CXLIII - UPDATED 6/3 - Coyotes arena deal takes next step after Tempe council votes to open negotiations

[Llama19]

Coyotes on campus: Arizona's NHL team makes preparations to try to pass a critical test

To quote:

"Despite having far fewer tickets to sell — after those put aside for players, families, broadcast personnel and the league there will be approximately 4,700 remaining — [Coyotes President Xavier] Gutierrez said the team expects to generate revenue “at, if not above, what we had generated at Gila River Arena.”

Several industry executives with knowledge of the arena business expressed skepticism about this claim.

“How can you make more money unless you grow the pie or you divide the pie up that much more in your favor?” asked facility management consultant David Touhey, who previously served as president of venues for Monumental Sports & Entertainment.

Gutierrez said the team is squarely focused on the Tempe proposal, but does have backup plans to keep the team in the area.

“We certainly have looked at other options in this market,” he said, without offering specifics. “This is a compelling market. There are plenty of opportunities and plenty of other municipalities that I think see the compelling nature.”"

Source: www.bizjournals.com/phoenix/news/2022/10/10/arizona-coyotes-college-arena.html

 

[TheLegend]

"Despite having far fewer tickets to sell — after those put aside for players, families, broadcast personnel and the league there will be approximately 4,700 remaining — [Coyotes President Xavier] Gutierrez said the team expects to generate revenue “at, if not above, what we had generated at Gila River Arena.”

Several industry executives with knowledge of the arena business expressed skepticism about this claim.

“How can you make more money unless you grow the pie or you divide the pie up that much more in your favor?” asked facility management consultant David Touhey, who previously served as president of venues for Monumental Sports & Entertainment.

They've been using those same quotes for well over a year now.

Talk about stale tea.......

 

[sh724]

Coyotes on campus: Arizona's NHL team makes preparations to try to pass a critical test

To quote:

"Despite having far fewer tickets to sell — after those put aside for players, families, broadcast personnel and the league there will be approximately 4,700 remaining — [Coyotes President Xavier] Gutierrez said the team expects to generate revenue “at, if not above, what we had generated at Gila River Arena.”

Several industry executives with knowledge of the arena business expressed skepticism about this claim.

“How can you make more money unless you grow the pie or you divide the pie up that much more in your favor?” asked facility management consultant David Touhey, who previously served as president of venues for Monumental Sports & Entertainment.

Gutierrez said the team is squarely focused on the Tempe proposal, but does have backup plans to keep the team in the area.

“We certainly have looked at other options in this market,” he said, without offering specifics. “This is a compelling market. There are plenty of opportunities and plenty of other municipalities that I think see the compelling nature.”"

Source: www.bizjournals.com/phoenix/news/2022/10/10/arizona-coyotes-college-arena.html

Anyone that knows anything about economics can tell you there is another way to make more money and that is by making your product more exclusive and raising prices.

If the current average ticket price is significantly greater than the previous aveage ticket price, which why know it is, then its possible to produce similar, if not increased, revenues.

10M seats sold at an average of $40 = $40M
5M seasts sold at an average of $81 = $40.5M

 

[TheLegend]

Anyone that knows anything about economics can tell you there is another way to make more money and that is by making your product more exclusive and raising prices.

If the current average ticket price is significantly greater than the previous aveage ticket price, which why know it is, then its possible to produce similar, if not increased, revenues.

10M seats sold at an average of $40 = $40M
5M seasts sold at an average of $81 = $40.5M

However….

There is a question with other revenues like advertising. et al.

Coyotes have limited control over what ads they can run inside Mullett arena because all of ASU on ice and dasher board ads are theirs. Coyotes cannot cover or replace them physically or digitally. But they can add to what’s there on game days.

Per Gutierrez they exceeded the revenue the received from the arena naming rights with Gila River Resorts in Glendale with a patch on the home jerseys. They still have the away jerseys they can sell.

They’ve also been allowed to sell their merchandise on the ASU campus.

Still there’s a lot more to account for than just ticket sales.

 

[GordonGraham]

Anyone that knows anything about economics can tell you there is another way to make more money and that is by making your product more exclusive and raising prices.

If the current average ticket price is significantly greater than the previous aveage ticket price, which why know it is, then its possible to produce similar, if not increased, revenues.

10M seats sold at an average of $40 = $40M
5M seasts sold at an average of $81 = $40.5M

With that logic you lose 5M people paying for parking food, beer, merchandise...........

 

[TheLegend]

With that logic you lose 5M people paying for parking food, beer, merchandise...........

They weren’t getting parking at Glendale. They won’t at ASU either.

 

[sh724]

However….

There is a question with other revenues like advertising. et al.

