SHOALTS - bankers are the ones calling the tune

[SuperUnknown]

Now I know you are full of hot air, the current owner was part of the original Yankee Nets deal in 2000 and only bought out Yankee net and the rest of the investors. The transfer as a matter of fact was approved Sept 15, lockout day, jeez wonder why?

Oh and if they are bleeding red that bad where are they getting the 100 million to finance the arena deal?

For how much did he buy their share and what was their share worth in the initial $175M transaction? I don't have the numbers at hand, but I'm 99% sure they sold at a capital loss. Why would they do that if NJ is such a good business?

 

[vanlady]

so you think the government pays its 200 million off right away too...lol

I have ocean front property in Iowa I want to sell ya

Actually they do, it's called something called bonds. NJ is already defining it's bond offering for the arena. Once those bonds are sold they have 100% of the money up front. Most capital regional bond offerings are only open for 90-180 days which means they will have raised the money in less than 6 months.

 

[likea]

I know here in Pa, when Three Rivers Stadium was destroyed, it still wasn't paid off...

the government might take bonds or loans out but no way do the Devils give a check for 100 million straight to the constructon company

a bank will pay the company....

the government and the Devils will pay the bank...kinda like a house payment...over years and years...lol

 

[likea]

Actually they do, it's called something called bonds. NJ is already defining it's bond offering for the arena. Once those bonds are sold they have 100% of the money up front. Most capital regional bond offerings are only open for 90-180 days which means they will have raised the money in less than 6 months.

do the bonds not have to be paid back when they come due...its the same thing... :lol

ok, lets say you have $25,000 in loans to a bank

you pay it off with your credit card

is that you actually having the money to pay it off???

 

[vanlady]

I know here in Pa, when Three Rivers Stadium was destroyed, it still wasn't paid off...

the government might take bonds or loans out but no way do the Devils give a check for 100 million straight to the constructon company

a bank will pay the company....

the government and the Devils will pay the bank...kinda like a house payment...over years and years...lol

LOL now I know you know nothing about arena financing. Regional goverments issue 7-10 year bond issues to fund capital cost projects. They do not ever pay banks. If the Devils paid the bank then you are dooming them to not only paying an annual lease fee to the regional authority who will own the arena but they also now have to pay interest? Not only that if the Devils are in the financial trouble they are in the only banks that will touch them are organizations like Frontier who are the Avco's of the sports industry. Oh goody you now not only pay a lease, you pay sky high interest rates, let's dig the hole bigger, at the expence of the players paychecks, good business expence. Smarter business decision, stay where you are until you have your business finances under some control.

 

[likea]

would it surprise you if I told you that from the year 2000-2003, not counting the 2003-2004 season

the Devils averaged 100 less fans per game than the Pittsburgh Penguins....

in that span the Devils finished 1st twice and 3rd in their division

the Pens finished 3rd once, and last twice....

but the Devils are not losing money...no...why would they lose money with a 60 million dollar payroll with all that support

 

[vanlady]

do the bonds not have to be paid back when they come due...its the same thing... :lol

ok, lets say you have $25,000 in loans to a bank

you pay it off with your credit card

is that you actually having the money to pay it off???

Interest rates on bond issues that are not high risk are often lower or at prime and hedge any interest rate climbs. Yes 7-10 years from now the bonds come due, but if the regional authority have saved themselves millions on interest paying those bonds becomes an issues of less than what they raised.

 

[Boomhower]

I know its not as simple as that, you have to look at luxery boxes, advertising, ect..ect..

but who do you think gets the big companies....the Rangers or the Devils

Madision square garden or that crap of an arena the devils play in

NHL is an attendence base sport....

That's only the tip of the iceberg.

- You have to take into account the leasing arrangements on each franchises arena. Some teams pay millions per year for the use of their facility, others have plum deals and pay next to nothing.

-You have to take into account TV deals. Again there are vast differences in the amount of revenues each franchise makes from television deals.

- You've got to factor in average price per ticket. Solid franchises with deep fan bases just price their tickets and watch them sell. Others have to be creative and have special promotions (i.e. $2 ticket nights for upper deck) and have alot of different ticket giveaways to bring in new fans.

- Most importantly this very starting topic of the thread. How much are certain teams paying back against loans? We've all heard the term; 'smart businessman never use their own money to pay for anything.'
Even though some of these owners are billionaires, chances are they still paid for their franchises using the bank's money. So the amount of their loaned money and the kind of interest they're having to pay against the loan can also be a huge factor in a teams net profits/losses over a calendar year.
I'm no businessman, but I'm pretty sure the interest a said company is paying back against a loan is a legit business expense and I'm sure the yearly interest on a loan of these proportions is stagering.

 

[likea]

That's only the tip of the iceberg.

