Phoenix LXII: Abandon Hope all Ye Who Enter Here

[calmdown]

My God! It took me 2 hours to catch up with that thread having been absent for half a day... If GJ and COG could be as fast as you guys... All would have been done in June ;-)

 

[ajmidd12]

Interesting blurb.... http://www.glendaleaz.com/Clerk/agendasandminutes/Workshops/Agendas/100212-W03.pdf

...Analysis conducted by independent outside experts concludes that, in their opinion, the deal....

Apparently they are still going off of TL Hocking's report

This really won't end....

 

[OthmarAmmann]

Also, the $24MM v $25MM scenario includes another anomaly. I have to defer to the finance guys but I'm extremely skeptical of Skeete's assumption that debt can only be refinanced if the city pays to keep the Coyotes.

Sadly I don't have as much time to devote to this as I used to. It's noteworthy that Moody's explicitly called out the support of the Coyotes when they put the credit rating on negative outlook. It's a bit academic really, since the only party that would be willing to extend the city credit is probably a hedge fund that would seek a rate that is practically usurious.

I frankly am all for the tax increase combined with closing the lease. The city is a fiscal basket case and I can only hope I have the opportunity to observe them dig themselves even deeper.

 

[bobbop]

I couldn't resist your comment bob... First, Sunnucks always speculate ;-) (afther reading this thread lol ) But in your comment we can see the difference between political managing and business managing... That's funny how political persons can be fooled because of their lack of knowledge of business...

You are so right...and from what I have heard, that is exactly what happened.

 

[blues10]

Interesting. From this rather brief and cryptic note, it would seem that the have "restructured" the AMF payment schedule without lowering the overall amount. This is to address the short-term budget crunch.

As I've noted before, the NHL would be loony to walk away from this situation, considering the struggles in some other markets.

It would seem that the only potentially troublesome issue to consummating the deal might be a challenge under the gift clause. The GWI has been awfully quiet these days.

I wonder when we'll finally learn who Jamison's investors are.

Ice Edge confirmed.

Jamison has also not disclosed his partners or where the money may be coming from though it has been confirmed that executives with Ice Edge Holdings are working with the former Sharks executive.

http://www.bizjournals.com/phoenix/...glendale-council-to-get-update-on.html?page=2

 

[OttawaRoughRiderFan*]

Ice Edge confirmed.

OMG... The lowest common denominator.

 

[blues10]

OMG... The lowest common denominator.

I am sure the other investors will actually have money and be vetted by the NHL.

7. Gary Bettman Is a Telemarketer

According to Gatehouse, Bettman keeps a contact file that's "stuffed with the names and numbers of anyone with money who has ever expressed even a passing interest in the sport" and makes dozens of "cold calls" every month to potential NHL investors and owners.

Keep it up, sir, and one day you'll get those Glengarry leads.

8. Gary Bettman's Biggest Embarrassment Might Be John Spano

Spano was a 33-year-old who claimed to own 10 companies around the world. In 1997, he made a deal to buy the New York Islanders for $165 million. Then things got hinky: He missed payments, wired $5 instead of $5000 and so on. Spoiler: He was broke. Bettman considers it an embarrassment he wishes he could take back, telling Gatehouse:


"We learned from that, and we have better ways of checking now. We use private investigators to probe people's backgrounds—have they been arrested, have they done anything they shouldn't, talk to their references and neighbours, so you know what you are getting. And we use forensic accountants to dig in and make sure the money is really there."

And yet 'Boots' Del Biaggio still happened.

http://ca.sports.yahoo.com/blogs/nh...n-t-know-gary-bettman-nhl-133508744--nhl.html

 

[blues10]

Some interseting points.

Don't blame Coyotes for Glendale's problems (Blame Glendale)

It took just 22 minutes for the Glendale City Council to agree to shell out $180 million to build an arena for the Phoenix Coyotes. City leaders had spent the previous weekend urging then-Coyotes owner Steve Ellman to dump Scottsdale – where skeptical city officials weren’t buying his pitch – and come west.

In a flash, Glendale’s dazzling dreams of hockey grandeur were coming true.

“It truly is a historical event,†a beaming Glendale Mayor Elaine Scruggs said that April evening in 2001.

Turns out Scruggs was right.

Eleven years later, the city is in a financial hole of historic proportion as a result of its sports-crazed leaders...........

But the most galling part of all? The city’s insistence that its desperation is due to the economy.