Coyotes have limited control over what ads they can run inside Mullett arena because all of ASU on ice and dasher board ads are theirs. Coyotes cannot cover or replace them physically or digitally. But they can add to what’s there on game days.

Per Gutierrez they exceeded the revenue the received from the arena naming rights with Gila River Resorts in Glendale with a patch on the home jerseys. They still have the away jerseys they can sell.

They’ve also been allowed to sell their merchandise on the ASU campus.

Still there’s a lot more to account for than just ticket sales.

I am aware that total revenues include much more than ticket sales, however the quote that i was replying to only mentioned ticket sales so that is what i was replying to.

 

[Ciao]

Anyone that knows anything about economics can tell you there is another way to make more money and that is by making your product more exclusive and raising prices.

If the current average ticket price is significantly greater than the previous aveage ticket price, which why know it is, then its possible to produce similar, if not increased, revenues.

10M seats sold at an average of $40 = $40M
5M seasts sold at an average of $81 = $40.5M

Maybe I'm not that great at math, but I think 10,000 x $40 = $400,000, not $40M?

Either way, $400,000 per game more or less is pretty poor revenue in comparison with the costs of running an NHL franchise.

Is that about $35-million per year? Kind of pales in comparison to the salary-cap floor and ceiling.

 

[Tawnos]

Maybe I'm not that great at math, but I think 10,000 x $40 = $400,000, not $40M?

Either way, $400,000 per game more or less is pretty poor revenue in comparison with the costs of running an NHL franchise.

Is that about $35-million per year? Kind of pales in comparison to the salary-cap floor and ceiling.

You realize that those weren't real numbers related to the Coyotes, but just an example of how math works, right? He cites 10 million tickets sold, but average NHL tickets sold over a year per team is like 700 thousand. League-wide, 20-25 million.

 

[Llama19]

Tempe schedules series of hearings on Arizona Coyotes arena project

To quote:

"Bluebird and the Coyotes will host the first event on Oct. 15 at 11 a.m. at the Canopy by Hilton in Tempe.

Then on Nov. 15, Tempe’s Development Review Board will consider the project at a 6 p.m. meeting. There will be two City Council meetings on Nov. 22 and Nov. 29, where the Council and residents can discuss the projects.

The city of Tempe first called for proposals for a professional sports complex on the 46-acre plot of land at the northeast corner of Priest Drive and Rio Salado Parkway in the summer of 2021. The Business Journal reported that the team had been in contact with the city for years prior about developing something on that land. The Coyotes submitted their proposal in September 2021 and revised it a few times over the next several months. In June, the city voted to start a negotiating process with the Coyotes on the development. "

Source: www.bizjournals.com/phoenix/news/2022/10/11/tempe-schedules-hearings-on-coyotes-project.html

 

[Ciao]

You realize that those weren't real numbers related to the Coyotes, but just an example of how math works, right? He cites 10 million tickets sold, but average NHL tickets sold over a year per team is like 700 thousand. League-wide, 20-25 million.

I still don't get it.

10-million tickets sold at $40 each is $400-million, not $40-million.

It still doesn't make any sense to me.

 

[oldunclehue]

I still don't get it.

10-million tickets sold at $40 each is $400-million, not $40-million.

It still doesn't make any sense to me.

He was using numbers as an example, and his math was horribly off.

Coyotes total tickets sold in 2021-22 season;

475,669 x average ticket price ($90) = $42,810,210 (potential ticket sales)

Mullet arena =

4,700 paid tickets x 41 games = 192,700 in ticket sales

192,700 x average price of $188 = $36,227,600 in ticket sales.

- This is just quick math with google amounts for averages. But not all that off the mark if they sellout every game with that average price.

 

[Stumbledore]

He was using numbers as an example, and his math was horribly off.

As an example of what?

Or am I the only one who thinks this is screamingly funny?

 

[oldunclehue]

As an example of what?

Or am I the only one who thinks this is screamingly funny?

He used 10m x 40 = As an example of Gila River ticket sales
He used 5m x 80 = As an example of Mullet arena sales.

Attempting to prove that with less seats but high prices the amount of money returned would be the same/similar.

He didnt use real numbers or the right math calculation.

 

[Ciao]

He was using numbers as an example, and his math was horribly off.

Coyotes total tickets sold in 2021-22 season;

475,669 x average ticket price ($90) = $42,810,210 (potential ticket sales)

Mullet arena =

4,700 paid tickets x 41 games = 192,700 in ticket sales

192,700 x average price of $188 = $36,227,600 in ticket sales.

- This is just quick math with google amounts for averages. But not all that off the mark if they sellout every game with that average price.

That makes sense now. Thank you.

 

[sh724]

That makes sense now. Thank you.

It should have said 400 not 40 but yes it was just a random example.

