The NHL is Eyeing Austin Texas instead of Houston - Oak View agrees to Build New Arena!!!

[lgrwmike]

Mark Berman‏ @MarkBermanFox26 1h1 hour ago
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NHL sources: #Rockets owner @TillmanJFertitta has met with NHL Commissioner Gary Bettman about potential of bringing the NHL to Houston. Fertitta has had preliminary talks about buying & relocating the @ArizonaCoyotes to Houston. Nothing on that happening now. No decisions close

 

[PCSPounder]

Even San Antonio makes more sense than Austin.

For as unconvinced as I am that Austin is really a thing, I can point at the Spurs and give a couple reasons why Austin might be a better hockey market than San Antonio.

The problem is "less pro competition" would be a lie given the presence of UT... not so much in players paid, but in attitude from the athletic department.

I think Austin might have a demographic advantage. But the institution in town has to be overridden, and I don't see that happening.

 

[Cor]

It would be so NHL to have a good market like Houston but instead going 120-150 minutes away to a less ideal market.

I am almost certain we will have an Arizona relocation to Houston announcement by the end of the 19-20 season.

 

[LT]

It would be so NHL to have a good market like Houston but instead going 45 minutes away to a less ideal market.

45 minutes? Austin is a good 2.5 hours away from Houston.

I don't see Austin as a great fit. I don't know who would be the owner. They'd have to build a new arena, too, which makes it all the more unlikely. There's virtually no significant hockey history in Austin until recently. I just don't see many factors pointing toward Austin as a favorable market, especially compared to Houston. The Texas Stars are doing fine but not well enough to garner an upgrade.

If you're referring to them putting a Houston team in a suburb, that won't be happening. They'll move into the Toyota Center, which is right in the middle of downtown Houston. That's one of the whole reasons there's been so much speculation about Houston getting a team - they've had the arena for a while now, they (arguably) have the market, they just never had an owner. They do now, though.

 

[Cor]

45 minutes? Austin is a good 2.5 hours away from Houston.

I don't see Austin as a great fit. I don't know who would be the owner. They'd have to build a new arena, too, which makes it all the more unlikely. There's virtually no significant hockey history in Austin until recently. I just don't see many factors pointing toward Austin as a favorable market, especially compared to Houston. The Texas Stars are doing fine but not well enough to garner an upgrade.

If you're referring to them putting a Houston team in a suburb, that won't be happening. They'll move into the Toyota Center, which is right in the middle of downtown Houston. That's one of the whole reasons there's been so much speculation about Houston getting a team - they've had the arena for a while now, they (arguably) have the market, they just never had an owner. They do now, though.

Sorry, had my timing messed up. I was referring to Austin.

As I said, I think we'll have an announcement on a relocation by the end of 19-20. There's been more frequent public posturing, and based on the speculation I've heard, have met as far back as a year ago, and 3 or 4 times in the past couple months.

 

[sexydonut]

Why would the NHL want relocation when an expansion franchise brings in money?

More like there are veiled threats to relocate Arizona, Calgary and Ottawa to extract further subsidized arenas and tax breaks from the respective cities.

 

[RABBIT]

So which stance holds most water? Friedman's confirmation that a local buyer is in the process of purchasing with the intention of building an arena and keeping the Coyotes in Arizona...or the fact that Houston is interested but doesn't know if making the move is even possible?

 

[LT]

Sorry, had my timing messed up. I was referring to Austin.

As I said, I think we'll have an announcement on a relocation by the end of 19-20. There's been more frequent public posturing, and based on the speculation I've heard, have met as far back as a year ago, and 3 or 4 times in the past couple months.

My only question is how serious Fertitta is about having a team. He's not one of those super-billionaires with money too burn like Vinik. He's also got a ton of money tied up in the Rockets right now, who are struggling right now. An expansion team was never an option - he doesn't have the money, and he joined the game too late.

 

[Cor]

My only question is how serious Fertitta is about having a team. He's not one of those super-billionaires with money too burn like Vinik. He's also got a ton of money tied up in the Rockets right now, who are struggling right now. An expansion team was never an option - he doesn't have the money, and he joined the game too late.

Fertitta has spoken about his interest for a while now. I don't think expansion was ever a consideration. Forbes values the Arizona Coyotes at around 300M, so I think when everything's said and done, a 400M purchase could be in order. The Seattle and Vegas expansion's for example ended up with a total cost of around 1B-1.2B in total between the price of the franchise and price to build the arena etc. So a team relocating to Houston makes a lot more sense, not only for the NHL, but Fertitta as well. I think Fertitta didn't have much interest in expansion, but relocation is a lot easier and the Coyotes aren't worth a whole lot.

