Phoenix LXXX: Is there another way out?

[nelina]

Yup! From what I recall, even Hulsizer were willing to put more cash down back in the day. The gong show keeps on beating away.

BTW..great new Avatar

Thanks for the avatar. It is my own creation for my brotha. He got that printed on T's and hoodies for him and his friends that are avid waterfowlers. The full logo shows a big CLUCK YA! on top. Funny

 

[OthmarAmmann]

So in other-words, the CoG is buying themselves a hockey team that they will actually never own. $120M ( plus the $50M the CoG has already put in ) would get you owning the team yourself.

Also shows that , NOBODY is willing to put their own money into this team. You want it? Then pay for it out of your own pocket.

Yes, except it would be far cheaper for the city to just finance that with muni bonds rather than from a hedge fund.

 

[madhi19]

So in other-words, the CoG is buying themselves a hockey team that they will actually never own. $120M ( plus the $50M the CoG has already put in ) would get you owning the team yourself.

Also shows that , NOBODY is willing to put their own money into this team. You want it? Then pay for it out of your own pocket.

Yeah at this point sell it to Glendale directly at least they get equity.

 

[Major4Boarding]

Yes, I had heard that was going to be a substantial piece of the financing. Expensive capital there. The whole thing would have just fallen apart in a few years anyway.

At $120 million the AMF would have to have been around to $13 million to $15 million per year to get close to what Fortress' target return probably would have been. Even that's only a 10% to 12% IRR over 30 years.

$6 million per year is 3% IRR - not going to happen.

Getting to work on the Double D... will post later.

My immediate response (article) was... huh?

 

[CGG]

Fortress has $2.2 billion in assets and $1.3 billion in equity. I don't want to tell them how to run their business, but putting up $120 million in a gamble on a near-bankrupt municipality doesn't seem like a solid use of 10% of your firm's equity. Must have been expecting a pretty handsome return. Not $6 million a year, but $15 million a year.

 

[wildcat48]

Yes, I had heard that was going to be a substantial piece of the financing. Expensive capital there. The whole thing would have just fallen apart in a few years anyway.

At $120 million the AMF would have to have been around to $13 million to $15 million per year to get close to what Fortress' target return probably would have been. Even that's only a 10% to 12% IRR over 30 years.

$6 million per year is 3% IRR - not going to happen.

I can't even fathom what the expected ROI on that loan would be..... I think I have some spare change between my sofa cushions.

 

[Killion]

Points for creativity.... thats all Ive got.

 

[CGG]

One more tasty tidbit that looks like it was added after the original article went up:

In addition, the NFL is promising the new owners that they will get the maximum amount of revenue from the league’s revenue-sharing system.

I assume the author meant NHL, not NFL.

 

[King_Stannis]

Oye, those detail would seem to be another black eye for the league. They have to resort to an interest free loan before they get one dime while they hope an outside fund is satisfied with what is entirely taxpayer money.

At one point does someone just push their chair away from the table, stand up and say "you know what, this is just so ludicrous. We have a business that has never sustained itself and given the current market condition, probably never will. It's over folks, thanks for all your hard work."

 

[OthmarAmmann]

Fortress has $2.2 billion in assets and $1.3 billion in equity. I don't want to tell them how to run their business, but putting up $120 million in a gamble on a near-bankrupt municipality doesn't seem like a solid use of 10% of your firm's equity. Must have been expecting a pretty handsome return. Not $6 million a year, but $15 million a year.

FIG has $55 billion of assets under management including $6.4 billion of "dry powder" than can be invested today.

http://www.fortress.com/PublicShare...inancialFundamentals/fundAssetUnderManagement

 

[Grzkid]

The whole situation gets more amusing (in a bad way for Yotes fans) every day.

 

[JimAnchower]

How screwed up is Pastor's offer to be deemed worse than the piece of vomit deal that Gosbee cobbled together?

Pastor's deal isn't that much worse than Gosbee's deal, especially given that the NHL agrees with Gosbee's deal, but won't call back Pastor. Now the NHL may simply not want to do business with Pastor (perhaps because he is a complete outsider, perhaps for other reasons). I would be very interested in Pastor's response to this proposed deal.

