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PKP offer for Coyotes may be 230 million (mod: to QC w/relo $$)
Just a reminder, the thread is about PKP's potential offer for the Coyotes, not a discussion about arena pricing schemes.
With latest rumors, that is that there is a ''buyer'' for keeping Coyotes in Phoenix and the league (BOG) having basicly to vote on we keep Coyotes in Phoenix for 100M or we move them to Quebec City for 230M arena pricing comes indeed in as a big factor.
Lets be honest, even if someone buys and keeps the team in Phoenix, seats wont be full and empty seats means less money, less money means more cash from other teams.
So this vote again, it's BOG voting on a 100M + deficits for future years or 230M + potential profits. They can very well base themselves on Jets.
With latest rumors, that is that there is a ''buyer'' for keeping Coyotes in Phoenix and the league (BOG) having basicly to vote on we keep Coyotes in Phoenix for 100M or we move them to Quebec City for 230M arena pricing comes indeed in as a big factor.
Lets be honest, even if someone buys and keeps the team in Phoenix, seats wont be full and empty seats means less money, less money means more cash from other teams.
So this vote again, it's BOG voting on a 100M + deficits for future years or 230M + potential profits. They can very well base themselves on Jets.
I'm no expert and I would prefer the coyotes to stay in AZ but it seems far more profitable to the NHL not to relocate the team to QC.
Assumptions:
NHL has 170M into the Coyotes.
QC will pay 230M for a team.
Option 1: Sell Coyotes to someone in AZ for 100M (taking the 70M loss) and then sell an expansion team to QC for 230M. Net is 160M profit.
Option 2: Sell Coyotes to QC for 230M (team + relocation). Net profit is 60M
I'm no expert and I would prefer the coyotes to stay in AZ but it seems far more profitable to the NHL not to relocate the team to QC.
Assumptions:
NHL has 170M into the Coyotes.
QC will pay 230M for a team.
Option 1: Sell Coyotes to someone in AZ for 100M (taking the 70M loss) and then sell an expansion team to QC for 230M. Net is 160M profit.
Option 2: Sell Coyotes to QC for 230M (team + relocation). Net profit is 60M
There is one major thing everyone forgets when they say "sell an expansion team to QC"... and that is, why would QC ever agree to join the NHL as an expansion franchise, when for the forseeable future there will be teams that will be potentially relocating.
I look back to comments I heard from TNSE in Winnipeg in regards to that and basically if the only way to get back in the NHL was going to be via paying $200M and up for expansion, it wasn't going to happen. Not only is the money an issue when existing teams could be bought at a bargain basement price, but an expansion team sucks for years. Both QC and Winnipeg got killed when they first joined the NHL and it took years to become competitive, building from the ground up. At least with relocation you have something decent to start working with and might even make the playoffs your first year.
If the offer of $230M is correct, then PKP is being more than gracious with that offer and giving the NHL a place to move a problem. Why should PKP pay the penalty of being an expansion team as well.
I'm no expert and I would prefer the coyotes to stay in AZ but it seems far more profitable to the NHL not to relocate the team to QC.
Assumptions:
NHL has 170M into the Coyotes.
QC will pay 230M for a team.
Option 1: Sell Coyotes to someone in AZ for 100M (taking the 70M loss) and then sell an expansion team to QC for 230M. Net is 160M profit.
Option 2: Sell Coyotes to QC for 230M (team + relocation). Net profit is 60M
no
Correction :
Option 2: Sell Coyotes to QC for 230M (team + relocation) and then sell an expansion team to Seattle for 200M Net profit is 430M
I'm no expert and I would prefer the coyotes to stay in AZ but it seems far more profitable to the NHL not to relocate the team to QC.
Assumptions:
NHL has 170M into the Coyotes.
QC will pay 230M for a team.
Option 1: Sell Coyotes to someone in AZ for 100M (taking the 70M loss) and then sell an expansion team to QC for 230M. Net is 160M profit.
Option 2: Sell Coyotes to QC for 230M (team + relocation). Net profit is 60M
Option 2 profit is 60M, fair.
Option 1 profit is how much ? Lets say there is no expansion prior to 2015. So, revenue sharing will have the league spend another 100M for 3 years (so roughly 30ish M per year). So Option 1 profit is 60M.
Now, you either cash in 60M today and invest it at a 1%/yr interest rate, which makes it 61.8M by 2015, or you cash a 70M loss today and get extra losses for the next 3 years.
I'm no expert and I would prefer the coyotes to stay in AZ but it seems far more profitable to the NHL not to relocate the team to QC.
Assumptions:
NHL has 170M into the Coyotes.
QC will pay 230M for a team.
Option 1: Sell Coyotes to someone in AZ for 100M (taking the 70M loss) and then sell an expansion team to QC for 230M. Net is 160M profit.
Option 2: Sell Coyotes to QC for 230M (team + relocation). Net profit is 60M
The league would be crazy to expand in a economy like this and when more than half the teams are losing money.
