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

[awfulwaffle]

Well its his and his investors money. Once you get investors it ceases to be a toy. Ballmer is worth over $100B so for him a $2B arena is a toy. For Muruelo its not. That's why this is so interesting to me

The ENTIRE entertainment district was going to be $2.1B in Tempe. Not just the arena. I don't know why you keep forgetting the fact that there is going to be residential, commercial, etc. included with this project. The fact that he has a hockey team is the reason why there is going to be an arena included with this district. And the reason why he's building a district and not just an arena(as was previously stated), is because the regular revenue stream helps offset losses in other areas.

I'll take the opinion of a successful business man over someone that just doesn't like arenas for some reason.

 

[Yukon Joe]

The ENTIRE entertainment district was going to be $2.1B in Tempe. Not just the arena. I don't know why you keep forgetting the fact that there is going to be residential, commercial, etc. included with this project. The fact that he has a hockey team is the reason why there is going to be an arena included with this district. And the reason why he's building a district and not just an arena(as was previously stated), is because the regular revenue stream helps offset losses in other areas.

I'll take the opinion of a successful business man over someone that just doesn't like arenas for some reason.

So that of course was the entire plan. No doubt about it.

The thing is though - what exactly does the hockey team bring to the party though? Why not just build the entertainment district by itself, if the hockey team loses money by itself?

The thinking is that pro-sports can be used to extract concessions/subsidies/whatever from local government that a purely business-only development wouldn't get.

 

[aqib]

The ENTIRE entertainment district was going to be $2.1B in Tempe. Not just the arena. I don't know why you keep forgetting the fact that there is going to be residential, commercial, etc. included with this project. The fact that he has a hockey team is the reason why there is going to be an arena included with this district. And the reason why he's building a district and not just an arena(as was previously stated), is because the regular revenue stream helps offset losses in other areas.

I'll take the opinion of a successful business man over someone that just doesn't like arenas for some reason.

The numbers I've seen for the new location is $3 billion. I know that the districts are more than the arena. However, mixed use residential and commercial districts are popping up all over North America. Its the trend in real estate development. However you don't need an arena for that. Markham's NHL arena was supposed to anchor a mixed use development. The arena got scrapped, but there is a mixed used development went ahead and is doing well (I live 15 minutes from it). The residential component gets sold off when its constructed. So you are counting on the commercial component making profits to offset arena/team losses. That begs the question, why not just do the commercial and residential development and not lose money on the arena.

 

[TheLegend]

So that of course was the entire plan. No doubt about it.

The thing is though - what exactly does the hockey team bring to the party though? Why not just build the entertainment district by itself, if the hockey team loses money by itself?

The thinking is that pro-sports can be used to extract concessions/subsidies/whatever from local government that a purely business-only development wouldn't get.

Because you want the team.

Sometime the simple answer is the only one.

 

[awfulwaffle]

So that of course was the entire plan. No doubt about it.

The thing is though - what exactly does the hockey team bring to the party though? Why not just build the entertainment district by itself, if the hockey team loses money by itself?

The thinking is that pro-sports can be used to extract concessions/subsidies/whatever from local government that a purely business-only development wouldn't get.

Why not? He bought the team(it's elite company to be a professional sports owner). He has a gambling license in AZ now. And that's going to be the anchor tenant now for more events that would happen at his new arena.

And you are crazy if you don't think regular businesses don't get concessions/tax breaks either.....

The numbers I've seen for the new location is $3 billion. I know that the districts are more than the arena. However, mixed use residential and commercial districts are popping up all over North America. Its the trend in real estate development. However you don't need an arena for that. Markham's NHL arena was supposed to anchor a mixed use development. The arena got scrapped, but there is a mixed used development went ahead and is doing well (I live 15 minutes from it). The residential component gets sold off when its constructed. So you are counting on the commercial component making profits to offset arena/team losses. That begs the question, why not just do the commercial and residential development and not lose money on the arena.

