The Business of HockeyDiscuss the financial and business aspects of the NHL. Franchise sales, valuations, TV contracts, ratings, expansion, relocation, the CBA and work stoppage discussion goes here.
the NHL had more flexibility with their financing from the TNSE relocation fee.
The only person to my knowledge that has in the past speculated in print that the relocation fee would/could be applied to ease the Coyote franchise purchase price was Mike Sunnucks of the Phoenix Business Journal; a perusal of his past screed suggests he does not exactly have NHL BOG level contacts.
It does not compute, it does not follow, it defines the term non sequitur. Why would individual teams (many of them financially squeezed themselves mind you and having already contributed financially to carrying the franchise in Phoenix) continue to throw good money after bad, especially after having been made aware of the potential revenue contributions available elsewhere? TNSE/Winnipeg have clearly demonstrated to the league that the grass is indeed greener elsewhere.
Yet the whole "TNSE relocation fee can be applied to ease the burden in Phoenix" fantasy has become a part of the regular narrative here. Why? It makes no sense.
Yet the whole "TNSE relocation fee can be applied to ease the burden in Phoenix" fantasy has become a part of the regular narrative here. Why? It makes no sense.
That would be purely speculativenarrative of course. No one knows definitively one way or the other that the NHL would use TNSE's $60M relo fee to pay down its LOC & thus discount the sale price on the Coyotes. Sixty million divided by 29 teams doesnt amount to much more than about $2M & change each. If it helps to expedite the sale of the franchise I rather doubt the BOG's would object. For all intensive purposes' it was "found money", not something thats part of the regular revenue streams. Finally, the other 29 teams have not been dipping into their own pockets to prop-up the Coyotes beyond the normal revenue sharing contributions they'd be making regardless.
That would be purely speculativenarrative of course. No one knows definitively one way or the other that the NHL would use TNSE's $60M relo fee to pay down its LOC & thus discount the sale price on the Coyotes. Sixty million divided by 29 teams doesnt amount to much more than about $2M & change each. If it helps to expedite the sale of the franchise I rather doubt the BOG's would object. For all intensive purposes' it was "found money", not something thats part of the regular revenue streams. Finally, the other 29 teams have not been dipping into their own pockets to prop-up the Coyotes beyond the normal revenue sharing contributions they'd be making regardless.
Since you are one of those that has continued the narrative from its illogical beginnings, your defense of it is hardly shocking.
If you consider 2 million plus per franchise to be found money, that is your prerogative I suppose. I understand the meaning of your usage of the term, but it still results in money thrown away if it is allocated to ease a sale price in Phoenix. It does nothing to solve the problem, which are the losses taken on the daily operation of the franchise, not the purchase price. To use a fractured analogy, paying less for beef cattle (for example) does not discount the fact that at the end of the day one is still purchasing cattle. Paying less per animal enables one to carry it a bit longer, but the end destination for the animal remains the same.
To all intents and purposes, why should revenue sharing money be destined to be wasted annually in Phoenix when it could be applied more effectively elsewhere? Surely many of the franchises would rather that revenue be invested wisely rather than simply thrown down a hole with zero hope of any future return?
Last edited by Gump Hasek: 10-29-2011 at 12:59 PM.
Since you are one of those that has continued the narrative from its illogical beginnings, your defense of it is hardly shocking.
If you consider 2 million plus per franchise to be found money, that is your prerogative I suppose. I understand the meaning of your usage of the term, but it still results in money thrown away if it is allocated to ease a sale price in Phoenix. It does nothing to solve the problem, which are the losses taken on the daily operation of the franchise, not the purchase price. To use a fractured analogy, paying less for beef cattle (for example) does not discount the fact that at the end of the day one is still purchasing cattle. Paying less per animal enables one to carry it a bit longer, but the end destination for the animal remains the same.
To all intents and purposes, why should revenue sharing money be destined to be wasted annually in Phoenix when it could be applied more effectively elsewhere? Surely many of the franchises would rather that revenue be invested wisely rather than simply thrown down a hole with zero hope of any future return?
Even that analogy is too kind, Gump.
We have a relocation opportunity that nets the collective $60 million. Please choose Door #1-- I keep the $2 million, or Door #2-- I send it to the desert. I am already sending money to Phoenix, on top of the the $140 million I paid with my fellow owners to protect my right to keep my territory from being usurped. (Only, realistically very few teams would have that problem potentially. In fact, the 29 other owners would do very well to let someone in on Toronto.)
Why would you keep foregoing revenue and allow it to be invested in something that may not survive regardless? You have to believe you will get all that money back, or more, either through an eventual sale/relocation -- or -- you lose a similar amount of money, or more, by closing down that shop. You're already in for $140 million + annual losses, and perhaps a rebate due to NBC for exiting that market?
