CXLI - UPDATE 1/27 - Coyotes working on deal to play at 5,000-seat arena at ASU

[voyageur]

I don't think the 800k metro of QC (which are not all sports fans of hockey fans) will make a dent in tv ratings to justify a large increase. Not even temporarily. The revenue they will bring to the table is ticket sales (splitting up corporate Quebec between the Habs and Nords - the Habs will be the sexier option). No league wants to rely on ticket sales anymore. You live and die by performance.

What the hell are you talking about? This is a league that relies on ticket sales. Have you looked at why games are being cancelled in Canada right now. Because the NHL needs that revenue. Especially that Toronto-Montreal revenue which makes the league richer, sharing with the bottom. Edmonton and Vancouver are probably revenue sharing generating teams too at this point, when you look at attendance in California.

You take a metro and expand it with other regions around the metro and there are over a 1 million fans. And a lot who are hockey fans.

Anyone who says Quebec won't draw fans is simply talking out of their ass, having no idea about the love of hockey there. That's where Jean Beliveau comes from, the Nordiques were the first team to start selling out in the WHA. Get to the NHL they outdrew the Bruins. Junior hockey, attendance is great. What more proof do you need?

I am willing to bet that the price point of tickets, and corporate sales trumps what Houston could put up in revenues. Houston has alot of the same problems Atlanta did, starting with what people will pay for hockey and general interest in the community for hockey.

It's funny that a Canadian guy would say this about Quebec City. Have you been there? You know that Quebec breathes hockey right.

Texas, it's the Friday night lights, you might get better attendance for a high school football game.

Like c'mon man. If you are going to trash a market, make sure it is a factual dig.

 

[MNNumbers]

Off the rails.....

It just seems impossible to NOT talk are relocation, doesn't it? Especially when there is no news out of Tempe.

Concerning ticket sales vs media markets and contracts......

It is true this is a gate driven league. However, it's also true that, for the other 31 owners, it matters very very little how many tickets are sold in Glendale, Tempe, AVMC or in Quebec City. That money all stays local. The only ones who really care about local ticket sales and local TV contracts are the local owners.

Therefore, for Jacobs, for example, it doesn't make one bit of difference if the team sells out Centre Videotron, ar has half empty crowds in GRA. The only thing he cares about it how important the league appears to broadcasters, because that is where his bread is buttered.

For this reason, I continue to believe that, if the Yotes have to relocate, Houston will be the chosen spot, the first choice. There is no other choise, unless Fertitta says....."XXX amount and no more", and that amount is much less than the league is willing to accept. In that case (and there would be a reasonable chance that could happen), who knows what happens next? The only other place that anyone is talking anywhere except here is QC. That doesn't mean they HAVE to go there. It's just the current state of affairs.

 

[voyageur]

Off the rails.....

It just seems impossible to NOT talk are relocation, doesn't it? Especially when there is no news out of Tempe.

Concerning ticket sales vs media markets and contracts......

It is true this is a gate driven league. However, it's also true that, for the other 31 owners, it matters very very little how many tickets are sold in Glendale, Tempe, AVMC or in Quebec City. That money all stays local. The only ones who really care about local ticket sales and local TV contracts are the local owners.

Therefore, for Jacobs, for example, it doesn't make one bit of difference if the team sells out Centre Videotron, ar has half empty crowds in GRA. The only thing he cares about it how important the league appears to broadcasters, because that is where his bread is buttered.

For this reason, I continue to believe that, if the Yotes have to relocate, Houston will be the chosen spot, the first choice. There is no other choise, unless Fertitta says....."XXX amount and no more", and that amount is much less than the league is willing to accept. In that case (and there would be a reasonable chance that could happen), who knows what happens next? The only other place that anyone is talking anywhere except here is QC. That doesn't mean they HAVE to go there. It's just the current state of affairs.

