Part XVII: Phoenix -- This Thread Title Available For Lease

[Fugu]

On an encrypted & secure ebay page trying to outbid one another?.

Pure gold. Man, you're back with a vengeance after the holiday break.


I think the Glendale bureaucrats have acquired a taste for champagne. It's nice to rub elbows with all those millionaires and billionaires, working on "big" deals and groundbreaking initiatives. Each time a new iteration of one of these lease agreements rolls around, it boggles the mind, but more importantly illustrates how completely and utterly out of their depth the the Glendale managers seem to be. There's a fine graduate business school in Glendale. Maybe the politicos should head over there and spend some time with the finance guys.

 

[Killion]

I suppose the Chicago bidder is now seeing how he can get someone to give him even more money to take the team off the NHL's hands...

Yepp. Bugger just stepped in and agreed to the "Buy it Now" price, however, the NHL's apparently having a problem with the transaction. Glendale wants to pay cash but Hulsizers' hoping they'll accept Paypal.

Jeff I do agree with some of your post,their will probably be a couple.....

Nevermind that Jeff93 guy. I think I once played pond hockey against him. He arrived early & determined where the weakest portions of the ice were at. Proceeded to deliberately over-pass right into the danger zones, throughout the day, as it got warmer......

 

[PitbulI]

Since the NHL has already stated that TNSE(Winnipeg) were on the verge of getting the Coyotes back in June and are considered the potential buyer past the Dec 31 deadline, The chances of Winnipeg landing the coyotes if this deal falls through is probably pretty high.

The only other place for this team would be KC. They have the arena and I'm sure there could be a non local owner willing to move a team there. However, Winnipeg most likely gets the first crack at buying the team.

What the NHL gets from TNSE is a very rich owner (Thomson) and modern building although a little small and no special deals that must be made with the city or the NHL.

 

[danishh]

Since the NHL has already stated that TNSE(Winnipeg) were on the verge of getting the Coyotes back in June and are considered the potential buyer past the Dec 31 deadline, The chances of Winnipeg landing the coyotes if this deal falls through is probably pretty high.

The only other place for this team would be KC. They have the arena and I'm sure there could be a non local owner willing to move a team there. However, Winnipeg most likely gets the first crack at buying the team.

What the NHL gets from TNSE is a very rich owner (Thomson) and modern building although a little small and no special deals that must be made with the city or the NHL.

I'd agree with this. Every impression i've had of TNSE/winnipeg during this whole situation is that they will sit quietly in the background and if the NHL decides relocation is an option, then they will swiftly complete a deal that has already been discussed behind closed doors. TNSE will not do anything publicly, but i'm sure they are periodically in communication with the NHL setting up for plan B.

 

[HamiltonFan]

The Coyotes have qualified for revenue sharing each year since revenue sharing came into existence after the lockout. In the bankruptcy case we learned they received over $13.5 MM for 2009. Revenue sharing is a complicated formula. A portion of revenue sharing is subject to attendance figure growth targets. Last year the Coyotes received full revenue sharing as certain CBA requirements were waived by the BOGs since the NHL owns the team and the BOGs would have to pay for the losses one way or the other.

GHOST

That's not necessarily true. When bettman does something, it's always for a reason that benefits him. If the coyotes did not get revenue sharing, then that money (approximately $14 million) would be made up evenly by each of the 29 other teams paying an equal share. However, the revenue sharing pool is funded largely by the teams in the league that make money. So, by awarding himself full revenue sharing, that $14 million is paid mostly by the money making teams in the league, and those money pit southern teams therefore save money. This makes bettman very happy.

 

[HamiltonFan]

So lets look at your list.

Las Vegas ... No building, no owners, and the NHL doesn't want to be in a city where people would rather gamble all night or go watch shows, than go watch hockey. Pro sports just don't seem to work in sin city.

Kansas City ... No owners. The papers in KC have interviewed all the movers and shakers in KC and none of them want to own a team. So unless the NHL still lets Hulsizer buy the team but move it to KC, who is going to own it.

Quebec City... No arena for at least 3 years.

Cleveland... lol.

Hamilton / Toronto/ Southern Ontario... the only way a team lands in these markets is expansion because of the huge potential expansion fee the NHL will ask for. The NHL will never let a team relocate to its last big expansion market.

Seattle ... good arena, but just not for hockey.

Milwaukee ... interesting. The arena there can sit 18,000 but it is an older building that would need some upgrades.

I'm not saying other cities aren't in the running ( as long as the NHL wants to fold the Coyotes and have no team for say 2 -3 years while other cities get arenas and ownership set up ) the ONLY NHL ready arena in North America that could take a team for next season is Winnipeg.

So for next season... Winnipeg 99% Others 1%
But if PHX deal dies and the NHL wants to wait with no team for a few years than its wide open.

