Phoenix XXV: Anyone in the theatre seen a pale horse?

[MountainHawk]

Well, what happens if Atlanta ownership does make a deal with TNSE?

What a messy conflict of interest. If the league vetos the move and then moves the Coyotes to Winnipeg, I see a nasty lawsuit.

TNSE has a $170m offer on the table that appears to have been cleared by the league. Other owners that want to get out without taking additional losses must be pretty tempted by it.

The cleanest way for the league to get out of this mess is to take that money, now.

NHL has a clear rule in its Constitution that it has final say on any relocation. If Atlanta's owners didn't want that limitation, they shouldn't have bought in the first place.

 

[NHLfan4life]

Forgive me, but I've been absent from this topic for quite a while, but what is the market price you refer to, and who is that willing "someone"?

Here are some interesting numbers form a CBC report:

The NHL's done several detailed analyses of the market. (I'm aware of two, apparently, there were more.) According to a couple of sources, the league estimates revenues of approximately $70 million per season. That would be lowest among Canadian teams.

Ask several financial wizards if you can survive in the NHL with $70 million (plus any additional monies from a very successful MTS Centre), and many of the answers are negative. Luckily for Winnipeg, the only ones that matter belong to the prospective owners, Mark Chipman and the Thomson family.

"Anyone who thinks they are committing $170 million to this without believing they can make it work is wrong. They know what they're doing," says one Manitoba supporter. (That figure is the purchase price for the Winnipeg group.)

The good news is that $70 million in revenues would double Phoenix's totals and be approximately $20 million more than Atlanta's. And, even though the Jets would be a revenue-sharing team, other owners would find that much more palatable than funding losses.

http://www.cbc.ca/sports/blogs/elli...ncially-strapped-clubs-only-clear-option.html

I just consider the source.

They don't name "the sources" so if they're quoting a "manitoba supporter", what is he going to say? "Nah, it didn't work then, it most certainly won't work now."...i know everyone is still speculating...just my .02 cents.

 

[Retail1LO*]

Makes perfect sense. I have no problems with revenue sharing to an extent. If the team is being well supported and is still in the red despite exhausting all efforts to increase revenues in their local market, then they should be eligible for revenue sharing. If fans aren't supporting the team and attendance is well below 90% capacity, then I don't see why that team should be eligible for revenue sharing. Why should fans from other markets support a team that isn't receiving support in its own market?

It shouldn't. Plain and simple. If your doing everything that you can, and you still qualify for revenue sharing, have at it. But if your **** is ****ed up six ways from Saturday...and you arguably don't even HAVE a fan base...why should you reap what others have sowed? Pardon my language, but it seems asinine to me to allow a a team to move into a town it arguably shouldn't have been in to begin with, then have the rest of the league pay you out of their pockets because you're busy trying to beat a square peg through a round hole.

 

[LeftCoast]

I have to wonder if Hulsizer himself might not be quietly backing away...

Not only would he have to eat the current year's massive losses, but a $40m deficit would also indicate that it's going to take a LOT longer before he could possibly break even on the team, even with all the subsidies.

Complicating matters for the NHL might be that the Thrashers could also be looking to move their team to Winnipeg. If they were to close a deal with TNSE, the league would be holding the bag with a team in Phoenix that is facing massive losses and no obvious place to move to. Sure, Kansas City or Houston might be options, but at what sale price? Can they get the same $170m that is offered by TNSE?

So time is indeed running out for the league. What they must be looking to do right now is quietly make a deal with TNSE, and then announce it once the season is over. Looks like they will be on the hook for $15m in losses this season. And that miscalculation WILL hang around Bettman's neck.

They should have just worked out a reasonable relocation price with Balsillie that would have paid off all the interested parties, left the league with a healthy profit and dumped back significant revenue sharing to the poorer teams for years to come. Now, even if they end up with a team in Winnipeg, it's going to be a significant revenue sharing suck.

This could be a nightmare situation for the league - and could end Bettman's tenure with the league.

One thing Bettman has been very adept at is pulling new investors out of thin air. Reinsdorf, Hulsizer, Chipman and Thompson, DelBagio, Tom Golisano, Terrence Pegula, etc. However he may be facing his greatest challenge in that respect right now as he is trying to find new owners for the Thrashers and bond investors for the City of Glendale.

If Gary Bettman manages to navigate his way through this minefield, I will have a new found respect for him (I still won't like him). Either or both of the situations in Atlanta and Phoenix totally unravel. Think of the worst case for the league. If the Phoenix operating losses are truly in the $40M range, Hulsizer has to be considering his options. Are he and his investors willing to own an NHL franchise IN PHOENIX at any cost? At the very least, he is going to try to get either the league or the CoG to eat at least $25M of those losses - because an NHL franchise stuck in Phoenix is not worth $200M.