With latest rumors, that is that there is a ''buyer'' for keeping Coyotes in Phoenix and the league (BOG) having basicly to vote on we keep Coyotes in Phoenix for 100M or we move them to Quebec City for 230M arena pricing comes indeed in as a big factor.
Lets be honest, even if someone buys and keeps the team in Phoenix, seats wont be full and empty seats means less money, less money means more cash from other teams.
So this vote again, it's BOG voting on a 100M + deficits for future years or 230M + potential profits. They can very well base themselves on Jets.
If the NHL announced the sale of the Phoenix Coyotes to local parties, and that Quebec was being granted an expansion team, there is no question that Quebec would sell out all 41 home games, at a higher cost per ticket, than Phoenix would next year. In the short term, Quebec would make more money.
Long term, with a stable ownership group, Phoenix could become another San Jose. Attendance is lousy because they went through eight years of missing the playoffs, play in a remote area, and have had three straight years of daily relocation talk. If that happened to the Toronto Maple Leafs, they wouldn’t be doing too well either. Okay, so the playoff thing is true, but they have a centrally located arena, a stable ownership group, and the Toronto factor (they’re used to losing).
Phoenix also represents Gary Bettman’s vision for the NHL and is one of the largest cities in the United States. They represent the American Southwest.
The Detroit Red Wings are the best run organisation in hockey. But that’s today. Before Mike Ilitch bought the team, they had trouble getting fans in the seats, they had the cheapest ticket in hockey, they missed the playoffs year after year, and there was talk of relocation.
There are a number of clubs that have endured troubled times, flirted with relocation, survived, and recovered. That list includes some “traditional” hockey markets as well as new ones. Buffalo, Calgary, Detroit, Edmonton, Nashville, Pittsburgh, St. Louis (at least twice), and Washington have all gone through it. Right now Columbus, Dallas, Florida, New Jersey, New York Islanders, and Tampa Bay are at various levels of risk/recovery.
If the NHL announced the sale of the Phoenix Coyotes to local parties, and that Quebec was being granted an expansion team, there is no question that Quebec would sell out all 41 home games, at a higher cost per ticket, than Phoenix would next year. In the short term, Quebec would make more money.
Long term, with a stable ownership group, Phoenix could become another San Jose. Attendance is lousy because they went through eight years of missing the playoffs, play in a remote area, and have had three straight years of daily relocation talk. If that happened to the Toronto Maple Leafs, they wouldn’t be doing too well either. Okay, so the playoff thing is true, but they have a centrally located arena, a stable ownership group, and the Toronto factor (they’re used to losing).
Phoenix also represents Gary Bettman’s vision for the NHL and is one of the largest cities in the United States. They represent the American Southwest.
The Detroit Red Wings are the best run organisation in hockey. But that’s today. Before Mike Ilitch bought the team, they had trouble getting fans in the seats, they had the cheapest ticket in hockey, they missed the playoffs year after year, and there was talk of relocation.
There are a number of clubs that have endured troubled times, flirted with relocation, survived, and recovered. That list includes some “traditional” hockey markets as well as new ones. Buffalo, Calgary, Detroit, Edmonton, Nashville, Pittsburgh, St. Louis (at least twice), and Washington have all gone through it. Right now Columbus, Dallas, Florida, New Jersey, New York Islanders, and Tampa Bay are at various levels of risk/recovery.
I understand that. But from all the talk about all of it, there is two things I retain.
1) It seems very difficult to find an owner that will engage to stay the owner of Coyotes (and keep the team there) for next 10+ years.
2) The currently favored/rumored Jamison or whatever his name is again is rumored to not have deep enough pockets for a 10+ years investment.
Montreal was sold by MOLSON because they had financial troubles, bought by a guy that had the cash and the appetite for sports but was not a financial genie, what happened, he bought Liverpool, got red from head to toe financialy and had to sell his most profitable asset, the Habs, to be able to survive. Who bought it ? Molson, because in last 15 years they went from nothing to everything in their primary business.
I mean lets be serious. For the BOG to accept an owner in Phoenix who will keep the team there, they will demand that there is not even a 0.000000000001% of chances that the team goes back to what it currently is (that is owned by the league for last 3 years). They asked the same of TNSE with Jets and will ask the same with whoever is bringing a team to Quebec City. The real difference is, how it looks right now, chances of success on short, mid and long term overall favor Winnipeg and Quebec over Phoenix.
The league would be crazy to expand in a economy like this and when more than half the teams are losing money.
[citation needed]
Also, every expansion since 1967 has been done with troubled markets and teams already in the league, so the argument that the league wouldn't expand without first stabilizing all the existing franchises that already exist doesn't have a historical basis in reality.
Might be a smart idea though, but the NHL is quite crazy. Plus, you never know, in the new CBA negotiations, offering the NHLPA a carrot of two more teams' worth of NHL roster spots (plus likely two more AHL teams as a result as well) might just be enough to get them to agree with a smaller piece of the overall pie percentage-wise, which is something that the league clearly wants.