I think you neglect two important aspects of the league beyond TV contracts. Which I wonder if Arizona or Houston matter to major broadcast networks, who generally stick to teams that get a high TV rating. New York, Boston, Chicago, Detroit, Pittsburgh, Philly, Washington, Minnesota, St. Louis, Denver, and more recently Tampa,Vegas and Seattle. Those are markets which are good TV markets for the NHL. Dallas, how many Dallas games are nationally broadcast this year on the major networks? I know Arizona has got quite a few broadcasts I believe on ESPN this year. Can anyone tell me what the local ratings were?

But the important ones in regards to revenue are revenue sharing. And that would directly affect the profits of an owner like Jacobs. Does anyone have a breakdown of revenue sharing in the NHL? We know that the bottom 10 markets are all revenue sharing teams. The extent of revenue shared is another discussion. But the stronger the market the less revenue shared. Which increases profit, in a time of financial pressure. Add to that the value of television, if a broadcaster like TVA pays more for their current TV contract because they have a 2nd team to broadcast, that's more money for the NHL. And Quebec is a province that is proven to generate over a million viewers for hockey.

Secondly one can not ignore merchandising as an important element of general NHL revenues. The Coyotes brand generates the lowest in the league. Expansion generates usually the highest numbers I believe in merchandising in the first year. I believe Seattle will sell the most merchandise this year, and Vegas did in their first year. A new franchise wherever it will be will generate significant revenues. I think a simple calculation would add about $150 million in merchandising revenues to the leagues, for a new market, or what the Nordiques would generate over an existing franchise. That may seem like chump change in a billion industry, but it is one of the highest profit margins the NHL has in its brand. It's more than gate revenues of any team I believe.

I honestly don't care how it plays out. Coyotes can stay in Arizona, if they get an arena. There has been work to build the team and the grassroots, and that's what Carolina did to make itself successful enough, to be attractive to an owner like Dundon. They can move to Houston if the NHL thinks the market can work. There's some corporate big hitters there, in the oil, gas and plastics industry. I don't know if there have been any studies into the price point and desire for hockey about the population. But usually if the NHL is sniffing at a market they think it can work. There's still uncertainty in Ottawa, I have no idea what Florida does after 2024, in their current financial state. I think Quebec City will get a team based on meeting all the criteria for an NHL team, ownership (which may need someone other than Peladeau to front for it), arena with luxury suites, and fanbase. And I would say that would put them in the same league as Calgary, St. Louis, Colorado, and Tampa in revenue capabilities, so potentially profitable, with the biggest question mark being the Canadian dollar. And the pandemic restrictions on top of that. Because 11 000 fans is obviously better than none. As current cancellations in scheduling are showing.

Anyways it's a month away from any sort of conclusion, so it's all speculation, and some wishful thinking I guess.

 

[powerstuck]

Off the rails.....

It just seems impossible to NOT talk are relocation, doesn't it? Especially when there is no news out of Tempe.

Concerning ticket sales vs media markets and contracts......

It is true this is a gate driven league. However, it's also true that, for the other 31 owners, it matters very very little how many tickets are sold in Glendale, Tempe, AVMC or in Quebec City. That money all stays local. The only ones who really care about local ticket sales and local TV contracts are the local owners.

Therefore, for Jacobs, for example, it doesn't make one bit of difference if the team sells out Centre Videotron, ar has half empty crowds in GRA. The only thing he cares about it how important the league appears to broadcasters, because that is where his bread is buttered.

For this reason, I continue to believe that, if the Yotes have to relocate, Houston will be the chosen spot, the first choice. There is no other choise, unless Fertitta says....."XXX amount and no more", and that amount is much less than the league is willing to accept. In that case (and there would be a reasonable chance that could happen), who knows what happens next? The only other place that anyone is talking anywhere except here is QC. That doesn't mean they HAVE to go there. It's just the current state of affairs.

I agree with both points (gate driven and owners way of thinking). But then again, if adding Vegas and Seattle (it was known they would come and at which date when the latest US TV contract was negotiated) barrely moved the numbers (contract went from 200 to 225M a season)...I can hardly see Houston making a bigger dent, especially if you consider that as things stand now, you would be moving a team from Phoenix to Houston, both of which are rather big ''markets'', so the overall number of potential viewers wouldn't be that big.

