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Phoenix XXIX: What's the next act? I'm tired of the dog & pony show

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Old
03-20-2011, 03:19 PM
  #1
LadyStanley
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Phoenix XXIX: What's the next act? I'm tired of the dog & pony show

Previous thread: http://hfboards.com/showthread.php?t=891612



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Old
03-20-2011, 04:30 PM
  #2
Whileee
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Originally Posted by GSC2k2 View Post
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.



As I have said several times now, there is no need to do estimates. PHO's previous financials are publicly available. I have studied them. I recommended that you do so as well, because otherwise you are at a disadvantage in discussing this with me.



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.
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.

Are you referring to this sort of document about previous financials (http://docs.bmcgroup.com/phoenixcoyo...k-9488_472.pdf)?

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?

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Old
03-20-2011, 04:33 PM
  #3
billy blaze
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sorry if repost:

nothing happening today so here's sunday music recap courtesy of Winnipeg radio station Power97

Yo Matthew, I'm really happy for you, I'ma Let you finish, but this Coyotes deal has given me one of the biggest headaches of all time!

http://www.youtube.com/watch?v=dsaVt...layer_embedded

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03-20-2011, 04:40 PM
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Tinalera
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Alright a new thread! There must some news......


Oh, no news...

Hopefully we get some news tomorrow?

Please?

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03-20-2011, 04:41 PM
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OthmarAmmann
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This situation is becoming lame and boring.

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03-20-2011, 04:47 PM
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Originally Posted by OthmarAmmann View Post
This situation is becoming lame and boring.
Couldn't agree more. The NHL has had ever opportunity to make this like the winning bid announcement for the Olympics.

Which ever way it goes, the Coyotes leave or stay.

Instead this thing has been strung out, slapping the face of every logical person on the planet who realizes this should be over.

Anti-climactic to say the least.

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Old
03-20-2011, 04:48 PM
  #7
Brodie
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Originally Posted by Tinalera View Post
Alright a new thread! There must some news......

Oh, no news...
This has been my reaction to like the last 4 threads

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03-20-2011, 05:12 PM
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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.

Are you referring to this sort of document about previous financials (http://docs.bmcgroup.com/phoenixcoyo...k-9488_472.pdf)?

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?
Scouts , trainers, medical personnel,

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Old
03-20-2011, 05:21 PM
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Blue Shakehead
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Originally Posted by Whileee View Post
Are you referring to this sort of document about previous financials (http://docs.bmcgroup.com/phoenixcoyo...k-9488_472.pdf)?
As a side note, the Coyotes ticket revenues were $13,328,609 for 2008-09 according to these documents. They lost $27 million. To get an idea of real attendance as opposed to announced, if we use the posted $37/ticket average for 41 games, we get an average of 8,786 fans per game. I realize this isn't scientific.

The NHL's published attendance for the Coyotes for 2009-09 was 14,875, which either means they are lying (likely) or that the average ticket was $21/game (even more likely). Probably a mixture of both.

This year, they stand to lose $40 million.

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Old
03-20-2011, 05:32 PM
  #10
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Deep in engineering down where mortals seldom go,
A manager and customer come looking for a show.
They pass amused among us, and they sign in on the log.
They've come to see our pony and they've come to see our dog.

Three things you should be wary of,
A new kid in his prime,
A man with all the answers,
And a code that runs first time.

Summoned from our cubicles to conference room we go.
We bring our dog and pony for we know they'll want a show.
Watching as we enter with a shifty restless eye,
The customer sits waiting in his pinstripe suit and tie.

Three things never trust in,
That's the vendor's final bill,
The promises your boss makes,
And the customer's good will.

...

The manager and customer are quick to leave this bunch,
They take the dog and pony and they all go out to lunch.
Now how will we revenge ourselves on those who raise our ire?
Write code that self destructs the day the warranties expire.

