CXLVII - Is this the 'Final Countdown' in Arizona?

[Tom ServoMST3K]

A letter of intent is a good sign, but you can't say much more than that right now.

Could be the first step towards stability, or another dead end. It's nice they seem to have a concrete plan though.

 

[Dirty Old Man]

This group is doing a much more thorough job of keeping things that shouldn't be made public, not made public. If you'll recall, the Tempe plan got very much sprung on everyone suddenly, even we locals didn't know, although obviously months of work had been done.

 

[Shwan]

I don't think it has anything to do with the Barroway stuff because the Barroway stuff is inconsequential to all of this.

If Barroway is forced to sell his 5% that will provide new valuation to the team which would definitely affect the loans Meruelo would need to get to 100% privately finance the arena.

If that's now happening in December, Meruelo would be wise to get the land and loans before then.

 

[aqib]

If Barroway is forced to sell his 5% that will provide new valuation to the team which would definitely affect the loans Meruelo would need to get to 100% privately finance the arena.

If that's now happening in December, Meruelo would be wise to get the land and loans before then.

Non-controlling stakes change hands all the time. Long story short I had a conversation with some guys who work for one the firms that does sports deals. I basically asked how they keep busy when there are really only 4-5 teams in the major sports that change hands each year and they told me that there are a lot of non-controlling stakes that change hands all the time that we don't hear about. Like that minority owner of the Texans who just got charged with sexual assault. Did anyone know that the Texans even had minority owners?

 

[TheLegend]

A letter of intent is a good sign, but you can't say much more than that right now.

Could be the first step towards stability, or another dead end. It's nice they seem to have a concrete plan though.

The consensus feeling I get is the Coyotes leaked this item out to John Gambadoro. Why I have no idea (other than to keep the control of the info) but if you’re going to leak something he’s the one you leak it too.

 

[TheLegend]

Is it common to have an announcement of a letter of intent....which are mostly non binding..... where both the plot of land and the seller are still unknown?

In addition that fact the team is planning on looking other parcels doesn't seem to think they'll have much locked down by mid season....but gotta have plan Ds, Es and so on

Their “plan” this time around is to be working on more than one location at the same time. Back when they had locked in on TED they dropped everything else. That’s one lesson they actually may have learned.

 

[Tom ServoMST3K]

The consensus feeling I get is the Coyotes leaked this item out to John Gambadoro. Why I have no idea (other than to keep the control of the info) but if you’re going to leak something he’s the one you leak it too.

This is 1000 per cent a Coyotes leak - I thought it was so obviously that I didn't even feel the need to comment on it, lol.

I'd also do the exact same thing if I were them.

 

[MeHateHe]

Meruelo’s goal is to have multiple sites under contract so there are options. This is to have a plan in place by the first quarter of 2024, so a target date is hit for a new arena’s completion in time for the start of the 2026-27 season. This would continue the Coyotes’ efforts and intention of staying in the Valley.

So, another 8-9 months before a plan is in place. Say, 4-6 months to get the regulatory hurdles and design work done, so we're talking breaking ground in January of 2025. Can you get an arena finished and ready to be occupied in 17 months? That seems awfully ambitious, no? And that all assumes no roadblocks in the way - financing is seamless, the appropriate legal hurdles are ... uh ... hurdled ... and there are no construction delays.

To look at this more cynically, if the owners are telling the league 'trust us' until June of 2024 (end of Q1), then that restricts the ability of the league to force the Coyotes into some non-Arizona action because at that point it's too late to move the club for the 2024-2025 season which gives the club more time to rag the puck.

Maybe this LOI turns into something real and Mesa turns into Mecca. But if I'm the NHL I'd be insisting on something a hell of a lot more concrete than "a plan in place by the first quarter of 2024." It's just not tenable to have the team playing out of a small college rink indefinitely. Like, if you can't have shovels in the ground by October/November of next year, then we're taking whatever steps we have to to put the club into a real NHL-calibre arena.

 

[Shwan]

Like that minority owner of the Texans who just got charged with sexual assault. Did anyone know that the Texans even had minority owners?

1. Javier Loya owns less than 1% of the Texans so that would not likely impact valuation if he's found guilty and sold.

2. In 2019 there was an outcry for Mark Stevens to sell his 2-5% share of the Warriors for shoving and saying profanities to Kyle Lowry. That never materialized due to the logistics of the forced sell not meeting the crime. He was suspended for a year and fined $500,000.

3. In 2020 Jim Pallota sold his 8% which greatly shored up the Celtics' valuation to one of the most valuable teams in the NBA.

Pallotta is selling his eight percent stake to Steve Pagliuca, a managing director at private investment firm Bain Capital, in a deal that values the Celtics at $2.8 billion, Sportico reported.

