you have teams no owner wants, well you can cut them, however if some owner wants to run the team in another location. I'm sure the league would take the money.

 

[MAROONSRoad]

And I have always defined that for as long as the NHL wants to keep a team here; there is an owner willing to pay the price to keep the team here; and the COG can reach an agreement with that owner to provide an Arena for the team.

Remove one of those variables, and there is no team in Phoenix.

When all is said and done there is only ONE factor that allows a city to have an NHL team and that is that there is someone willing to own a team in that city. The reason teams relocate is because no one can be found to own a team in a market. Bettman has said as much. Everything else, of course -- arena situation, fan base, public and corporate financial support, etc. -- has a bearing on whether someone will want to own a team in a particular location.

As much as some Coyotes fans heap contempt on Jerry Moyes, he was the owner that allowed the Coyotes several years of existence in Glendale. When he tried to sell the team no one wanted to buy it from him. I am not surprised that he took the bankruptcy route after the NHL tried to have him hand over the team for nothing to another owner that would then be given financial concessions from the COG that apparently Moyes was unworthy of receiving.

GHOST

 

[Steve Passless*]

You do realize that most of the teams in the NHL do not own their own arenas and for very good reason.

Off the top of my head, the Maple Leafs, Canadiens, Blackhawks, Rangers, Bruins, Canucks, Senators, Kings, Stars, Flyers, and Avs all own their arenas. Not coincidentally, these teams tend to do well for themselves by having more revenue streams available to them. It's nice to say "build me an arena for free and let me keep the money," but we can't all be Jerry Reinsdorf, now can we.

 

[pegcity]

You do realize that most of the teams in the NHL do not own their own arenas and for very good reason. When you own your own arena you generally have to pay for it and if you are debt financing it that means you have to add the interest and principal payments to the cost of running a franchise. In addition, when you own the arena, you generally have to pay a (massive) property tax bills each year.

If you can, it is much better to persuade the public to build you an arena and then hand it over to you as your own personal money generating asset. What happens in many cases is just that. The owner of the NHL team gets to keep the majority of the revenues from hockey and non-hockey events. This is not the current Edmonton model or the old Winnipeg Arena model where the city runs the arena and keeps the revenues from non-hockey events or even concessions, etc. The model that is mostly employed, especially in the newer, non-traditional markets, is that the NHL owner sets up a separate arena management company to run the entire operations. The profits and losses are those of the NHL owner. The public which financed the arena hopes to benefit mainly indirectly by economic spin-offs, tax receipts generated by the team and its fans, the prestige of having a pro team in their community, etc.

GHOST

I do realize that a number of successful NHL clubs do not own their arena and it still boils down to the transfer of some type of arena concessions generated from the 41 dates a year. The Coyotes have been losing upwards of 10-20 million since their inception even though they were drawing in their first few years. This is clearly the result of the mixture of a bad on ice product and bad arena deal. We in Winnipeg should know all to well about that story.

 

[blues10]

When all is said and done there is only ONE factor that allows a city to have an NHL team and that is that there is someone willing to own a team in that city. The reason teams relocate is because no one can be found to own a team in a market. Bettman has said as much. Everything else, of course -- arena situation, fan base, public and corporate financial support, etc. -- has a bearing on whether someone will want to own a team in a particular location.

As much as some Coyotes fans heap contempt on Jerry Moyes, he was the owner that allowed the Coyotes several years of existence in Glendale. When he tried to sell the team no one wanted to buy it from him. I am not surprised that he took the bankruptcy route after the NHL tried to have him hand over the team for nothing to another owner that would then be given financial concessions from the COG that apparently Moyes was unworthy of receiving.

GHOST

I agree with the statements above. However, wanting to own a team in a market and having the $$$$ or willingness to part with ones own $$$$ in said market makes things much easier. When owning an NHL team in said market involves other people's money it makes the task much more difficult. All one needs to do is check the difficulties that Phoenix has encountered in relation to the relative ease of the sale of the Sabres. I would have loved to have bought the Coyotes with 8-10 investor buddies so I could be in the "club" but quite frankly we didn't think we had enough $$$$. Maybe we sold ourselves short.

 

[MAROONSRoad]

Off the top of my head, the Maple Leafs, Canadiens, Blackhawks, Rangers, Bruins, Canucks, Senators, Kings, Stars, Flyers, and Avs all own their arenas. Not coincidentally, these teams tend to do well for themselves by having more revenue streams available to them.

It is well known that for the most part the model I described is not practiced in Canada -- but that doesn't mean the Habs and Leafs would not be more profitable under that model. I'm sure the Habs wouldn't mind not having to pay their huge property tax bill each year. The Senators are an interesting case in that they went bankrupt mainly because of the debt burden of building their own arena.

Now, I will turn it around. What revenue streams are the Florida Panthers, Nashville Predators, Phoenix Coyotes, Atlanta Thrashers, Tampa Bay Lightning, Carolina Hurricanes, etc., lacking due to the fact that their arena management companies lease their arenas from public entities? Do you really think the owners of those teams would not have build their own arenas with their own money if they could make more money doing it that way?