Three things trust above all else;
Your knowledge of your craft,
That someone makes a profit,
And that you will get the shaft.
12-08-2008 Hockey in The Desert (Phoenix franchise and finance/business matters)
02-04-2009 Hockey in the Desert II (Phoenix Coyotes franchise and business matters)

05-05-2009 Balsillie puts in $212.5 mil offer for the Coyotes
05-07-2009 Balsillie/Phoenix part II
05-18-2009 Balsillie/Phoenix part III
05-22-2009 Balsillie/Phoenix part IV
06-03-2009 Balsillie/Phoenix part V
06-09-2009 Balsillie/Phoenix Part VI
06-12-2009 Balsillie/Phoenix Part VII: I'm just waitin' on a judge
06-16-2009 Balsillie/Phoenix Part VIII: It's dead, Jim
06-24-2009 Balsillie/Phoenix Part IX: 'Dorf on Hockey
07-25-2009 Phoenix bankruptcy/ownership Part X: The Truth? You Can't Handle The Truth!
08-03-2009 Phoenix bankruptcy/ownership Part XI: A Fistful of Dollars?
08-07-2009 Phoenix bankruptcy/ownership Part XII: For a Few Dollars More
08-12-2009 Phoenix bankruptcy/ownership Part XIII: The Good, The Bad, and The Ugly
08-21-2009 Phoenix bankruptcy/ownership Part XIV: The Wrath of Baum
08-27-2009 Phoenix bankruptcy/ownership Part XV - SITREP: SNAFU
09-02-2009 Phoenix bankruptcy/ownership Part XVI: Barbarian at the Gate
09-08-2009 Phoenix bankruptcy/ownership Part XVII: Wake Me Up When September Ends
09-10-2009 Phoenix bankruptcy/ownership Part XVIII: Is that a pale horse in the distance?
09-12-2009 Phoenix bankruptcy Part XIX: How I Learned to Stop Worrying and Love the Baum
09-21-2009 Phoenix Bankruptcy Part XX: There Will Be Baum
09-28-2009 Phoenix Bankruptcy Part XXI: 2009 -- A Sports Odyssey
10-26-2009 Phoenix Bankruptcy Part XXII: Long and winding road

11-24-2009 Keeping up with potential owners for NHL Phoenix Coyotes (UPD: Ice Edge signs LOI)
03-14-2010 Part II. Potential owners of NHL's Phoenix Coyotes
03-26-2010 Part III. Prospective Owners - Phoenix Coyotes (UPD Lease vote 4/13; IEH signs MOU)
04-10-2010 Part IV Phoenix Coyotes post bankrtuptcy; UPD COG approves Reinsdorf MOU, not IEH MOU
05-02-2010 Part V Phoenix Coyotes post bankruptcy UPD Reinsdorf out? IEH back in? else Winnipeg?
05-11-2010 Part VI Phoenix Coyotes post bankruptcy
05-23-2010 Part VII Phoenix Coyotes post bankrtuptcy
06-07-2010 Part VIII: Phoenix Coyotes Post-bankrtuptcy
06-22-2010 Part IX: Phoenix Coyotes Post-bankruptcy UPD: Pres Moss fired 6/30 with IEH input
07-26-2010 Part X: Phoenix Coyotes - Between Scylla and Charybdis
08-27-2010 Part XI: Phoenix Coyotes -- Greetings, Starfighter, You have been selected ...
09-16-2010 Part XII: Phx Coyotes - Still haven't found what I'm looking for
10-12-2010 Part XIII: Phoenix Coyotes - The Final Cut?
10-27-2010 Part XIV: Phoenix Coyotes - To Infinity And Beyond....
12-05-2010 Part XV: Phoenix - the battle of evermore
12-14-2010 Part XVI: Phoenix -- Money for Nothing
12-20-2010 Part XVII: Phoenix -- Thread Title Available For Lease
01-09-2011 Part XVIII: Phoenix -- Imminence Front
01-24-2011 Phoenix XIXth: Nervous Breakdown
02-02-2011 Phoenix XX: Two weeks
02-11-2011 Phoenix XXI: When will then be now?
02-22-2011 Phoenix XXII: It's Now or Never
02-28-2011 Phoenix XXIII - Bond: The Phoenix Project
03-03-2011 Phoenix XXIV: How many twists does the scriptwriter have left?
03-07-2011 Phoenix XXV: Anyone in the theatre seen a pale horse?
03-08-2011 Phoenix XXVI: Pain in the AZ
03-11-2011 Phoenix XXVII: Can we all get along?
03-16-2011 Phoenix XXVIII: Lawyers, Bonds and Money
03-20-2011 Phoenix XXIX: What's the next act? I'm tired of the dog & pony show

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Old
03-20-2011, 05:33 PM
  #11
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Originally Posted by Tinalera View Post
Alright a new thread! There must some news......