Minority stakes in professional sports franchises are often difficult to sell and offered at a discount compared to the team’s valuation. Despite their steep price tag, the stakes rarely provide the operational control often sought by wealthy buyers.

The general public might not know and care about the minority shares but banks certainly do.

 

[bossram]

This is 1000 per cent a Coyotes leak - I thought it was so obviously that I didn't even feel the need to comment on it, lol.

I'd also do the exact same thing if I were them.

Yep. Very thinly-veiled attempt to broadcast "look, we're staying in Arizona!"

So, another 8-9 months before a plan is in place. Say, 4-6 months to get the regulatory hurdles and design work done, so we're talking breaking ground in January of 2025. Can you get an arena finished and ready to be occupied in 17 months? That seems awfully ambitious, no? And that all assumes no roadblocks in the way - financing is seamless, the appropriate legal hurdles are ... uh ... hurdled ... and there are no construction delays.

To look at this more cynically, if the owners are telling the league 'trust us' until June of 2024 (end of Q1), then that restricts the ability of the league to force the Coyotes into some non-Arizona action because at that point it's too late to move the club for the 2024-2025 season which gives the club more time to rag the puck.

Maybe this LOI turns into something real and Mesa turns into Mecca. But if I'm the NHL I'd be insisting on something a hell of a lot more concrete than "a plan in place by the first quarter of 2024." It's just not tenable to have the team playing out of a small college rink indefinitely. Like, if you can't have shovels in the ground by October/November of next year, then we're taking whatever steps we have to to put the club into a real NHL-calibre arena.

Yep. Even if the Mesa "plan" (it's not even a plan at this point) moves forward smoothly, which is unlikely, they're so far away in the process of actually having an arena that it's realistically 4-5 years before the Coyotes would be even playing there.

Is Bettman and the NHL just gonna be like, aight we'll stick around in Mullet for the foreseeable future?

 

[LPHabsFan]

At this point, holding onto this petty grudge and continuing to spin everything as negative is desperate and sad.

I don't think this is LOI is as big of a flex as you seem to think it is based on the comment. But I mean hey, if you're happy and content with everything that's going on with the team, you do you boo.

If Barroway is forced to sell his 5% that will provide new valuation to the team which would definitely affect the loans Meruelo would need to get to 100% privately finance the arena.

If that's now happening in December, Meruelo would be wise to get the land and loans before then.

Well firstly I was talking about the timing of the leak as a way to distract from the Barroway situation. IIRC, Barroway hasn't had any involvement in the team on any level since he sold to Muruelo and is probably just still there on paper and therefore not part of the situation. That's where the inconsequential comment came from. Even when it was announce and some people tried to tie him to the Coyotes, it didn't fly because of what I said above.

As for the other part of the comment, I still don't see the connection. Are you trying to say that Muruelo would try and use an older, and with the assumption that it's therefore lower, valuation than a more up to date one when trying to secure loans on a future project? And that if Barroway were to be forced to sell, that would automatically require a new valuation?

I mean two things spring to mind. One is that the sale may not require one as it could be a hard figure rather than 5% in the event of a buyout. Stranger things have happened.

Secondly though is, are banks that stupid? I know for example when you get a mortgage pre-approval, they honor it for 3-6 months depending on the bank but with the amount of money we're talking about here, wouldn't they automatically want a current one given it will, I'm assuming by the time this gets done, a long time since the last one? So I ask again, are banks really that stupid?

 

[TheLegend]

I don't think this is LOI is as big of a flex as you seem to think it is based on the comment. But I mean hey, if you're happy and content with everything that's going on with the team, you do you boo.


Well firstly I was talking about the timing of the leak as a way to distract from the Barroway situation. IIRC, Barroway hasn't had any involvement in the team on any level since he sold to Muruelo and is probably just still there on paper and therefore not part of the situation. That's where the inconsequential comment came from. Even when it was announce and some people tried to tie him to the Coyotes, it didn't fly because of what I said above.

As for the other part of the comment, I still don't see the connection. Are you trying to say that Muruelo would try and use an older, and with the assumption that it's therefore lower, valuation than a more up to date one when trying to secure loans on a future project? And that if Barroway were to be forced to sell, that would automatically require a new valuation?

I mean two things spring to mind. One is that the sale may not require one as it could be a hard figure rather than 5% in the event of a buyout. Stranger things have happened.

Secondly though is, are banks that stupid? I know for example when you get a mortgage pre-approval, they honor it for 3-6 months depending on the bank but with the amount of money we're talking about here, wouldn't they automatically want a current one given it will, I'm assuming by the time this gets done, a long time since the last one? So I ask again, are banks really that stupid?

Just going to say that Meruelo had seven national banks lined up with letters of credit for building the first phase of TED.

So if he had the money lined up for that, a simple land purchase isn’t going to be a problem.

This is just a first step and it’s a small one. I’m expecting to see more LOIs on other parcels over the next 4-5 months.

