Phoenix XXIV: How many twists does the scriptwriter have left?

[Crazy_Ike]

Has nothing to do with everything that came before that time. Had Bettman been doing his job, he surely would have noticed how much money Phoenix was making, and had a reasonable guess at how much they were losing.

Wow, do you honestly believe he didn't know? Unless Moyes was lying to the league, it was well aware long before the media was of the state of the Coyotes. And they found a buyer anyways.

Wasn't Moyes trying to sell the team from about 2006? So, yeah, one might consider that he couldn't just keep doing it.

We also know Moyes wasn't setting realistic prices for the team during that time.

Could you say what the league should have done differently?

Certainly Moyes made things interesting for the league, I'll grant you that. You at least are admitting that the team had a HORRIBLE lease. It wasn't just Moyes being goofy.

You wrong me. I am not particularly a fan of Phoenix. I admire their fans and the dedication they show to the team given what it has been put through, but as a market, out there in Glendale, I personally think they underestimated how many things had to go right, or at least the degree of "right" they needed to go to succeed there. America West was no permanent solution either, of course.

But, the final decision on that belonged to Colangelo, and it was up to him whether or not he thought it was worth trying.

No, this is the point. If the extraordinary measures we see now are what's needed to help this team survive, are you saying that Moyes could have done it with the old lease? Heck, he wasn't even going to get $18-19m for managing the arena, let alone $100m upfront.

If Moyes had received half the help being doled out now, this entire situation might have been avoided.

The help being doled out now is only possible solely because the league has taken over the team and vacated the lease through the bankruptcy. Not having that bargaining power would (and did) leave too much leverage in the hands of the city.

Remember, please, that Bettman is not an omnipotent god, who can change these things by fiat. The lease is a business transaction between the owner and the building management. The league has set guidelines as to certain things required of the building but under normal conditions has no other direct impact than that. These are not normal conditions, which is why the league is imparting a great deal more leverage on the city than is normally the case.

I'm not sure I know what you mean in this paragraph. The entire point of contention here is that this deal is taking public money and handing it over to a private entity or party. The only way the team is viable is with public bonds and potentially excise taxes to back it up.

Whether or not the transaction is legal in the eyes of the Goldwater Institute is not really the league's problem. It's not obligated to put the franchise in a position to fail when it holds all the negotiating power. If the city can't come through with what the league believes it NEEDS to make the team viable, then it will move.

The unusual situation of the league being able to negotiate its own lease with the city with a backup plan already in place has given them all the trump cards. They WILL get what they need, from Glendale or from... someone else. THAT is the brilliance of the situation they have set up, and no amount of humming and hawwing from Canadian sports media propagandists changes that. Sucks for Glendale, but the league doesn't work for them. Its interests are solely with its franchises. The NHL is not a charity.

I'm not sure I think this is a good move for the league as far as ownership models. This goes beyond who the team is and where it's located, but it would represent a crossing of the Rubicon for pro sports economic models.

Establishing exactly what is necessary for the team to survive is regarded as bad? I don't think so.

Staying in Glendale is extremely high risk. The water is well and truly poisoned. I mean, tailing pond levels of poisoning. No matter how optimistic the good Coyotes fans of the board are, it will take a herculean effort to get past this regardless of the terms of the deal. Thinking people will throw down a hundred million on this situation without any problem is not realistic. Once the bleeding stops and the situation stabilizes? Maybe. But not now. Nor in the near future. That ship sailed the moment Moyes put the team in bankruptcy.

Only one question. Of the NHL franchises that do not own their own building would you care to list which teams had a more enviable lease arrangement? Oh and it would also be appreciated if you supplied the figures to support your position.

Long since done in the original bankruptcy threads. Given the way these boards work I have never and will never deign to repeat effort already done for people who come later because it never stops. It is no bones to me whether or not you believe me or not.

 

[Crazy_Ike]

This entire episode would make on hell of a case study for Economics studies.

The NHL is also failing to accept that the price they paid in BK court was to protect their right on choosing members of their club; and that current members could only sell that which they owned (their location), not another territory.