That would be purely speculativenarrative of course. No one knows definitively one way or the other that the NHL would use TNSE's $60M relo fee to pay down its LOC & thus discount the sale price on the Coyotes. Sixty million divided by 29 teams doesnt amount to much more than about $2M & change each. If it helps to expedite the sale of the franchise I rather doubt the BOG's would object. For all intensive purposes' it was "found money", not something thats part of the regular revenue streams. Finally, the other 29 teams have not been dipping into their own pockets to prop-up the Coyotes beyond the normal revenue sharing contributions they'd be making regardless.
Who is paying for the losses that exceed the 25 mill put up by the Cog? It has to be coming from someones pockets, and that is above and beyond the onies received as part of the revenue sharing agreement
Who is paying for the losses that exceed the 25 mill put up by the Cog? It has to be coming from someones pockets, and that is above and beyond the monies received as part of the revenue sharing agreement
Shortly before Jerry Moyes declared Bankruptcy, the NHL increased its Line of Credit (I believe with Bank America) from app. $70M to $250M. They used those credit facilities to buy the Coyotes and have been using them ever since to cover losses over & above the $25M provided by the COG. Whats not clear is whether or not they receive Revenue Sharing as clearly they dont reach the thresholds in terms of Seasons Ticket Subscribers.
Gumps' & Fugu's assertions that the individual owners are actually paying the freight are erroneous. This is on Bettmans head. If he cant sell the team locally, then he'll have to sell them for relo and I guess we know where & to whom unless there is truth to the rumors that Levin might be waiting in the wings out in Seattle. Either way, the leagues nut will be covered.
Fugu also raises an interesting point with respect to NBC & the potential fallout the loss of Phoenix, on the heels of Atlanta might cause with respect to their contract with the NHL. Youve' just gotta figure they wouldnt be impressed, though whether or not the fee's would decrease is questionable.
Fugu also raises an interesting point with respect to NBC & the potential fallout the loss of Phoenix, on the heels of Atlanta might cause with respect to their contract with the NHL. Youve' just gotta figure they wouldnt be impressed, though whether or not the fee's would decrease is questionable.
Is there anyone here who needs 2 hands to count the number of times they've seen a Coyote game on NBC? In all likelihood, a relocation to a place like Seattle would increase the overall viewership.
Shortly before Jerry Moyes declared Bankruptcy, the NHL increased its Line of Credit (I believe with Bank America) from app. $70M to $250M. They used those credit facilities to buy the Coyotes and have been using them ever since to cover losses over & above the $25M provided by the COG. Whats not clear is whether or not they receive Revenue Sharing as clearly they dont reach the thresholds in terms of Seasons Ticket Subscribers.
Gumps' & Fugu's assertions that the individual owners are actually paying the freight are erroneous. This is on Bettmans head. If he cant sell the team locally, then he'll have to sell them for relo and I guess we know where & to whom unless there is truth to the rumors that Levin might be waiting in the wings out in Seattle. Either way, the leagues nut will be covered.
Fugu also raises an interesting point with respect to NBC & the potential fallout the loss of Phoenix, on the heels of Atlanta might cause with respect to their contract with the NHL. Youve' just gotta figure they wouldnt be impressed, though whether or not the fee's would decrease is questionable.
Yes, I wonder too what implications this would serve.
One should keep in mind, that although in Atlanta's case they do not have a home NHL team anymore, and in Phoenix's case they potentially might not any more, the Preds I believe now have broadcast rights in Atlanta correct?
So technically, that region still has broadcast rights...assuming Phoenix were to move, another team might claim the Phoenix region for broadcast rights.
NBC was not stupid when they made that deal; they knew which markets had low viewership; very likely they had access to that information prior to a deal being consummated
Thus, it might not be as big a deal as it seems.
Sure Atlanta and Phoenix are huge media markets, but NBC has broadcast rights for NHL hockey and these markets thus far are minuscule compared to others like Detroit, Boston, New York, Chicago, Buffalo etc...specifically regarding NHL.
My point being, NHL seems to be niche in these markets, so another NHL team claiming broadcast rights should a team relocate, isn't a huge issue ultimately to NBC as it doesn't change the small viewership numbers very much...unlike if say the Bruins or Wings had to relocate.
The main negative thing, for NBC, I can see is the team moving to Canada - outside of their region.
Then there are other factors; is there a positive monetary turnout with low viewership? Would it really matter then to NBC should Phoenix also leave?
Not to derail the thread or anything...but that point is interesting.