Oh, no news...

Hopefully we get some news tomorrow?

Please?
May be some news on tonights WGN broadcast of the Black Hawks - Coyotes.

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Old
03-20-2011, 05:38 PM
  #12
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Originally Posted by OthmarAmmann View Post
This situation is becoming lame and boring.
I second that emotion.

 
Old
03-20-2011, 05:41 PM
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For those who wants news, I'm sorry but you'll be waiting much longer. The NHL will not give any REAL News or answers until the Coyotes are done for the season or the playoffs whichever comes first. I still think May 1st we will get our answers.

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03-20-2011, 05:42 PM
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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.

Quote:
Are you referring to this sort of document about previous financials (http://docs.bmcgroup.com/phoenixcoyo...k-9488_472.pdf)?
Yes.

Quote:
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.

- Jobing.com 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.


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03-20-2011, 05:46 PM
  #15
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For those who wants news, I'm sorry but you'll be waiting much longer. The NHL will not give any REAL News or answers until the Coyotes are done for the season or the playoffs whichever comes first. I still think May 1st we will get our answers.
Altough your assuming thats if the bonds don't sell. If Bettman can close the sale you can bet I'll do it ASAP.

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03-20-2011, 05:57 PM
  #16
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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.



Yes.



- 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.

- Jobing.com 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? Doe sit at least make the question of jacking up the numbers artificially relatively moot?
It has nothing to do with "jacking up the expenses" in my opinion, but rather an overly broad definition of "non-hockey related expenses". I happen to think that you are making unwarranted assumptions about what might and might not be included in Team expenses. I didn't mention any of the $53 million in hockey operations, but I expect that not all of that is for coach and player salaries / travel and equipment, so some of that will be eligible.

Suffice to say, non-hockey related expenses are not defined in the Lease as you or I might define them. Instead, they only explicitly exclude a narrow set of specific hockey-related expenses. I am not sure how GAAP helps clarifies this since it is based on the contractual definition of eligibility of expenses, not how they are accounted. Anyway, if this deal proceeds we will see how this is interpreted, and I remain confident that we will see much wider latitude in the expenses that are deemed "non-hockey related" and therefore eligible under the "arena management fee" than you are suggesting.

I agree it is getting tedious, and won't post anything more on this subject. Other posters can read the lease and financial statements and come to their own conclusions.

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03-20-2011, 05:59 PM
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In addition to his $97 million in arena management fees (read: present from the City of Glendale, albeit not a gift in the context of the AZ constitution), I wonder if Hulsizer will be taking an egg management fee.

http://www.youtube.com/watch?v=QgdTymCZowU

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03-20-2011, 06:10 PM
  #18
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Maybe this saga will soon....
Or maybe not...

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03-20-2011, 06:20 PM
  #19
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WTF? Thanks for that.

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03-20-2011, 06:26 PM
  #20
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Gee I am sorry I missed the title contest.

My suggestions would've been

The waiting game
or
Read my lips: No news in Phoenix
or
Art of extending the imminence.

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03-20-2011, 06:27 PM
  #21
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I got a feeling that Bettman will never allow Coyotes to be re-located.

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03-20-2011, 06:55 PM
  #22
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In addition to his $97 million in arena management fees (read: present from the City of Glendale, albeit not a gift in the context of the AZ constitution), I wonder if Hulsizer will be taking an egg management fee.

http://www.youtube.com/watch?v=QgdTymCZowU
Logan will not like that fee.

So no one really has any idea what's going on eh? Did the bonds sell or simply taken off the market due to not finding a buyer?

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03-20-2011, 06:59 PM
  #23
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It has nothing to do with "jacking up the expenses" in my opinion, but rather an overly broad definition of "non-hockey related expenses". I happen to think that you are making unwarranted assumptions about what might and might not be included in Team expenses. I didn't mention any of the $53 million in hockey operations, but I expect that not all of that is for coach and player salaries / travel and equipment, so some of that will be eligible.