Thus the "asking price" seems to have very little to do with the Coyotes.

You know why the league can do that? Three reasons.

1. The league, unlike Balsillie, actually CAN buy and sell a franchise without a location.
2. The price is set at what it already knows it can get moving the team and recovering the losses.
3. They have, through their management of the bankruptcy, acquired all the leverage and power they needed to do this.

"Failing to accept"? This is exactly what they WANT.

 

[RAgIn]

Motives questionable in Coyotes deal

Burnside chimes in:

http://sports.espn.go.com/nhl/columns/story?columnist=burnside_scott&id=6179973

Now ESPN.com has learned that the city believes the loss of the team would ultimately cost the city and its taxpayers more than half a billion dollars, $510 million, in lost revenues, taxes, taxes from ticket sales and jobs, not to mention the $25 million they guaranteed the NHL this season to cover losses while the city worked on a new lease deal with prospective owners.

Must've got that information from the City of Glendale fact sheet. Quite the scoop.

 

[Fugu]

You know why the league can do that? Three reasons.

1. The league, unlike Balsillie, actually CAN buy and sell a franchise without a location.
2. The price is set at what it already knows it can get moving the team and recovering the losses.
3. They have, through their management of the bankruptcy, acquired all the leverage and power they needed to do this.

"Failing to accept"? This is exactly what they WANT.

They didn't want to buy the team, Ike. They wanted Moyes to walk away so JR could take over. The price of this franchise has nothing to do with this market, but yes, it is based on what they can get somewhere else (partially) and that they put in a bid with the court so they could walk away as the owners-- free and clear.

(Iirc, they were a secured creditor, so I suppose some of the money went back to them.)

As to point three??? Yes, they paid $140m to get that. Like I said, it's not just about the franchise, but rights which have a far greater value to them than anyone else.

 

[RAgIn]

Yes, the City of Glendale apparently didn't take the Goldwater people seriously enough and dragged their heels on providing documentation about the lease agreement. But is that a reason to scuttle a deal that could cost the municipality for years to come as opposed to working with the city to ensure that the deal is done properly?

The NHL has hired a consultant, John Kaites, to try and work with the Goldwater people to find some common ground on how the lease deal with Hulsizer might get worked out and allow Hulsizer to buy the team from the NHL, ESPN.com has learned.

Kaites worked with Chicago White Sox/Chicago Bulls owner Jerry Reinsdorf on his failed bid to buy the Coyotes, a bid that also included significant givebacks from the City of Glendale.

Kaites has been able to speak to some of those involved but, so far, multiple sources have described the Goldwater role as delaying and interfering as opposed to proactive and helpful.

This is definitely new news. Was anyone aware of this? Kaites was at one point the go-to guy between Reinsdorf-the City-NHL. Interesting. Weren't the COG delaying the process to begin with. Wow. Roles are definitely reversed.

The City of Glendale will receive the $25 million back it guaranteed to the NHL to cover operating losses while the city tried to strike a deal with a new owner. The Hulsizer group has also agreed to absorb this year's losses, estimated at $40 million this year.

Sunnucks was just $5 million off

 

[Brodie]

Burnside chimes in:

http://sports.espn.go.com/nhl/columns/story?columnist=burnside_scott&id=6179973



Must've got that information from the City of Glendale fact sheet. Quite the scoop.

interesting

Even late Thursday night there was some indication talks were pointed in the right direction on sorting out the parking issue, sources told ESPN.com.

Likewise, there seemed to be some headway in getting the city bonds sold that are crucial to getting the lease deal done with Hulsizer.

 

[Wham City]

Just watched the Scruggs press conference, very Blagovevich-esque having the part-time employee wheelchair bound Vietnam vet make your case for you.

 

[yotesreign]

Back when Hulsizer first came on the scene for our purposes, he noted that the asking price for the team was out of line and it was an issue. The NHL re-affirmed their stance that the price wasn't negotiable.