I think Fertitta would buy the Coyotes tomorrow if the NHL allowed him too. Yeah he has the Rockets, but their operating income is approximately 90-100M per year with full revenue at nearly 300M. Landry's is massively successful, So he makes a ton of money off those and for a guy worth nearly 4.7 billion currently, that is only increasing.

It comes down to the NHL. The fact that they have spent so much time meeting Fertitta over this means the NHL is obviously softening on their stance. Bettman not so long ago said Glendale isn't an option anymore. Now that ASU isn't willing to partner with the Coyotes for an arena, it is so far from a guarntee that Phoenix City Council will give them the time of day for any city funding, given that they just announced a renovation deal with the Suns for their arena (which doesn't include any plans for making the stadium hockey possible) and the Diamondbacks recent deal as well.

So Glendale isn't an option, Phoenix certainly doesn't appear to be that strong of an option anymore either.

So to me, unless some rich SOB comes along, buys the team, and builds an arena in Phoenix with little to no city funding, we are trending towards a relocation.

 

[TheLegend]

I swear the NHL will have teams in Mexico, London, and Johannesburg before they put another team in Canada.

If they have groups willing to put up $650+ million and an arena to play in for the long term.... then yes.

 

[gstommylee]

Why would the NHL want relocation when an expansion franchise brings in money?

More like there are veiled threats to relocate Arizona, Calgary and Ottawa to extract further subsidized arenas and tax breaks from the respective cities.

Its much cheaper to buy the coyotes and move a them than it is to pay 650m. Houston balked at 650m. NHL isn't going to expand any time in the foreseeable future. Seattle is imo the last market to fetch the NHL at least that kind of money.

 

[gstommylee]

So which stance holds most water? Friedman's confirmation that a local buyer is in the process of purchasing with the intention of building an arena and keeping the Coyotes in Arizona...or the fact that Houston is interested but doesn't know if making the move is even possible?

Let see here a billionaire showing up buying significant shares of the coyotes and building a 100% privately funded arena just for hockey. So far that has yet to happen. Even if it does happen, the team is still going to be playing in the central division after seattle starts no matter what the new owner says. NHL isn't going to screw over half the league just for 1 teams.

 

[sexydonut]

Its much cheaper to buy the coyotes and move a them than it is to pay 650m. Houston balked at 650m. NHL isn't going to expand any time in the foreseeable future. Seattle is imo the last market to fetch the NHL at least that kind of money.

Cheaper for the potential owners, but the NHL wants to maximize its revenues. Thus if Fertitta or some other billionaire/sucker/money launderer with the mindset of Bill Foley or those Seattle people comes around, the NHL would naturally favor them instead of some expansion.

Expansion fees > many lifetimes of (paper) losses for the Coyotes/Panthers/Senators/random sad sack loser franchise.

 

[gstommylee]

Cheaper for the potential owners, but the NHL wants to maximize its revenues. Thus if Fertitta or some other billionaire/sucker/money launderer with the mindset of Bill Foley or those Seattle people comes around, the NHL would naturally favor them instead of some expansion.

Expansion fees > many lifetimes of (paper) losses for the Coyotes/Panthers/Senators/random sad sack loser franchise.

And Fertitta has balked at the 650m fee. NHL will not be going more than 32 team for any time in the foreseeable future. So you rather have expansion and expansion for the sake of expanding further then realize you over expanded and is forced to contract teams? I don't thinks so. Houston will only get a team if its relocation only and only relocation.

There has to be a long term solution for the coyotes and that is not in glendae. The NHL said that themselves that coyotes can not stay in glendale. Either a billionaire shows up and builds a new arena in a better location in Arizona for the coyotes or the team is moved to houston.

 

[MNNumbers]

Cheaper for the potential owners, but the NHL wants to maximize its revenues. Thus if Fertitta or some other billionaire/sucker/money launderer has the mindset of Bill Foley or those Seattle people come around, the NHL would naturally favor them instead of some expansion.

Expansion fees > many lifetimes of (paper) losses for the Coyotes/Panthers/Senators/random sad sack loser franchise.

However, the Coyotes are NOT your typical 'sad sack loser franchise.'

Again, everyone needs to remember here that:

1- The NHL actually owned the team out of bankruptcy. That was for ONE simple reason. The alternative was Balsillie purchasing and moving to Hamilton.

2- Every supposed sale since then (and there are only 2) have been to groups or Barroway who have little wealth, in the scheme of typical sports owners.

3- Therefore, it makes perfect sense, especially in light of the original load that IA had with FIG, that the actual truth is that the league itself is still backing the losses of the team.

