Balsillie/Phoenix part V

[MoreOrr]

Any estimates on how much the NHL will be spending on this court battle?
And what would be the $ difference between an Expansion Fee for another team in Phoenix (or Houston, or Las Vegas, or Kansas City) compared to the yet 'undeclared' Expansion Fee/Territorial Rights Fees that a team in Hamilton would have to pay?

 

[mouser]

AHHH,... but I've never contended that the MLSE are in this alone. I'm simply saying that MLSE has huge influence in the League, and that what they want strongly influences the BOG. Of course, I'm only using personal speculation here, but beyond not expanding/maintaining "the NHL's horizons" in Arizona, what other strong reasoning does the League have against a team being put in the Hamilton area?
And if it is in fact all about Expansion/Territorial Rights Fees that Balsillie refuses to pay then where's the evidence that the League even ever presented Balsillie with $$ figures? The League can just come right out and say: "We told Balsillie that if he wants a team in Hamilton then what he has to do is pay xxx amounts in Expansion/Territorial Rights Fees, but he refuses to do so and keeps trying these relocation tactics".

My point is whatever Balsillie "was told by MLSE" isn't enforceable solely by them.

I doubt the league has ever presented Balsillie with expansion or territorial rights fee figures, because I don't think either topic has advanced far enough within the BoG to arrive at what those numbers might be. In my view, the Balsillie request to avoid those fees is preemptive and part of the overall strategy to have the bankruptcy court force the NHL to accept him as owner and relocation.

At the same time, the NHL has no obligation to provide those numbers. There's no expansion underway, so of course there's not going to calculate an expansion fee. The league's position is they don't want the team moved, not surprising they haven't gone through the work that would be required to determine adequate compensation for the Leafs and Sabres. Though I'm sure representatives for those teams are doing their homework in the event they do need to submit recommendations to the BoG.

 

[MoreOrr]

I-R-R-E-P-A-R-A-B-L-E damage- A team in Hamilton will reduce revenues in both Buffalo and Toronto. The Sabres stand to lose up to 20% of their market and therefore their revenue base. According to Forbes, the Sabres had 76 million in total revenues last year. Reducing that likely places the Sabres in bankruptcy reasonably soon. How would you propose to repair that? Additionally, losing control over location rights reduces the value of all franchises. How much would it reduce the value of the Maple Leafs? How does one repair that? It also reduces the value of the remaining teams. Repair that?

You're right to focus your commentary on Buffalo, because the "irreparable" damage to Toronto is a joke. Toronto would likely be less "damaged" than the Rangers or Los Angeles were by allowing other teams in their "backyards". Yes, Toronto is a smaller city than the other two, much the hockey fanbase in Ontario (and across Canada) more than makes up for that.

And yes, Buffalo would be negatively effected, no doubt in that. Though that 20% figure is definitely at the high end. I've heard that only about 8% of attendance in Buffalo generally comes from across the border (though I might be remembering incorrectly).

But also, these nearby teams create greater rivalries, as the NY area teams will attest to, and those kinds of rivalries also attract fans.

 

[kdb209]

AHHH,... but I've never contended that the MLSE are in this alone. I'm simply saying that MLSE has huge influence in the League, and that what they want strongly influences the BOG. Of course, I'm only using personal speculation here, but beyond not expanding/maintaining "the NHL's horizons" in Arizona, what other strong reasoning does the League have against a team being put in the Hamilton area?

MLSE has a huge influence in the league when most other teams have only a minor vested interest in the decision.

Most teams are likely to side with the Leafs and not approve a relocation to So Ontario unless their is an agreement and suitable territorial fees negotiated.

I think the situation will be quite different in 2 or 3 or 4 or whatever years (assuming that JB fails with the Hamilton Coyotes) if the league is looking at expansion and those teams are looking at pocketing $10+M each. I think the league will tell the Leafs/Sabres "come up with a number or we'll come up with one for you" and then happily take the money and run and approve an expansion even over the Leafs/Sabres objections.

Which is why I still think the endgame is expansion with a 2nd team playing in the ACC (ala the Staples Center and the Clippers) - minimal impact on the Sabres, the Leafs get ongoing revenues (in addition to any territorial fees), and it undercuts any attempt to build an arena which could compete with the ACC for other events.

