CXLIX - FINAL thoughts on the Arizona Coyotes

[Headshot77]

I think the NHL will remain highly motivated to return an NHL franchise to Arizona, but one of the reasons they fought so long and hard to sustain the existing franchise was because the challenge and cost of starting afresh will be substantial.

As you note, it will not only take an owner willing to make a major investment for the purchase or expansion fee (probably $1 billion or more), but also an ideal venue and business plan to make the investment worthwhile.

It must be highly frustrating for fans and also for the NHL that all of the putative and short-term owners turned out to be so unserious and/or insubstantial. Now, they will need a bona fide owner with deep pockets and a rock-solid arena plan to pull it off.

One hope for a discounted price might be that another franchise falters at some point in the future, with Arizona as the best landing place. But for Arizona to be at the front of the line they will need to have a solid local group that has an arena solution and has developed a relationship with the NHL. That was how TNSE brought the Jets back to Winnipeg (didn't hurt that they had one of N America's wealthiest persons to help bankroll it).

The problem is that half of the cost of starting fresh is the expansion fee. If the NHL REALLY wanted to be in Houston, Atlanta, and Arizona, they don't need to make the price tag $1b. Yes I know that this is necessary to prop up franchise values so that this iron bubble never bursts. But realistically if you're the NHL, you've got three cities you're dying to play in. If you're willing to actually charge about half that per franchise, but BS the public so it's perceived that it SEEMS like a $1b purchase, I think the NHL would go for that.

Hell, the NHL already did that with the Coyotes. SEG payed $1b for an "expansion franchise" to UTAH, with all of the Coyotes players. And then within two weeks the Coyotes franchise just became inert. Alex Meurelo probably ended up just barely being made whole for his role in this, like $100-200mil in profit at most. People are already forgetting that the NHL brokered this deal and likely fudged some numbers to make it look good.

Ishbia and Fertitta are basically the only ones who can buy franchises in their respective markets, so you can't hardball them. If they are only willing to pay $500mil, and you're desperate to enter those markets the right way (i.e. with an owner who has a building, and money, and positive cash flow), then you gotta make it look like those franchises cost $1b each to make it happen.

 

[aqib]

The arena in Tucson had ice too, long before there was an AHL team.

The Winnipeg arena was built with an AHL team already in town ready to go

 

[KevFu]

Building the NHL arena inside Chase and the tearing down chase is the most ridiculous thing I've heard on this site.

The Diamondbacks should live at Chase forever, and they should negotiate a massive renovation to modernize it a bit. Baseball stadiums are too specialized to justify entire teardowns and rebuilds unless you're the Oakland A's

Yes, the DBacks should stay there. And now that they're focused on renovations and upgrades and extending the lease, the concept of that site for an NHL arena is pretty moot.

But it's not ridiculous at all.
The location is great, the infrastructure is already there. It's ALREADY a place that can bring in 55,000 people for an evening of sports.

So you're thinking big entertainment district with a retractable roof and major league arena under it?

A retractable roof is something that needs a ton of maintenance, and everyone who has one spends a ton of money keeping it working. But the only reason you NEED a retractable roof is to keep grass alive by getting it sun. Hockey ice just doesn't have that problem. It can just stay closed.

But obviously, if the DBacks are staying (Great!) then it's moot.

 

[Yukon Joe]

A retractable roof is something that needs a ton of maintenance, and everyone who has one spends a ton of money keeping it working. But the only reason you NEED a retractable roof is to keep grass alive by getting it sun. Hockey ice just doesn't have that problem. It can just stay closed.

I thought the "new hotness" of stadiums was having retractable turf - that you would move the turf itself inside and outside in order to get sun on it. A retractable roof then becomes a metter of fan preference - that nothing is nicer than sitting outside on a nice day to watch a sports game (be it soccer, football, baseball or whatever) - but that sitting outside in crappy weather is just a miserable experience - trust me I've sat outside to watch Grey Cup games in late November in Canada...

 

[TheLegend]

The Winnipeg arena was built with an AHL team already in town ready to go

Footprint was built primarily for basketball because Jerry Colangelo was told the NHL wasn’t coming to Arizona in his lifetime.

The Roadrunners never played there. They played at the AVMC.

 

[Sgt Schultz]

I thought the "new hotness" of stadiums was having retractable turf - that you would move the turf itself inside and outside in order to get sun on it. A retractable roof then becomes a metter of fan preference - that nothing is nicer than sitting outside on a nice day to watch a sports game (be it soccer, football, baseball or whatever) - but that sitting outside in crappy weather is just a miserable experience - trust me I've sat outside to watch Grey Cup games in late November in Canada...

