Coyotes to stay in Phoenix, apparently
- Thread starter ZBBM
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Leafaholic99
New member
Looks like he coyotes are saved, doesn't seem like they will move.
BARF... it was a close one, could of gone either way. Can't afford to pay for emergency services but are willing to throw money into a proven loser.Nik the Trik said:
Tweet Quote:
City Council reminds me of a poker player who calls an all-in bet thinking they are pot committed when really they should fold.
Resident claims he is going to file a referendum to have decision over turned... to be continued?
That's obviously debatable... projections are exactly that, projections. I wouldn't be surprised if they loose the 50M over 5 years and exercise their out clause and move the team. 50M and 5 years to move the team could end up being a great investment and it's easier then you think to manipulate financials to show a loss of 50M if they choose to.cw said:
Kin
New member
cw said:
As someone who watched what he could of the meeting it does seem like that was the idea put forth by the new ownership group and the NHL and glommed onto by the deal's supporters. I think it probably holds true. The alternate idea, that a separate arena management company could have found enough non-anchor tenant events to generate an approximate amount of revenue to the Coyotes, never seemed realistic in light of the competing arenas run by pretty well connected arena management firms.
That said I suppose that if I were a Glendale resident I would have maybe liked a little bit more acknowledgement from the four votes in favour that the deal for the city really kind of sucks but is a marginal improvement on the team moving. The league/new owners did have the city over a barrel and they took advantage in every way they could. That's maybe not entirely fair considering that the league would have been more than justified in just moving the team years ago but considering the way that Glendale taxpayers have ultimately done really, really poorly by their experience with NHL hockey(financially anyway) I can imagine a non-Coyote fan being pretty upset with the whole situation.
That said there was something to be said for the fact that there are hockey fans in Arizona and a bunch of them came to the meeting and spoke with passion(if not eloquence) about how much they want the team to stay. As a person who cares about government properly using tax dollars to spur economic growth I think Glendale's experience with the NHL should be example 1A in bright bold letters why cities shouldn't finance major league sports facilities but as a hockey fan? I'm genuinely happy those people get to keep their team.
Besides, without the Coyotes what team would we joke about playing in front of nobody?
cabber24 said:
There's a little more going on that projections here. There's a very detailed history in the bankruptcy court on what has gone on financially. There's a guarantee that if Glendale loses more than the $6 mil per year, they'll pay it back before they leave town.
They needed $15 mil per year to break even and got it in this deal. To lose $10 mil more per year when the new CBA improved their situation with increased revenue sharing is quite a margin of error.
And the losses are tied to a team that is third party audited by the NHLPA and limited to a pretty tight (close to excellent in many respects) lease agreement - so there are real limits to the accounting gamesmanship that can be played because it's detailed pretty well in a 100+ page document.
If the Goldwater Institute leaves well enough alone and the US economy rebounds over those five years, there's a good shot they can survive. And that's the key. Long term, with the market growth projected for that area, I think they'll be fine and a better location than many of the smaller NHL markets. I've said it before: if I had to make a choice between a long term investment between the Sabres and the Coyotes, I'd invest in the Coyotes. It's getting over this rough patch and the damage from the bankruptcy that's the critical time. I think this new ownership and Bettman & the NHL feel similarly.
And if they pull this off, there is a great reward (roughly $100 mil) awaiting them in the increase of franchise valuation.
Kin
New member
cabber24 said:
Even if they do that the 30 million that the city's losses would be capped at over those five years seems like a fairly workable figure considering the alternative of letting the team leave. Rather than the sort of false reporting shenanigans that you're talking about I think that there are two slightly more pressing issues for me if I'm a Glendale resident:
1. That 30 million dollar guarantee in the event the out clause is used is one that would help but if the ownership group's projections are off and the city loses significantly more than the six million dollar a year figure right away the city will probably have to make immediate cutbacks in terms of services and raise taxes where they can. If the team then does move whatever amount they pay the team back wouldn't retroactively smooth over the damage that can do.
2. It doesn't seem likely to me that there's a figure that the city could lose over and above that six million a year that would change the almost certainly likely situation where paying the city for their excess losses would be enough of a penalty to change the fact that, five years from now, the Coyotes will be more valuable elsewhere then they would be in Phoenix. Unless the league has made promises that before those five years are up the demand for NHL franchises elsewhere would be met with expansion the Coyotes could be worth 500+ million dollars to someone in Quebec City or Markham or Seattle in that time and that would be a number that would be very hard to turn down.
Nik the Trik said:
That's been the business case for the city since before the bankruptcy. It was the business case presented to the bankruptcy court and was accepted by the bankruptcy judge when he rendered his judgement as he looked out for the creditors (of which the city was one).
