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03-20-2011, 05:42 PM
Join Date: Mar 2005
Location: Hamilton, Ontario
Country: Canada
Posts: 7,384
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Originally Posted by Whileee View Post
And I am puzzled as to why you seem to think that you repeating your position is reasonable, and my consistent response is not. I only repeated my position when I saw you once again repeating yours, with which I disagree. I will be happy to cease posting on this topic if you plan to do so as well.
Actually, I was not repeating mine. I was responding to Ghost's unsupported assertion that the expenses were "grossly inflated", which I take as some sort of suggestion that MH is going to make more than he spends. Post whatever you want, but it is getting tedious on my end, at least.

Are you referring to this sort of document about previous financials (

If so, I have perused this and did not find it too difficult to total up $15-20 million in expenses beyond arena management and hockey / coach salaries and travel. Could you with certainty specify which items in the list of Expenses are clearly excluded from the "Arena Management Fee"? If so, I would like to know how you have done that.

For example, would the $9.5 million in "Ownership Expenses", "League Expenses" and "Other Management Expense" be excluded from eligible costs? If so, why were they not explicitly excluded as were player / coach salaries, travel and equipment? In addition, how would the $7 million for Business, Finance and Admin, Ticketing and Broadcasting be treated?
- with the exception of "media relations" (which is arguably a promotional expense at $600k), anything above the "Total Hockey Expenses" line would be excluded.

- pretty well all of "Total Business Expenses" would be split 50/50 as advertising and promotional expenses, but keep in mind that the consultant reports issued while Moyes was trying to get his own deal with CoG indicated that the expenses were grossly inflated, so it is a safe bet that MH will run a tighter ship than the absentee owner Moyes). $16.6M - (20% for efficiency) = $13.4M x 50% = $6.7M

- League Expenses fails the GAAP test as a non-hockey related expense. They are also in any event primarily levies of the league to cover league-wide insurance and benefits (benefits alone are ~$2.2M)and are thus ineligible as "benefits expenses".

- Ownership expense is a separate payment to Moyes that he was making to himself, so it is not relevant.

- Other Ownership Expenses is also a Moyes related-party transaction, and is therefore irrelevant for our purposes.

- other expenses is probably eligible for reimbursement ($370k).

- As for AMG operations, that relates to the Arena Management Group expenses, which is another kettle of fish in those financials:

(i) About $6.1M in Event Expenses, consisting of "event labour" and "event expenses", which may be tighter with the NHL in charge;

(ii) About $5.3M in Non-Event Expenses, consisting of a variety of direct arena costs which I would not quibble with, although they may be tighter as well with the NHL in charge;

(iii) About $2.4M in "overhead allocations" from Moyes' other corporate organization for HR, Legal, F&A, IT and executive, despite the hockey team also having all of those services. This is an entry for a Moyes related-party transaction, and I will not count it.

I will take the $11.4M, deduct 10% for efficiency (not 20% as above, because hopefully the arena may need more event labour for more events), leaving $10.2M.

So, we have a rough estimate of $6.7M + $600k + $370k + $10.2M, giving us ~$17.9M.

Does that get us further down the road? Does it at least make the question of jacking up the numbers artificially relatively moot?

EDIT: Note that the math that I have done above does not rely on anything other than actual expenses directed to the arena, even in the definition that you choose to accept. IMO, it truly does dispose of the nefarious schemes that you had in mind for MH to jack up the numbers.

Last edited by GSC2k2*: 03-20-2011 at 05:54 PM.
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