The "field on a tray" design works well in football, where the field is a rectangle. The football stadium in Glendale uses that and I think was the first NFL field to do so.

Baseball fields are much wider and a more irregular shape, making the concept pretty tough and maybe impossible to pull off.

 

[Lions67]

You realize they had an AHL team in the arena at the time. I think the ice plant was more for the 36 AHL regular season games than Disney on Ice.

As you mentioned the arena issue is way to huge of a hurdle. The arena cost $133.5 million to built in 2003 (about $100 million USD at the time) Adjusted for inflation that's roughly $230CAD/$200MUSD. That was also the only arena capable of hosting major events in the city not the 3rd.

Let’s settle down a bit now.
They just lost their team and are in mourning. Let them process their grief in peace.
The Coyotes are dead.
There is nothing more for any of us to say on the matter.

 

[aqib]

Let’s settle down a bit now.
They just lost their team and are in mourning. Let them process their grief in peace.
The Coyotes are dead.
There is nothing more for any of us to say on the matter.

It's been long established that team boards are the safe space where fans of the team can talk amongst themselves with no outside agitators but the business board is a free for all.

 

[KevFu]

I thought the "new hotness" of stadiums was having retractable turf - that you would move the turf itself inside and outside in order to get sun on it. A retractable roof then becomes a metter of fan preference - that nothing is nicer than sitting outside on a nice day to watch a sports game (be it soccer, football, baseball or whatever) - but that sitting outside in crappy weather is just a miserable experience - trust me I've sat outside to watch Grey Cup games in late November in Canada...

Generally speaking... but this is Phoenix.

You have a roof because it's 106 to 114 degrees from Memorial Day to September, so you need AC. And the roof retracts so the field can get sun.

(April/May and September can be nice after dark. I've been to games where the roof is closed, AC is on pregame; and then they open it after the sun is lower than the roof.

 

[TheLegend]

It's been long established that team boards are the safe space where fans of the team can talk amongst themselves with no outside agitators but the business board is a free for all.

Not supposed to be…. but there’s always that occasional drive by poster who gets lost from the main board.

(present company not included)

 

[StreetHawk]

Ishbia and Fertitta are basically the only ones who can buy franchises in their respective markets, so you can't hardball them. If they are only willing to pay $500mil, and you're desperate to enter those markets the right way (i.e. with an owner who has a building, and money, and positive cash flow), then you gotta make it look like those franchises cost $1b each to make it happen.

NHL could have given Coyotes to Fertitta over smith, but they opted not to. Can't see them ever dropping the price. That's the reality of the situation.

Barring a group in those cities doing an ATL, NHL will just have to keep private contact with those 2 NBA owners on their interest in an NHL team. If there is still no other group building another arena or those NBA owners don't want to pay the price the NHL wants, then it's a battle to see who blinks. But, I don't think the NHL owners view Houston/AZ as markets that will offset a drop in price of a team to allow them in at a discount. Especially given their market size.

 

[ponder719]

Not supposed to be…. but there’s always that occasional drive by poster who gets lost from the main board.

(present company not included)

True. You have three tiers of board on here; the team board, where you can be with your own group and express yourself however you like, BoH (and to a lesser extent, the trade board), where you get a wider perspective and should comport yourself with appropriate decorum, and the general board. That way, madness lies. (Also, the people who would otherwise be on the team boards, but they're mad that their opinion isn't the majority opinion, so they go there to complain.)

 

[Stumbledore]

Building the NHL arena inside Chase and the tearing down chase is the most ridiculous thing I've heard on this site.

Then you obviously haven't been paying attention.

 

[dj4aces]

and Hamilton has an arena and there would be owners if the league was willing to entertain the idea.

The only way there would be owners lining up for Hamilton is if the Leafs and Sabres both agreed to not demand indemnification. The league, in this case, is the least of their worries.

I'm sure there's interest in Arizona, just as some groups continued to communicate with the NHL in Atlanta until roughly 2015. There may not be a five year plan, but the league definitely wants to be there (moreso than any other prospective market currently), and I'm more than willing to believe they'll bend over backwards to see a return to Phoenix.

 

[aqib]

The only way there would be owners lining up for Hamilton is if the Leafs and Sabres both agreed to not demand indemnification. The league, in this case, is the least of their worries.

I'm sure there's interest in Arizona, just as some groups continued to communicate with the NHL in Atlanta until roughly 2015. There may not be a five year plan, but the league definitely wants to be there (moreso than any other prospective market currently), and I'm more than willing to believe they'll bend over backwards to see a return to Phoenix.