I'm not sure why people keep saying this, but the concept that the nhl would be better off financially by 'saving' southern ontario as an expansion market simply isn't true. It makes no difference financially to the nhl if the SO franchise comes about via expansion or relocation.

Lets take scenario A, where the coyotes are relocated to winnipeg, and SO gets an expansion franchise.
Coyotes get sold to winnipeg for $150 million. Net profit to nhl is zero. Southern ontario franchise is awarded to SO for $300 million. Net profit to nhl is 300 million, but likely $100 mil of that goes to toronto, and $50 mil to buffalo for territorial fees.

Scenario B, Coyotes relocate to SO, and winnipeg (or any other city not in southern ontario) gets an expansion franchise, which would cost about $150 mil. The SO franchise (coyotes) is purchased from the nhl for $300 million, net profit $150 million. The other $150 mil of the $300 mil purchase price would be a relocation fee, which would can only be charged to an SO market. Again, presumably, $100 mil goes to toronto, $50 mil to buffalo. So, again, net profit to NHL is $300 mil (150 from expansion team, and $150 from relocation fee from SO team).

So, either way it's a wash. With an SO team in the picture, there is an extra $150 million on the table for the nhl. Whether that's obtained by the higher price of an SO expansion team, or the relocation fee that can only be reaped from an SO team, it's still the same amount of money either way.

Saying that they are 'saving' SO for expansion is just another way of putting the SO issue on the back burner, where it will remain in perpetuity, as the nhl is obviously in no shape to expand anytime soon.

 

[Tom ServoMST3K]

I'm not sure why people keep saying this, but the concept that the nhl would be better off financially by 'saving' southern ontario as an expansion market simply isn't true. It makes no difference financially to the nhl if the SO franchise comes about via expansion or relocation.

Lets take scenario A, where the coyotes are relocated to winnipeg, and SO gets an expansion franchise.
Coyotes get sold to winnipeg for $150 million. Net profit to nhl is zero. Southern ontario franchise is awarded to SO for $300 million. Net profit to nhl is 300 million, but likely $100 mil of that goes to toronto, and $50 mil to buffalo for territorial fees.

Scenario B, Coyotes relocate to SO, and winnipeg (or any other city not in southern ontario) gets an expansion franchise, which would cost about $150 mil. The SO franchise (coyotes) is purchased from the nhl for $300 million, net profit $150 million. The other $150 mil of the $300 mil purchase price would be a relocation fee, which would can only be charged to an SO market. Again, presumably, $100 mil goes to toronto, $50 mil to buffalo. So, again, net profit to NHL is $300 mil (150 from expansion team, and $150 from relocation fee from SO team).

So, either way it's a wash. With an SO team in the picture, there is an extra $150 million on the table for the nhl. Whether that's obtained by the higher price of an SO expansion team, or the relocation fee that can only be reaped from an SO team, it's still the same amount of money either way.

Saying that they are 'saving' SO for expansion is just another way of putting the SO issue on the back burner, where it will remain in perpetuity, as the nhl is obviously in no shape to expand anytime soon.

You can charge an relocation fee to winnipeg and I believe the payouts to the Laffs and sabres would be extra

I think.......

 

[Ciao]

There are a LOT of cities who are worse off than Glendale right now because of not having the balls to do what they did with the sports district.

That stretches the imagination.

 

[Ciao]

Silence is Ambiguous

Guaranteed it is a dead deal. Daly wouldn't be able to contain himself if there was good news to report.

Although...I guess I should wait until the 15th of the month for the monthly update. Anyone wanna place bets on what news comes out on the 15th??

At this point that's not a fair inference. With Glendale having announced its' intention to pay for Hulsizer's purchase with a bond issue, the situation is the opposite of what it was before that announcement.

If Glendale really wants to raise $125MM with a bonds issue, it will do so unless a challenge from Goldwater stops it. It definitely has the financial means, if it is only willing to pay the right price in terms of interest etc. In that case, it might be doing its' work quietly behind the scenes to get the best possible financing situation.

If Hulsizer is not somehow involved with the financing, he would still want to keep his trap shut for fear of having his $197MM Christmas present turn into a lump of coal.

The Clowns are the LAST ones he would tell, for fear they would spill the beans. He might also have threatened to banish them from his kingdom for life if they utter one word until a cheque arrives on his desk.

As for Daly and Bettman, ditto. If financing arrangements are in progress, there is absolutely no upside to saying or doing anything that might interrupt the Brinks truck on its' way to NHL HQ.

On the other hand, the deal might well be dead, in which case we won't find out until a relocation announcement is made.

However, the silent treatment does not tend to prove either conclusion. It is entirely ambiguous.

 

[Confucius]

As opposed to other cities that put everything on housing and commercial investments?

