CXLVIII - Coyotes owner Alex Meruelo had 'productive' meeting with Phoenix mayor

[wpgallday1960]

The way Friedman was talking tonite on SN it struck me as a done deal and some Coyote players were upset about it. Seems the NHL really wants Harris in its ownership group and with all the question marks about Coyotes and their land purchase, the NHL wanted to make the move asap.

 

[Llama19]

As the US Stock Market fell again...due to inflation coming in higher than expected...

And...the notation that the Coyotes franchise is worth upwards of over ONE BILLION DOLLARS...well...

The question is...was Meruelo really the 'owner'...or was he just the 'debt' holder...

Remember when the NHL 'sold' the franchise to the original IceArizona (Gosbee, LeBlanc) group...

"A source close to the negotiations, who traded candor for anonymity, revealed the purchase price as $170 million. The capital structure would consist of RS&E putting in $45 million of equity, Fortress Investment Group lending $120 million (to be repaid by the fee Glendale taxpayers are going to pay the team to run the arena), and an $85 million loan from the NHL.

The $80 million the total capital investment ($250 million) exceeds the enterprise value of the purchase ($170 million) will be used as working capital. In other words, no capital calls even if the team loses a lot of money over the next few years."

Then...in 2015...Glendale was trying to get out of the arena management lease...but got outplayed by Bettman...

"Documents acquired by Forbes via a Freedom of Information Act request with the City of Glendale, Arizona, show that the Coyotes Gila River Arena Management Company had $177 million of debt as of June, 2014. Of that $177 million, $79 million was a loan from Fortress and $85 million was a loan from the NHL that were used to finance the purchase of the team.

The Fortress debt is at the center of Glendale's possible attempt to get out of its lease with the Coyotes. But the city has a big hole in its case: The owners of the Coyotes have refinanced the Fortress debt. That's right--it's gone. All of it.

During the past year NHL commissioner Gary Bettman approved replacing the Fortress debt NHL debt. The Fortress debt carried a much higher interest rate about three times more than the league's loan.

That is huge for the Coyotes. Not just because the FOIA request shows the team lost $35 million during the 2014-15 season."

So...has...at that time...$177 million (or more) debt...when Barroway 'bought' out in 2017...when the debt was reported at $250 with Barroway 'seeking' a $500 million valuation...then in 2019...Meruelo purchased 95% of the franchise...was the 'debt' paid off by Meruelo...or did Meruelo just take over the debt payments still under the IceArizona name...because the original IceArizona agreement...did have that seven-year 'no move' clause...that has expired...under Meruelo's 'ownership'...

So...did the NHL place that 'debt' call...that all franchise debts are due...now...leaving the NHL controlling the franchise...once again...forcing a sale and relocation...hmmm..

 

[StreetHawk]

Strikes me as odd that with the auction not final til June 27 that the nhl wants to make this transaction now.

Does this kind of signal that AM doesn’t have the funds to build the arena while operating the team?

Seems odd to go this long in AZ and not give them til the end of the auction to figure that out.

 

[ORRFForever]

Who is the multi billionaire, ready to bring an NHL team Quebec City?

Pierre Karl Péladeau

 

[Noldo]

Strikes me as odd that with the auction not final til June 27 that the nhl wants to make this transaction now.

Does this kind of signal that AM doesn’t have the funds to build the arena while operating the team?

Seems odd to go this long in AZ and not give them til the end of the auction to figure that out.

If the rumors are true and AM is given a prospective expansion teams as part of the deal, the timing makes sense.

The League avoids the risk that arena plan falters, because after the auction it is too late to relocate the team for 24/25 season and a lame duck season in the Mullet Arena would be disastrous.

And since Coyotes would need a few years to build the new arena anyway, a commitment that you will have a team once it is built can be as valuable or even more valuable for AM than current Coyotes. It not like he is generating huge positive cash flow each year with them in current conditions, the most valuable part of the team is most likely its membership in the League.

 

[Devilmademedoit]

interesting 24 hours to say the least

 

[GKJ]

Honestly the AHL might need to expand to (number of NHL franchises)+2 because the Wolves and Bears don't exactly play nice.

I don’t think the Capitals have any complaints about the Bears, though.

 

[Isles72]

how much is the league going to charge AM for the expansion fee if/when AZ is ready to roll with an arena suitable for nhl ?

 

[GKJ]

Strikes me as odd that with the auction not final til June 27 that the nhl wants to make this transaction now.