But yeah, you've pretty much hit on the perfect storm situation for the NHL. Atlanta moves to Winnipeg, the Hulsizer deal falls apart and the league is forced to sell the franchise to someone else with no commitment to Phoenix at a discount due to mounting losses.

 

[NHLfan4life]

NHL has a clear rule in its Constitution that it has final say on any relocation. If Atlanta's owners didn't want that limitation, they shouldn't have bought in the first place.

Excellent point. A lot of people on here tend to forget that the NHL has the power to move the teams where they want, not where people with a lot of money want. In that case, the billionaires are powerless.

 

[yotesreign]

You do realize this piece is nothing but a cynical commercial jingle for Henleys' Walden Pond Foundation?. Whats next, dropping "product placements" into lyrics?. Are you aware of the fact that he also has interests in the Sunset Grill franchise chains?. Owns a considerable amount of stock in Ray Ban?. Beelzubub with a sharp pen and a set of drumsticks. Just ask Glenn Frey or Stevie Nicks... Dont take my word for it....

my background check before post did not yield this information Killion....i thank you for the update and wrecking a song i loved (name now changed to "the end of my innocence"). That being said it doesn't surprise me.....the Eagles "not getting along but still on the road" tours have been a bit of a financial boon....you know Killion i have never trusted those musicians who are businessmen .....if they ain't crashing on a strangers couch they have sold out somewhere along the way!!

Don was an early adopter of crass commercialism say you......Killion = GSC of the musical references.....i shall be submitting to you now for proof reading before posting....what is your hourly rate???

onto that product placement comment......holey "James Bond" i went to a movie and a NASCAR event broke out


foot note to my music police friend: Crass commercialism is a term referring to articles of culture which are based mostly on capitalist pursuits, while masquerading as being material of substance.

ps: back onto the couch for one more question....do music mixes at parties often annoy you and do you find a need to bully your way onto the DJ stand ....busted!!!....however i am guessing that is a good thing care to share your iTunes genius mix or are you still kicking it old school with the vinyl??

My response is OT so briefly:

The other person's rant about End of the Innocence made no sense to me.

The lyrics to the song, End of the Innocence, were written by Bruce Hornsby, not Don Henley. In 1989. Before Henly founded Walden Woods Foundation (not Walden Pond Foundation).

But hell, why let fact get in the way of whinging about crass commercialism.

Just as the Sunset Grill referenced in Henley's 1980s song was a well known (locally)hamburger joint in West Hollywood popular in the 1970's that had been around since the late 1950's...

Good thing there was no mention of Margaritaville... now THERE's some crass commercialism and hucksterism with their signage, eh?

 

[Ernie]

The circumstances are alot different now then they were in the past when it comes to just how much money a team in Winnipeg could generate. I really don't see a team in Winnipeg being a "revenue sharing suck". Is it possible at least that they could break even or even turn a marginal profit?

The team's revenue will likely still be in the bottom half of the league. They could receive revenue sharing and at the same time turn a small profit if they keep a modest payroll, especially if revenue sharing is increased in the next CBA. But it would be nothing like having a team in Hamilton, which would have funneled significant cash back into the other owners' pockets.

 

[Brodie]

Still no real news of any variety.

 

[therealkoho]

http://www.tsn.ca/nhl/dregerreport/

Dregger
Another TSN report here...

http://tsn.ca/nhl/story/?id=356981

doh ......you have no idea how upset he gets when you spell his name wrong


What I do know about this epic clusterbang is that the last thing Bettman wants is this thing to end up in court............the govs are probably just figuring out that there'll be no way to get their lost dollars out of the franchise if that happens

this is almost better than the playoff races

 

[Retail1LO*]

Balsillie wasn't paying for a Phoenix franchise, he was paying for a Southern Ontario franchise, which is worth 3 or 4 times what Balsillie's offer was.

So...basically, rather than tap Souther Ontario and reap all the extra money it would bring, especially to the teams taking part in revenue sharing...you leave it alone because of the initial expansion fee?

By the time another team ends up in SO, regardless of what they charge for another team to be there...they'll probably have lost money when you consider what could have been made with a team there sooner rather than later.

 

[tradeyoumooseforjets]

If you were here in Glendale you would understand. I'm not sure how long you have been following this story but this has been debated at least 100,000 times.