- You have to take into account the leases on the respective arenas. Some teams pay millions per year for the use of their facility, others have plum deals and pay next to nothing.

-You have to take into account TV deals. Again there are vast differences in the amount of revenues each franchise makes from television deals.

- You've got to factor in average price per ticket. Solid franchises with deep fan bases just price their tickets and watch them sell. Others have to be creative and have special promotions (i.e. $2 ticket nights for upper deck) and have alot of different ticket giveaways to bring in new fans.

- Most importantly this very starting topic of the thread. How much are certain teams paying back against loans? We've all heard the term, smart businessman never use their own money for anything. Even though some of these owners are billionaires, chances are they still paid for their franchises using the bank's money. So the amount of their loaned money and the kind of interest they're having to pay against the loan can also be a huge factor aswell.
I'm no businessman, but I'm pretty sure the interest a said company is paying back against a loan is a legit business expense and I'm sure the yearly interest on a loan of these proportions is stagering.

and NJ, as of last year...has a ton of loans and no way to pay them, esp. with the lock out

I wish i could get the article for you but I don't have a membership anymore

it stated NJ was having a hard time getting the money they needed because of their dept, the lockout, and how little money the franchise actually brings in....

whats NJ's Tv deal like???

NJ's fan base is a small markets fan base...they averaged less than 15,000 the last 2 years

 

[wazee]

No bank in there right mind is going to fund a capital cost project for any business bleeding money. Until you can give a business reason why a bank would fund an arena when the business is not bringing in any income, after they have already extended a 60 million line of credit to that organization, you have no evidence that the Devils are bleeding money.

The Pepsi Center was financed when the Avs were bleeding money and the Nuggets(who shared the same owner) weren't exactly rolling in cash. That owner, Ascent Entertainment, didn't have a lot of other assets, either. So...why did the banks finance the arena? Probably because Ascent put forward a business plan that convinced the bankers it was a good investment. As it has turned out to be.

 

[SuperUnknown]

- Most importantly this very starting topic of the thread. How much are certain teams paying back against loans? We've all heard the term; 'smart businessman never use their own money to pay for anything.'
Even though some of these owners are billionaires, chances are they still paid for their franchises using the bank's money. So the amount of their loaned money and the kind of interest they're having to pay against the loan can also be a huge factor in a teams net profits/losses over a calendar year.
I'm no businessman, but I'm pretty sure the interest a said company is paying back against a loan is a legit business expense and I'm sure the yearly interest on a loan of these proportions is stagering.

On the other hand, the Levitt report claims the NHL is losing close to $300M BEFORE interests and amortization.

 

[SuperUnknown]

NJ's fan base is a small markets fan base...they averaged less than 15,000 the last 2 years

They have high ticket prices though (and I think a decent tv deal).

 

[likea]

They have high ticket prices though (and I think a decent tv deal).

the Penguins have one of the best TV deals in all of hockey according to local sportscasters here in Pittsburgh.....

Pittsburgh gets some of the best NHL ratings....both nationally televised games and locally

I can't compare ticket prices, I am ignorant on the matter of NJ's ticket prices

I know Pittsburghs are not cheap compared to other small markets

now if you compare them to Ranger prices then they are cheap...I'll take a look at NJ's and I'll be back

 

[Boomhower]

On the other hand, the Levitt report claims the NHL is losing close to $300M BEFORE interests and amortization.

Interesting.
But in general when a team claims a loss, do they include interests and amortization? Because when your trying to compare two specific teams in terms of why one team lost more than the other, than interests and amortization could be a big 'X factor' (if included).

 

[mr gib]

they need a new arena to try and turn things around

its a calculated investment

like the canuck sale - quinn's new contract - and howard baldwin wants in again - odd timing

 

[Trottier]

This is a very positive sign that the NHL is not only telling the truth, but that the NHL financially is in deeper trouble than anyone could've guessed.

Including the players. You raise a really good point here, BCF. As time has gone on in these negotiations, and one reads the rumored numbers that the owners are proposing for a hardcap, you cannot help being struck with the notion you express.

That is, if one takes the owners at their word and looks at this entire episode with a modicum of objectivity (which eliminates numerous posters here ) , the fact that the league is basically desirous of setting the ceiling at or around the current average NHL payroll, says that:

1) payrolls are farther out wack than many fans (myself included) and, very likely, most players realized.

2) ominously, the league does not foresee measurable revenue growth in its near-term future. For, in its proposed cap numbers, it is allowing for virtually no upward movement of payroll expenditures (for most teams, based on their current payroll numbers.)

This second point should be of grave concern to any fan, regardless whether one is pro- or anti-cap. That is, a barrier on spending is just that, a means to reduce payrolls and re-allocate monies into owners' pockets. (And make no mistake, that is where the owners "newfound profits" will go; they are not going to you and me.) Fair enough.