4- If that is all true, and it may or may not be, we don't know....If it is all true, the league itself has somewhere between 300 and 400 M invested in this thing already, with more losses coming. It will take 2 more years to build an arena if one is announced today. So, that's 3 seasons, including the present one, of losses to add to the above figures.

At some point, the total already invested, including the losses accumulated, exceed the amount one can get by selling the franchise and at that point, you are losing no matter what, and the place becomes a hole for more losses the longer you wait.

Considering all of that: There is definitely an argument to be made that the league WOULD be interested in selling to Fertitta. Namely, that the league itself gets the proceeds since they are the ones backing the losses.

 

[sexydonut]

He balks, his loss.

Why would any league choose to cap its size at an arbitrary number? And why would any league whose average franchise values are in the mid 8-figure range have to contract? If Las Vegas/Seattle were willing and able to pony up, Houston or any other candidate city should be subject to the same entry fee.

It's not the WHA/NHL of the mid 70s anymore.

 

[sexydonut]

However, the Coyotes are NOT your typical 'sad sack loser franchise.'

Again, everyone needs to remember here that:

1- The NHL actually owned the team out of bankruptcy. That was for ONE simple reason. The alternative was Balsillie purchasing and moving to Hamilton.

2- Every supposed sale since then (and there are only 2) have been to groups or Barroway who have little wealth, in the scheme of typical sports owners.

3- Therefore, it makes perfect sense, especially in light of the original load that IA had with FIG, that the actual truth is that the league itself is still backing the losses of the team.

4- If that is all true, and it may or may not be, we don't know....If it is all true, the league itself has somewhere between 300 and 400 M invested in this thing already, with more losses coming. It will take 2 more years to build an arena if one is announced today. So, that's 3 seasons, including the present one, of losses to add to the above figures.

At some point, the total already invested, including the losses accumulated, exceed the amount one can get by selling the franchise and at that point, you are losing no matter what, and the place becomes a hole for more losses the longer you wait.

Considering all of that: There is definitely an argument to be made that the league WOULD be interested in selling to Fertitta. Namely, that the league itself gets the proceeds since they are the ones backing the losses.

A lot of these "losses" are simply potential owners borrowing huge amounts to purchase the club, then using club cash flow to repay huge amounts for interest, and to pay outsized amounts for salaries and for expenses to "related" parties. Basically the same financial engineering as was done to Sears, Toys R Us, and just about every financialized corporation out there.

ANY expansion fee would recoup all those paper losses and then some.

 

[gstommylee]

He balks, his loss.

Why would any league choose to cap its size at an arbitrary number? And why would any league whose average franchise values are in the mid 8-figure range have to contract? If Las Vegas/Seattle were willing and able to pony up, Houston or any other candidate city should be subject to the same entry fee.

It's not the WHA/NHL of the mid 70s anymore.

And no one else is going to pay 650m+ for a team. Not houston not quebec not GTA2 no one else. Seattle was the first and only group that is willing to pay that fee. Why don't you understand that. The last thing anyone wants is too have another failing team cause the cost was way way too high for it to work.

A lot of these "losses" are simply potential owners borrowing huge amounts to purchase the club, then using club cash flow to repay huge amounts for interest, and to pay outsized amounts for salaries and for expenses to "related" parties. Basically the same financial engineering as was done to Sears, Toys R Us, and just about every financialized corporation out there.

ANY expansion fee would recoup all those paper losses and then some.

But it won't address the actually issue with the coyotes franchise. They can't remain in glendale. It'll be a forever loosing $$$ that the league will have to keep it floating and you rather have a unhealthy league due to over expansion and even more deals in the red just to keep the coyotes in arizona.

 

[sexydonut]

And no one else is going to pay 650m+ for a team. Not houston not quebec not GTA2 no one else. Seattle was the first and only group that is willing to pay that fee. Why don't you understand that. The last thing anyone wants is too have another failing team cause the cost was way way too high for it to work.

LOLZ. Somehow I can imagine a prospective NHL owner paying a lot more for a prime market like Toronto 2. Plenty of dumb cash out there.

You aren't the arbiter of franchise values. It'd be nice to actually run hockey as a non profit, but sadly that is not the case.

 

[gstommylee]

LOLZ. Somehow I can imagine a prospective NHL owner paying a lot more for a prime market like Toronto 2. Plenty of dumb cash out there.

You aren't the arbiter of franchise values. It'd be nice to actually run hockey as a non profit, but sadly that is not the case.

SO you see someone in GTA paying 1.5b+ (canadain dollar) for another franchise in toronto. That is team + arena + paying off buffalo and the maple leafs? Again i don't think so.