NHLfan, Do you own a home in Glendale? If you do and are a taxpayer there, are you not concerned at all about this deal? I can certainly understand any fan NOT living in Glendale would absolutely be ecstatic about this deal because they get heavily subsidized NHL hockey to watch. But living in Glendale, I'm curious as to your thoughts, IF you're a current taxpayer.

 

[NHLfan4life]

The excuse of unstable ownership is just an excuse. If fans really wanted to keep the team, they'd make a movement to make the team an attractive investment.

I respect your opinion but there have been teams in the past that were leaving with less attendance and even cheaper ticket prices than we have that didn't make a difference either by doing what you are recommending. Maybe there was a lesson in it. Check it out.

 

[Killion]

She said there is no subsidy,
And the truth is plain to see
That I wandered through my lawsuits,
And would not let her be
One of sixteen council virgins
Who's careers are now toast.
And although the Job was open,
It might just as well have been closed.

I'll take Procul Harem over the Eagles & or Henley anyday kdb...

A Salty Dog = GSC2k2
The Prodigal Stranger = Mathew Hulsizer (apparently, according to the COG)
The Long Goodbye = running clean out of Roman Numerals
The Wells on Fire = seemingly so, with no way to cap the inferno
Grand Hotel = My home away from home

....i thank you for the update and wrecking a song i loved.....are you still kicking it old school with the vinyl??

No worries. Why dont you PM me with the rest of your favorites?, I'll see what I can do. Nothing like pulling out the cutlery & administering a good old fashioned evisceration on Monday mornings to get the week off to a good start. You want the 2-4-1 or just reg'lar?.... Gotta do somethin to keep myself amused here at Burger King...... And Ipods' huh?. Howzabout ya'll start reaching into your pockets & actually paying for things instead of worshipping the likes of Mathew Hulsizer?. Now excuse me, seems the deep fryer on the fritz again, someone seems to have accidentally like dropped a batch of mp3's into the baskets ....

It's not just MH forking out more, it's MH going to his 8-10 partnership group and asking THEM to fork out more...

Ya, like thats gonna happen anytime before 12/12/12, when really, it wont much matter anymore anyway...

 

[OthmarAmmann]

My editorial on Goldwater from earlier today:

Goldwater Institute – Dictating business outcomes with no business experience

http://coyotes.azvibe.com/2011/03/0...usiness-outcomes-with-no-business-experience/

Can't say I've been too blown away by CoG's business expertise. They're probably on par with the majority of local governments in that regard.

The Phoenix Coyotes currently sit 6th place in the West, after finishing 4th in the West last year, yet their attendance is 11,626 this year, which is down from the dead last ranking of 11,989 they averaged last year. The team is having success on the ice, yet fans are not showing up.

RR has been keeping track, but there has been an increase YOY. The average last year includes a number of sellouts near the end of the season.

 

[Ernie]

NHL has a clear rule in its Constitution that it has final say on any relocation. If Atlanta's owners didn't want that limitation, they shouldn't have bought in the first place.

That's nice.

What a court of law says might be a different matter, as the league would have a clear conflict of interest. They've already set up the price and terms of the deal. If that deal is good for the Coyotes, why not for the Thrashers?

 

[AllByDesign]

doh ......you have no idea how upset he gets when you spell his name wrong

Noted, Daren.

 

[y2kcanucks]

I respect your opinion but there have been teams in the past that were leaving with less attendance and even cheaper ticket prices than we have that didn't make a difference either by doing what you are recommending. Maybe there was a lesson in it. Check it out.

Yeah. Find better markets. That's something the NHL didn't do in the first place.

I've stated all along that if Phoenix can support the Coyotes that they should have a team. I would see no real business logic that would support moving the team if the fans were supporting it and they were generating respectable revenues. But when fans aren't supporting the team, despite success on the ice, and the team is sufferring losses of $40M per year, how is that an attractive investment for any potential investor?

Buffalo was a team that had been struggling with revenues and ownership problems, yet you never heard a peep out of anyone in terms of relocation or Buffalo being a bad market, because that just wasn't the case.

 

[MountainHawk]

So...basically, rather than tap Souther Ontario and reap all the extra money it would bring, especially to the teams taking part in revenue sharing...you leave it alone because of the initial expansion fee?

By the time another team ends up in SO, regardless of what they charge for another team to be there...they'll probably have lost money when you consider what could have been made with a team there sooner rather than later.

Depending on how you read the NHL Constitution and how Canadian and US federal laws apply, either the NHL or the Toronto Maple Leafs own the rights to the Southern Ontario market. Why would they vote to allow someone to relocate to that market without cashing in?

SO could easily bring a $700M or so expansion fee/rights payment to TOR. Why would the NHL give that up forever?