The only way MH was interested in owning this team was with the COG bridging the difference. What you propose, Fugu, makes perfect sense. The Economics at the "purchase level" would not allow a make sense solution at the lease level.

Too bad the NHL doesn't decide to sell him the team for $70 million but keep the parking rights.

If MH is really taking the $100 million from the city to hand it over to the league to pay the $170 to get the team and the agreements and the parking rights, just sever the parking rights from the deal, have MH and the league agree the parking rights are worth $100 million to each, league keeps the rights, MH buys the team for $70, deal closes without the city bonding $116 million. All parties could agree that the league's not interested in owning the parking rights beyond the sale, so the city & league would negotiate a sale of those rights from the league to the city, maybe invite the Goldwater kids to serve as meddlers er I mean mediators...

Only real downside is to do that we'll have to start over and that will be another 13 months of posts and links to articles and blogs and op-eds...

I'm up for it!

 

[RAgIn]

Something tells me Burnside had a little talk with one of the members of the COG. It's also easy to realize which side he's on. Take a guess.

Are there other agendas at play here?

Politics? Personal profile? How about the tight connection between Goldwater Institute board members and the Arizona Diamondbacks? Does it somehow help the Diamondbacks in a hardscrabble economy if the Coyotes leave town?

Hmm. Always possible, but that would literally ruin the GWI credibility.

 

[Shawa666]

They wouldnt give it for starters. Crazy talk. Spit out by Mcown last week & now oft repeated elsewhere as possible fact. But ya; "All because of Gary's ego" according to Bob. Ah, dont think so. I wonder if any of those idiots back there ever stop to realize that if not for the "total incompetence & outsized ego's, arrogance & lying liar ways" of the likes of Gary Bettman, Bill Daly & MLSE they'd all be out of work?.....

Another league would pop out. at least in Canada. The demand for Pro hockey is too great to be ignored.

 

[Crazy_Ike]

They didn't want to buy the team, Ike.

Actually, more accurately, they weren't sure they would even be allowed to. As Bettman said during the hearings, this was not a situation anyone had ever been in before.

However, having gotten the court on their side and allowed to take control through bankruptcy, they certainly moved forward to take advantage of their new leverage

They wanted Moyes to walk away so JR could take over.

Given what ended up happening, Moyes should have accepted it. But he plays the risk game like everyone else. Maybe he thought this was a reasonable gamble to take... but no one else seems to have thought so. He ended up with virtually nothing and lawsuits still looming.

In any event, they didn't "want" Moyes to walk away, he already had. Without Balsillie (or Rodier at least), and without the much stronger ability of league management to withstand these situations, there could have been a very real possibility of a Ralston-Purina v2.0.

The price of this franchise has nothing to do with this market, but yes, it is based on what they can get somewhere else (partially) and that they put in a bid with the court so they could walk away as the owners-- free and clear.

That's part of it as I said but it also has plenty to do with what the franchise needs to survive in the NHL. The league, with all the leverage, isn't going to put one of its teams in a position to just fail again.

The situation is never as simple or linear as "it's this, not that". It's everything involved.

 

[Fugu]

I'm a couple hours ahead of you, so this will be the last one on this round...

Wow, do you honestly believe he didn't know? Unless Moyes was lying to the league, it was well aware long before the media was of the state of the Coyotes. And they found a buyer anyways.

Brilliance would imply that it could have been managed to a much softer landing, or you know, getting COG to reconsider the lease back when it mattered.

They found a buy who also wanted a handout from COG, far greater than anything Moyes could have gotten-- who then threw in the towel. How about helping the guy who already owned the team and avoiding the mess? That's what a brilliant leader could have done, when he wasn't walking on water.

We also know Moyes wasn't setting realistic prices for the team during that time.

Are you saying that Moyes ~alone~ set a price for the franchise value, and that Bettman had no interest or input in that point?

Could you say what the league should have done differently?

I think I just did in the previous posts.

The help being doled out now is only possible solely because the league has taken over the team and vacated the lease through the bankruptcy. Not having that bargaining power would (and did) leave too much leverage in the hands of the city.