He owns the team though.....that's the whole idea behind building an arena, BECAUSE HE OWNS THE TEAM!

 

[aqib]

He owns the team though.....that's the whole idea behind building an arena, BECAUSE HE OWNS THE TEAM!

Ok you're at the point where you just see red every time someone questions the viability of this project. I get it. I was angry when the Browns left Cleveland even though their return was guaranteed.

That being said this is still a business board and we're talking business. Right now he doesn't own a team. He owns an option. He can pay $1 billion to exercise his option and then spend another $1 billion to build an arena and something like another $2 billion to build development surrounding the arena which according to you guys will be used to offset the losses that the team and arena will generate.

So why wouldn't a guy just pocket the profits on the development and not bother with reactivating the team and building an arena which will basically eat up his profits from the development?

 

[Tawnos]

Because you want the team.

Sometime the simple answer is the only one.

But also, the district would help bring in funds to reinvest in the team in terms of the on ice product, fan engagement in the arena, and outreach into the community, both through marketing and community engagement.

Do those things right and a team in the Phoenix area can definitely become profitable given the right amount of time and dedication, the second of which has been sorely lacking for a couple of decades now. Open question on Meruelo being the guy who can do that, but the model of using those tactics to create a profitable team is already proven in other markets.

 

[sh724]

Ok you're at the point where you just see red every time someone questions the viability of this project. I get it. I was angry when the Browns left Cleveland even though their return was guaranteed.

That being said this is still a business board and we're talking business. Right now he doesn't own a team. He owns an option. He can pay $1 billion to exercise his option and then spend another $1 billion to build an arena and something like another $2 billion to build development surrounding the arena which according to you guys will be used to offset the losses that the team and arena will generate.

So why wouldn't a guy just pocket the profits on the development and not bother with reactivating the team and building an arena which will basically eat up his profits from the development?

Outside of the NFL, generally people do not own sports teams to make money on said team year over year. They own sports teams because of the "prestige", the tax advantages that come with it, and to make a ton of money when they sell the team at some future point.

With few exceptions, over the past 50+ years, if an owner wants a sports team to be highly successful every year they are going to lose money operating the team (at least on paper).

Yes, it is possible to build a mixed use development without an arena and make money. That isn't hard to do they are pretty common. But not many of those developers can say "look at the ED I built, its center piece is MY arena and MY sports team".

It is regularly discussed on here that the owner of an NHL team needs arena revenues or it will not be sustainable. Adding an ED makes it that much more sustainable. The team losses money (at least on paper) and the other revenue streams make up the difference.

 

[Llama19]

I’m a former Coyotes employee, AMA.
(Verified - Further context, I have not been with the organization over the past year, but I had been with the team since before Alex Meruelo became owner.

FYI to users, we verified the identity of this user prior to approving the post, and confirmed that they are a former employee.)

To quote (just a few questions, as screenshots):

Source: www.reddit.com/r/Coyotes/comments/1cly0bf/im_a_former_coyotes_employee_ama/

 

[awfulwaffle]

I’m a former Coyotes employee, AMA.
(Verified - Further context, I have not been with the organization over the past year, but I had been with the team since before Alex Meruelo became owner.

FYI to users, we verified the identity of this user prior to approving the post, and confirmed that they are a former employee.)

To quote (just a few questions, as screenshots):

View attachment 866274

View attachment 866275

View attachment 866277

View attachment 866278

Source: www.reddit.com/r/Coyotes/comments/1cly0bf/im_a_former_coyotes_employee_ama/

We don't know what role this person had in the organization.....

Not to mention, decided to chime in on stuff AFTER they supposedly stopped working there. Should have just said "Not sure, that happened after I wasn't there". Seems to be a lot of opinionated thoughts in there.

 

[TheLegend]

We don't know what role this person had in the organization.....

