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Phoenix XXVIII: Lawyers, Bonds and Money

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Old
03-20-2011, 03:27 PM
  #976
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Originally Posted by Dado View Post
That's a ridiculous claim. CoG could have closed this deal at any time, and stil can, if they actually want to. The only way GWI can hold up anything if CoG is in fact in violation of the AZ laws/constitution.

The impediment here is clearly CoG itself.
I think you misunderstand his intent. I think it's implied that they have the ability to do it, but something else is causing a delay. It may have been the interest rate, or other factors.

 
Old
03-20-2011, 03:38 PM
  #977
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Quote:
Originally Posted by Art.Vandelay View Post
Revenues are also only half the issue. When Moyes owned the team, despite having amongst the lowest revenues of any NHL team, the Coyotes had amongst the highest operating costs. A big part of this disparity is the $ spent on servicing debt and Jerry Moyes overpaying for services provided by his other companies.

Revenues do indeed to increase for the Coyotes to get into black numbers, but the reduced operating costs will help there as well.
The losses this year are greater (or at least hovering around the same levels) than they were with Moyes, and the debt servicing is gone (isn't it?) so it seems as though the shortfalls in revenue along with a higher payroll are outweighing the improvements made to other operating costs.

I think the only place where significant cuts to operating costs can be made is payroll, but given that they aren't even in the top half of the league and you need a competitive team to gain interest its not really a cut one can afford to make.

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03-20-2011, 03:38 PM
  #978
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If this sale goes through the CoG deserves everything that is coming to them when their fiscal irresponsibility blows up in their faces [mod: deleted].

It's harsh, and I know the holier than thou's on here will attack me for it, but I needed to say it. This whole thing is beyond a joke.

In 5 years when the friggin NHL is crying for someone to take this failure of a franchise off their hands I hope they are forced to contract it. These clowns think they are immune to destroying their business with awful decisions but there has to be a point where enough is enough.

/rant.


Last edited by Fugu: 03-20-2011 at 03:48 PM. Reason: apathy in the face of full/complete disclosure is one thing...
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Old
03-20-2011, 03:38 PM
  #979
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Originally Posted by blues10 View Post
I am not a Coyote STH but do get the phone calls from ticketing reps even though I live in Canada over 1000 miles from jobing.com. ST prices in the lower bowl excluding club seating break down to about $45.00 per game for the next two years. These renewals include set playoff ticket pricing. For example IF the Coyotes played the Penguins in the Stanly cup final the tickets would remain $45.00 for game 7.
Absolutely false according to some of our posters.

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03-20-2011, 03:45 PM
  #980
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FYI, private investors DO own it right now, so your position seems even stranger.

I will ignore the silly strawman.

Actually, no, they have the right to claim the rights, as a discarded item in a bankruptcy case.

Also if you're not going to argue the basis for your conclusions with new posters, then don't raise your conclusions and engage said new posters. It's a nice way to say whatever you want and go unchallenged. I guess you have that option, but let's call a spade a spade.

 
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03-20-2011, 03:49 PM
  #981
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I am - correctly - classifying the parking business that they are buying as a business, because that is what it is.

Once again with this "if it were so valuable ..." nonsense. By that standard, valuable businesses would also be sold a hundred times each every day. That is as silly a trope as the other one I punctured above. THe issue of whether or not a business has been sold or not is in no way directly related to anything other than the fact that the owner was comfortable with owning it. You are saying that, if a business has not been sold, it must be not valuable. That is an absurd position.

FYI, private investors DO own it right now, so your position seems even stranger.

I will ignore the silly strawman.
I don't think you've fully addressed the issue. I would agree with your post if the transactions were between businesses. The fact is the CoG is assuming the risk. I believe if you ask the average person the private sector could take the risk not gov't gambling with taxpayer dollars. Theoretically, MH could have sold the parking rights to a 3rd party, a parking company, and financed the deal the same way. To boil it down I just have a problem with governments assuming this level of risk that the private sector should be assuming.

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03-20-2011, 03:50 PM
  #982
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GSC, I am reading the black and white of the lease document, not trying to read into how it will be interpreted. The lease does not stipulate that eligible expenses have to be directly related to the arena management per se, but rather includes Team costs with very specific language about what is excluded.
I am puzzled why you feel compelled to repeat your position, virtually word for word. I got it the first time. As requested, I responded with a detailed legal argument. I believe you disagree with said argument. I get it. We are at a dead end on on the interpretation issue, my friend. There is nothing else to say.

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Therefore, the fact of the matter is that Team costs (excluding salaries and travel of players and coaches and equipment) incorporates a wide set of expenses, which will certainly top $15-20 million per annum. This could be quickly verified by estimating the actual expenses of and NHL franchise per annum and deducting player and coach salaries and travel and equipment and half of marketing.
As I have said several times now, there is no need to do estimates. PHO's previous financials are publicly available. [Mod: deleted.]
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I have been a bit curious about the effective date of the lease agreement. I didn't see that specified in the Lease Agreement that I have looked at (December 10, 2010 version). It indicates that the $100 million must be paid on or before the effective date. I am not sure how that can be done if the effective date is actually June, 2010. Has this been amended in a subsequent version of the lease?
Happy to clarify. I am not referring to the effective date in the AMULA. I am referring to the effective date in what will be the asset purchase agreement between the NHL and Hulsizer. THat is what dictates adjustments to the purchase price. The AMULA will have its own start date.