Does this kind of signal that AM doesn’t have the funds to build the arena while operating the team?

Seems odd to go this long in AZ and not give them til the end of the auction to figure that out.

It was too many unknowns. There isn’t even a guarantee the auction takes place at that time. The reporting was consistent that the league didn’t feel committed to it unless they got too close to the date. Bill Daly’s comments were worded a certain way for a reason.

 

[AtlantaWhaler]

Strikes me as odd that with the auction not final til June 27 that the nhl wants to make this transaction now.

Does this kind of signal that AM doesn’t have the funds to build the arena while operating the team?

Seems odd to go this long in AZ and not give them til the end of the auction to figure that out.

I think it signals that, even if (and I think it's a slam dunk) AM gets the land, the NHL decided they don't want to wait another 2-4 years of playing in Mullet. If the reports are true, AZ getting an expansion once all the construction hurdles are done makes sense. I just hate that a fanbase has to lose any team without certainty.

 

[mikelvl]

I think it signals that, even if (and I think it's a slam dunk) AM gets the land, the NHL decided they don't want to wait another 2-4 years of playing while playing in Mullet. If the reports are true, AZ getting an expansion once all the construction hurdles are done makes sense. I just hate that a fanbase has to lose any team without certainty.

They've had years and years to get this right. The want the Salt Lake City owner in the club badly. And the NHL wants to remain in that market. They will be back. The only reason they won't be back in Phoenix/Scottsdale is if they don't have an owner. Basically, Meruelo has to screw up royally.

 

[JimAnchower]

I think it signals that, even if (and I think it's a slam dunk) AM gets the land, the NHL decided they don't want to wait another 2-4 years of playing in Mullet. If the reports are true, AZ getting an expansion once all the construction hurdles are done makes sense. I just hate that a fanbase has to lose any team without certainty.

Yeah, the land auction is likely the easy part. The hard part is what's comes after. The league knows the details of how AM is looking to fund this and if there is any public money involved, even if just for infrastructure, it is going to be a tough slog. Bettman may not want to use any clout he has left in Arizona trying, again, for a new arena. Give AM 5-7 years to figure it all out on his own and he'll get another team. If not, maybe there's an opportunity when the Suns look for a new arena in 10-12 years.

 

[Skidooboy]

Who is the multi billionaire, ready to bring an NHL team Quebec City?

PKP the same one who owns the Videotron cable company, holds an 18K seat NHL ready arena lease and operating company, and has a very good metro market of 890K french speaking people in a traditional hockey market that goes up to over 1 million if you include the dense "rural" areas serviced from QC.

in short
Owner with money
local TV Deal
Arena
Captive French speaking Market with a draw of over 1 million people. who draw 10,000 people out to minor hockey games.
A ton of French businesses and corporations who want to support a team and the French Canadian Hockey culture.

 

[Smirnov2Chistov]

still so many questions around the topic/team

Will the Coyotes still be considered a cap-dump franchise? Or does this new potential ownership group put a halt to that?

The way Friedman was talking tonite on SN it struck me as a done deal and some Coyote players were upset about it. Seems the NHL really wants Harris in its ownership group and with all the question marks about Coyotes and their land purchase, the NHL wanted to make the move asap.

I saw a short clip of it on Twitter but couldn’t find it. What did the players think?

 

[rojac]

Here's my guess at how the deal breaks down. The numbers are basically guesses on my part.

1) AM trades the Coyotes to the NHL for a conditional expansion franchise. He gets to keep the team IP and records.

2) Smith buys the former Coyotes from the NHL for 1.3B. They would be considered a new team.

3) The NHL owners share .3B as a relocation fee. 1B is kept in trust as the potential expansion fee for the returning Coyotes.

4) AM has five years to build an arena for the return of the Coyotes.

5) If AM succeeds, he gets the expansion franchise and the NHL owners share the $1B.

6) If AM fails to build an arena, he gets all or part of the 1B as compensation for the Coyotes with the remainder being considered additional relocation money to be shared by the owners.

 

[wpgallday1960]

still so many questions around the topic/team

Will the Coyotes still be considered a cap-dump franchise? Or does this new potential ownership group put a halt to that?



I saw a short clip of it on Twitter but couldn’t find it. What did the players think?