“Many people say the Coyotes are the cause of this problem, but that’s not the truth,†Councilman Manny Martinez told citizens this week.

Actually, he’s right. The Coyotes aren’t the problem. The city’s leadership is the problem…

…Leaders who put residents on the hook for a hocky arena that has brought in a grand total of $3.8 million in direct tax revenue since May 2010, while costing $50 million in management fees.

http://www.azcentral.com/members/Blog/LaurieRoberts/172505

 

[Whileee]

Ice Edge confirmed.



http://www.bizjournals.com/phoenix/...glendale-council-to-get-update-on.html?page=2

It doesn't even say that the Ice Edge guys are investors, only that they Ice Edge "executives" (executives of what?) are working with Jamison. I'm not sure which is more troubling - the IEH guys as owners or the IEH guys as advisors. This is the group that brought you the "5 home games in Saskatoon" as a central plank of their business plan to turn around the Coyotes previously.

 

[sipowicz]

When GJ's JIG is revealed at the presser announcing an ownership change. Seats at the head table reserved for the TO, Arabs and Ice Edge clowns. Never a prouder day for L'ill Gary and willy D.

Love it, Lieberman should also be at the head table (black cat calling the black pot black with a black hat), along with Gary Bettmans parrot (weeks not months, weeks not months...), Abraham "Abe" Jay-Jedediah Simpson II (keep gramps Jamison company), Gary Busey (host)....

 

[wildthing202]

So are they going to extend the lease or just let it expire?

 

[Evil Doctor]

So are they going to extend the lease or just let it expire?

The way this is going, they will try to do both...

Arizona Coyotes? They should name the team Schrödinger's Coyotes...

 

[barneyg]

http://www.glendaleaz.com/Clerk/agendasandminutes/Workshops/Agendas/100212-W03.pdf

Apparently they are still going off of TL Hocking's report

Interesting. From this rather brief and cryptic note, it would seem that the have "restructured" the AMF payment schedule without lowering the overall amount. This is to address the short-term budget crunch.

I think you guys misread that, the majority of that announcement is the exact description of the deal as approved in June. So of course the Hocking numbers were used. My reading is that "payments for the early years" will be lower, but there's no indication that the total amount will stay the same after the restructuring.

Funny how they now use the NPV figure instead of the raw numbers. That's theoretically accurate of course but I'm not sure regular councilmembers can figure out what to do with that.

Also, the $24MM v $25MM scenario includes another anomaly. I have to defer to the finance guys but I'm extremely skeptical of Skeete's assumption that debt can only be refinanced if the city pays to keep the Coyotes.

It boils down to (1) accepting the city's assessment of direct and indirect revenue generated by the Coyotes (remember the claim that the Coyotes generate 40% of Westgate year-round sales tax revenue? etc.), and (2) accepting the six twelve million figure for arena management without the Coyotes. To think any kind of banker would take those two at face value is a pretty bold assumption to make.

More generally, debt can always be refinanced. The question is whether the resulting payments will be lower than before. Glendale is facing a short-term budget shortfall so it will be looking to convert (say) 10-15-year debt into 30-year debt, likely to the expense of a higher interest rate. If the COG had the tools to convince anyone that 15+ years from now, the Coyotes are going to be a cash cow for the city, then some bond investor would take the bait because refinancing would make financial sense. I don't think it's likely but I've been surprised before.

I have said it before in other threads, but under no reasonable CBA will the cities like Phoenix become viable NHL markets. The Phoenix sports market is incredibly vibrant and busy. It's no wonder a niche sport like hockey becomes lost in the desert.

Define "reasonable", it's a value judgement. A CBA with a cap and no floor could make Phoenix viable. Not sure many people want the resulting on-ice product though.

 

[OthmarAmmann]

I think you guys misread that, the majority of that announcement is the exact description of the deal as approved in June. So of course the Hocking numbers were used. My reading is that "payments for the early years" will be lower, but there's no indication that the total amount will stay the same after the restructuring.

Funny how they now use the NPV figure instead of the raw numbers. That's theoretically accurate of course but I'm not sure regular councilmembers can figure out what to do with that.



It boils down to (1) accepting the city's assessment of direct and indirect revenue generated by the Coyotes (remember the claim that the Coyotes generate 40% of Westgate year-round sales tax revenue? etc.), and (2) accepting the six twelve million figure for arena management without the Coyotes. To think any kind of banker would take those two at face value is a pretty bold assumption to make.