 

[eojsmada]

Yep. Very thinly-veiled attempt to broadcast "look, we're staying in Arizona!"

Yep. Even if the Mesa "plan" (it's not even a plan at this point) moves forward smoothly, which is unlikely, they're so far away in the process of actually having an arena that it's realistically 4-5 years before the Coyotes would be even playing there.

Is Bettman and the NHL just gonna be like, aight we'll stick around in Mullet for the foreseeable future?

Not only that but the NHLPA has already pushed on the NHL to try and resolve the situation.

 

[mouser]

Not only that but the NHLPA has already pushed on the NHL to try and resolve the situation

The PA has zero leverage over team ownership or locations.

 

[aqib]

1. Javier Loya owns less than 1% of the Texans so that would not likely impact valuation if he's found guilty and sold.

2. In 2019 there was an outcry for Mark Stevens to sell his 2-5% share of the Warriors for shoving and saying profanities to Kyle Lowry. That never materialized due to the logistics of the forced sell not meeting the crime. He was suspended for a year and fined $500,000.

3. In 2020 Jim Pallota sold his 8% which greatly shored up the Celtics' valuation to one of the most valuable teams in the NBA.




The general public might not know and care about the minority shares but banks certainly do.

Each case would be different. In some cases, people will overpay for a minority stake just to be part of it. Look at the Packers stock sales. People pay for basically a piece of paper saying they are part owner of an NFL team. So some guys overpay just so they can call themselves an owner and hang out in owners luxury box and be "in the the club"

My point is you can't really extrapolate a small stake that gives you no operating rights or distributions of profits to the value of the whole team. The bankers who handle sports deals know that.

 

[eojsmada]

The PA has zero leverage over team ownership or locations.

It does if its found out that Arizona might be being used as a "shelter" for benefitting the owners for HRR, since it's a known loser of revenue and the owners' contribution to Arizona directly effects the the amount that the players get from their share because it comes off before the split to "make whole". And with the CBA coming due in three years, this could be a pressure point.

 

[FriendlyGhost92]

We're gonna get another three years of this shit that ends in another arena plan being blocked, aren't we?

 

[Stumbledore]

Somehow all the hockey fans in the valley all congregate on one side of town.

Yep, while largely ignoring the team's games on TV.

EDIT: Local TV ratings for 2021-2022: 0.16 (down 58% from the previous year… which would have made the previous year’s ratings under 0.3)

 

[Stumbledore]

Secondly though is, are banks that stupid? I know for example when you get a mortgage pre-

A good question, which I'm not qualified to answer. But I do note that:

Silicon Valley Bank (Santa Clara) failed on 10 March.
Signature Bank (New York) failed on 12 March.
First Republic Bank (San Francisco) failed on 1 May.
Heartland Tri-State Bank(Elkhart) failed on 28 July.

That's just in a 5 month period this year. Perhaps stupidity was a factor.

 

[Llama19]

Coyotes owner thinking about making a bid to buy arena site in Mesa, maybe, or somewhere else, don’t rush him

Source: www.fieldofschemes.com/2023/08/10/20259/coyotes-owner-thinking-about-making-a-bid-to-buy-arena-site-in-mesa-maybe-or-somewhere-else-dont-rush-him/

 

[TheLegend]

Coyotes owner thinking about making a bid to buy arena site in Mesa, maybe, or somewhere else, don’t rush him

Source: www.fieldofschemes.com/2023/08/10/20259/coyotes-owner-thinking-about-making-a-bid-to-buy-arena-site-in-mesa-maybe-or-somewhere-else-dont-rush-him/

He basically says nothing, but it allowed him to produce a lot of bluster that got him clicks and one local Arizona political news reporter to boost him.

 

[Tawnos]

He basically says nothing, but it allowed him to produce a lot of bluster that got him clicks and one local Arizona political news reporter to boost him.

I’m sure you knew that before you clicked the link.

 

[TheLegend]

I’m sure you knew that before you clicked the link.

True.... but I couldn't qualify the opinion unless I read it.

 

[Llama19]

Arizona Coyotes eye north Mesa gravel pit near Loop 202 as future hockey home

Source: www.azcentral.com/story/news/local/mesa/2023/08/10/arizona-coyotes-look-at-buying-41-acre-gravel-pit-in-mesa-for-new-home/70560983007/

 

[TheLegend]

Arizona Coyotes eye north Mesa gravel pit near Loop 202 as future hockey home

Source: www.azcentral.com/story/news/local/mesa/2023/08/10/arizona-coyotes-look-at-buying-41-acre-gravel-pit-in-mesa-for-new-home/70560983007/

Only thing wrong here is.....

The Coyotes never mentioned where the actual site is. There happens to be another site near there though that's also 41 acres.

(UPDATE: word is it’s not the gravel pit the article writer thinks it is)