Now, I also know that owners, by some kind of magic think that no one in Houston even knows about hockey and doesn't watch it and also that everyone in Phoenix would still be following and adoring NHL despite loosing their favorite team, in both cases it's not how it works.

And lastly, as a personnal opinion, I don't think even expanding into Houston would increase the numbers significantly despite what the league things and this is not a diss of the market, but this league has been and will always been dependant on ticket sales and other local revenues.

Just one exemple, but Habs do everything to make the playoffs, even refusing to tank and aim for a luckly 1st overall, because when comes playoffs, they generate a whooping 2M CAD profit out of 2,9M revenue per game played in Bell Centre. And those are numbers from 2010, today it's even more. TV contract is already paid wether they play 82 or 110 games. But tickets and marchandise sold due to playoffs participation is simply not to be neglected.

 

[MNNumbers]

@voyageur and @powerstuck

I agree with you are saying, as a matter of strict consideration of the numerical aspects of the franchise.

However, I have found myself in error before when I thought that sports owners were callous beasts, concerned only for the interest of the bottom line, and willing to accept any properly considered information which would lead to such.

To wit: The SoFi stadium in Los Angeles, which has been privately funded to the greatest degree, has cost billions more than it was supposed to cost when it began, and the stadium itself will hardly pay 10 figures back. So, what happened? The owner was more concerned about his emotions than he was about what the actual numbers looked like.

And, in some ways, I think the same applies here.

To answer some questions:
Unless the recent additions to the CBA to cover the effects of the pandemic have been incredilbyl far reaching, the revenue redistribution works such as that the top 10-12 teams (not sure how this adjusted with 2 expansion teams involved) pay in, and the other 20-22 teams receive. The amount that is paid in is an established %age of leageu wide HRR, and the cut from each of the payers is a %age of that, based on their own HRR. The bottom line is this arrangement is that 'payers' don't care how many losing teams there are in the league, because it doesn't cost them more if the Yotes lose 40M or if the Jets lose 5M. They pay in the same amount. In fact, their obligation is less if league HRR is lower, so there is actually motivation to keep the team in a losing market. The 'payees', on the other hand, receive amounts based on their numerical rank in HRR. So, the effect here is that if a money losing team relocates and jumps in the ranking, then everyone in between drops one spot, and those teams recieve slightly more. However, the effect is fairly minor - maybe 1M or so. Less than a league minimum contract basically, and therefore the effect of nothing more than good salary cap calculating. All of which is to say that the "Revenue Sharing" part of a relocation is very very miniscule.

I'll discuss what I think is really happening with regard to Houston v Quebec in the next post, for the sake of later quoting.

 

[MNNumbers]

Again, @powerstuck and @voyageur

So, if the sheer numbers about Rev Sharing are not a big part of the discussion, what is?

League wide revenue? I don't think so, at least not in direct terms. As has been mentioned, I don't think that ESPN factored in the Phoenix market very heavily when they considered how much to pay on the new contract. So, it's not the direct measure.....

I think it's more of an emotional response, and an 'idea' about the future....
Here is what I think is actually happening:
First, we know the league wants a team in Houston. And, it's obvious they want to keep a team in Phoenix. And, they haven't seemed excited about Quebec City. Why would all of that be?

I think it is that the owners all want to be big fish in the pond. Their league is 4th in the US, not even close to MLB, NFL and NBA. They know this. They also know that MLS is growing in popularity. But, these men are very rich, and very powerful, and they want to convince themselves that they are even more powerful. So, put yourselves in their position......

Would you want your league, which is connected to your sense of power, to move a team from a large US market to a small, remote Canadian city? That doesn't seem like a move that 'important' people make. The LA Rams owner sunk billions into a new stadium in LA because, in part, the move made him feel important. The fact that the NFL has lost a lawsuit to the city of St Louis, from which they left, shows that the move was done for power, and spite, and a sense of "we're tired of being in St Louis, they don't give us everything we want, we will show them." That attitude is probably found in most sports owners. They want their league to look important.