Also in the financial industry M is used for thousand not K. M is the Roman numberal for 000. It is the abreviation for mil which is the root of the word mile which equals 1,000 paces and 1 pace equals 2 steps. In roman numerals million would be MM.

Using K for thousand is a reference to the metric system, which is also where M for million comes from.

 

[Ciao]

It should have said 400 not 40 but yes it was just a random example.

Also in the financial industry M is used for thousand not K. M is the Roman numberal for 000. It is the abreviation for mil which is the root of the word mile which equals 1,000 paces and 1 pace equals 2 steps. In roman numerals million would be MM.

Using K for thousand is a reference to the metric system, which is also where M for million comes from.

I think I understood your use of the symbol "M" the first time around. I just couldn't follow your math.

@Tawnos suggested you meant millions, not thousands and that didn't work either. Evidently, Tawnos didn’t know what you meant either.

No big deal. I think we all understand what you meant to say now. No probs.

Finally, @oldunclehue did a little Google work to provide a reasonable estimate of gate revenues of $36-42-million at either site, which I still think is pretty weak for an NHL franchise given the minimum and maximum player-salary expenses under the CBA. Much thanks for that, Hue.

While revenue in the new arena might be comparable to that in the old one, that doesn't say much because it's still no great shakes either way.

 

[TheLegend]

I think I understood your use of the symbol "M" the first time around. I just couldn't follow your math.

@Tawnos suggested you meant millions, not thousands and that didn't work either. Evidently, Tawnos didn’t know what you meant either.

No big deal. I think we all understand what you meant to say now. No probs.

Finally, @oldunclehue did a little Google work to provide a reasonable estimate of gate revenues of $36-42-million at either site, which I still think is pretty weak for an NHL franchise given the minimum and maximum player-salary expenses under the CBA. Much thanks for that, Hue.

While revenue in the new arena might be comparable to that in the old one, that doesn't say much because it's still no great shakes either way.

If I may add a little context here.....

*IF* the revenues end up not much different between ASU and Glendale then it disproves what was a heavily pushed narrative across practically every media platform you could think of, that the Coyotes playing in a college arena was going to lead to a massive increase in losses over previous years. When, in reality, they won't be much worse off than before.

However, what is different is the Coyotes could find themselves in the position to finally get out from under that if TED becomes a reality and they go from venue of 4700 seats to one with a little over 16,000. One that they completely own with close to 100% of the revenues coming their way.

The Coyotes' position this entire time (post Glendale cancelling their lease) was to find a temporary solution that wouldn't put any more financial stress on all parties than is already there, while pursuing a permanent solution to a problem that was created in 2006 when Steve Ellman and Jerry Moyes ended their partnership that resulted in the Coyotes being separated from Westgate.

This is all, of course, dependent upon everything turning out as they (Coyotes) predict it will.

 

[Summer Rose]

It should have said 400 not 40 but yes it was just a random example.

Also in the financial industry M is used for thousand not K. M is the Roman numberal for 000. It is the abreviation for mil which is the root of the word mile which equals 1,000 paces and 1 pace equals 2 steps. In roman numerals million would be MM.

Using K for thousand is a reference to the metric system, which is also where M for million comes from.

Huh, odd. This might be straying off topic, but I work in scribing for a particular part of the financial industry, and we don't use M for thousand. We use it to mean million. Kind of interesting. If you've ever heard of Copytalk, that's me. If someone dictates "seven million dollars" to me, I'm going to send back "$7M" to them, not "$7MM."

 

[KevFu]

They literally just renovated the arena and have 15 years on the lease. Why would he pay a couple of hundred million to break the lease to move them away from downtown?

This is why the situation is less than ideal and just kinda dumb. Because the Suns and Coyotes aren't owned by the same person, and therefore will not share a venue, there's TWO arenas, which need two new arenas every 15 years, and each cost (insert cost of NBA/NHL arena based on year) that are taxpayer-funded by one of the municipalities within the PHX metro area.

Phoenix and the other municipalities don't have the luxury of space, like the Philly situation, where they earmarked a large parcel of land for stadiums for every team and parking for everyone, and can just build a new place in a parking lot and tear the others down.

It's individually dumb for one franchise to give anything up to make things better for the taxpayers. But the goodwill of the taxpayers is significant. The Suns/Coyotes being owned by the same person, from day one, playing downtown in an arena that could hold NHL/NBA simultaneously would have made the Coyotes situation infinitely better. And the taxpayers. The only person it wouldn't be better for would be "The other guy" who got to be one of two owners of NHL/NBA teams instead. And half of them were corrupt/stupid/canceled.

 

[KevFu]

Well since nobody has actually seen the facilities yet for those games it’s all quite irrelevant. Kypreos is just making a lot of noise for the sake of it.

