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

[gstommylee]

Tommy..... you do understand that the NHL would be entitled to charge a relocation fee that could make the total cost of buying the Coyotes and moving them the same as if they bought in as an expansion, right???

Jeremy Jacobs obviously thinks Houston is worth that given comments he’s made. There are probably a few other owners who also think that as well.

Right now they aren’t in any hurry to get into Houston. They know what the market is worth and unless Barroway decides he can’t do it anymore or some other owner wants to bail from their market nothing is going to happen.

And the price will just keep going up as time goes on as Seattle found out.

And clock is ticking. The coyotes are not going to have a 650m cost + relocation fee to be in houston. The NHL isn't not going to charge 250m or more for an relocation fee. You darn well know that.

The fee would be the difference between phx and houston. Phx is #12 houston is #7. Houston is not a top 5 or a top 3 market. The fee isn't going ridiculously high as you suggest.

 

[MNNumbers]

I rather think that if it happens that the team ends up in Houston, the numbers will be something like this:

1- Whatever Barroway has invested in the team, including his debt, he gets back. This might be 350M or so, or possibly less.

2- There will be a relocation fee. But this fee will be negotiated between NHL and Fertitta. I think that it is likely that Fertitta has an upper limit to what he will pay, and the NHL will seek to find that in the negotiations. It's clear that the Houston market should be more valuable than the Phoenix market, so there shouldn't be any problem with this.

Result will have to be more than 500M, because that is what the Hurricanes sold for (well, reportedly 503M with the rights to the minority share that Karmanos kept).

 

[gstommylee]

I rather think that if it happens that the team ends up in Houston, the numbers will be something like this:

1- Whatever Barroway has invested in the team, including his debt, he gets back. This might be 350M or so, or possibly less.

2- There will be a relocation fee. But this fee will be negotiated between NHL and Fertitta. I think that it is likely that Fertitta has an upper limit to what he will pay, and the NHL will seek to find that in the negotiations. It's clear that the Houston market should be more valuable than the Phoenix market, so there shouldn't be any problem with this.

Result will have to be more than 500M, because that is what the Hurricanes sold for (well, reportedly 503M with the rights to the minority share that Karmanos kept).

My understanding the fee is the difference between markets. Eh i don't see it being that. Hurricanes are worth more given they have a much better arena + much healthier team than the coyotes. What hurts the value of the coyotes is the debt and the arena in a very poor location.

 

[MNNumbers]

^^^We are, however, figuring in the debt into the franchise valuation.

Market valuation = arena + market.

True in some ways the Carolina should be worth more. However, for the sake of franchise values in the future, I can't see the announced price ending up lower than 500M

 

[gstommylee]

^^^We are, however, figuring in the debt into the franchise valuation.

Market valuation = arena + market.

True in some ways the Carolina should be worth more. However, for the sake of franchise values in the future, I can't see the announced price ending up lower than 500M

The arena being in a poor location should hurt the valuation imo. Houston is a top 10 tv market but it shouldn't require relocation fee that treats them like a top 3 market which they are not. Over valuing a market is not a good thing.

 

[sexydonut]

Is not the result of most LBOs that part of the business is also sold off for the financial sake of the new owners, who purchased the team with leverage? If so, how does that transfer to the Coyotes?

LBOs are more about buying on leverage, then having to siphon cash flow into debt service, and most likely having to pare back on investment into new products/services. If they are cut up and further sold, that is just another phase of it. Or they can be bled dry, or they can just continue indefinitely, with endless new loans and cash flow indefinitely being used to payback endless creditors.

Of course, even non-leveraged owners can be white collar criminals and gut their companies from within, e.g. Harold Ballard. But with leveraged buyouts, companies really have no choice but to commandeer their cash flow to pay back outsiders.

 

[TheLegend]

But he's still paying interest costs to the lender. Thus a good chunk of Coyotes cash flow is diverted towards debt service, and contributes to higher expenses and ultimately a financial loss.