More generally, debt can always be refinanced. The question is whether the resulting payments will be lower than before. Glendale is facing a short-term budget shortfall so it will be looking to convert (say) 10-15-year debt into 30-year debt, likely to the expense of a higher interest rate. If the COG had the tools to convince anyone that 15+ years from now, the Coyotes are going to be a cash cow for the city, then some bond investor would take the bait because refinancing would make financial sense. I don't think it's likely but I've been surprised before.



Define "reasonable", it's a value judgement. A CBA with a cap and no floor could make Phoenix viable. Not sure many people want the resulting on-ice product though.

And on top of all that they used "net present value" as a verb. If they do manage to refinance the investor will almost certainly tear them a new ***hole.

 

[Whileee]

I think you guys misread that, the majority of that announcement is the exact description of the deal as approved in June. So of course the Hocking numbers were used. My reading is that "payments for the early years" will be lower, but there's no indication that the total amount will stay the same after the restructuring.

Funny how they now use the NPV figure instead of the raw numbers. That's theoretically accurate of course but I'm not sure regular councilmembers can figure out what to do with that.

With due respect, I think you are mistaken. If Glendale had a revised lease agreement that reduced the overall payment substantially, they would surely have included that in this information release. Everything else in the release is meant to paint a rosy picture of the agreement, so I am quite sure they would have trumpeted overall reduced costs from the June 8 agreement.

We'll soon see, I expect.

 

[Wheathead]

Even if the JIG signs a lease and completes the purchase, it won't be long until we're back on this board discussing ownership issues with the team. Even with a favourable lease, the JIG will be combating $15M-$20M of losses per season (at the current rate.) When will the first cash call come? How long will it take before investors back out due to losses? A new CBA that is favourable towards the owners won't help the Coyotes, either. I have nothing against investment groups (the Edmonton Investors Group saved the Oilers from moving to Houston in 98), but they are never a long term ownership solution. At the time when they sold to Katz, a lot of investors wanted out.

If the JIG buys the team, the fans of the Coyotes best be prepared to either pay more for tickets, or buy more tickets, because there is basically no other way that this organization can survive.

 

[cbcwpg]

Even if the JIG signs a lease and completes the purchase, it won't be long until we're back on this board discussing ownership issues with the team. Even with a favourable lease, the JIG will be combating $15M-$20M of losses per season (at the current rate.) When will the first cash call come? How long will it take before investors back out due to losses? A new CBA that is favourable towards the owners won't help the Coyotes, either. I have nothing against investment groups (the Edmonton Investors Group saved the Oilers from moving to Houston in 98), but they are never a long term ownership solution. At the time when they sold to Katz, a lot of investors wanted out.

If the JIG buys the team, the fans of the Coyotes best be prepared to either pay more for tickets, or buy more tickets, because there is basically no other way that this organization can survive.

Attendance has to be at 15,000 per game with ticket prices doubled what they are today, for there to even be a remote chance of this team breaking even.... How likely is that?

 

[blues10]

So are they going to extend the lease or just let it expire?

After some thought....

If the NHL wanted to put pressure on Grampa Jamison and the COG to hammer out a deal ASAP they would let the lease expire.

However, the NHL would never expose themselves to having a team with no building to play in so... the only way it is left to expire is if the NHL has an agreement in principle to relocate the team elsewhere. Which is exactly what the NHL and TNSE had in May 2010.

or...

the league suspends the operation of the Coyotes.

or.....

the league renews the lease and is willing to put up with the smell of lame duck cooking in the desert heat if GJ and the COG can't reach an agreement.

so....

I really have no idea.

 

[blues10]

This is worth a read.

Glendale's sports dream turning into a nightmare

Big investments putting financial strain on city

This sums it up.

"We were once called visionaries," said Glendale Councilman Manny Martinez. "Now we're being called other things which I won't name."

Glendale Mayor Elaine Scruggs, who has led the city for nearly two decades, now wishes she and other council members had demanded deeper cuts and asked more questions as staff presented the sports and entertainment deals in the past.

"There's enough blame to go around for everybody," Scruggs said. "The council members basically trusted totally in (city) management and supported management 100 percent or more."

http://www.azcentral.com/community/...am-turning-into-nightmare.html?nclick_check=1

 

[ClassLessCoyote]

Some interseting points.



http://www.azcentral.com/members/Blog/LaurieRoberts/172505

Meh

It's just another poorly written and short sighted article the AZ Republic.