Oh wow. So you're with the organization? You know exactly what things are like and what they will be like and have intimate details of their schedule and how things impact them as well? I guess you also get to decide what they should think and feel and say as well? That's a pretty important job man congrats.

Do I need to go on about the stupidity of trying to decide what should or shouldn't be important to other individuals just because you don't want things to "fuel negativity"?

I'm going to say the same thing I said a few weeks ago in a different manner. If there wasn't any negativity to fuel, they wouldn't be able to fuel it. But the reality is that there is, and it's real.

P.S. You're also assuming that even when the annex is completed it will be up to NHL standards especially in comparison to other NHL teams.

Forgive the generalization, but Canadians in Toronto talking trash on Southern American NHL cities is just an eye-roll situation. It's drivel to get Canadian viewers/listeners to comment, like and subscribe. It's click bait.

Again, generalizations are bad. But in general American hockey fans love Canada, and Canadians, and don't feel a single ounce of nationalism about anything that happens in the NHL, while Canadian fans act like every team in the Southern United States personally got up during their wedding and took a giant dump on the bride's dress.

Legend posted the poll about visiting locker rooms, and the Islanders arena built in 1970 was FOURTH WORST? That place had roof leaks and broken seats OPENING NIGHT And was still in use 50 years later! There's no way any 2021 built facility is worse. Might be less convenient, but it's four games. Suck it up.

The place is NHL standards because the NHL signed off.

AND, by the way, select NHL teams have been using football and baseball stadium facilities, and golf courses in Lake Tahoe for ONE GAME a year without giving a damn. If you think that Wrigley Field, Fenway Park and a Lake Tahoe Golf Course are more ready to house NHL than a Pac-12 Division I hockey program, you're out of your mind.

 

[KevFu]

A ticket in Tempe is now pretty much the most expensive in the league. The fan base is not there to justify such a price IMO.

I'm sure some will pay, but if the goal is to sell out im not sure this goal will be achieved. I guess we will see, I am skeptical.

Maybe I'm not that great at math, but I think 10,000 x $40 = $400,000, not $40M?

Either way, $400,000 per game more or less is pretty poor revenue in comparison with the costs of running an NHL franchise.

Is that about $35-million per year? Kind of pales in comparison to the salary-cap floor and ceiling.

Every baseball stadium that's been designed since, well, Camden Yards, has been smaller than the one that preceded it. It's basic supply and demand.

The demand for hockey in Glendale was small, because Glendale is so far from most of Phoenix. The supply of tickets in Tempe is small, so prices are much higher. They'll be fine.


Also, "Average ticket price" is really dumb, because teams are making 40% of their profits off 15% of their seats, and 85% of their seats are below average price.

Jeff Bezos and I have an average net worth of $92 billion.
Wayne Gretzky and I averaged 1,429 NHL points in our careers.
The Pacific Ocean and I average 357 million cubic kilometers.

Those facts are totally correct, but a gross misrepresentation of my worth, skill and size.

 

[Ciao]

Every baseball stadium that's been designed since, well, Camden Yards, has been smaller than the one that preceded it. It's basic supply and demand.

The demand for hockey in Glendale was small, because Glendale is so far from most of Phoenix. The supply of tickets in Tempe is small, so prices are much higher. They'll be fine.


Also, "Average ticket price" is really dumb, because teams are making 40% of their profits off 15% of their seats, and 85% of their seats are below average price.

Jeff Bezos and I have an average net worth of $92 billion.
Wayne Gretzky and I averaged 1,429 NHL points in our careers.
The Pacific Ocean and I average 357 million cubic kilometers.

Those facts are totally correct, but a gross misrepresentation of my worth, skill and size.

I don't understand what possible connection your reply has to my post that you quoted.

 

[KevFu]

I don't understand what possible connection your reply has to my post that you quoted.

There were a bunch of posts about the whole supply and demand thing ticket prices thing, I may have multi-quoted the wrong one.

 

[Tawnos]

I think I understood your use of the symbol "M" the first time around. I just couldn't follow your math.

@Tawnos suggested you meant millions, not thousands and that didn't work either. Evidently, Tawnos didn’t know what you meant either.

No big deal. I think we all understand what you meant to say now. No probs.

Finally, @oldunclehue did a little Google work to provide a reasonable estimate of gate revenues of $36-42-million at either site, which I still think is pretty weak for an NHL franchise given the minimum and maximum player-salary expenses under the CBA. Much thanks for that, Hue.

While revenue in the new arena might be comparable to that in the old one, that doesn't say much because it's still no great shakes either way.

Don't rope me in to your point. The whole purpose of my post was that the actual math didn't matter... the concept did. It is a *really* simple concept to understand too.