However, it speaks nothing to how this league is going to generate more money moving forward.

 

[Strangelove]

I can't compare ticket prices, I am ignorant on the matter of NJ's ticket prices

I know Pittsburghs are not cheap compared to other small markets

now if you compare them to Ranger prices then they are cheap...I'll take a look at NJ's and I'll be back

http://www.moagandcompany.com/pdf/04_06_NHL_review.pdf

("Exhibit 9" - almost half-way down)

I noticed you have compared the attendance of the Devils versus that of Caps, Pens, & Rags.

Some have pointed out that you need to look at other factors, included ticket prices.

The chart (from June 8 2004) shows that the average ticket price in NJ was $55..... NY was $44...... Wash was $43.... Pits was $42

The chart lists NJ at #4 overall, but I thought I had heard awhile back that NJ had increased prices and become #1 overall (over $60 average??)....

 

[likea]

http://www.moagandcompany.com/pdf/04_06_NHL_review.pdf

("Exhibit 9" - almost half-way down)

I noticed you have compared the attendance of the Devils versus that of Caps, Pens, & Rags.

Some have pointed out that you need to look at other factors, included ticket prices.

The chart (from June 8 2004) shows that the average ticket price in NJ was $55..... NY was $44...... Wash was $43.... Pits was $42

The chart lists NJ at #4 overall, but I thought I had heard awhile back that NJ had increased prices and become #1 overall (over $60 average??)....

where did you get that page at???

it ends the arguement

look at exhibit 13

NHL revenues vs. market size

the revenues for
New jersey is 75 million
Washington is around 63 million

now Washington had a 50 million dollar payroll and lost 20-30 million

with a payroll in the 60 million dollar range for NJ

they have to be bleeding money according to this

 

[Strangelove]

where did you get that page at???

it ends the arguement

look at exhibit 13

NHL revenues vs. market size

the revenues for
New jersey is 75 million
Washington is around 63 million

now Washington had a 50 million dollar payroll and lost 20-30 million

with a payroll in the 60 million dollar range for NJ

they have to be bleeding money according to this

I can't vouch for the accuracy of the link.

And after I posted that, I did a google search for that ticket price increase that I alluded to.

I found an article that said NJ new average ticket price was now $68.

Sorry, I didn't post it at the time and I can't seem to find it right now... and I gotta run. But maybe someone else can dig it up?

Toodles.....

 

[SJeasy]

NJ's overall payout for players only recently went up due to arbitration. They were not as far out before the arbiter increased Scott Niedermayer to $7mil/year before the strike. Each year they have been hit in arbitration for one player or another and their only choice is to hit the trade market or pass on the arbitrated salary. If the season had gone forward, they would have been moving players.

 

[dakota]

Report: NHL could take over Ducks

More news:

According to a report in the Los Angeles Times, the National Hockey League has a plan to take over the Mighty Ducks if the Walt Disney Co. attempts to sell the team for less than what the league considers market value.

http://www.tsn.ca/nhl/news_story.asp?id=114048

Is this NHL propoganda we are seeing or just reality? A necessary illusion.

 

[DownFromNJ]

NJ succeeds more than it's attendence record because:

1) 2nd or 3rd highest ticket prices in the league
2) Corporate sponsorship
3) 2nd or 3rd best TV deal in the league


However, we can't fund a 60 million dollar payroll by any means. We could do pretty well with a 42 million dollar payroll though.

 

[RangerBoy]

The Devils just signed a long term deal with Cablevision for their cable rights.The deal was going to expire.The CVC TV deal with the Islanders is a main reason why that team is still there.The Devils could have joined forces with the Mets on their Mets regional sports network but Dolan anted up the cash to keep the Devils under the CVC umbrella

Jeff Vanderbeek is no moron

 

[arnie]

http://www.theglobeandmail.com/sports/

Looks like upto 15 owners are being told by their banks to get cost certainty or risk having their loans called...

this does not bode well for the players.. it tells me they do NEED cost certainty... now if the owners could get this and figure out another way to give the players something we may be ok.

This is yet more confirmation that the owners have been losing a fortune. Creditors would be screaming bloody murder to get the games going at any cost if teams were actually making monwey needed to pay their loans.

 

[dakota]

This is yet more confirmation that the owners have been losing a fortune. Creditors would be screaming bloody murder to get the games going at any cost if teams were actually making monwey needed to pay their loans.

I guess the question is will the owners lose more than a "fortune" if they do not get cost certainty... i think the answer is yes...

they have saved up quite a bit 300 million to help them out... each team is setup differently but it has been stated that many teams are actually saving money NOT playing... who woulda thunk that...