Last edited by Fugu: 03-20-2011 at 03:52 PM. Reason: condescension is uncalled for
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Old
03-20-2011, 03:52 PM
  #983
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Originally Posted by wpgallday1960 View Post
I don't think you've fully addressed the issue. I would agree with your post if the transactions were between businesses. The fact is the CoG is assuming the risk. I believe if you ask the average person the private sector could take the risk not gov't gambling with taxpayer dollars. Theoretically, MH could have sold the parking rights to a 3rd party, a parking company, and financed the deal the same way. To boil it down I just have a problem with governments assuming this level of risk that the private sector should be assuming.
Obviously the private sector isn't valuating the the parking rights as highly as Glendale. And MH isn't stupid to not realize that he might lose a lot of money if the revenues don't roll in at the highly optimistic rates.

So we have a government body with a direct stake in this transaction also agreeing to a valuation that the private sector cannot support. It's almost a conflict of interest, in the purest sense.

 
Old
03-20-2011, 04:00 PM
  #984
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Originally Posted by blues10 View Post
I am not a Coyote STH but do get the phone calls from ticketing reps even though I live in Canada over 1000 miles from jobing.com. ST prices in the lower bowl excluding club seating break down to about $45.00 per game for the next two years. These renewals include set playoff ticket pricing. For example IF the Coyotes played the Penguins in the Stanly cup final the tickets would remain $45.00 for game 7.
The renewals include fixed pricing for the regular season for 2 years. Playoff tickets are tiered based on the round. Here is an example of some of the pricing for this year's playoff tickets that was provided by the Coyotes:

Lower Level
Round 1: $75.00
Round 2: $101.25
Round 3: $112.50
Round 4: $150.00

Upper Level Sides/Ends
Round 1: $36.00
Round 2: $48.60
Round 3: $54.00
Round 4: $72.00

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03-20-2011, 04:01 PM
  #985
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Absolutely false according to some of our posters.
There is no need to take the word of any poster....1 call and or 1 email to the team will give you your answer.

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Old
03-20-2011, 04:03 PM
  #986
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Actually, no, they have the right to claim the rights, as a discarded item in a bankruptcy case.
Actually, yes, private investors do hold those rights. The bankrupt estates hold them, with the NHL having the right to acquire. I did not suggest that the NHL was the "private investor" that owned them.

Quote:
Also if you're not going to argue the basis for your conclusions with new posters, then don't raise your conclusions and engage said new posters. It's a nice way to say whatever you want and go unchallenged. I guess you have that option, but let's call a spade a spade.
You are confused. He engaged me, I did not engage him. THat said, I do make it a bit of a rule of thumb to ignore new posters, for various reasons. I broke my own rule of thumb. Fair enough. I will increase my self-discipline accordingly.

Quote:
Originally Posted by wpgallday1960 View Post
I don't think you've fully addressed the issue. I would agree with your post if the transactions were between businesses. The fact is the CoG is assuming the risk. I believe if you ask the average person the private sector could take the risk not gov't gambling with taxpayer dollars. Theoretically, MH could have sold the parking rights to a 3rd party, a parking company, and financed the deal the same way. To boil it down I just have a problem with governments assuming this level of risk that the private sector should be assuming.
He could not have done so the same way with a third party, because detailed arrangements are in place with Westgate for cross-easements and rights of use which allow for the spots to be used for Westgate (and future residential development) when they are not being used for an arena event. A third party developer would not see the same value in that, and would have discounted their bid accordingly. In short, the spaces are worth more to CoG than they are to third parties because of the prior transactions.

As well, CoG has the luxury of controlling traffic and routing and local parking ordinances, so it can use its regulatory authority to further ensure its revenue streams. A third party cannot do so. Again, that regulatory authority allows CoG to obtain greater value than third parties.

Regarding the role of government, that is a philosophical matter, and we can only agree to disagree. From my pragmatic view, governments are also economic actors, and it is pointless to ignore that reality. As such, they must take risk just as will any other economic actor.

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03-20-2011, 04:05 PM
  #987
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OK, for we non-lawyers who don't have time or patience for the multi-paragraph explanation:

If the bonds sell as rumored, and Goldwater begins legal proceedings, is it possible for them to block the sale via injunction in a timely fashion? Or, if it drags out over a period of time, perhaps years, and the final decision is is favor of Goldwater, does that just mean that whoever bought the bonds is left holding the bag at the end of the day? Glendale, then MH, then the NHL got their money, the team stays, and the bondholders have the egg on their face?

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03-20-2011, 04:07 PM
  #988
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Originally Posted by Roughneck View Post
The losses this year are greater (or at least hovering around the same levels) than they were with Moyes, and the debt servicing is gone (isn't it?) so it seems as though the shortfalls in revenue along with a higher payroll are outweighing the improvements made to other operating costs.