Big league leagues play in the big, most important cities. Not in small remote places. I think that this, in reality, is the hindrance for Quebec. It's the pride of the BOG.

Now, it should be said that such pride can justify itself. For example....
"If we go to Houston, we won't get any new TV money for 7 years, but we are growing the brand, and eventually, when everyone realizes how important we are, the TV money will rise."

Things like that.

People can be really good at fooling themselves when their ideas are formed by human emotions.

 

[awfulwaffle]

Off the rails.....

It just seems impossible to NOT talk are relocation, doesn't it? Especially when there is no news out of Tempe.

Concerning ticket sales vs media markets and contracts......

It is true this is a gate driven league. However, it's also true that, for the other 31 owners, it matters very very little how many tickets are sold in Glendale, Tempe, AVMC or in Quebec City. That money all stays local. The only ones who really care about local ticket sales and local TV contracts are the local owners.

Therefore, for Jacobs, for example, it doesn't make one bit of difference if the team sells out Centre Videotron, ar has half empty crowds in GRA. The only thing he cares about it how important the league appears to broadcasters, because that is where his bread is buttered.

For this reason, I continue to believe that, if the Yotes have to relocate, Houston will be the chosen spot, the first choice. There is no other choise, unless Fertitta says....."XXX amount and no more", and that amount is much less than the league is willing to accept. In that case (and there would be a reasonable chance that could happen), who knows what happens next? The only other place that anyone is talking anywhere except here is QC. That doesn't mean they HAVE to go there. It's just the current state of affairs.

Why would there be any news? They have a 3rd party reviewing the proposal and will provide their opinion once that process is done. Until that is completed, why should you expect Tempe to have any kind of information?

 

[OG6ix]

What the hell are you talking about? This is a league that relies on ticket sales. Have you looked at why games are being cancelled in Canada right now. Because the NHL needs that revenue. Especially that Toronto-Montreal revenue which makes the league richer, sharing with the bottom. Edmonton and Vancouver are probably revenue sharing generating teams too at this point, when you look at attendance in California.

You take a metro and expand it with other regions around the metro and there are over a 1 million fans. And a lot who are hockey fans.

Anyone who says Quebec won't draw fans is simply talking out of their ass, having no idea about the love of hockey there. That's where Jean Beliveau comes from, the Nordiques were the first team to start selling out in the WHA. Get to the NHL they outdrew the Bruins. Junior hockey, attendance is great. What more proof do you need?

I am willing to bet that the price point of tickets, and corporate sales trumps what Houston could put up in revenues. Houston has alot of the same problems Atlanta did, starting with what people will pay for hockey and general interest in the community for hockey.

It's funny that a Canadian guy would say this about Quebec City. Have you been there? You know that Quebec breathes hockey right.

Texas, it's the Friday night lights, you might get better attendance for a high school football game.

Like c'mon man. If you are going to trash a market, make sure it is a factual dig.

I'll take businesses that want to stay stagnant or decline for 500 Alex. You think the NHL wants to stay a gate driven league? That's not the goal anymore this isn't the 80s where attendance was a big deal across sports leagues. You can wax poetic about Canada I was born and raised here but even I know the weakness of this league stretching to all these samll Canadian markets. I didn't even bother reading the rest of your rant as you are probably just passionate and want a team.

 

[MNNumbers]

Why would there be any news? They have a 3rd party reviewing the proposal and will provide their opinion once that process is done. Until that is completed, why should you expect Tempe to have any kind of information?

I didn't say Tempe SHOULD be releasing anything. What I said was....

This thread keeps leaning toward relocation talk, and the reason is that there isn't anything else to talk about, until Tempe releases some information.

I always hesitate in this thread because I know that you Coyote fans don't like it when there are assumptions about relocation and so on, and so my comment was actually intended to sort of half apologize for discussing other markets.

Clearly, I didn't communicate well enough.

I'm sorry

 

[TheLegend]

I didn't say Tempe SHOULD be releasing anything. What I said was....

This thread keeps leaning toward relocation talk, and the reason is that there isn't anything else to talk about, until Tempe releases some information.