 

[MountainHawk]

That's nice.

What a court of law says might be a different matter, as the league would have a clear conflict of interest. They've already set up the price and terms of the deal. If that deal is good for the Coyotes, why not for the Thrashers?

Court of law pretty much already acknowledged the NHL's ability to block the relocations.

 

[NHLfan4life]

NHLfan, Do you own a home in Glendale? If you do and are a taxpayer there, are you not concerned at all about this deal? I can certainly understand any fan NOT living in Glendale would absolutely be ecstatic about this deal because they get heavily subsidized NHL hockey to watch. But living in Glendale, I'm curious as to your thoughts, IF you're a current taxpayer.

yes, i have lived in Glendale for 35 years. I am not ecstatic about the deal but I am less ecstatic about losing our team which I'm sure you can relate to. If MH does what he says he wants to do as far as marketing and managing the team, then it will work. We have had some clowns (including Gretsky) running the show here for too long. The CoG is doing what they can to resolve this. We are all tired of the theatrics and threats from both sides. Just lock GWI, the NHL and the CoG in a freaking room and get this done. The length of time is excessive but the NHL seems to have some pretty good patience, lucky for us in Glendale.

 

[crazed323]

It's there just kind of not centralized. I hear a lot about it but everyone knows how it turned out in WPG. From talking to fellow Glendale citizens, they feel that they have no power as to what the outcome is. Now that it's reached this level of legality and lawyers...the layers just keep distancing people from the situation. They are alienating the fanbase even further than the management has over the years.
I think that's my best answer for your question. Here in Glendale, things are still upbeat but I can feel a collective "Oh brother" in response to the current situation.

SSDD.

Maybe what I was asking was if this team is so very very important to Glendale and surrounding area. Why has no one (including the city itself) taken the time to organize such a rally to generate support and revenue that could really bring a city together to reach a common goal. Although this effort in Winnipeg didn't save the Jets no one in their right mind could ever question the support for the Jets. I have a really hard time feeling sorry people (although I do feel for the fans) who fail to take things into their own hands. Why would a fan base sit there and say it's out of my control when it is still very much in their control. If MH were to see a rally of this magnitude in Glendale to save the coyotes, I would bet everything I own on him coming up with the extra money to complete this transaction. I only wish that this rally had saved the Jets as this would have saved me a few hours everyday for the last year or so (maybe). Check out the support below:

http://youtu.be/tAJmArEsY9Q

 

[Duckhole]

The Phoenix Coyotes currently sit 6th place in the West, after finishing 4th in the West last year, yet their attendance is 11,626 this year, which is down from the dead last ranking of 11,989 they averaged last year. The team is having success on the ice, yet fans are not showing up. Last year, Phoenix also had an average ticket price of $37.45 which ranked 27th in the league. Despite cheap ticket prices and a quality team on the ice, fans still aren't showing up.

One would think that if the team really meant something to the fans that they would go to the arena, support the team, which would generate revenue dollars and make their team much more attractive for a prospective owner to purchase them and keep them in Glendale. That isn't happening.

This ownership saga has nothing to do with that I'm sure.

 

[y2kcanucks]

yes, i have lived in Glendale for 35 years. I am not ecstatic about the deal but I am less ecstatic about losing our team which I'm sure you can relate to. If MH does what he says he wants to do as far as marketing and managing the team, then it will work. We have had some clowns (including Gretsky) running the show here for too long. The CoG is doing what they can to resolve this. We are all tired of the theatrics and threats from both sides. Just lock GWI, the NHL and the CoG in a freaking room and get this done. The length of time is excessive but the NHL seems to have some pretty good patience, lucky for us in Glendale.

If the bonds are sold, and the team still fails and ends up moving due to lack of support, lack of revenue and massive losses, are you still comfortable with footing the bill?

 

[Dado]

I just consider the source.

I'll keep that in mind, given your profile says "Glendale".



IME life is rarely that simple.

 

[NHLfan4life]

Yeah. Find better markets. That's something the NHL didn't do in the first place.

I've stated all along that if Phoenix can support the Coyotes that they should have a team. I would see no real business logic that would support moving the team if the fans were supporting it and they were generating respectable revenues. But when fans aren't supporting the team, despite success on the ice, and the team is sufferring losses of $40M per year, how is that an attractive investment for any potential investor?

Buffalo was a team that had been struggling with revenues and ownership problems, yet you never heard a peep out of anyone in terms of relocation or Buffalo being a bad market, because that just wasn't the case.

Well, fans don't like uncertainty for long periods of time. Buffalo was an established hockey market so not really comparing apples to apples.