Bettman did a very nice job re-negotiating leases with Nashville, and probably to some extent (I don't know exactly), with the new Pittsburgh deal. We know he's capable of it.

Remember, please, that Bettman is not an omnipotent god, who can change these things by fiat.

That seems to be your schtick, Ike. You know --> I <-- would never accuse him of such things.

It's Roman night.

The lease is a business transaction between the owner and the building management. The league has set guidelines as to certain things required of the building but under normal conditions has no other direct impact than that. These are not normal conditions, which is why the league is imparting a great deal more leverage on the city than is normally the case.

The league is being inflexible in its pricing of the franchise in Glendale. They want to sell the team in Glendale for a price that cannot be supported in Glendale. The price they paid in court was for some things that have nothing to do with the price of the team in Glendale (like the NHL rights that were being protected; or the fact that a team might have a different value in a different market). That's the problem.

Whether or not the transaction is legal in the eyes of the Goldwater Institute is not really the league's problem. It's not obligated to put the franchise in a position to fail when it holds all the negotiating power. If the city can't come through with what the league believes it NEEDS to make the team viable, then it will move.

I agree on that point, but the asking price is unreasonable for the location. Is it possible that their arbitrary setting of price or artificial support (subsidies, revenue transfers) contributes to this very problem?

The unusual situation of the league being able to negotiate its own lease with the city with a backup plan already in place has given them all the trump cards. They WILL get what they need, from Glendale or from... someone else. THAT is the brilliance of the situation they have set up, and no amount of humming and hawwing from Canadian sports media propagandists changes that. Sucks for Glendale, but the league doesn't work for them. Its interests are solely with its franchises. The NHL is not a charity.

That much is clear.

If indeed Phoenix is an important cog in the NHL's strategy, then what you outline isn't brilliant at all, but rather short-sighted. They had to pay a heck of a lot of money to protect league rights, and their attempts to recoup this money is being put on the shoulders of one franchise--- not where it belongs, that being a league cost. There is a price in Glendale that might actually be realistic, but it's the NHL that has distorted that completely.

 

[danishh]

the city is saying that they will lose 500M if they lock the arena and do nothing with it.

on the other hand, this coyotes bailout will cost them over 400M.

so, is there really nothing the city can do with the arena to make 100M?

 

[pucka lucka]

the city is saying that they will lose 500M if they lock the arena and do nothing with it.

on the other hand, this coyotes bailout will cost them over 400M.

so, is there really nothing the city can do with the arena to make 100M?

I heard that all the children in Glendale will die, if the Coyotes leave.

 

[Crazy_Ike]

Brilliance would imply that it could have been managed to a much softer landing, or you know, getting COG to reconsider the lease back when it mattered.

How do you know they didn't? JR at the time was quite confident of being able to get a deal he could live with. But even that aside, at THAT time, all the leverage was with Glendale, who didn't have to renegotiate anything at all if they didn't want to.

They found a buy who also wanted a handout from COG, far greater than anything Moyes could have gotten-- who then threw in the towel. How about helping the guy who already owned the team and avoiding the mess? That's what a brilliant leader could have done, when he wasn't walking on water.

You are again assigning the league far more power than it normally has. The league did what it could to assist Moyes up to and including advancing him money, but - until he walked away from it at least - it is STILL MOYES' TEAM.

If the NHL actually had as strong a centralized control as some of you seem to believe it does you better believe things would be a lot different, but a lot of owners wouldn't be interested in owning the teams in that case, would they? They're called owners, not managers.

Are you saying that Moyes ~alone~ set a price for the franchise value, and that Bettman had no interest or input in that point?

It was his team, Fugu. Bettman facilitates, works contacts, drums up interest, finds investors and other interested people, and if necessary provides the owners with data the league collects, but the owner is still the owner. The league can't force an owner to sell - at any price - without something very unusual going on (like legal difficulties).

I seem to recall during the bankruptcy the league itself stating that Moyes' set price made finding buyers exceedingly difficult.

I think I just did in the previous posts.

How about some things it actually COULD do then?