Barroway is still a leveraged buyout guy, no different from the ones who bought Toys R Us, Sears, etc. by borrowing huge amounts of money, then gutting cash flow in order to pay back the loans.

Thus an otherwise viable/potentially viable business may have artificially inflated losses because of the financing involved.

I wasn't addressing the fact that Barroway financed a chunk of his ownership.

I was addressing your assertion that the NHL was.

 

[TheLegend]

People, get a clue. Tilman Fertitta is reportedly in negotiations to bring the Coyotes to HOUSTON...................NOT Austin.

He owns the NBA Rockets' arena, and wants a hockey team that can fill the arena on alternate dates.

Austin is NOT in the running. That's just silly.

Read on.

Sources say Houston Rockets owner Fertitta met with NHL Commissioner

Come on Uncle Tilman!!! MAKE IT HAPPEN!!!

I..... and a lot of others around here.... tend to take the word of Eliot Friedman.... who has many more connections within the NHL itself...... rather than some local reporter looking to pump up his viewership for ratings.

 

[TheLegend]

And clock is ticking. The coyotes are not going to have a 650m cost + relocation fee to be in houston. The NHL isn't not going to charge 250m or more for an relocation fee. You darn well know that.

The fee would be the difference between phx and houston. Phx is #12 houston is #7. Houston is not a top 5 or a top 3 market. The fee isn't going ridiculously high as you suggest.

Tommy..... read my post carefully again..... The league could tack on a relo fee that would bring the cost at least equal to an expansion bid. Or more if they think the market is worth that much.

To do otherwise could lead to DEFLATE many team values across the league.

BTW the clock's been ticking for almost ten years now...... that cliche isn't getting any fresher.

 

[uhlaw97]

I..... and a lot of others around here.... tend to take the word of Eliot Friedman.... who has many more connections within the NHL itself...... rather than some local reporter looking to pump up his viewership for ratings.

Eliot Friedman obviously does not know Tilman Fertitta very well then. You won't meet a more loyal Houstonian. He has given tens of millions to the University of Houston and sits on its board. He already owns the Rockets, and a NHL ready arena that needs something to fill the seats on non-NBA dates.

The idea that such a man would buy a team, and then forsake all of that in order to place a team in a smaller, less lucrative market that he has no loyalty to, and where he'd have to either get an arena built or spend money to lease someone else's arena is pretty ridiculous.

Friedman may have a lot of connections............but I'm afraid that he's missed the mark on this one.

Houston is the largest market in North America without a franchise, and is the home of the famous "Billionaire Buyer."

Austin is not.

Austin is NOT in the running.

PRINT IT!!!

 

[uhlaw97]

Also, Fertitta will have to pay dearly for the franchise, but remember, he is the BILLIONAIRE BUYER.

If he could buy a NBA franchise without even so much as batting an eye, he'll have no trouble paying whatever fees or costs the NHL puts in place.

 

[RogerRoger]

Also, Fertitta will have to pay dearly for the franchise, but remember, he is the BILLIONAIRE BUYER.

If he could buy a NBA franchise without even so much as batting an eye, he'll have no trouble paying whatever fees or costs the NHL puts in place.

How many teams of the big four are in Houston and how many are in Austin? Maybe Friedman is guessing that the NHL would go to the less saturated market?

 

[gstommylee]

Also, Fertitta will have to pay dearly for the franchise, but remember, he is the BILLIONAIRE BUYER.

If he could buy a NBA franchise without even so much as batting an eye, he'll have no trouble paying whatever fees or costs the NHL puts in place.

There is a difference between having the $$ to do so and actually be willing to do so. He's imo is not going to be paying 650m (sale + reloc) to get the coyotes to Houston. It makes zero sense imo. Lets not treat Houston as a top 3 or even a top 5 tv market.

 

[TheLegend]

Eliot Friedman obviously does not know Tilman Fertitta very well then. You won't meet a more loyal Houstonian. He has given tens of millions to the University of Houston and sits on its board. He already owns the Rockets, and a NHL ready arena that needs something to fill the seats on non-NBA dates.