 

[MaskedSonja]

One more tasty tidbit that looks like it was added after the original article went up:



I assume the author meant NHL, not NFL.

Wow, the team gets that juicy deal AND revenue sharing????


I can't see how the owners would go for that-giving a don't pay back for five year loan AND rev sharing?

Again, I wonder-what is it about the Yotes franchise that has the NHL doing financial backflips and contortions to keep the team there?


Can I vote for "Go on take the money and run" as the next thread title????

 

[CGG]

FIG has $55 billion of assets under management including $6.4 billion of "dry powder" than can be invested today.

http://www.fortress.com/PublicShare...inancialFundamentals/fundAssetUnderManagement

Ah. Okay. So Fortess would also be investing "Other People's Money" in the transaction. Got it.

 

[madhi19]

The Glendale budget session of May 28. Hopefully I don't get a strike over it.

 

[OthmarAmmann]

Ah. Okay. So Fortess would also be investing "Other People's Money" in the transaction. Got it.

Yup. I believe they already have lent a good chunk to the Coyotes over the past few years. Could be wrong, just what I heard.

 

[CasualFan]

Yup. I believe they already have lent a good chunk to the Coyotes over the past few years. Could be wrong, just what I heard.

Everyone wants in on a money-making-machine like the Coyotes.

 

[Fugu]

Wow, the team gets that juicy deal AND revenue sharing????


I can't see how the owners would go for that-giving a don't pay back for five year loan AND rev sharing?

Again, I wonder-what is it about the Yotes franchise that has the NHL doing financial backflips and contortions to keep the team there?


Can I vote for "Go on take the money and run" as the next thread title????

Lower cap and the industry fund helped Gary find some more money, just like I said earlier.

 

[Wheathead]

Explain the new developments to me like I'm 5, please.

 

[madhi19]

I wonder who leaked the details to Forbes? That deal is so ridiculous you got to wonder if it not an owner who did it.

 

[Crease]

Interesting to say the least.

 

[OthmarAmmann]

Everyone wants in on a money-making-machine like the Coyotes.

"Drawbridge Special Opportunities Funds

The Drawbridge Special Opportunities Funds form the core of our credit hedge fund investing strategy. The funds opportunistically acquire a diversified portfolio of investments primarily throughout the United States, Western Europe and the Pacific region. The funds’ investment program incorporates three complementary investment strategies, focusing on asset-based transactions, loans and corporate securities. The majority of the funds’ investments are relatively illiquid, and the funds generally make investments that are expected to liquidate or be realized within a five year period.

Management fees are charged based on the AUM of the Drawbridge Special Opportunities Funds at a rate generally equal to 2% annually. We generally earn incentive income of 20% of the fund’s profits, payable annually, and subject to achieving cumulative positive returns since the prior incentive income payment. Investors in the Drawbridge Special Opportunities Funds may redeem annually on December 31. Because of the illiquid nature of the funds’ investments, rather than paying out redemption requests immediately, the fund may elect to pay out redeeming investors as and when the particular investments held by the fund at the time of redemption are realized."​

http://www.sec.gov/Archives/edgar/data/1380393/000119312511051919/d10k.htm#tx154295_2

money-making-machine for the portfolio manager

 

[wildcat48]

I wonder if this Bettman's reaction to reading this Forbes article.....

 

[CGG]

Here's Gary's Choice:

Option 1

Sell to PKP. Move team to Quebec. Pocket about $210 million, plus or minus. Claim you now have 30 healthy markets. Case closed.

Option 2

Sell to Gosbee. Pocket about $85 million while carrying a loan for another $85 million, hoping it will one day get paid back. But not for at least 5 years. Convince the BOG to be cool with allowing Phoenix to have full revenue sharing no matter what goals they hit or miss. Likely agree to some future arrangement that lets Gosbee get the heck out a few years down the road, possibly giving up potential relocation fees in the process. Continue to live the dream that Phoenix will one day amount to something of a decent "market" for NHL hockey. Stay on alert for when Renaissance and/or Glendale file for bankruptcy protection.

Seems like an obvious choice to me.

 

[Mightygoose]

I wonder who leaked the details to Forbes? That deal is so ridiculous you got to wonder if it not an owner who did it.

Well if we don't get denials from Daly later today, the breakdown of the deal must be true