 

[Killion]

It doesn't even say that the Ice Edge guys are investors, only that they Ice Edge "executives" (executives of what?) are working with Jamison. I'm not sure which is more troubling - the IEH guys as owners or the IEH guys as advisors. This is the group that brought you the "5 home games in Saskatoon" as a central plank of their business plan to turn around the Coyotes previously.

I would suspect as "vocal investors" Whileee. If Jamisons able to channel their enthusiasm, then I dont see a problem with them being involved & active in the marketing & promotional side of the business. However, it might be akin to trying to herd cats, the lads requiring a close eye be kept on their activities, twitterings & tweets. Let loose in the candy shop. Accidentally locked into a high-end department store overnight. One with a fully stocked bar, selection of fine wines & single malts, cigars; Armani boutique....

 

[OttawaRoughRiderFan*]

AZ Central needs to hire a better photographer for its journalists. Every picture is unflattering. Every one.

 

[OttawaRoughRiderFan*]

"We were once called visionaries," said Glendale Councilman Manny Martinez. "Now we're being called other things which I won't name."

What do you call people who are in over their heads?

**

These people are not alone. 60 Minutes did a story about cities, all over the world, who were taken in by investment bankers.
They even took advantage of nuns in a convent. The world can be an awful place. Money/Greed make it worse.

 

[Major4Boarding]

Sadly I don't have as much time to devote to this as I used to. It's noteworthy that Moody's explicitly called out the support of the Coyotes when they put the credit rating on negative outlook. It's a bit academic really, since the only party that would be willing to extend the city credit is probably a hedge fund that would seek a rate that is practically usurious.

I think you guys misread that, the majority of that announcement is the exact description of the deal as approved in June. So of course the Hocking numbers were used. My reading is that "payments for the early years" will be lower, but there's no indication that the total amount will stay the same after the restructuring.

Funny how they now use the NPV figure instead of the raw numbers. That's theoretically accurate of course but I'm not sure regular councilmembers can figure out what to do with that.

...

More generally, debt can always be refinanced. The question is whether the resulting payments will be lower than before. Glendale is facing a short-term budget shortfall so it will be looking to convert (say) 10-15-year debt into 30-year debt, likely to the expense of a higher interest rate. If the COG had the tools to convince anyone that 15+ years from now, the Coyotes are going to be a cash cow for the city, then some bond investor would take the bait because refinancing would make financial sense. I don't think it's likely but I've been surprised before.
.

So, after reading both of these posts I went back and read both agendas again (6/8 & 10/2). Combining the 2 and highlighting the additions and omissions I noticed the following (using 10/2's Agenda as PoR):

Purpose and Policy Guidance

Staff is seeking guidance from City Council on proposed modifications to the Arena Management Agreement with Arizona Hockey Arena Partners LLC and Arizona Hockey Partners for the use of the city-owned Jobing.com Arena by the Phoenix Coyotes.

Background Summary

A summary of the main points from the Arena Management Agreement approved on June 8, 2012, is as follows:

• The NHL team stays in Glendale for 20 years, the same amount of time remaining on the original bonds for the arena.

• The city receives 15% of the naming rights revenue for the arena. (estimated between $4 million and $10 million over the life of the agreement)

• The city does not issue any new debt to support this agreement directly.

• The city pays an average arena management fee of $15 million per year which was net present valued at $203.7 million using a 6.5% discount rate.

• Analysis conducted by independent outside experts concludes that, in their opinion, the deal:

o Meets the constitutional test against gifting by the city.

o The financial position for the city with the team in place will be better than managing the arena without the team.

o This conclusion was arrived at without the inclusion of any revenue from the Westgate development, which is expected to at least double over the life of the team’s stay.

In August 2012, Council directed the Acting City Manager to renegotiate the payment terms of the approved agreement with a stated objective of reducing the payments made in the early years of the agreement to better meet the city’s cash flow needs.

During today’s workshop, the Acting City Manager will present the final agreed upon restructuring terms.

Setting the table...

 

[Coramoor]

Okay so I've been out of the loop for a while

How exactly is this deal going to be remotely viable, or are we moving the team to Quebec in the next 5 years instead of right now, which I somewhat understand the owners not wanting to do because it would significantly weaken their bargaining position during the CBA talks