GHOST

 

[Steve Passless*]

Well, judging by the Coyotes' books, all of 'em!

 

[MAROONSRoad]

I agree with the statements above. However, wanting to own a team in a market and having the $$$$ or willingness to part with ones own $$$$ in said market makes things much easier. When owning an NHL team in said market involves other people's money it makes the task much more difficult. All one needs to do is check the difficulties that Phoenix has encountered in relation to the relative ease of the sale of the Sabres. I would have loved to have bought the Coyotes with 8-10 investor buddies so I could be in the "club" but quite frankly we didn't think we had enough $$$$. Maybe we sold ourselves short.

I should have written willing and able to own a franchise in the market, but the able part is fairly obvious, isn't it?

GHOST

 

[MAROONSRoad]

Well, judging by the Coyotes' books, all of 'em!

Nope. The main problem for the Coyotes is not that they don't have access to many potential revenues it's that they don't generate the revenues due to lack of demand. Moyes not only lost money on the hockey side, but the arena management company itself was losing money on the concert side, etc. I wonder if the COG did a proper market study before they decided to build the arena in that location.

GHOST

 

[blues10]

Nope. The main problem for the Coyotes is not that they don't have access to many potential revenues it's that they don't generate the revenues due to lack of demand. Moyes not only lost money on the hockey side, but the arena management company itself was losing money on the concert side, etc. I wonder if the COG did a proper market study before they decided to build the arena in that location.

GHOST

Yes the market study was done by a group named Hocking. Just kidding but I could not pass that up.

Can anyone confirm or refute the rumour that I had heard that the COG literrally studied the initial proposal from Ellman for a whole of 3 days before signing on the dotted line to build the arena. That sounds a tad bit crazy.

 

[Killion]

Blame it all on the ownership groups, eh?GHOST

Thats' the primary factor GHOST, though you are quite correct, their are other variables?

When all is said and done there is only ONE factor that allows a city to have an NHL team and that is that there is someone willing to own a team in that city.GHOST

Now your confusing me. Which is it?. You cant have it both ways.

 

[Whileee]

And I have always defined that for as long as the NHL wants to keep a team here; there is an owner willing to pay the price to keep the team here; and the COG can reach an agreement with that owner to provide an Arena for the team.

Remove one of those variables, and there is no team in Phoenix.

That is the usual formula, but for Glendale....

"....for as long as the NHL wants to keep a team here: there is an owner willing to keep the team here; and the COG is willing to pay the price and can reach an agreement with that owner to provide an Arena for the team."

 

[pegcity]

Nope. The main problem for the Coyotes is not that they don't have access to many potential revenues it's that they don't generate the revenues due to lack of demand. Moyes not only lost money on the hockey side, but the arena management company itself was losing money on the concert side, etc. I wonder if the COG did a proper market study before they decided to build the arena in that location.

GHOST

I reiterate, why haven't the Coyotes been able to generate the needed revenue since moving to Jobing.com arena. Simply saying that it is because of lack of fan support and it hasn't been heavily influenced by the current recession in the US and the lack of on ice success is narrow minded IMO.

The problems currently faced in Glendale right now are similar to what was faced in Winnipeg.

 

[Killion]

Well you can only cut a team if the owner is willing to sell. I see that no team in Canada is forsale. If a team in any U S city has an owner willing to keep the team, you can't cut that team either. Now if you have teams no owner wants, well you can cut them, however if some owner wants to run the team in another location. I'm sure the league would take the money.

Like Jimmy B' HH?....

 

[Confucius]

Off the top of my head, the Maple Leafs, Canadiens, Blackhawks, Rangers, Bruins, Canucks, Senators, Kings, Stars, Flyers, and Avs all own their arenas. Not coincidentally, these teams tend to do well for themselves by having more revenue streams available to them. It's nice to say "build me an arena for free and let me keep the money," but we can't all be Jerry Reinsdorf, now can we.

That's nothing compared to build me an arena and buy me the team. CofG would love JR to come back.

 

[cbcwpg]

I agree with the statements above. However, wanting to own a team in a market and having the $$$$ or willingness to part with ones own $$$$ in said market makes things much easier. When owning an NHL team in said market involves other people's money it makes the task much more difficult. All one needs to do is check the difficulties that Phoenix has encountered in relation to the relative ease of the sale of the Sabres. I would have loved to have bought the Coyotes with 8-10 investor buddies so I could be in the "club" but quite frankly we didn't think we had enough $$$$. Maybe we sold ourselves short.

I offered to buy the team with Canadian Tire money I had pilling up around the house, but it didn't work out.

 

[Killion]

I reiterate, why hasn't the Coyotes been able to generate the needed revenue since moving to Jobing.com arena. Simply saying that it is because of lack of fan support and it hasn't been heavily influenced by the current recession in the US and the lack of on ice success if narrow minded IMO.
The problems currently faced in Glendale right now are similar to what was faced in Winnipeg.