At the same time that no one was willing to pay $140 million for the Coyotes when they came with a free arena without additional cash from Glendale, Balsillie was offering $212 million and indicated he was willing to pay $100 million relocation fee. So yeah if the league was open to a Hamilton team I think bidders would go higher than they would for Arizona.
Also since the arena in Hamilton is getting an overhaul it won't be necessary for someone to build one that frees up money for indemnification fees.

 

[Tawnos]

At the same time that no one was willing to pay $140 million for the Coyotes when they came with a free arena without additional cash from Glendale, Balsillie was offering $212 million and indicated he was willing to pay $100 million relocation fee. So yeah if the league was open to a Hamilton team I think bidders would go higher than they would for Arizona.
Also since the arena in Hamilton is getting an overhaul it won't be necessary for someone to build one that frees up money for indemnification fees.

If Balsille had tried to establish a strong relationship with the league and not hijack a team (for a third time) and move it without their ok, he might have actually been successful. The issue was never the market he wanted to move them to. The issue was him and the way he tried to do it.

It is kind of interesting to speculate what would’ve happened to the Hamilton team during his ouster from the company or the Research in Motion/Blackberry (relative) collapse. I would guess he would’ve been able to find a local buyer, but it wouldn’t have exactly been a smooth ride.

 

[TheLegend]

At the same time that no one was willing to pay $140 million for the Coyotes when they came with a free arena without additional cash from Glendale, Balsillie was offering $212 million and indicated he was willing to pay $100 million relocation fee. So yeah if the league was open to a Hamilton team I think bidders would go higher than they would for Arizona.
Also since the arena in Hamilton is getting an overhaul it won't be necessary for someone to build one that frees up money for indemnification fees.

Um…. The arena in Glendale weren’t free.

Balsillie was desperate…… the Coyotes was his THIRD attempt to siphon a franchise off to Hamilton. He knew franchise values were going to head north and the NHL knew his offer was well under what a Hamilton franchise was worth since they were forced to show that in the BK proceedings.

 

[TheLegend]

If Balsille had tried to establish a strong relationship with the league and not hijack a team (for a third time) and move it without their ok, he might have actually been successful. The issue was never the market he wanted to move them to. The issue was him and the way he tried to do it.

It is kind of interesting to speculate what would’ve happened to the Hamilton team during his ouster from the company or the Research in Motion/Blackberry (relative) collapse. I would guess he would’ve been able to find a local buyer, but it wouldn’t have exactly been a smooth ride.

Bill Daly even said after the Coyotes if Balsillie wanted to come to the NHL though the front door instead of the side window they would listen.

 

[dj4aces]

At the same time that no one was willing to pay $140 million for the Coyotes when they came with a free arena without additional cash from Glendale, Balsillie was offering $212 million and indicated he was willing to pay $100 million relocation fee. So yeah if the league was open to a Hamilton team I think bidders would go higher than they would for Arizona.
Also since the arena in Hamilton is getting an overhaul it won't be necessary for someone to build one that frees up money for indemnification fees.

Why would someone buy the Coyotes tied to an arena that wasn't in a favorable location?

Hamilton might have an arena, but only an idiot would buy a franchise only to also have to pay out a couple billion to the Leafs and Sabres. That market is incredibly valuable, and neither team will allow entry for free. Red Deer is more likely to land a franchise than Hamilton.

 

[aqib]

Um…. The arena in Glendale weren’t free.

Balsillie was desperate…… the Coyotes was his THIRD attempt to siphon a franchise off to Hamilton. He knew franchise values were going to head north and the NHL knew his offer was well under what a Hamilton franchise was worth since they were forced to show that in the BK proceedings.

To anyone buying he Coyotes it was. Whoever bought the Coyotes weren't going to pay for the arena. Whoever wants to put a team in Arizona will have to pay $1 billion+ for one.

Its funny on the one hand we've got people here saying that its not viable and now we have people saying his offer was too low, even though between the $212M offer and potentially $100M relo fee that was almost twice what recent sales were for.

 

[aqib]

If Balsille had tried to establish a strong relationship with the league and not hijack a team (for a third time) and move it without their ok, he might have actually been successful. The issue was never the market he wanted to move them to. The issue was him and the way he tried to do it.

It is kind of interesting to speculate what would’ve happened to the Hamilton team during his ouster from the company or the Research in Motion/Blackberry (relative) collapse. I would guess he would’ve been able to find a local buyer, but it wouldn’t have exactly been a smooth ride.

He would have probably had to sell a lot of stock to fund the purchase of the team so he probably would have been better off. Then again we don't know what prices he sold his RIM/Blackberry stock.