I always hesitate in this thread because I know that you Coyote fans don't like it when there are assumptions about relocation and so on, and so my comment was actually intended to sort of half apologize for discussing other markets.

Clearly, I didn't communicate well enough.

I'm sorry

Not going to speak for the others but I understood what you were getting at. But I've been a long time reader of the thread so I have a little more insight on where most of the participants come from.

BTW, some fans have written the Tempe city council members and pretty much every one that replied have said they're waiting on the consultant's report.

You have to appreciate that Tempe is going to stay to the process in spite of the media rhetoric that's ramping up.

 

[Montrealer]

Eating popcorn watching people in this thread talking authoritatively as if the current valuations of NHL franchises is an inflated number when people with far more money than we'd ever imagine having are willing to buy in at those valuations.

Sports franchises are special beasts that are decoupled from simple valuations of typical businesses or other investment vehicles, obviously. Trying to imprint your own logic on their value is folly.

 

[edog37]

What the hell are you talking about? This is a league that relies on ticket sales. Have you looked at why games are being cancelled in Canada right now. Because the NHL needs that revenue. Especially that Toronto-Montreal revenue which makes the league richer, sharing with the bottom. Edmonton and Vancouver are probably revenue sharing generating teams too at this point, when you look at attendance in California.

You take a metro and expand it with other regions around the metro and there are over a 1 million fans. And a lot who are hockey fans.

Anyone who says Quebec won't draw fans is simply talking out of their ass, having no idea about the love of hockey there. That's where Jean Beliveau comes from, the Nordiques were the first team to start selling out in the WHA. Get to the NHL they outdrew the Bruins. Junior hockey, attendance is great. What more proof do you need?

I am willing to bet that the price point of tickets, and corporate sales trumps what Houston could put up in revenues. Houston has alot of the same problems Atlanta did, starting with what people will pay for hockey and general interest in the community for hockey.

It's funny that a Canadian guy would say this about Quebec City. Have you been there? You know that Quebec breathes hockey right.

Texas, it's the Friday night lights, you might get better attendance for a high school football game.

Like c'mon man. If you are going to trash a market, make sure it is a factual dig.

If the league were serious about going to Quebec, that would have happened during the last round of expansion. The fact that Quebec wasn't chosen despite being a finalist telegraphed the league's intent very loudly. If Arizona moves, it will be to Houston.

 

[TheGreenTBer]

If the league were serious about going to Quebec, that would have happened during the last round of expansion. The fact that Quebec wasn't chosen despite being a finalist telegraphed the league's intent very loudly. If Arizona moves, it will be to Houston.

The league wasn't serious about going to Winnipeg in 2011, yet that happened. They'll go to Quebec if and only if they have absolutely no other choice. I don't expect it to happen though.

 

[Rob]

If the league were serious about going to Quebec, that would have happened during the last round of expansion. The fact that Quebec wasn't chosen despite being a finalist telegraphed the league's intent very loudly. If Arizona moves, it will be to Houston.

If Houston wants a team.

 

[aqib]

Never said it was setting the floor but it definitely did screw the value, if Calippers were worth 1,5 billion and got sold for 33% price increase even the owner of a team worth only 100 millions suddenly hopes someone overpays the value by 30%+.

Not YOU per say but this is something that we see on this board a lot. People keep saying the NHL won't "let" a team sell for less than what Seattle paid. That's based on nothing. The Penguins got an unfathomable price for reasons that are unique to Pittsburgh. We'll see what the Coyotes get if and when they change hands but its not going to be as simple as "last team sale price + inflation" or anything like that.

 

[Apex Predator]

I think relocating to Houston is worth the gamble for the NHL. Worst case is they don’t work out but I bet still better for attendance and revenue than Phoenix.

 

[Pandemonia]

Again, @powerstuck and @voyageur
Big league leagues play in the big, most important cities. Not in small remote places. I think that this, in reality, is the hindrance for Quebec. It's the pride of the BOG.

Green Bay, Wisconsin, says hello.

 

[TheGreenTBer]

Green Bay, Wisconsin, says hello.