 

[TaketheCannoli]

I think the situation will be quite different in 2 or 3 or 4 or whatever years (assuming that JB fails with the Hamilton Coyotes) if the league is looking at expansion and those teams are looking at pocketing $10+M each. I think the league will tell the Leafs/Sabres "come up with a number or we'll come up with one for you" and then happily take the money and run and approve an expansion even over the Leafs/Sabres objections.

Which is why I still think the endgame is expansion with a 2nd team playing in the ACC (ala the Staples Center and the Clippers) - minimal impact on the Sabres, the Leafs get ongoing revenues (in addition to any territorial fees), and it undercuts any attempt to build an arena which could compete with the ACC for other events.

kdb, do you really believe the expansion fee could be $300 million in addition to any territorial fees? I have heard conjecture by Toronto radio that the Leafs will get $120 Million + and the Sabres could ask over $50 million if a team is placed within their home territory.

Of course, I have always maintained MLSE would push for a new team to play in the ACC, ever since an NHL PA guy suggested that's the only way to get their support.

 

[pepty]

Why? Another Ontario team that doesn't get on TV during the early games?

Or to try to give Ontario viewers a reason to stay up to 1am?

If the CBC winds up taking Vancouver, Calgary, Edmonton games off the schedule to put Hamilton road games on TV to provide late-night viewing for Ontario customers, that'll go over like a turd in a punch-bowl.)

Edmonton and Calgary might be affected,but the Senators will disppear from the national braodcasts of HNIC altogehter.

As it is they are only on in the aftenoon or the odd game when the Leafs are on the late braodcast.

The GTA boosters at HNIC will ensure that the new Toronto/Hamilton rivalry will be the central obsession at our national broadcaster.

 

[HockeyScholar]

The GTA boosters at HNIC will ensure that the new Toronto/Hamilton rivalry will be the central obsession at our national broadcaster.

Don't see much of a rivalry seeing as though they'll only be playing each other twice a year and never in the playoffs unless they meet in the Stanley Cup finals.

Regarding this Buffalo issue, does anybody have any links to support their claims? I have heard on this message board alone that Buffalo's tickets 5-25% Canadian owned. What is the real number?

With the recent American protectionism and border laws, this will only have a negative impact on Canadians who travel to Buffalo to follow the Sabres.

 

[BigFatCat999]

Edmonton and Calgary might be affected,but the Senators will disppear from the national braodcasts of HNIC altogehter.

As it is they are only on in the aftenoon or the odd game when the Leafs are on the late braodcast.

The GTA boosters at HNIC will ensure that the new Toronto/Hamilton rivalry will be the central obsession at our national broadcaster.

When I travel across the border and watch HNIC I thought the total coverage was piss poor. They are aimming for rating I understand that BUT there ARE other provinces other than Ontario to cover.

 

[Fish on The Sand]

Ah, I get it. Woops. My bad. But the league has 0 teams in the northern states west of Minnesota, no one seems too worried about that.

there's very few major markets in the north west of minnesota though. There is Seattle and Portland, and Seattle is simply not in the conversation due to lack of an existing building, lack of public willingness to use tax dollars to fund a new building and the lack of any potential owners to build an arena or even operate a team in Seattle. Portland (if you consider it a major market) faces many of the same problems. In the south, there are many large tv markets that make it more attractive.

 

[MoreOrr]

What's the predicted lifespan of the Coyotes if they don't get moved?

 

[triggrman]

What's the predicted lifespan of the Coyotes if they don't get moved?

with a better lease better business sense and better marketing who knows.

 

[Dolemite]

Oooo look what just came from the Hamilton Spectator (re: the Coyotes)!

http://www.thespec.com/News/Local/article/577233

Love dem unbiased articles!!!

 

[Clock]

Ugh. I feel for the Phoenix fans.

 

[seanlinden]

Guys, remember how this process works.... If somebody wants to locate a team in another's region; he negotiates with MLSE (or the Sabres) for a fee that would put the Leafs/Sabres in favour of the move. At the BoG meeting (with Balsillie out of the room); every member team has a voice and a vote... they can all adress their concerns or reccomandations to the group before the proposal is voted on.

In the past, teams haven't felt like it would impact on their future franchise value; so they're happy to take an immidate cash payment. But those were the days before sports were considered to be such a business-driven entity; now its a matter of buying their support.