He wouldn't have had to sell the team because it would have been profitable enough on its own, so he wouldn't have needed to fund losses like the various Coyotes owners have had to do.

 

[TheLegend]

To anyone buying he Coyotes it was. Whoever bought the Coyotes weren't going to pay for the arena. Whoever wants to put a team in Arizona will have to pay $1 billion+ for one.

Its funny on the one hand we've got people here saying that its not viable and now we have people saying his offer was too low, even though between the $212M offer and potentially $100M relo fee that was almost twice what recent sales were for.

You're mixing two unrelated things there....

First.... You still had to pay to play there.

In the Coyotes case it was running $3-4 million a year when you threw in base rent and all the practice/workout days, TAXES, etc.

And Glendale wanted Meruelo to sink additional money into the arena on top of an extended lease (ice plant was obsolete, etc.)

So it wasn't exactly "free".

Second..... everything regarding Balsillie's offer was covered here during the BK precedings. The NHL valued Hamilton at about $300 million in 2009. Leafs were valued at around $448 million.

Value of Hamilton team would rank high

Expert estimates team would be the fifth most valuable NHL franchise at around $300-million

www.theglobeandmail.com

 

[aqib]

You're mixing two unrelated things there....

First.... You still had to pay to play there.

In the Coyotes case it was running $3-4 million a year when you threw in base rent and all the practice/workout days, TAXES, etc.

And Glendale wanted Meruelo to sink additional money into the arena on top of an extended lease (ice plant was obsolete, etc.)

So it wasn't exactly "free".

Second..... everything regarding Balsillie's offer was covered here during the BK precedings. The NHL valued Hamilton at about $300 million in 2009. Leafs were valued at around $448 million.

Value of Hamilton team would rank high

Expert estimates team would be the fifth most valuable NHL franchise at around $300-million

www.theglobeandmail.com

I was referring to the situation in 2009, the arena was basically free and in the subsequent years the city was paying them to play there. Now an owner would have to build a new arena himself.

So $212M purchase price + $100M relo fees gets you to $312M which was right in the range that the NHL valued the team. Who knows how high he would have gone because the league refused to consider it. We also don't know how high Gagliardi would have bid if the Coyotes had gone to Winnipeg and the Thrashers were on the block to go anywhere.

 

[TheLegend]

I was referring to the situation in 2009, the arena was basically free and in the subsequent years the city was paying them to play there. Now an owner would have to build a new arena himself.

So $212M purchase price + $100M relo fees gets you to $312M which was right in the range that the NHL valued the team. Who knows how high he would have gone because the league refused to consider it. We also don't know how high Gagliardi would have bid if the Coyotes had gone to Winnipeg and the Thrashers were on the block to go anywhere.

I’ll go you a year sooner.

Sources: Strapped Coyotes seeking investors

The NHL hasn't taken over control of the Phoenix Coyotes, but it is taking an active role in trying to find new investors or ownership for the financially strapped franchise, ESPN.com has learned from team and league sources.

www.espn.com

At that point the Coyotes were paying Glendale for parking. Because they were still on the original lease based on the Coyotes being part of Westgate. Only that went away in 2006 when Ellman and Moyes split and separated the Coyotes from most of their revenue sources.

(As in….. the entire business plan was shredded)

Even so…… You’re still ignoring the elephant in the room on rogue wanna be ownerships cutting themselves in without going through the appropriate process.

There’s a reason why the NFL, MLB and NBA all filed briefs with Judge Baum in support of the NHL.

 

[Yukon Joe]

I was referring to the situation in 2009, the arena was basically free and in the subsequent years the city was paying them to play there. Now an owner would have to build a new arena himself.

So $212M purchase price + $100M relo fees gets you to $312M which was right in the range that the NHL valued the team. Who knows how high he would have gone because the league refused to consider it. We also don't know how high Gagliardi would have bid if the Coyotes had gone to Winnipeg and the Thrashers were on the block to go anywhere.

There are so many crazy "what if" scenarios with the Coyotes.

Just as one example - I know Phoenix was hit really hard in the 2008 financial crisis.

But if you were a forward-thinking person with money back then - you could have bought the Coyotes for a song, you had a nearly-brand-new arena that the City of Glendale was willing to pay you money to use, you'd be in a fast-growing city, and your investment would be worth more than a billion dollars 15 years later.

And if the freaking Florida Panthers can win the Stanley Cup, there's no reason why the Arizona Coyotes couldn't either.

But - that's all just a "what if". Nobody of substance stepped up to buy the Coyotes back in 2008, so instead you had years of either league ownership or under-capitalized owners / scam artists, leading up to the team relocating to SLC.