Trying to avoid being ID'd and getting sued in case he was under NDA (not to mention making themselves unhireable). I haven't worked as a volunteer remote staffer for AOL for nearly 30 years but I'm still under one and limited in what I can say about certain things.

Not to mention, decided to chime in on stuff AFTER they supposedly stopped working there. Should have just said "Not sure, that happened after I wasn't there". Seems to be a lot of opinionated thoughts in there.

Water cooler gossip.

Honestly..... if this person really wanted to be credible they would only stick to what they know and observed first hand and not mix in opinion and hearsay. But this looks like the same person who was spilling things out on Chayka's departure a few years back as well. Used some of the same key descriptive words in both cases.

That said..... I'm sure there were things the Meruelo ownership did that were not all that great. But that in itself is a subjective opinion.

 

[aqib]

Outside of the NFL, generally people do not own sports teams to make money on said team year over year. They own sports teams because of the "prestige", the tax advantages that come with it, and to make a ton of money when they sell the team at some future point.

With few exceptions, over the past 50+ years, if an owner wants a sports team to be highly successful every year they are going to lose money operating the team (at least on paper).

Yes, it is possible to build a mixed use development without an arena and make money. That isn't hard to do they are pretty common. But not many of those developers can say "look at the ED I built, its center piece is MY arena and MY sports team".

It is regularly discussed on here that the owner of an NHL team needs arena revenues or it will not be sustainable. Adding an ED makes it that much more sustainable. The team losses money (at least on paper) and the other revenue streams make up the difference.

There really isn't a lot of prestige attached to owning a team that's been a punchline. Its why Dan Snyder's kids wanted nothing to do with owning the Commanders. They decided they would rather take the money. Also when you're an owner who would rather hide what prestige are you basking in?

With the price now $1 billion + cost of an arena its no longer in the hobby zone.

 

[awfulwaffle]

There really isn't a lot of prestige attached to owning a team that's been a punchline. Its why Dan Snyder's kids wanted nothing to do with owning the Commanders. They decided they would rather take the money. Also when you're an owner who would rather hide what prestige are you basking in?

With the price now $1 billion + cost of an arena its no longer in the hobby zone.

If he's able to afford it, why not have it be an expensive hobby? Again, as has been stated multiple times, he has the ability to do this. He wanted to own a sports team, and be in that elite group. He has a gambling license in AZ(on top of his Casino in NV). There's plenty of reasons why he might want to own a hockey team, and spend the money to build this arena/district

 

[Montrealer]

Having lost a franchise near and dear to my heart (Expos), I am amazed at how charitable AZ fans are to the current and ongoing ownership (just seeing the reaction to the former Coyotes employee just now). I know the damned ownership group (Loria and his son, sound familar) we had to endure had less than zero support here by the time MLB took over.

Edit: Look at how long it's been since I posted here by my profile pic! But this saga's sudden turn brought back a lot of people.

 

[aqib]

If he's able to afford it, why not have it be an expensive hobby? Again, as has been stated multiple times, he has the ability to do this. He wanted to own a sports team, and be in that elite group. He has a gambling license in AZ(on top of his Casino in NV). There's plenty of reasons why he might want to own a hockey team, and spend the money to build this arena/district

Stating he has the ability doesn't make it true. So far he hasn't been able to afford the same level of hotels as every other team in the NHL. Again he's in not Steve Ballmer he needs to raise a good chunk of money to do this. $1 billion to activate the team + $1 billion for the arena + $2 billion for the rest of the development. He can't cut a $4B check so he will need investors and/or lenders. So you can't spin it as a hobby when you need other people's money to pull it off.

Also, the gaming license doesn't mean anything. We already saw how little his gaming operation generated and that's with legal sports betting being new. Who knows if it will even survive once the novelty wears off.

 

[awfulwaffle]

Stating he has the ability doesn't make it true. So far he hasn't been able to afford the same level of hotels as every other team in the NHL. Again he's in not Steve Ballmer he needs to raise a good chunk of money to do this. $1 billion to activate the team + $1 billion for the arena + $2 billion for the rest of the development. He can't cut a $4B check so he will need investors and/or lenders. So you can't spin it as a hobby when you need other people's money to pull it off.

