Phoenix LXXX: Is there another way out?

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Killion

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Feb 19, 2010
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More on FIG and Vancover (Whistler)...

Yes despite the denials by VANOC, the organizers of 2010 Games, there actually was grave concern for some time that Fortress/Intrawest might get shutdown by their lenders with liens on the mountains, lifts, buildings, the whole shebang. Dunno how they managed to mess up so badly after buying out the former principals & shareholders who had built Intrawest up from the 80's starting with Blackcomb next to Whistler, but mess up people did. Seriously over-extended themselves in the leveraged buyout. Acquiring other areas as well, Tremblant north of Montreal included which had & was still undergoing major development. Whistler the number one ski resort destination in the world. Like MLSE is to the NHL. Crazy.

In hindsight, maybe the best deal he never made? Add it all up and that's one heck of a lot of money at the same time that his investment in RIM would have fallen in value.

I dont know Mork. It may have been "the best deal he ever made", fortuitous, as he'd have used his own personal wealth, divesting even further his shares in RIM prior to their massive fall, so he'd have had that asset (team & building) well in-hand, conceivably a hands on owner-operator of the old school ilk like Ballard. Maybe emulated Gordon Pinsent as Duff McCardle, owner of the Hamilton Steelheads from the 98-00 tv show Power Play. Moved in to Copps. Real nice Loft up in the rafters for the wife & kids. Sold the ranch in Waterloo.
 

wunderpanda

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Any ideas what the CoG would ask for in a lease agreement with Renaissance? 20 years no out-clause? A deal like Edmonton, where the NHL promised to always have an NHL team in the arena? Can't imagine they move forward without certain assurances from the league and/or owners.
 

madhi19

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Any ideas what the CoG would ask for in a lease agreement with Renaissance? 20 years no out-clause? A deal like Edmonton, where the NHL promised to always have an NHL team in the arena? Can't imagine they move forward without certain assurances from the league and/or owners.
They don't have the money to drop 12 to 15 million a year either way. More to the point they don't want to.
 

Killion

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Any ideas what the CoG would ask for in a lease agreement with Renaissance? 20 years no out-clause? A deal like Edmonton, where the NHL promised to always have an NHL team in the arena? Can't imagine they move forward without certain assurances from the league and/or owners.

Well, the current Council & Mayor I dont think would even contemplate a long-term lease as being all that attractive if they then had to basically double down on the Arena Management Fee's to secure it. Fact is, they simply dont have that kind of money, and even if they did, after the revelations of actual arena management costs ($5.5-$6M) not prepared to pay double the going rate. Hypothetically speaking if they did that, for absolute certainty the deal would be challenged via referendum, probable re-call efforts, by the Goldwater Institute, civic employees', Police & Fire.... your talking full on nightmare to be wandering down that road.
 

manisback121

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Never mind that the COG cant come with the difference between $6M & app $12M, leaving Fortress to go whistle up a dark alley, I wonder if Gary Bettman would have that kind of latitude in light of the fact that there does appear to be another option for a cash transaction (obviously involving a relocation). The whole thing is convoluted, seems to contain an awful lot that could go wrong, and Murphys Law being what it is, a rather serious roll of the dice.

Not forgetting a material deviation from the high average of AMF would cause litigation from those would be plaintiffs GWI or other aggrieved bidders :)
 

Nordskull

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Killion

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Not forgetting a material deviation from the high average of AMF would cause litigation from those would be plaintiffs GWI or other aggrieved bidders :)

Ya thats something to consider. I noted you brought that up earlier, possibility of an aggrieved bidder to the RFP filing suit, though Id think the COG would be able to get that tossed wouldnt they? How common is that in the legal world anyway, that aggrieved bidders sue local, state or even federal branches when RFP's are pulled and or awarded sole source?
 

LetangInTheSO

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Oct 17, 2008
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Ya thats something to consider. I noted you brought that up earlier, possibility of an aggrieved bidder to the RFP filing suit, though Id think the COG would be able to get that tossed wouldnt they? How common is that in the legal world anyway, that aggrieved bidders sue local, state or even federal branches when RFP's are pulled and or awarded sole source?

My company sold equipment to municipal, state and federal agencies (sometimes bidding on open RFPs and sometimes as a sole source vendor) and we never encountered this.
 

enarwpg

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Jun 21, 2011
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Holy crap. $250 million to be raised as follows:

$45 million cash put in by Renaissance
$85 million loan from the NHL - no repayments necessary for at least 5 years
$120 million loan from Fortress Investment Group to be paid down by the annual AMF provided by Glendale.

Sweet deal. Never gonna fly, but sweet deal.

That's less cash in the deal than even Reinsdorf was condsidering way back when. Someone hit the gong, show's over, team is moving, this is a ridiculous farce of a "deal". Owner only puts in 26% of the purchase price in equity? It's shameful that anyone even considered this. Move the team already.

Edit - purchase price would be $170 million, plus $80 million in working capital (i.e. future year losses).

$120 million loan .... to be paid down by the annual AMF provided by Glendale.

Yikes, talk about gifting taxpayers money. Actually coming out and saying it's to pay off a loan, and not for arena management ! :help:

However ....once Glenadale advances management fees does it really matter what those funds are used for?
 

manisback121

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Feb 28, 2008
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Ya thats something to consider. I noted you brought that up earlier, possibility of an aggrieved bidder to the RFP filing suit, though Id think the COG would be able to get that tossed wouldnt they? How common is that in the legal world anyway, that aggrieved bidders sue local, state or even federal branches when RFP's are pulled and or awarded sole source?