You do understand why Green Bay is a unicorn and not at all applicable to this situation, correct?

 

[Pandemonia]

You do understand why Green Bay is a unicorn and not at all applicable to this situation, correct?

Correct. As I'm sure you understand that whenever someone makes a broad and inaccurate generalization, and someone else rebutts it with a fact that proves its inaccuracy, the word "Unicorn" is invariably raised at some point.

Now, as to "not at all applicable", I won't challenge your opinion-not-a-fact so as to avoid more mythical beasts being invoked.

 

[voyageur]

I'll take businesses that want to stay stagnant or decline for 500 Alex. You think the NHL wants to stay a gate driven league? That's not the goal anymore this isn't the 80s where attendance was a big deal across sports leagues. You can wax poetic about Canada I was born and raised here but even I know the weakness of this league stretching to all these samll Canadian markets. I didn't even bother reading the rest of your rant as you are probably just passionate and want a team.

I have a team. And I'll point out that my team is the smallest market in the NHL and it raised NHL revenues by moving from a bigger market. That's all.

 

[voyageur]

If the league were serious about going to Quebec, that would have happened during the last round of expansion. The fact that Quebec wasn't chosen despite being a finalist telegraphed the league's intent very loudly. If Arizona moves, it will be to Houston.

It didn't telegraph anything. The NHL wanted to move Detroit and Columbus East, at the behest of the owners, who are franchise shareholders. It then had a clear plan to go to Vegas and Seattle. I think there was even some expressed disappointment when Seattle didn't bid in the first round of expansion. As MNN stated in a way, the NHL was looking for the ticket to the next big TV contract, and getting into two of the biggest markets that the NBA isn't in (because we know hockey is second fiddle to basketball everywhere but the Union states), was good for that TV contract. The next TV contract up is Canada's and Rogers has been losing money on that one. What Bettman has said about Quebec seems to indicate subtly that it is being considered for relocation...although Bettman will always tell you the league has never been stronger...

 

[Dirty Old Man]

Correct. As I'm sure you understand that whenever someone makes a broad and inaccurate generalization, and someone else rebutts it with a fact that proves its inaccuracy, the word "Unicorn" is invariably raised at some point.

Now, as to "not at all applicable", I won't challenge your opinion-not-a-fact so as to avoid more mythical beasts being invoked.

So, you didn't understand why it wasn't applicable. Fair enough.

 

[hockeyguy0022]

Interesting topics in here... ahem.

The coyotes need to announce do something soon, as more time goes by, the less likely anything in Arizona is happening. You need all the time (starting now) to make temp arrangements. Consider the backorders on appliances/hardware in the world. easily 10-20 weeks for some items.

 

[Pandemonia]

So, you didn't understand why it wasn't applicable. Fair enough.

Right. The old "if you don't agree with me you obviously don't understand" patriarchy.

Whatever gives you comfort...

 

[Melrose Munch]

If the league were serious about going to Quebec, that would have happened during the last round of expansion. The fact that Quebec wasn't chosen despite being a finalist telegraphed the league's intent very loudly. If Arizona moves, it will be to Houston.

That was Quebecor's fault, not the league. The league wanted them. Hell Gary called out Hamilton! They chose not to pay, you can speculate as to why.

It didn't telegraph anything. The NHL wanted to move Detroit and Columbus East, at the behest of the owners, who are franchise shareholders. It then had a clear plan to go to Vegas and Seattle. I think there was even some expressed disappointment when Seattle didn't bid in the first round of expansion. As MNN stated in a way, the NHL was looking for the ticket to the next big TV contract, and getting into two of the biggest markets that the NBA isn't in (because we know hockey is second fiddle to basketball everywhere but the Union states), was good for that TV contract. The next TV contract up is Canada's and Rogers has been losing money on that one. What Bettman has said about Quebec seems to indicate subtly that it is being considered for relocation...although Bettman will always tell you the league has never been stronger...

I think if Houston was available, they would have chosen them. They were upset about Seattle too. I don't think Rogers will pay as much this time.

Will be interesting to see how the league moves forward.