Its so easy to spend someone else's money. No one is going to be interesting if all they are going to do is be losing money.

 

[MNNumbers]

A lot of these "losses" are simply potential owners borrowing huge amounts to purchase the club, then using club cash flow to repay huge amounts for interest, and to pay outsized amounts for salaries and for expenses to "related" parties. Basically the same financial engineering as was done to Sears, Toys R Us, and just about every financialized corporation out there.

ANY expansion fee would recoup all those paper losses and then some.

I would kindly disagree:

IA admitted 35M in losses in year one. Considering attendance and the fact that there was a 15M buyout involved, that number seems to me very plausible.
All other losses in my calculations follow from that one. There is no 'borrowing to purchase', 'using club cash flow', etc that I am aware of at all.

Simply put, there have been too many years in which the salary floor system forced the team to spend money, and the local seat sales and TV interest was not enough to pay the bills.

There is no creative accounting necessary for that.

 

[Tawnos]

Fertitta has spoken about his interest for a while now. I don't think expansion was ever a consideration. Forbes values the Arizona Coyotes at around 300M, so I think when everything's said and done, a 400M purchase could be in order. The Seattle and Vegas expansion's for example ended up with a total cost of around 1B-1.2B in total between the price of the franchise and price to build the arena etc. So a team relocating to Houston makes a lot more sense, not only for the NHL, but Fertitta as well. I think Fertitta didn't have much interest in expansion, but relocation is a lot easier and the Coyotes aren't worth a whole lot.

I think Fertitta would buy the Coyotes tomorrow if the NHL allowed him too. Yeah he has the Rockets, but their operating income is approximately 90-100M per year with full revenue at nearly 300M. Landry's is massively successful, So he makes a ton of money off those and for a guy worth nearly 4.7 billion currently, that is only increasing.

It comes down to the NHL. The fact that they have spent so much time meeting Fertitta over this means the NHL is obviously softening on their stance. Bettman not so long ago said Glendale isn't an option anymore. Now that ASU isn't willing to partner with the Coyotes for an arena, it is so far from a guarntee that Phoenix City Council will give them the time of day for any city funding, given that they just announced a renovation deal with the Suns for their arena (which doesn't include any plans for making the stadium hockey possible) and the Diamondbacks recent deal as well.

So Glendale isn't an option, Phoenix certainly doesn't appear to be that strong of an option anymore either.

So to me, unless some rich SOB comes along, buys the team, and builds an arena in Phoenix with little to no city funding, we are trending towards a relocation.

Something to consider too. He buys the Coyotes for $400m, and how long is it going to take for a Houston NHL franchise’s value to grow to be around where the Dallas Stars are, which is $525m? Provided, of course, that the franchise is well-run.

 

[sexydonut]

You guys somehow ignore the fact that expansion cash is something all the leagues view as free money.

A lousy team like AZ with carpet bagging owners would lose money in just about every market, including Houston. It's EASY for corporate owners to direct cash flow from the actual product towards themselves and towards paying creditors.

It's a reason why community owned, non-profit Green Bay Packers consistently produces a very profitable, very competitive product--They don't siphon money towards themselves or towards interest payments.

 

[sexydonut]

I would kindly disagree:

IA admitted 35M in losses in year one. Considering attendance and the fact that there was a 15M buyout involved, that number seems to me very plausible.
All other losses in my calculations follow from that one. There is no 'borrowing to purchase', 'using club cash flow', etc that I am aware of at all.

Simply put, there have been too many years in which the salary floor system forced the team to spend money, and the local seat sales and TV interest was not enough to pay the bills.

There is no creative accounting necessary for that.

It actually is creative accounting.

Barroway completes buyout of Coyotes' minority owners

Notice the paragraph about the interest rate? Barroway's interest expenses are someone else's revenues.

 

[gstommylee]

You guys somehow ignore the fact that expansion cash is something all the leagues view as free money.

A lousy team like AZ with carpet bagging owners would lose money in just about every market, including Houston. It's EASY for corporate owners to direct cash flow from the actual product towards themselves and towards paying creditors.

It's a reason why community owned, non-profit Green Bay Packers consistently produces a very profitable, very competitive product--They don't siphon money towards themselves or towards interest payments.

Can we not compare a NHL franchise to the NFL... Btw the success of any sports franchise is about the location of the arena. That arena needs to be in the core populations. Houston arena is in houston in its core population. The coyotes arena is not in the core population of that region. NHL said they can't remain there. The team will relocate if they can't get the investors needed to build the arena in a better location. Btw you aren't the one that is going to be writing the check.