Bettman did a very nice job re-negotiating leases with Nashville, and probably to some extent (I don't know exactly), with the new Pittsburgh deal. We know he's capable of it.

There is a very VERY large difference between renegotiating an expired lease (or one in which you have an out clause), and one that isn't.

That seems to be your schtick, Ike. You know --> I <-- would never accuse him of such things.

Believing the league has more control than it actually does is an ongoing problem here - probably because Bettman is so good at his job it seems like it really does.

The league is being inflexible in its pricing of the franchise in Glendale. They want to sell the team in Glendale for a price that cannot be supported in Glendale.

The agreement to sell it with MH suggests that there is a level at which the league and the potential owners believe it CAN be supported there. This level isn't exactly a low bar to reach given what they are demanding from the city, obviously. However, the league is absolutely 100% consistent in every city it has dealt with relocation issues, from Winnipeg to now - they will sell to a local owner if and only if that owner is capable of supporting the team in place. It's no different here. Given the market damage, the league has established risk to the franchise in staying in Glendale is so high it will require this much additional support from the city to survive. It can afford to play this trump card because if the city doesn't pony up, it can just move the team without any issue at all.

From the league's point of view, there's no real way to lose this. But, as always, they give the locals every chance possible to make it happen for them first.

 

[peter sullivan]

What analysis needs to take place?

The reason we're all here is because someone thinks it violates the constitution of AZ (GWI), and here we are.

Hulsizer should just go ahead and buy the team WITH HIS OWN MONEY.

He can start charging for parking immediately to help pay the bills, and then he and Glendale can work out a nice little agreement where he sells them those rights. They could do annual payments, you know, to keep things from getting too complicated.

i agree with this completely....what is the point of us analyzing this deal anymore...its legality is irrelevant at this point....it may or may not violate the gift clause but all that matters is that GWI believes it does and the deal is murky enough that the doubt they cast on it is effective, even if it isn't true.

GWI not liking this deal hardly comes as a surprise....they haven't exactly come out of nowhere...they were scratching the dirt when JR was around, when IEH was around and when they created the escrow account.

the COG's plan all along has been to play hide the ball as long as possible and now its come back to bite them in the ass....they could have worked with GWI.....they could have structured it so that any legal challenge was laughable...but they chose not to.

there is simply no reason that a government should have to be selling bonds on the parking lots....if it is really worth $100m then it should be up to MH to extract that money....either simply charge for parking for 30 years or use the equity to finance a loan.....it is the simple solution to this whole problem...the fact that MH wont do that tells me that there is some risk in it, so the tax dollars backing up the bonds are in similar risk.....making GWI's concerns legitimate.

MH is the bad guy the in my opinion....having even the slightest bit of commitment to the market would make all the problems go away.

 

[RR]

i agree with this completely....what is the point of us analyzing this deal anymore...its legality is irrelevant at this point....it may or may not violate the gift clause but all that matters is that GWI believes it does and the deal is murky enough that the doubt they cast on it is effective, even if it isn't true.

GWI not liking this deal hardly comes as a surprise....they haven't exactly come out of nowhere...they were scratching the dirt when JR was around, when IEH was around and when they created the escrow account.

the COG's plan all along has been to play hide the ball as long as possible and now its come back to bite them in the ass....they could have worked with GWI.....they could have structured it so that any legal challenge was laughable...but they chose not to.

there is simply no reason that a government should have to be selling bonds on the parking lots....if it is really worth $100m then it should be up to MH to extract that money....either simply charge for parking for 30 years or use the equity to finance a loan.....it is the simple solution to this whole problem...the fact that MH wont do that tells me that there is some risk in it, so the tax dollars backing up the bonds are in similar risk.....making GWI's concerns legitimate.

MH is the bad guy the in my opinion....having even the slightest bit of commitment to the market would make all the problems go away.

Easy to say $70M isn't enough to demonstrate, "even the slightest bit of commitment to the market," when it's not your $70M.