The idea that such a man would buy a team, and then forsake all of that in order to place a team in a smaller, less lucrative market that he has no loyalty to, and where he'd have to either get an arena built or spend money to lease someone else's arena is pretty ridiculous.

Friedman may have a lot of connections............but I'm afraid that he's missed the mark on this one.

Houston is the largest market in North America without a franchise, and is the home of the famous "Billionaire Buyer."

Austin is not.

Austin is NOT in the running.

PRINT IT!!!

It doesn't matter what Friedman knows about Fertitta. Friedman knows NHL people..... for a lot longer than some video hack out of Austin TX. Friedman wouldn't say what he said without some legs to it. No amount of pumping Fertitta's tires on a hockey board is going to change that fact.

Also, Fertitta will have to pay dearly for the franchise, but remember, he is the BILLIONAIRE BUYER.

If he could buy a NBA franchise without even so much as batting an eye, he'll have no trouble paying whatever fees or costs the NHL puts in place.

Have you been paying attention to the various threads here...???

Fertitta was quoted he thinks the asking price for an expansion team is too high..... and that "markets south of the Mason-Dixon line" struggle with hockey. Sure sounds like a guy who's ready pay anything for a franchise that he openly claims will struggle in just because "HE'S A BILLIONAIRE", doesn't it??

 

[Aero 75]

Interesting article concerning where the major leagues should expand next. It has Houston at the top of the list
for the next NHL city, but also remarks it will need to "invest locally in growing the game on the youth level".
Something I also noticed in the article is its choices for MLB expansion. Montreal as the top choice should
surprise no one, but it lists San Antonio as its second choice, but also noting it would "go toe-to-toe with Austin,
which has a lot of merit in its own right". Something to keep an eye on that could change things.

Where NFL, NHL, MLS, NBA, WNBA and more will expand next

 

[uhlaw97]

It doesn't matter what Friedman knows about Fertitta. Friedman knows NHL people..... for a lot longer than some video hack out of Austin TX. Friedman wouldn't say what he said without some legs to it. No amount of pumping Fertitta's tires on a hockey board is going to change that fact.





Have you been paying attention to the various threads here...???

Fertitta was quoted he thinks the asking price for an expansion team is too high..... and that "markets south of the Mason-Dixon line" struggle with hockey. Sure sounds like a guy who's ready pay anything for a franchise that he openly claims will struggle in just because "HE'S A BILLIONAIRE", doesn't it??

For an expansion team, maybe, but not merely for relocation, which would likely be quite a bit less costly.

Trust me. If he can buy a MORE EXPENSIVE NBA franchise without even so much as batting an eye, then he'd have no trouble at all buying a LESS EXPENSIVE NHL franchise, especially one struggling to the extent that the Yotes have been. Hell, he already owns a NHL-ready state of the art arena. He could buy them, move them, and install them with relatively few complications.

I'm sure that Friedman knows plenty of people in the NHL. But he obviously doesn't know Tilman Fertitta, what he is well-known for advocating and expressing an interest in, his loyalty to the city of Houston (a loyalty which he does NOT similarly have for Austin), and the position that Tilman is in.

Austin is NOT happening.

Houston will..............the only question is when.

As I said.............PRINT IT!!!

 

[uhlaw97]

There is a difference between having the $$ to do so and actually be willing to do so. He's imo is not going to be paying 650m (sale + reloc) to get the coyotes to Houston. It makes zero sense imo. Lets not treat Houston as a top 3 or even a top 5 tv market.

He has already said that he's interested in doing just that: getting Houston a NHL franchise so that his arena won't sit empty and non-revenue producing on non-NBA dates.

Remember, he paid over $800 million for a NBA franchise. Given that, the idea that he wouldn't be willing or able to pay considerably less for a NHL franchise isn't convincing.

That dog simply doesn't hunt. It may bark, but it doesn't hunt.