****ed up situation, I agree. Yet, 1) the last time I checked open bids have details about how winning bids qualify/awarded; 2) Glendale's public representation can be posed as a commitment to public bidding process which leads to 3) A PE claim on behalf (hence the material deviation) of the qualifying bidders and 4) GWI's way to court as well.

I wouldn't take a case like that, too risky. Yet, theoretically possible; however this isn't your typical case anyway!
 

madhi19

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$120 million loan .... to be paid down by the annual AMF provided by Glendale.

Yikes, talk about gifting taxpayers money. Actually coming out and saying it's to pay off a loan, and not for arena management ! :help:

However ....once Glenadale advances management fees does it really matter what those funds are used for?
It sure is if GWI sue and they will if this thing close but it won't come to that the CoG is not spending more than $6 million and this deal at least need 12 if not more.

****ed up situation, I agree. Yet, 1) the last time I checked open bids have details about how winning bids qualify/awarded; 2) Glendale's public representation can be posed as a commitment to public bidding process which leads to 3) A PE claim on behalf (hence the material deviation) of the qualifying bidders and 4) GWI's way to court as well.

I wouldn't take a case like that, too risky. Yet, theoretically possible; however this isn't your typical case anyway!
Forget that angle it political suicide to back this deal. Where will they find the money the budget is already done they can tweak it but it can only be neutral or lower. That mean cut something else.
 
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enarwpg

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Jun 21, 2011
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The Glendale budget session of May 28. Hopefully I don't get a strike over it.


Very impressive: she used both sides of the paper she was reading from as a show of the much greater financial accountability being introduced by the new administration.... :handclap:
 

Killion

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****ed up situation, I agree...

Ya Id think that would be pretty tenuous at best, long shot. But absolutely
right about it being grist for Goldwaters mill. All kinds of ammo right there.

Note; anyone else experiencing software problems?
 

LPHabsFan

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$120 million loan .... to be paid down by the annual AMF provided by Glendale.

Yikes, talk about gifting taxpayers money. Actually coming out and saying it's to pay off a loan, and not for arena management ! :help:

However ....once Glenadale advances management fees does it really matter what those funds are used for?

COG is paying a service fee of 6 million to a company to manage their arena. What the managing company does with that money is entirely up to them and also completely out of the control of the COG. If they want to pay off a loan, that's their choice. GWI would only be able to challenge that part if the money was going directly from them to the loan company. The loan is for the purcahse of the Coyotes from the NHL and has nothing to do with the COG.

Some might say that's a useless argument and is only semantics. Me on the other hand? I think it's important......
 

Donwood

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Mar 13, 2011
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COG is paying a service fee of 6 million to a company to manage their arena. What the managing company does with that money is entirely up to them and also completely out of the control of the COG. If they want to pay off a loan, that's their choice. GWI would only be able to challenge that part if the money was going directly from them to the loan company. The loan is for the purcahse of the Coyotes from the NHL and has nothing to do with the COG.

Some might say that's a useless argument and is only semantics. Me on the other hand? I think it's important......

6 million isn't even close to what they would need to pay
 

manisback121

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Ya Id think that would be pretty tenuous at best, long shot. But absolutely
right about it being grist for Goldwaters mill. All kinds of ammo right there.

The only thing I can think of is how this type of situation could work out. Tenuous yes, but how long before the representations add up to something actionable. That would really be fuel for GWI's fire if Glendale were to be collaterally estopped from litigating the reasonableness of the number. Now I digress....
 

Hawker14

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Oct 27, 2004
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$20+ million a year in negative annual cashflow, and the plan is to run the franchise on credit. Too bad they can't saddle the franchise with debt to start out with, too ... oh wait, nvm.


Highly leveraged, and shallow pocketed "ownership" -I don't see how this could possibly fail !!!

Too bad the clowns aren't going to get the chance to lose their $45m, because that would just be terrible. Wouldn't want to see LeBlanc have his $8m share proceeds from his time at Blackberry wiped out.

:)
 
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OthmarAmmann

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Jul 7, 2010
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Pay for what?

The debt service on the loan from Fortress.

The Fortress fund is like a lender of last resort, making the type of loans nobody else will. Fortress themselves do not make the loan but rather an investment fund that they manage is the lender. They will charge a very high rate and also take some potential upside in the value of the asset through the warrants, which are similar to call options.

You don't borrow from a fund like this unless you have absolutely no choice.
 

XX

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Dec 10, 2002
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$6m a year might not cover the interest alone, much less repayment, much less the cost of operating the arena. Glendale isn't going to pull $15-20m a year out of their ass. This is nonsense.
 

rkp

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Mar 31, 2011
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:amazed:

I never thought I post that small would bring as much reaction! Kudos to the Forbes reporter.

Funny to see the variety of interpretations: leak is wanted, leak is not wanted, league pushing Glendale toward a No or a Yes etc...

Thanks god there's not only hockey on earth :laugh:

I doubt that very much....they could have done the same with Jameson or any of the other previous potential buyers but they did not....the NHL have always stated the price 170 mill!!!....does anyone really think the owners are going give money to this well documented moneypit when they are viable profitable options out there
 
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