Also, the gaming license doesn't mean anything. We already saw how little his gaming operation generated and that's with legal sports betting being new. Who knows if it will even survive once the novelty wears off.

You have your opinions.

 

[awfulwaffle]

Why can't Ryan Smith just build an arena, why does he need a whole district? And why does he need public money?

Ryan Smith wants control of 3 city blocks — and a whole lot of public money — for his proposed SLC entertainment district

Ryan Smith wants more control and more public money than just sales tax revenue for a proposed downtown sports district.

www.sltrib.com

Let's see the group line up and defend this but not what AM was trying to do in AZ.

• Allowing SEG to keep the money generated by the sales tax increase for 30 years — except for a 1% administrative fee paid to the city and whatever the county and Smith’s group agree to use for renovations to the Salt Palace Convention Center.

Potentially requiring tax increment financing, a tool that allows developers to tap new property tax revenues created in an area.

The creation of a public infrastructure district. Such districts are able to issue bonds for things like roads.

 

[LPHabsFan]

Why can't Ryan Smith just build an arena, why does he need a whole district? And why does he need public money?

Let's see the group line up and defend this but not what AM was trying to do in AZ.

I mean do you actually want the answer as to why it's apples vs oranges or do you just want to think there's a gotcha moment to make you feel better and move on? I'm good with either or by the way.

 

[awfulwaffle]

I mean do you actually want the answer as to why it's apples vs oranges or do you just want to think there's a gotcha moment to make you feel better and move on? I'm good with either or by the way.

I already know the difference between the 2, but it's just hilarious he's asking for the same breaks that people were complaining about AM asking for. Rules for thee, not for me.

 

[aqib]

I already know the difference between the 2, but it's just hilarious he's asking for the same breaks that people were complaining about AM asking for. Rules for thee, not for me.

You mean that the Phoenix area already has 2 major league arenas and this would mean adding a 3rd whereas Utah is looking at renovating and expanding its one and only major league arena?

Add to that the public in the Valley, outside of a few diehards (we all remember the folks that came to the Glendale Council Meetings) have repeatedly rejected the Coyotes. In the meantime we know the Utah loves the Jazz so even if the NHL is a bust in Utah the arena and district still has the NBA to carry it, while there is nothing to carry this project.

 

[LPHabsFan]

I already know the difference between the 2, but it's just hilarious he's asking for the same breaks that people were complaining about AM asking for. Rules for thee, not for me.

If that's how you feel, then it's pretty obvious that you do not in fact know the differences between the two situations since if you did, it wouldn't be hilarious or even shocking at all.

 

[Tawnos]

I already know the difference between the 2, but it's just hilarious he's asking for the same breaks that people were complaining about AM asking for. Rules for thee, not for me.

Smith is asking for the same things PLUS direct public funding.

But another difference: the city didn’t give the newspaper the documents the story is about, but then SEG waived the confidentiality… which is something Meruelo would NEVER have done.

 

[Roadrage]

If the Utah legislature decided to vote a yes to give $1 billion+ for this district, that's on them. If I lived in Utah and had a vote, it would be a hard no. I can't even pretend to know the financial situation of Utah vs. Arizona and what their willingness to deal with owners of pro sports teams is.

 

[TheLegend]

Smith is asking for the same things PLUS direct public funding.

But another difference: the city didn’t give the newspaper the documents the story is about, but then SEG waived the confidentiality… which is something Meruelo would NEVER have done.

In Arizona he wouldn’t have had a choice.

 

[Tawnos]

In Arizona he wouldn’t have had a choice.

As in that type of confidentiality doesn’t exist? Or that type of confidentiality can’t be waived?

In either case, I think my point is that he wouldn’t if he had the option.