Actually no, the problems Glendale faces are worlds apart from those Winnipeg faced in the early to mid-90's. Glendale proper has a population of app. 350,000. Not much of a tax base to be building $200M arenas', supporting & propping up the team to the tune of another $200M. IMO, Steve Ellman (the developer behind Westgate & the Arena, former owner of the Coyotes pre-Moyes) sold Glendale a "Field of Dreams" when 2 other far superior locations were turned down as Salesman Steve was looking for some Big Time handouts. Glendale stepped up to the plate. From his initial pitch to the COG to stamped approvals?. 72hrs. Moyes was a partner & wound up owning the team, thereafter throwing the keys on Gretzkys' desk & allowing the Great One to run free run wild, hiring Mike Barnett, his former agent from IMG as GM, his brother as a Scout for $1.2M per year & on & on. Moyes trucking company, Swift got nailed when the economy tanked as you alluded to earlier, had no idea what he was doing with arena let alone a hockey team, but enough to know how to run up the costs for everything from $600 wastepaper baskets to extracting every sou possible from the league in revenue sharing. Location, pathetic performances year in year out, competition from 3 other Phoenix area venues for Concerts & events, just on & on. This was all about building Sandcastles in the desert using public money, a real estate play, a sports & entertainment juggernaut thats backfired very badly indeed. Though it wont be happening anytime soon, one hope would be amalgamation with the rest of the municipalities & cities throughout the Valley of the Sun. But for a city the size of Glendale?. Yikes....

 

[Confucius]

Like Jimmy B' HH?....

Jimmy B was the man. Made the league look great to investors. Offered way more money to teams than they were worth. Trouble was the owners actually thought they were worth what JB was offering.

 

[Confucius]

I offered to buy the team with Canadian Tire money I had pilling up around the house, but it didn't work out.

Well, that surprises me, if you didn't want any other guarantees, you were a slam dunk.

 

[MAROONSRoad]

Thats' the primary factor GHOST, though you are quite correct, their are other variables?

Now your confusing me. Which is it?. You cant have it both ways.

You really don't understand the difference between a) having a team in a location and b) factors in it being a financial success in a community? If Bill Gates wanted his own personal NHL team to play out of his backyard for his private viewing (and assuming the NHL would allowed it), Bill would have his team, it would have one fan only and it would lose 10s of millions of dollars each year.

GHOST

 

[Killion]

You really don't understand the difference between a) having a team in a location and b) factors in it being a financial success in a community?GHOST

Guess not GHOST.

 

[MAROONSRoad]

I reiterate, why haven't the Coyotes been able to generate the needed revenue since moving to Jobing.com arena. Simply saying that it is because of lack of fan support and it hasn't been heavily influenced by the current recession in the US and the lack of on ice success is narrow minded IMO.

The problems currently faced in Glendale right now are similar to what was faced in Winnipeg.

Wrong again and spectacularly so this time too. I'm not even going to bother...except to say the only similarity is that they both had trouble finding someone that was willing and able to purchase and operate the franchise in the location.

GHOST

 

[cbcwpg]

Thought I would build a time-machine and get some old quotes and articles etc.

http://www.themcgareygroup.com/02.6.1-News_Items/westgate/060519 Ellman offers.pdf

Thirty days later, Scruggs said, the council met and approved five memorandums of agreement to do business with Ellman and redevelop Manistee Town Center. Nov. 27, 2001, council approved five final development agreements that included the Glendale Arena construction and massive mixed-use around the arena, in addition to what would become Northern Crossing at 59th and Northern.

http://www.allbusiness.com/sports-recreation/sports-recreation-facilities-venues/12756680-1.html

City officials expected to make at least a $100 million profit on its $180 million investment in the new hockey arena, according to financial estimates and proposed agreements released in late November 2001. Most of the revenue was expected to come from sales taxes generated from new development around the arena.

http://sports.espn.go.com/nhl/news/story?id=1693100

"Our negotiations with the city were never about building a Stanley Cup contender," said Steve Ellman, a real estate mogul who assembled the ownership group that purchased the team three years ago."

"We are not putting all our hopes and all of our money into Coyotes hockey," Scruggs said." Sorry. I just gotta laugh at this statement.

City officials estimate the arena will more than pay for itself and even greater profits will be realized with the Westgate development. The Coyotes will pay at least $20 million rent during their 30-year lease and sales taxes from tickets, concessions and suites are predicted to bring in $43 million. The big money generator is parking, which officials figure will generate more than $130 million in revenue for the city over the life of the Coyotes' contract.

So I wonder who did the parking analysis back then that said parking was worth $130M.

 

[Niagara67]

But if we did as you suggest, gone would be Ottawa, Edmonton, Calgary, Vancouver, LA, Anaheim, Dallas, Phoenix, Tampa, Miami, Atlanta, Carolina, Nashville, Columbus, Detroit, Boston, Minnesota, Long Island, NJ, Chicago.........All who in recent history (since 1967) have had serious difficulties.

Any team can have hard times; how about this dity from 1941-42...

"Frank Patrick suffered a heart attack and had to sell his interest in the Montreal Canadiens, and the Habs almost had to move to Cleveland."

But when the hard times become the norm, then it's a bit more serious; hence the demise of the California Golden Seals and other similar teams.