Shortly before Jerry Moyes declared Bankruptcy, the NHL increased its Line of Credit (I believe with Bank America) from app. $70M to $250M. They used those credit facilities to buy the Coyotes and have been using them ever since to cover losses over & above the $25M provided by the COG. Whats not clear is whether or not they receive Revenue Sharing as clearly they dont reach the thresholds in terms of Seasons Ticket Subscribers.
Is there servicing being paid on said loans? Where does Bettman get his money?
It's a shell game, Killion. Bettman may have bought time with a credit line, but it's not like that's free money either.
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Gumps' & Fugu's assertions that the individual owners are actually paying the freight are erroneous. This is on Bettmans head. If he cant sell the team locally, then he'll have to sell them for relo and I guess we know where & to whom unless there is truth to the rumors that Levin might be waiting in the wings out in Seattle. Either way, the leagues nut will be covered.
Obviously Bettman has to sell the team for more than the cost of the loan, right?
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Fugu also raises an interesting point with respect to NBC & the potential fallout the loss of Phoenix, on the heels of Atlanta might cause with respect to their contract with the NHL. Youve' just gotta figure they wouldnt be impressed, though whether or not the fee's would decrease is questionable.
This point came up after the NBC deal was announced and around the time that Atlanta was also in play. One of the BOG let it slip offhandedly that there might be a small "rebate" that would need to be negotiated if Phoenix was moved. Iirc.
I think it must be brought up if the talk of TV markets is around...again.
And I also suppose it can be taken with either a grain of salt, or a chaser of rye.
(depending how many of us chose to STILL buy what the NHL is trying to sell, ie: NOTcovering Coyotes' losses, NOT covering Dallas' losses, Pho NOT moving, Atlanta NOT moving, etc.)
"But Daly wrote that the Coyotes' potential move "would not have 'any impact on our ongoing television negotiations' and the topic had not even been raised in discussion"
Considering the NBC/NHL tv deal has already been signed (APRIL), I think it is safe to say that NBC isn't gonna be offering any type of "refund" should the Coyotes leave. The 13,000 (10th largest TV market) NHL viewers in Atlant,GA have already been lost, not sure the 9,000 in the Phoenix, AZ are too much of a threat to the network, again, depending on who STILL believes the NHL brass.
I think it must be brought up if the talk of TV markets is around...again.
And I also suppose it can be taken with either a grain of salt, or a chaser of rye.
(depending how many of us chose to STILL buy what the NHL is trying to sell, ie: NOTcovering Coyotes' losses, NOT covering Dallas' losses, Pho NOT moving, Atlanta NOT moving, etc.)
"But Daly wrote that the Coyotes' potential move "would not have 'any impact on our ongoing television negotiations' and the topic had not even been raised in discussion"
Considering the NBC/NHL tv deal has already been signed (APRIL), I think it is safe to say that NBC isn't gonna be offering any type of "refund" should the Coyotes leave. The 13,000 (10th largest TV market) NHL viewers in Atlant,GA have already been lost, not sure the 9,000 in the Phoenix, AZ are too much of a threat to the network, again, depending on who STILL believes the NHL brass.
Again, I am not speculating myself as to what may or may not be in the cards. I am relaying a reported offhand comment by a member of the BOG who said something might need to be rebated (don't remember the exact term he used).
Daly's or Bettman's comments on any of this aren't worth the electrons used to convey these. They deny anything if it's not something they want released yet.
Is there servicing being paid on said loans? Where does Bettman get his money? It's a shell game, Killion. Bettman may have bought time with a credit line, but it's not like that's free money either. Obviously Bettman has to sell the team for more than the cost of the loan, right?
The NHL would likely be receiving extremely favorable terms from BA in carrying their LOC so that end of the equations likely minimal. Your quite correct of course in terming it a "shell game", a game practiced by countless millions everyday of the week, albeit on a smaller scale. I have every confidence in GB's ability to not only break even on this adventure but quite possibly turning a profit when all is said & done.
The only person to my knowledge that has in the past speculated in print that the relocation fee would/could be applied to ease the Coyote franchise purchase price was Mike Sunnucks of the Phoenix Business Journal; a perusal of his past screed suggests he does not exactly have NHL BOG level contacts.
It does not compute, it does not follow, it defines the term non sequitur. Why would individual teams (many of them financially squeezed themselves mind you and having already contributed financially to carrying the franchise in Phoenix) continue to throw good money after bad, especially after having been made aware of the potential revenue contributions available elsewhere? TNSE/Winnipeg have clearly demonstrated to the league that the grass is indeed greener elsewhere.
Yet the whole "TNSE relocation fee can be applied to ease the burden in Phoenix" fantasy has become a part of the regular narrative here. Why? It makes no sense.
Holy crap. I said earnout. Look it up.