Houston may not be a Top 3 market, but it is the largest market in North America without a NHL franchise. It's ripe for a NHL relocation! Austin isn't.

 

[uhlaw97]

How many teams of the big four are in Houston and how many are in Austin? Maybe Friedman is guessing that the NHL would go to the less saturated market?

Because even a "saturated" Houston market would be larger than the Austin market.

Remember, TV markets are based upon number of TV sets. Houston has far, FAR more than Austin.

In fact, Houston is the largest market in North America without a NHL team, regardless of "saturation."

Austin isn't close. On top of that, Tilman would have to shell out a lot more money for a venue in Austin. In Houston....................he's already set and ready to make money.

For those reasons, if Fertitta buys and moves a team................it'll be to Houston, NOT Austin.

 

[uhlaw97]

Interesting article concerning where the major leagues should expand next. It has Houston at the top of the list
for the next NHL city, but also remarks it will need to "invest locally in growing the game on the youth level".
Something I also noticed in the article is its choices for MLB expansion. Montreal as the top choice should
surprise no one, but it lists San Antonio as its second choice, but also noting it would "go toe-to-toe with Austin,
which has a lot of merit in its own right". Something to keep an eye on that could change things.

Where NFL, NHL, MLS, NBA, WNBA and more will expand next

I don't see Austin getting a MLB team, any more than Columbus, OH or Sacramento, CA might.

San Antonio should be ahead of Austin among Texas cities in that regard. MUCH larger market.

 

[gstommylee]

He has already said that he's interested in doing just that: getting Houston a NHL franchise so that his arena won't sit empty and non-revenue producing on non-NBA dates.

Remember, he paid over $800 million for a NBA franchise. Given that, the idea that he wouldn't be willing or able to pay considerably less for a NHL franchise isn't convincing.

That dog simply doesn't hunt. It may bark, but it doesn't hunt.

Houston may not be a Top 3 market, but it is the largest market in North America without a NHL franchise. It's ripe for a NHL relocation! Austin isn't.

NBA team is worth way way way more than a NHL team. (NBA has a huge nice luxury TV deal) NHL team is currently over valued in price due to the Balmer 2b on clippers effect. Hence why Vegas paid 500m and Seattle paid 650m.

 

[HockeylessInHouston]

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.

More like up to 4 hours with traffic in both cities. It takes me about an hour just to get from the SE side of Houston to the west side along BW-8. Sometimes longer.

Also, Austin's arena only seats about 6500 if memory serves correct.

 

[HockeylessInHouston]

Should also mention there is NO practice facility for an NHL team to use here. The one in Sugar Land the Aeros used is now a dump with millions of dollars of deferred maintenance which needs to be done. Also, last I heard they were running the place on a borrowed refrigeration unit as the old one crapped out and the owners didn't have the money to fix it. The place even closed temporarily.

So if Fertitta wants an NHL team, he needs to build a practice facility first, which could take a year or two.

 

[gstommylee]

Should also mention there is NO practice facility for an NHL team to use here. The one in Sugar Land the Aeros used is now a dump with millions of dollars of deferred maintenance which needs to be done. Also, last I heard they were running the place on a borrowed refrigeration unit as the old one crapped out and the owners didn't have the money to fix it. The place even closed temporarily.

So if Fertitta wants an NHL team, he needs to build a practice facility first, which could take a year or two.

That's an insane requirement to make on him especially on a possible relocation.

 

[HockeylessInHouston]

That's an insane requirement to make on him especially on a possible relocation.

Vegas had to build their practice facility. Where would the Houston team practice? The ice rink in the middle of the Galleria?

 

[gstommylee]

Vegas had to build their practice facility. Where would the Houston team practice? The ice rink in the middle of the Galleria?

Vegas was an expansion team there was time for them to build it. Relocation is much much different. NHL is not going to have 2 years of lame duck season just to have Houston wait until after the practice rink is done. So yea it would have to be there until its done.