Suffice to say, non-hockey related expenses are not defined in the Lease as you or I might define them. Instead, they only explicitly exclude a narrow set of specific hockey-related expenses. I am not sure how GAAP helps clarifies this since it is based on the contractual definition of eligibility of expenses, not how they are accounted. Anyway, if this deal proceeds we will see how this is interpreted, and I remain confident that we will see much wider latitude in the expenses that are deemed "non-hockey related" and therefore eligible under the "arena management fee" than you are suggesting.

I agree it is getting tedious, and won't post anything more on this subject. Other posters can read the lease and financial statements and come to their own conclusions.
Well, having now done the calculations, I am afraid I won't let you off that easy, whileee. I think there is a further "accounting" to be done here.

As I showed, even if one aggressively assumes (as I did) that MH will cut arena costs by 10-20%, we still have the direct arena costs at a minimum of $17.9M. My aggressive cost reduction assumptions may be invalid if, as one might expect, Hulsizer is going to undertake a massive promotional and advertising campaign after he acquires the team. In fact, the structure of the deal reflects this, with more money available in the first 2.5 years.:

Since it is now clear that Hulsizer will likely start from a 2008-09 base of $17.9M in indisputable no-trickery arena management costs, even without considering escalation in the first couple of years to do a promo carpetbombing, let's do some math.

First off, the $17.9M is based on 2008-09 numbers, so let's add 2% annual inflation, so we have a 2010-11 number of $18.6M. We will add 2% per annum for inflation going forward as well.

First Half Year (now) - $10M maximum amount, less $9.3M (50% of $18.6M) in true direct arena costs = $700k in remaining room for your potential shenanigans (not so at all, if one accepts my interpretation).

Year 1 - $20M, less $19.0M (without any speculative marketing blitz), leaving $1M in room.

Year 2 - $20M, less $19.4M (without any speculative marketing blitz), leaving $600k in room.

Year 3 - $17M, less $19.8M, leaving a shortfall for Hulsizer that he must fund of $2.8M.

Year 4 - $15M, less $20.2M, leaving a shortfall for Hulsizer that he must fund of $5.2M.

Year 5 - $15M, less $20.6M, leaving a shortfall for Hulsizer that he must fund of $5.6M.

Based on the above, this would leave Hulsizer short for direct arena management expenses, without Hulsizer doing any of your proposed padding, by $13.6M.

Now, even if you allow for Hulsizer to use up the remaining room in the amounts for things which are "really hockey-related" because of an overly broad definition, we have Hulsizer not getting covered for legitimate arena management costs to the tune of $11.3M

Let's let that sink in: this $97M, this supposed generous "gift", is not going to cover all of Hulsizer's direct arena operating expenses, to the tune of $13.6 million (or $11.3M, if you continue to insist that Hulsizer is going to be allowed to use this for hockey costs).

Hulsizer - the guy who is getting this team "for free" - is going to have to come up with this money, in addition to his equity investment and his team losses.

AND THAT is not even accounting for any kind of promo and advertising blitz to try to get the market - especially the corporate market - to recover. Most of that money is going to come out of Hulsizer's pocket, unless he used the $2.3M in room noted above (which then makes it not available for any shenanigans). AND that is assuming that he and the NHL could wring 10-20% in efficiencies out of operations from Moyes' operations.

As for what this means to your longtime assertions that this fee was ripe for Hulsizer to funnel huge amounts of hockey expenses and get reimbursed for them, that notion is now refuted by basic mathematics. So, you're right, we are probably done on this, although not for the reason you may have intended.

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03-20-2011, 07:05 PM
  #24
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Still, though, why should the city reimburse him AT ALL for these expenses?

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03-20-2011, 07:05 PM
  #25
cbcwpg
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Quote:
Originally Posted by Schai View Post
I got a feeling that Bettman will never allow Coyotes to be re-located.
Bettman is trying to figure out how he is going to break the news to his wife about how he just bought $100M in potential "junk" bonds.

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