If the $60 million went anywhere but against the credit facility financing the purchase of the Coyotes then the BoG should take two weeks off and then quit. Since they'd only carry the $110 mm balance they can be creative with the other $60 mm in the divestiture.
The NHL would likely be receiving extremely favorable terms from BA in carrying their LOC so that end of the equations likely minimal. Your quite correct of course in terming it a "shell game", a game practiced by countless millions everyday of the week, albeit on a smaller scale. I have every confidence in GB's ability to not only break even on this adventure but quite possibly turning a profit when all is said & done.
It's a large sum of money, and thus hardly insignificant, especially if one considers that perhaps it was avoidable (but that's neither here nor there). Furthermore, why would BA give them extremely favorable terms? BA is in the lending business to make money, not to provide favors. It may be favorable in a relative sense if they have a good rating (which I imagine they do).
According to the article http://www.truehockey.com/articles/P...reement-Signed quoted in the St Louis sale thread, Hulsizer has bought the Blues for slightly under $185 million. Is that the entire team, or just a majority share? If St Louis goes for under $185 million, no way does Phoenix go for $170 million-plus while staying in Phoenix. I could see it being sold for $175 million to PKP in Quebec, but not in Phoenix.
According to the article http://www.truehockey.com/articles/P...reement-Signed quoted in the St Louis sale thread, Hulsizer has bought the Blues for slightly under $185 million. Is that the entire team, or just a majority share? If St Louis goes for under $185 million, no way does Phoenix go for $170 million-plus while staying in Phoenix. I could see it being sold for $175 million to PKP in Quebec, but not in Phoenix.
That's a partial ownership of Blues, arena, opera house and AHL team, IIRC.
That's a partial ownership of Blues, arena, opera house and AHL team, IIRC.
Only PARTIAL ownership? So he was willing to pay 185 mil for partial ownership of the Blues, but NOT willing to pay significantly less for complete ownership of the Coyotes? If that this the case, then that does not boast well for parties having to shell out for the franchise in Phoenix.
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The main negative thing, for NBC, I can see is the team moving to Canada - outside of their region.
i could definitely see the NHL wanting the next relocation to be within the US for this very reason....not that the handful of people watching in phoenix matters at all to the overall ratings and therefore the value of the contract, but the optics are not great for the NHL trying to sell itself in the US.
that being said, they might not have any option.
...and no way no how the $60m TNSE money is being used to finance phoenix....in my opinion the BOG don't really care about phoenix and the only reason the plug hasn't been pulled is because of the gravy train from glendale...$2m might be small in the overall scheme but i dont see too many owners just letting go into the pit....i doubt the owners sit around hotly discussing the fate of the coyotes as if it were a make or break issue.
if the BOG were simply going to charity that money to some other cause, i can think of many better uses beyond making phoenix more attractive.....these are private businesses.
Fugu also raises an interesting point with respect to NBC & the potential fallout the loss of Phoenix, on the heels of Atlanta might cause with respect to their contract with the NHL. Youve' just gotta figure they wouldnt be impressed, though whether or not the fee's would decrease is questionable.
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Originally Posted by Fugu
This point came up after the NBC deal was announced and around the time that Atlanta was also in play. One of the BOG let it slip offhandedly that there might be a small "rebate" that would need to be negotiated if Phoenix was moved. Iirc.
NBC would have some sort of a leg to stand on for Phoenix being relocated... however even Bettman's little legs are taller than the stump we might be talking about.
If the team is moved to an American city with a more favorable hockey demographic, would the NHL be able to ask for more money? No. There may be contractual links in regards to Phoenix in the NBC deal, but if any it wouldn't be signifigant. While Phoenix is a large Television market, the current impact on viewership is minimal.
Only PARTIAL ownership? So he was willing to pay 185 mil for partial ownership of the Blues, but NOT willing to pay significantly less for complete ownership of the Coyotes? If that this the case, then that does not boast well for parties having to shell out for the franchise in Phoenix.
Did you not see Hulsizer's getting part ownership of the arena and other items in addition to the Blues??
If the team is moved to an American city with a more favorable hockey demographic, would the NHL be able to ask for more money? No. There may be contractual links in regards to Phoenix in the NBC deal, but if any it wouldn't be signifigant. While Phoenix is a large Television market, the current impact on viewership is minimal.
You miss the big picture. Across the US Phoenix is far more interesting to US viewership and US advertisers than a small market in Canada. That is why NBC would be due a rebate.
You miss the big picture. Across the US Phoenix is far more interesting to US viewership and US advertisers than a small market in Canada. That is why NBC would be due a rebate.
But if the team was moved to Seattle, would the NBC really be concerned?
Good points, and though I certainly understand, appreciate & respect your perspective & opinions, I dont share them.