They found the news sudden and many of them like playing in Arizona, so the move is viewed with some negativity. Apparently inquiries were made about seeking trades or the status of their contracts pending the move (paraphrasing).
Link to article and video:

NHL, Arizona Coyotes preparing for possible relocation to Utah

The NHL and the Arizona Coyotes are preparing for the possibility of a move to Utah as soon as April 18, multiple sources confirmed Wednesday.

www.sportsnet.ca

Also the new owner would be Ryan Smith not Harris as I messed up earlier.

 

[Fatass]

still so many questions around the topic/team

Will the Coyotes still be considered a cap-dump franchise? Or does this new potential ownership group put a halt to that?



I saw a short clip of it on Twitter but couldn’t find it. What did the players think?

Better chance to be on a winning club might make the players excited for the new owner and city? And no longer being the target of other player’s jokes about their rink?

 

[tucker3434]

Better chance to be on a winning club might make the players excited for the new owner and city? And no longer being the target of other player’s jokes about their rink?

The guys with contracts that aren't ending this summer didn't have plans to move their families in the next few months. Very few of them will be around long enough to enjoy the results of a franchise turnaround, even if perfectly executed.

It's pro spots. Part of the job. But II can understand why they'd be less excited about the news.

 

[LadyStanley]

 

[Ciao]

Strikes me as odd that with the auction not final til June 27 that the nhl wants to make this transaction now.

Does this kind of signal that AM doesn’t have the funds to build the arena while operating the team?

Seems odd to go this long in AZ and not give them til the end of the auction to figure that out.

I think it signals that if someone comes waving a billion dollars under the NHL's nose for a troubled, homeless franchise, they're going to take that offer before it disappears into thin air.

 

[Voight]

Here's my guess at how the deal breaks down. The numbers are basically guesses on my part.

1) AM trades the Coyotes to the NHL for a conditional expansion franchise. He gets to keep the team IP and records.

2) Smith buys the former Coyotes from the NHL for 1.3B. They would be considered a new team.

3) The NHL owners share .3B as a relocation fee. 1B is kept in trust as the potential expansion fee for the returning Coyotes.

4) AM has five years to build an arena for the return of the Coyotes.

5) If AM succeeds, he gets the expansion franchise and the NHL owners share the $1B.

6) If AM fails to build an arena, he gets all or part of the 1B as compensation for the Coyotes with the remainder being considered additional relocation money to be shared by the owners.

Don't know about this part. Think he'd rather have the actual cash on hand.

 

[TheLegend]

Yeah, the land auction is likely the easy part. The hard part is what's comes after. The league knows the details of how AM is looking to fund this and if there is any public money involved, even if just for infrastructure, it is going to be a tough slog. Bettman may not want to use any clout he has left in Arizona trying, again, for a new arena. Give AM 5-7 years to figure it all out on his own and he'll get another team. If not, maybe there's an opportunity when the Suns look for a new arena in 10-12 years.

You have the added pressure of two cities with bonafide bids for teams on the table and a pending CBA negotiation which probably made it too great for the league to wait the extra year or two (at minimum) this might have taken.

As much as it sucks they move a team that is in the middle of the first proper rebuild it’s ever had you just can’t ignore all these factors.

 

[TheLegend]

Here's my guess at how the deal breaks down. The numbers are basically guesses on my part.

1) AM trades the Coyotes to the NHL for a conditional expansion franchise. He gets to keep the team IP and records.

2) Smith buys the former Coyotes from the NHL for 1.3B. They would be considered a new team.

3) The NHL owners share .3B as a relocation fee. 1B is kept in trust as the potential expansion fee for the returning Coyotes.

4) AM has five years to build an arena for the return of the Coyotes.

5) If AM succeeds, he gets the expansion franchise and the NHL owners share the $1B.

6) If AM fails to build an arena, he gets all or part of the 1B as compensation for the Coyotes with the remainder being considered additional relocation money to be shared by the owners.

That’s a reasonable scenario.

However I don’t think Coyotes fans are going to accept Meruelo as an owner at this point. No matter if he pulls these things off.

There will be some support. But right now the way the team has been handling this PR wise over the last few weeks has torn the community apart.

He would have to start from square one.

 

[Lions67]

Would you even want to start a new club as the Coyotes 2.0?… I would think any new owner and more importantly the fans would want a clean start.
Pull the Yotes out for retro night but let the dog go

 

[JimAnchower]

Don't know about this part. Think he'd rather have the actual cash on hand.

Depends on how much he needs the possibility of a future franchise to meet the requirements of the land bid and development of it.