Buffalo is a team that barely makes money as-is; and taking away 20% of the fanbase would likely not make it a viable NHL city anymore; therefore they will be strongly apposed to the move (and problably a lot of sympathy on the BoG). Therefore, in order to get Buffalo's support; Balsillie would basically have to pay for their future relocation & market development costs to a place like KC.... not sure what that would cost; but I'd guess around $50million.

In terms of Toronto; they are the league's most valuable franchise, and adding another team in the area certaintly hurts it. They set a high benchmark for every other NHL franchise (specially when they turn down multi-billion dollar offers for MLSE); and that might be enough to justify keeping Hamilton out. In order to get Leaf support; they'd want no cash; instead they'd want the management agreement to Copps (along with a 20+ year lease), the Coyotes' TV distribution rights, and possibly merchandising rights aswell. If Balsillie doesn't buy their support, the Leafs will fight tooth & nail in the BoG meetings to keep him out. Anyone who suggests cash to MLSE has no idea what they are talking about; this is a growth company with more cash then it knows what to do with (likely waiting for the economy to turn its way around before they get in on something else). They can finance anything at basically 0 risk so they have no use for cash. MLSE currently has a licensce to print money, and there's no reason to sell that licesnce because they do not need the cash.

However, it doesn't really matter; because the short term profits from further exploiting a market like Hamilton do not compare anything to the potential lost revenues in Phoenix and league-wide when MLS & the KHL emerge. That is reason enough to say no to a move to Hamilton. The NHL will strategically locate where it feels fit; and Hamilton is obviously not one of those places.

The arguement of strengthening the core of the NHL is complete bull; its plenty strong and now is the time to get in on the ground floor of these growing population centres. You've got Toronto, NYR, Montreal, Philly, Detroit, Vancouver, Calgary, Edmonton, Ottawa, Boston, Dallas (hicks is selling because of other investments that went sour); and a bunch of other very strong franchises.

 

[Space Herpe]

Earlier in the day, speaking on Toronto radio station The Fan, Kelly wondered: "How much money must (a franchise) lose before someone says "perhaps they ought not to be there?"

Good question.

 

[Dolemite]

Good question.

The problem was mismanagement not the city. Jeez it's amazing how thick headed people are. Everyone on the 'move the Coyotes' have an agenda and this article is proof.

 

[BTD5504]

sad to say, but it isn't looking good for the future of hockey in Phoenix after this season.

 

[CGG]

Regarding this Buffalo issue, does anybody have any links to support their claims? I have heard on this message board alone that Buffalo's tickets 5-25% Canadian owned. What is the real number?

With the recent American protectionism and border laws, this will only have a negative impact on Canadians who travel to Buffalo to follow the Sabres.

This Buffalo impact gets vastly overstated. Although there are ticket buyers from Canada, Buffalo wouldn't automatically lose all of them with a new team in Hamilton. The big thing that most people miss is that Buffalo games aren't even available on TV across the border in Canada, so there's no way I'm believing they suddenly lose 25% of their revenue when they won't lose any TV-watching fans.

Add to this that Buffalo is more than 50 miles from Hamilton and you have to cross a border to get there. They may be protected by NHL by-laws, but not common sense. And I don't care if the SE corner of Hamilton is 49.8 miles away from the NW corner of Buffalo. You could make a decent argument that Hamilton shouldn't pay Buffalo anything.

 

[Space Herpe]

The problem was mismanagement not the city. Jeez it's amazing how thick headed people are. Everyone on the 'move the Coyotes' have an agenda and this article is proof.

I'm not saying it was mismangement.
I'm not saying it was the city/location.

I'm not saying it wasn't mismangement.
I'm not saying it wasn't the city/location.

It is a good question.
How long must *whatever* be there losing money before some realizes it shouldn't be there?

The *whatever* could be:
A McDonald's
A gas station
An NHL franchise
...etc...

 

[BigFatCat999]

Guys, remember how this process works.... If somebody wants to locate a team in another's region; he negotiates with MLSE (or the Sabres) for a fee that would put the Leafs/Sabres in favour of the move. At the BoG meeting (with Balsillie out of the room); every member team has a voice and a vote... they can all adress their concerns or reccomandations to the group before the proposal is voted on.

