Phoenix Bankruptcy Part XX: There Will Be Baum
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09-21-2009, 07:00 PM
Join Date: Feb 2005
Replying to things from the last thread.
BB - very hard to say on early attendance. The high-draw teams tend to be high-draw partially because they bring in local fans of the visiting team, a number that's likely to be unaffected. However, the Phoenix ticket base has been decimated by this mess. Assuming an ownership decision has been made by that point, some of the resentment of Moyes will go away, but there's still a lingering (though less likely) threat of relocation if a lease deal doesn't get done with Glendale, plus there's the issue of no marketing up until this point. Given the preseason numbers, I assume the season ticket base has been cut in half or worse by this mess through non-renewals (through the mistaken idea that they wouldn't be able to get a refund, a "wait and see" approach or simply an unwillingness to give Moyes any money while he was still technically the owner), and those are numbers that are difficult to make up in-season.
CGG - the reason it's relevant is it shows a pattern of potentially deceptive accounting by Moyes. If he's moving money to himself/other Moyes-owned companies from the Coyotes, why should I trust that he did everything in his power to make the business as profitable as possible? And is the business really losing money if it's going from one of Moyes' pockets to the other? Furthermore, he's got some abnormally large numbers in debt service (debt to himself in some cases?) as well as in depreciation and amortization, the latter two paper losses rather than real ones. Situations like that make me wonder about artificial inflation of losses as means to an end (i.e., bankruptcy), though no one knows that to be the case at this point, obviously.
The issue isn't whether the Coyotes lost money over Moyes' tenure as owner. They almost certainly did (like most of the other teams in the league have over decade-long stretches of poor play, including many in traditional markets).
The issue is why the accounting to potentially overplay the losses so severely? It's either accidentally inept management or deliberately inept management, possibly for some means to an end.
Besides that, if you can easily attribute a third of the "$300 million" in losses to some sort of inept management, how much of the remaining loss could you eliminate with a better look at the breakdown of the numbers or smart changes in how the team is run (i.e., not hiring an $8 million coach)? None of those decisions has anything to do with the market or its viability.
If the franchise was run and ran its books the same way in, say, downtown Toronto as it does in Phoenix, I am nearly certain it would still lose money every year.
Actually, that gives me some very interesting numbers to crunch.
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