There are a LOT of cities who are worse off than Glendale right now because of not having the balls to do what they did with the sports district.

Or pucks...

 

[Evil Doctor]

Hamilton / Toronto/ Southern Ontario... the only way a team lands in these markets is expansion because of the huge potential expansion fee the NHL will ask for. The NHL will never let a team relocate to its last big expansion market.

This one of those things that keeps getting repeated as if it's true but ignoring what the NHL has said on the subject. According to Bettman, the Leafs have a veto on expansion, not on relocation. I will leave this for you to wrap your brain around...

 

[cbcwpg]

This one of those things that keeps getting repeated as if it's true but ignoring what the NHL has said on the subject. According to Bettman, the Leafs have a veto on expansion, not on relocation. I will leave this for you to wrap your brain around...

http://www.thestar.com/sports/hocke...9--cox-there-is-no-veto-bettman-says-to-leafs

"There is no veto," Bettman said after an uneventful two-day board of governors meeting wrapped up. "There are two votes that, from a constitutional and bylaw standpoint, would be important. The relocation of a franchise requires a majority vote. Period. End of story. No veto. The granting of an expansion team, because that's also a new owner and a new team, requires a three-quarter vote. No vetoes. I understand that there's ongoing confusion about that point but there shouldn't be."

Sounds like no veto.

 

[MaskedSonja]

The fifteenth in a week.

Bets on what will be said that day?

"Things are Imminent"

"We're Cautiously Optimistic"

"We're Optimistic"

"Things are moving smoothly?"

Something else?

Personally, I'm betting on "it's a process, and we are cautiously optimistic that process will be completed soon."

 

[TheLegend]

Yepp. Bugger just stepped in and agreed to the "Buy it Now" price, however, the NHL's apparently having a problem with the transaction. Glendale wants to pay cash but Hulsizers' hoping they'll accept Paypal.

Oh gawd I can't stop laughing right now.........

Nevermind that Jeff93 guy. I think I once played pond hockey against him. He arrived early & determined where the weakest portions of the ice were at. Proceeded to deliberately over-pass right into the danger zones, throughout the day, as it got warmer......

^^^^ Nominated for post of the decade. ^^^^

 

[Killion]

Oh gawd I can't stop laughing right now.........

Me neither. I know its impolite to laugh at ones own jokes, but......

 

[Confucius]

The fifteenth in a week.

Bets on what will be said that day?

"Things are Imminent"

"We're Cautiously Optimistic"

"We're Optimistic"

"Things are moving smoothly?"

Something else?

Personally, I'm betting on "it's a process, and we are cautiously optimistic that process will be completed soon."

Cheque returned, NSF

 

[aj8000]

So.....when it is announced that this deal is dead.....what then??

As much as the Winnipeg folk seem to think it is a done deal they will get the team if the deal falls through.....I personally give that about a .5% chance of happening.

Ok....sorry....maybe it is closer to a 1% chance.

History, MAY repeat it self everyone remember this...

1995, Aug. 10 - Winnipeg City Council votes (10-6) to accept Spirit of Manitoba’s business plan, overturning the results of the previous vote on July 26.

1995, Aug. 14 - The Spirit of Manitoba announces that they were unable to raise the required capital to proceed with the purchase of the Winnipeg Jets. The organization promptly disbands.

1995, Aug. 15 - The franchise announces that the 1995-96 season will be the final year for the Jets in Winnipeg since the team cannot be moved prior to 1995-96.

1995, Dec. 19 - The Winnipeg Jets ownership announces in a press conference that the new home of the franchise will be Phoenix, AZ.

 

[Ludwig Fell Down]

Cheque returned, NSF

I think the COG should hire John Spano as a consultant. Is he out of jail yet? Instead of a check for $100m, they could send a check to Hulsizer for $1m and say they mis-placed the decimal point. I'm sure enough time has passed that the league has forgotten about that trick.

On second thought, Spano would fit in better with the IEH guys. Maybe he's the 12th investor.

 

[Whileee]

Yepp. Bugger just stepped in and agreed to the "Buy it Now" price, however, the NHL's apparently having a problem with the transaction. Glendale wants to pay cash but Hulsizers' hoping they'll accept Paypal.



Nevermind that Jeff93 guy. I think I once played pond hockey against him. He arrived early & determined where the weakest portions of the ice were at. Proceeded to deliberately over-pass right into the danger zones, throughout the day, as it got warmer......

^^^^ Nominated for post of the decade. ^^^^

I am going to second the nomination.

At first I thought that puff of smoke over the Golden Horseshoe signaled that Burke was going on about the Kessel deal, and his pants were aflame again. Then I read Killion's post... a thin blue flame...