In the past, teams haven't felt like it would impact on their future franchise value; so they're happy to take an immidate cash payment. But those were the days before sports were considered to be such a business-driven entity; now its a matter of buying their support.

Buffalo is a team that barely makes money as-is; and taking away 20% of the fanbase would likely not make it a viable NHL city anymore; therefore they will be strongly apposed to the move (and problably a lot of sympathy on the BoG). Therefore, in order to get Buffalo's support; Balsillie would basically have to pay for their future relocation & market development costs to a place like KC.... not sure what that would cost; but I'd guess around $50million.

In terms of Toronto; they are the league's most valuable franchise, and adding another team in the area certaintly hurts it. They set a high benchmark for every other NHL franchise (specially when they turn down multi-billion dollar offers for MLSE); and that might be enough to justify keeping Hamilton out. In order to get Leaf support; they'd want no cash; instead they'd want the management agreement to Copps (along with a 20+ year lease), the Coyotes' TV distribution rights, and possibly merchandising rights aswell. If Balsillie doesn't buy their support, the Leafs will fight tooth & nail in the BoG meetings to keep him out. Anyone who suggests cash to MLSE has no idea what they are talking about; this is a growth company with more cash then it knows what to do with (likely waiting for the economy to turn its way around before they get in on something else). They can finance anything at basically 0 risk so they have no use for cash. MLSE currently has a licensce to print money, and there's no reason to sell that licesnce because they do not need the cash.

However, it doesn't really matter; because the short term profits from further exploiting a market like Hamilton do not compare anything to the potential lost revenues in Phoenix and league-wide when MLS & the KHL emerge. That is reason enough to say no to a move to Hamilton. The NHL will strategically locate where it feels fit; and Hamilton is obviously not one of those places.

The arguement of strengthening the core of the NHL is complete bull; its plenty strong and now is the time to get in on the ground floor of these growing population centres. You've got Toronto, NYR, Montreal, Philly, Detroit, Vancouver, Calgary, Edmonton, Ottawa, Boston, Dallas (hicks is selling because of other investments that went sour); and a bunch of other very strong franchises.

Funny thing is that the NHL hasn't even come close to maximizing it's marketing potiential . It's not in Houston, Seattle, KC, Indianapolis, Las Vegas, and San Antonio. There is a twisted case that the NHL could expand to 40 teams and still be viable. It's not going to happen but the sites for teams are there. To me, Toronto is like Saudi Arabia and hockey is oil. There is one monopoly on Toronto but another team can drill there and not effect the other. Should the GTA have another team? Yes. Will they? That's up to MLSE. Now the real test might be an anti-monopoly case against MLSE preventing a team from moving into Toronto.

 

[Dolemite]

I'm not saying it was mismangement.
I'm not saying it was the city/location.

I'm not saying it wasn't mismangement.
I'm not saying it wasn't the city/location.

It is a good question.
How long must *whatever* be there losing money before some realizes it shouldn't be there?

The *whatever* could be:
A McDonald's
A gas station
An NHL franchise
...etc...

The losing money has nothing to do with whether or not the team should be there. The losing of money is whether or not the people running the team up to about two years ago should be there and they shouldn't.

 

[Shellz]

The losing money has nothing to do with whether or not the team should be there. The losing of money is whether or not the people running the team up to about two years ago should be there and they shouldn't.

This.

 

[Dogbert*]

Kelly is interested in getting as much revenue for the league as possible, because the players' cut is dependent on it. If he thinks that Hamilton or whatever other city will bring in more cash than Phoenix does, he's going to support it. He has no responsibilities towards Phoenix or its fans.

 

[Lemond23*]

The Coyotes have averaged less than 15,000 in home attendance for a number of years now. That's pretty awful.

 

[Dolemite]

Kelly is interested in getting as much revenue for the league as possible, because the players' cut is dependent on it. If he thinks that Hamilton or whatever other city will bring in more cash than Phoenix does, he's going to support it. He has no responsibilities towards Phoenix or its fans.

It doesn't matter where you put an NHL team.

If you have idiots driving say the New York Rangers into the ground. Is relocation really going to solve the issue? No.

The Coyotes have averaged less than 15,000 in home attendance for a number of years now. That's pretty awful.

Again, if you have idiots driving a team into the ground who is going to show up and watch them?