I think the only place where significant cuts to operating costs can be made is payroll, but given that they aren't even in the top half of the league and you need a competitive team to gain interest its not really a cut one can afford to make.
The NHL has reduced the operating costs. And so far that has only offset the additional revenue hit due to the BK. The local fanbase has been decimated due to BK starting with Jerry Moyes sending out letters to STH's warning them to not renew or they will lose their money.

If the team does stay in AZ, it will be up to Hulsizer to follow through on his promises and up to the local fans to step up and start supporting the team again.

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03-20-2011, 04:09 PM
  #989
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Originally Posted by GSC2k2 View Post
Actually, yes, private investors do hold those rights. The bankrupt estates hold them, with the NHL having the right to acquire. I did not suggest that the NHL was the "private investor" that owned them.
Enough said, operative word being "bankrupt".


Quote:
You are confused. He engaged me, I did not engage him. THat said, I do make it a bit of a rule of thumb to ignore new posters, for various reasons. I broke my own rule of thumb. Fair enough. I will increase my self-discipline accordingly.
I've removed the exchange in that case.

 
Old
03-20-2011, 04:10 PM
  #990
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I think you misunderstand his intent. I think it's implied that they have the ability to do it, but something else is causing a delay. It may have been the interest rate, or other factors.
I think the poster I quoted and I are more or less in agreement in disagreeing with the earlier assertion; apologies for my awkward form in expressing that agreement.

 
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03-20-2011, 04:11 PM
  #991
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Originally Posted by GSC2k2 View Post
Sorry, but I am not going to summarize my well-established positions for every poster who shows up and wants a briefing. Read the threads. I am the research guy around here. I don't rely on talking points, but thanks for the insult.
Oh, I understand your well-established positions clearly. The fact that they defy reason, economics and law, however, suggests that they are the quite the opposite of research, where you start with a conclusion (that this deal is good) and work your way backwards to prove it. I don't need a briefing, thanks.

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Originally Posted by GSC2k2 View Post
Indeed, the bond market was so frightened by the City's credit rating that they gave the bond offering an A2 rating, which BTW is a very sound rating. By contrast, the beleaguered state of Illinois, which is bankrupt and would kill for its finances to be as sound as Glendale's, sold ~$3.7 BILLION of A2 rated bonds very recently. On top of that, CoG will have a "horrible" debt service coverage ratio of 4.25 after this offering (anything above 2 is acceptable).
You seem to be proving my point, without knowing it. The bankrupt state of Illinois, whose taxing powers extend far beyond that of a municipal government has the same bond rating as the City of Glendale. Cue the red flag. The fact that the bankrupt state of Illinois has sold their bonds and Glendale hasn't suggests that investors had more confidence in the former. This is hardly a compelling argument for the soundness of Glendale's bonds.

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Originally Posted by GSC2k2 View Post
I am - correctly - classifying the parking business that they are buying as a business, because that is what it is.

Once again with this "if it were so valuable ..." nonsense. By that standard, valuable businesses would also be sold a hundred times each every day. That is as silly a trope as the other one I punctured above. THat being said, as it so happens, the parking business is of higher value to others because the CoG controls access to the lots through the ability to regulate traffic and roadways.

I will ignore the silly strawman.
Thank you. You're admitting now that the City of Glendale is indeed, in business and then by definition in competition with the private sector. Your point about the parking lot being more valuable to the CoG because they have regulatory powers is a good one (not one I would make if I were arguing from your side, but a good one nonetheless). So what you're saying is, they have the ability to regulate traffic and roadways, presumably to benefit their parking lot at the expense of other private parking lots. Gotcha. I don't think the City of Glendale will be using this particular defence in their upcoming case.

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03-20-2011, 04:12 PM
  #992
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Originally Posted by mikelvl View Post
OK, for we non-lawyers who don't have time or patience for the multi-paragraph explanation:

If the bonds sell as rumored, and Goldwater begins legal proceedings, is it possible for them to block the sale via injunction in a timely fashion?
Possible, yes. Unless the parties do it all at the same time as part of a closing of all the deals.

Quote:
Or, if it drags out over a period of time, perhaps years, and the final decision is is favor of Goldwater, does that just mean that whoever bought the bonds is left holding the bag at the end of the day?
Almost surely not, unless Glendale decides that they want to default, in which case the bondholders can collect under their lien rights on excise taxes, unless Glendale decides to go bankrupt.

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Glendale, then MH, then the NHL got their money, the team stays, and the bondholders have the egg on their face?
Highly unlikely. MH would be at risk.

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03-20-2011, 04:16 PM
  #993
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I've removed the exchange in that case.
Superb. As a demonstration of my renewed commitment to ignoring new posters.

Isn't it about time for thread name submissions?

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03-20-2011, 04:22 PM
  #994
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LS has one in waiting. Late as always.

 
Old
03-20-2011, 04:23 PM
  #995
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Phoenix XXIX: It's Just A Little Bankrupt, It's Still Good, It's Still Good

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03-20-2011, 04:24 PM
  #996
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http://hfboards.com/showthread.php?t=893366

Close enough. We'll pretend it's horseshoes.

 
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