 

[Hawker14]

Glendale casino dispute: Judge favors tribe in ruling

A U.S. District Court judge Thursday upheld a federal decision to designate land in the West Valley as a reservation, opening the door to a tribal casino near Glendale's sports and entertainment district.

http://www.azcentral.com/community/...a-tribe-glendale-casino-dispute-decision.html


Bad legal advice for Glendale to pursue this ? Or a bad judgement ?

 

[peter sullivan]

Easy to say $70M isn't enough to demonstrate, "even the slightest bit of commitment to the market," when it's not your $70M.

that $70m isnt even enough to buy the parking lot outside the arena, never mind the actual NHL franchise.

 

[LadyStanley]

I think almost everyone was in favor of "Yadda Yadda Yadda"

I am not and have never been a Seinfeld fan.


(See also new thread with quote from Detroit VP that there will be no relocation.)

 

[Melrose Munch]

3 billion in revenues makes your statement kinda foolish.

It may not be MLB or NFL big, but the NHL is still a big major league, whether you like it or not.

Both those leagues are almost double that.

Lowe's and Kmart have more revenue...

 

[RR]

that $70m isnt even enough to buy the parking lot outside the arena, never mind the actual NHL franchise.

The total sales price being paid is $170M.

 

[RR]

I am not and have never been a Seinfeld fan.


(See also new thread with quote from Detroit VP that there will be no relocation.)

I think it's relevant to this thread that Devellano said,

...no NHL franchises are on the verge of relocating, to Winnipeg or anywhere else, according to Red Wings senior vice president Jimmy Devellano...

“I don’t foresee any shift of any franchises, based on what I know, and I’m in tune with what’s happening in the league,†Devellano said....

...A move by Phoenix would not affect the Red Wings. But if Atlanta were to shift to Winnipeg, a Western Conference club would move to the East, and that could be Detroit.

But it’s moot, Devellano said, because no team is going anywhere.

“I think that’s pure Toronto media (speculation),†Devellano said. “It’s about getting another franchise in Canada. Let’s hope someday they do.

“(But) I’m told the Phoenix thing (Matthew Hulsizer’s deal with the city of Glendale to purchase the Coyotes) is just about done. I haven’t heard about Atlanta or anybody else (possibly relocating).

 

[RR]

Glendale casino dispute: Judge favors tribe in ruling

A U.S. District Court judge Thursday upheld a federal decision to designate land in the West Valley as a reservation, opening the door to a tribal casino near Glendale's sports and entertainment district.

http://www.azcentral.com/community/...a-tribe-glendale-casino-dispute-decision.html

Bad legal advice for Glendale to pursue this ? Or a bad judgement ?

I understand the reasons Glendale, and many County and State officials are opposed to this. Would be the first Casino Resort in the heart of metro Phoenix. And being right across the street from a local high school doesn't help either.

Bad judgment? No. Just another classic example in the battle of states rights vs. the federal government.

 

[Jeffrey93]

Too bad the NHL doesn't decide to sell him the team for $70 million but keep the parking rights.

If MH is really taking the $100 million from the city to hand it over to the league to pay the $170 to get the team and the agreements and the parking rights, just sever the parking rights from the deal, have MH and the league agree the parking rights are worth $100 million to each, league keeps the rights, MH buys the team for $70, deal closes without the city bonding $116 million. All parties could agree that the league's not interested in owning the parking rights beyond the sale, so the city & league would negotiate a sale of those rights from the league to the city, maybe invite the Goldwater kids to serve as meddlers er I mean mediators...

Only real downside is to do that we'll have to start over and that will be another 13 months of posts and links to articles and blogs and op-eds...

I'm up for it!

If MH and the league agreed the parking rights are worth $100M....then the NHL retained them and sold the team to Hulsizer for $100M less.....Glendale would be paying the NHL $100M anyway.

Once an arena deal is done and the sale is approved...those parking rights tank in value. They are only worth that right now because they are being used as an indirect subsidy.

No different than me bidding $5,000 for a stupid little ornament at a charity function. The ornament isn't worth anywhere near $5,000....I'm making a donation to the charity by purchasing it for that much.