On the original deal, the city to some extent messed up and allowed themselves to be misled by Ellman & Moyes. But there's been a lot of scrutiny on this deal. All they're trying to do is save the taxpayers some money - to avoid the bigger losses if the team leaves vs the deal they've structured to reduce those losses if the team stays.
No matter which way they went, the taxpayers were going to lose. This deal gives them a fair chance to reduce their losses.
Britishbulldog
Active member
Nik the Trik said:
New Jersey Devils??...one of the Florida teams? It's time for those 3 to move or fold.
Kin
New member
cw said:
I would use stronger language than the bolded sentence but I don't disagree with anything you're saying. Like I said, if I were a Glendale resident I'd be annoyed at certain things in the deal but ultimately I would probably be in favour of the lease, hockey fan or not. I just hope it would salt the earth for any other cities who think building an arena is a good use of tax dollars.
cabber24 said:
The bankruptcy hurt them beyond the financial hurt they were experiencing. In fact, Moyes to some extent tried to scuttle the franchise to try to help Balsillie get it out of town. If Goldwater doesn't attempt to obstruct this deal, I think they'll see a 10-15% bump in revenues very quickly now that this is settled. Understandably, a bunch of fans and corporate sponsors bailed or were on the fence with the uncertainty of the future of the team in Glendale. That should improve now that they have this resolution.
They just re-signed GM Maloney who I think is a good GM, a very good coach in Tippett and a good goalie in Mike Smith. They have a good D and good D prospects for depth. They just need some scorers and with this resolution, should be able to attract some UFAs. They should be quite competitive coming out of this mess.
lamajama said:
Let's kick some numbers around on that conspiracy theory:
$170 mil for the NHL francise in Phoenix was the NHL's price when I last checked
$50 mil in losses is what must be exceeded for them to get out in five years
$10 mil is a low ball of what they'd have to give back to Glendale as if the team lost $50 mil, Glendale losses would fall short as well and they have to make those up when they leave.
$10 million is a low ball on the relocation fee they'd have to pay the NHL - could be considerably higher and include indemnities
So we're talking about $240 mil minimum roughly to "join the NHL franchise owners club".
$240 mil would roughly buy any one of 17 of the 30 NHL teams now and in most of those cases, they'd have millions left over - it would be cheaper:
http://www.forbes.com/nhl-valuations/list/
And all they had to do was walk away from this deal which would have killed Phoenix and bid on a clean relocated franchise in Seattle/Kansas City/Quebec that would have all the start up headaches they would encounter if they moved there five years from now.
Meanwhile, the NHL takes a significant merchandising/broadcasting/sponsoring/advertising financial hit because they're no longer in one of the top US television markets (which is a part of what this fight for Glendale is about).
Mathematically, in my opinion, the conspiracy theory is on rather shaky ground.
Kin
New member
cw said:
The problem with that is that I doubt many of the teams that could be bought for 240 million have leases that could be broken easily or without significant penalty. If relocation is the ultimate goal then this deal might very well prove the easiest avenue for it.
Likewise if there is an expansion process there's every reason to think that the NHL would be looking for significantly more than 240 million dollars per franchise so that doesn't seem to be a more attractive proposition.
With all of that said, however, I'm not convinced that the people buying the Coyotes are definitely planning on moving the team in five years. I think, all things considered they'd much rather the Coyotes be a screaming success where they are and reap the benefits themselves with a very accommodating lease. However, I still think the Coyotes are going to have to be a pretty wild success for them not to be more valuable in Seattle or QC in five years time especially considering that the relocation fee and the giveback to the city could be factored into any subsequent purchase price. Especially if, as we're seeing in Seattle and Markham, the people they're selling to are planning on building a Westgate style business around a new team.
Nik the Trik said:
If they wanted to move that team to Markham, they have to indemnify the Leafs and pay the NHL for market "inventory" in southern Ontario. Hamilton would be worth $300-$400 mil now as it would quickly be in the top 4 in NHL revenues and Markham in the $500 mil neighborhood. The NHL owners are not going to give that away. Those guys would have to pony up a major hunk of the difference.
Likewise, Quebec city is a market inventory/franchise expansion opportunity for the NHL - not as grand as southern Ontario. But that would also require much more than the $10 mil I listed for a relocation fee to compensate the owners. The request for dough for that has survived antitrust scrutiny in the courts. The bickering would just be over how much.
If they want to go to Heaven, they'll have to pay for it and that needs to be factored into the conspiracy theory math. When it is, it doesn't look nearly so rosy. If that's what they really wanted to do, all they had to do was walk away and start bidding on a new location.
From the NHL's perspective, in 10-15 years time, that Phoenix market is likely to overtake a number of the existing NHL small markets in revenues. So what they needed was someone to hang in for a tough decade or so.