Phoenix LXVIII - "Watch out for that Tree"
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01-25-2013, 01:20 PM
Join Date: Nov 2005
Location: 222 Tudor Terrace
Originally Posted by
I defer to OA, Barney and the finance guys but I’m with M4B on this. It seems to me that in that scenario an entity such as MSD would be a senior secured debt, which would likely defeat the purpose as the JIG “owners” would be subordinating their position in order to close the transaction. That doesn't seem like a very sound investment strategy. Because
if the franchise tanked again, the music would stop and the JIG investors would be left without a chair.
I'm pretty far out of my depth on all this, so I'll shut up now.
I agree with you and am not arguing the merits of the business case whatsoever. The risk that the "owner" can be so easily eventually be subordinated often doesn't stop people from taking such risks however. Not sure why but the prospect of such a large amount of free governmental subsidy money is certainly alluring.
My only position is that the NHL would surely love to retain that COG subsidy in their arsenal for future reference when dealing with others which is why it wouldn't surprise me to see them help things along that path, if at all possible.
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