 

[aj8000]

That's not necessarily true. When bettman does something, it's always for a reason that benefits him. If the coyotes did not get revenue sharing, then that money (approximately $14 million) would be made up evenly by each of the 29 other teams paying an equal share. However, the revenue sharing pool is funded largely by the teams in the league that make money. So, by awarding himself full revenue sharing, that $14 million is paid mostly by the money making teams in the league, and those money pit southern teams therefore save money. This makes bettman very happy.

It also lowered the eventual purchase price of the Yotes by the Revenue sharing. If they had not got revenue sharing the price would have been higher.

 

[Niagara67]

So, either way it's a wash. With an SO team in the picture, there is an extra $150 million on the table for the nhl. Whether that's obtained by the higher price of an SO expansion team, or the relocation fee that can only be reaped from an SO team, it's still the same amount of money either way.

I'm getting OT here... but I heard Bettman say on CBC recently that maybe Hamilton isn't the best SO city for an NHL franchise..maybe it's London. Yes, Sir Gary Bettman actually said London! That would eliminate the $150M indemnity fees for Toronto & Buffalo, and London is too far from Detroit for indemnity. That makes it an interesting option for the NHL.. the local metro size is only 490,000, but having Kitchener and Hamilton metros a reasonable drive away pushes the market size to well over 1.6 million.

( Edit : Yeah I know Hamilton people might not be endeared to a London team - but Kitchener would, so still 950,000 market without Ham.)

 

[DeathToAllButMetal]

Yes that is what I am saying.

If....or when....the deal falls through I predict the NHL will announce that they did everything they could and it is with great regret that they have to seek new buyers that will move the team.

Then....very rich folks from or interested in certain markets will show up ....Possibly from....yes Winnipeg, and also Las Vegas, Kansas City, Quebec City, Cleveland, Hamilton, Milwaukee, Seattle,Toronto, Salt Lake City, etc., etc. will start tossing offers out to the NHL. Ultimately it will depend on what the NHL wants and who wants to pay the most. The latter being more important.

Who knows...maybe a Phoenix guy will show up and put the team in the US Airways Center.

If the team is being sold to a 'non-local'...I give Winnipeg a 1% chance of landing the team. The NHL isn't going to go from one absolute disaster to a risk. They will go from an absolute disaster to a safe bet. It is unfortunate for Winnipeg....but that is business.

This is just flat-out idiotic. For starters, there are no rich guys lining up to buy NHL teams and install them in ANY of the cities you are mentioning. The Southern Ontario thing is the only possibility, and the league's already made it clear it ain't going there right now. Also, how can you ignore the league's comments on Winnipeg here? This is a done deal the moment that Scruggs or Hulsizer or even Bettman sober up.

When the Phoenix deal dies, the Yotes will go home. Period.

 

[DeathToAllButMetal]

If Glendale was as conservative and prudent as Winnipeg, the Coyotes would have been playing hockey the last 8 years in Portland Oregon and there would be no Westgate and Glendale would still be trying to figure out what to do with the years empty Manistee Mall... which I suppose those cranky old men upset about ther water bills would retort "so? would my water bill be lower?"

And Westgate has been such a huge financial windfall for the city?

Laugh at the water bill thing all you want, but municipalities ALWAYS have to keep the focus on the bottom line. It's easy to get lured off into dreams of glory and being the mayor or councillor who gets the city to the promised land through some big development. Problem is, you've got to be aware of the consequences if the golden goose craps bricks instead of golden eggs.

You can't subsidize dreams off utility bills and a residential tax base. That will get you booted out of office at best and lynched at worst. Glendale has just been spectacularly irresponsible here with taxpayer dollars, continually trying to justify the Coyotes/Westgate dream on the backs of your cranky old guys who are just trying to keep roofs over their heads.

One more thing -- you don't think that developers have issues with things like high water rates? It's not just old retired guys. Companies assess all this stuff before they hire, fire, expand, contract. You get to a situation where your town is higher than its neighbors when it comes to water, sewer, tax rates, etc. and you will kill yourself when it comes to both residential and commercial development. So even if Glendale somehow manages to make money with this Coyotes stuff, it might also kill off, say, new residential building by driving developers into neighboring municipalities to avoid the higher living costs with Glendale's water/sewer bills.

 

[Dado]

The team has been known to be a relocatable asset for a year now, but there is not even a hint of anyone but TSNE being ready to move on it. If the team is going anywhere, it's either to Winnipeg, or to an existing NHL city that is about to lose their own franchise to Winnipeg .

 

[Major4Boarding]

Not sure if anyone has seen this yet.

Summary of Cost-Benefit Analysis of Coyotes Agreement
Glendale Benefits of Coyotes Agreement

I attached the pdf to this post but if there's issues, see link below:

http://www.goldwaterinstitute.org/case/3200

Look for "Public Records - Financial Analysis of Deal Commissioned by City" under Case Docs

... looks as if GWI posted this to their site on Monday.