Also, every expansion since 1967 has been done with troubled markets and teams already in the league, so the argument that the league wouldn't expand without first stabilizing all the existing franchises that already exist doesn't have a historical basis in reality.
Might be a smart idea though, but the NHL is quite crazy. Plus, you never know, in the new CBA negotiations, offering the NHLPA a carrot of two more teams' worth of NHL roster spots (plus likely two more AHL teams as a result as well) might just be enough to get them to agree with a smaller piece of the overall pie percentage-wise, which is something that the league clearly wants.
A no-brainer I think. Both Fehr and Bettman will need a way to get out and shout victory!
No fun, some links to pics and vids of the new arena in the Boudoir. I thought you'd like to watch. Nothing yet on the exterior but you can bet there's gonna be lot of glass.
I noticed the following in Dave Shoalts' update on the Phoenix situation yesterday:
Quote:
Finally, the amount put into the deal by Jamison is said to be $100-million, which means the purchase price has to be $140-million. Since the NHL previously demanded $170-million and Bettman promised the league owners they would not lose money on the Coyotes, it would be difficult for the league to accept that offer. Not when there are prospective owners willing to pay as much as $200-million if they can move the team to another city.
I find "as much as $200-million" to much more believable than that $230 million quoted on TSN. I don't know how Peladeau operates, but I see no reason for him to act like Balsillie and try to get a team for relocation by throwing out an oversized offer like $230 million when he could offer 10's of millions less and still be paying a nice premium over the next best option for the league.
So after reading the last 3 pages, we're all in agreement that there's about a 0.000001% chance the Cayotes stay in Phoenix yes?
I mean throughout this process it seems some have suggested the Yotes could indeed stay in Phoenix for years to come.
I'm not entirely sold that the team will move THIS season given the circumstances and how Bettman still has some wiggle room to take a loss for another year, but keeping the team in Phoenix by the numbers is an impossibility yes?
trying to get a clear consensus if some are fearful of mentioning it openly.
So after reading the last 3 pages, we're all in agreement that there's about a 0.000001% chance the Cayotes stay in Phoenix yes?
I wouldn't say that the odds of them staying are that low, but relocation seems to be the prohibitive favorite at this point in time and, with that in mind, QC seems to have everything going for it right now while Seattle is still a way's behind.
I'd say.... 95/5 between relocation and remaining in Glendale, and if they do move then something like 80/20 between moving to Quebec City or Seattle.
It's a pretty safe assumption. It's an awfully cosmologically huge assumption that expansion is even on the NHL's radar...
There's no real reason behind such an assumption. The league would be foolish if they haven't actually had some preliminary discussion about it. It's free money if the markets are ready for it and two happen to be coming around to it. They're asked about it a decent amount. Now, that's not saying it's a constant topic of discussion but Bettman and company definitely have to have thought about it as an option in the near future.
There's no real reason behind such an assumption. The league would be foolish if they haven't actually had some preliminary discussion about it. It's free money if the markets are ready for it and two happen to be coming around to it. They're asked about it a decent amount. Now, that's not saying it's a constant topic of discussion but Bettman and company definitely have to have thought about it as an option in the near future.
Free Money in the short term =/= long term gains.
The NHL would be foolish to expand. The product gets worse with added teams. We don't have 30 healthy teams, why expand? It would be shortsighted and come back to bite the league in the butt. The league would expand. Then the league 10 years later would contract.
The expansion period would be great for the owners, the contraction period that would follow would be a disaster for the owners. The CBA negotiations following the contraction (that would HAVE to occur) would involve the players getting anything they wanted in return for the loss of jobs that would result.
There is plenty of talent to expand, even by two teams. The owners need to keep one candidate city for relocation open so they can blackmail better deals for themselves in their current city. The choice for the owners, balancing the expansion fee against their loss of franchise value, probably errs towards no expansion. But they hired Bettman to make certain decisions for them, and he clearly favors keeping teams in places like Phoenix. It's human nature for the owners to be short-sighted, but Bettman's job is to think for their longer-term interests and to overrule them at times. I'm in favor of expansion because it should put downward pressure on ticket prices- the price of hockey tickets keeps so many fans from attending, let alone bringing their kids. I also favor the European style of hockey, and I believe expansion will tend to draw more from European players.
Because expanding to places like Hamilton and Quebec would tap big expansion fees, and provide two more lucrative markets that would likely contribute to revenue sharing, thus helping out the poorer teams.
Because expanding to places like Hamilton and Quebec would tap big expansion fees, and provide two more lucrative markets that would likely contribute to revenue sharing, thus helping out the poorer teams.
...and then what happens when you can't find a home for an ailing franchise that has to move? It's in the leagues interest to have a city or two in its back pocket so that if a move needs to happen, there's a Plan B in case they can't find a way to make it work where they are now.
The only way I see the NHL expanding any time soon is if a few other cities come forward claiming profound interest in a team, and have the finances and infrastructure in place to demonstrate they can make it work. Right now there are cities that have buildings but no owners (think KC/Portland/Houston) and cities with owners but no buildings (think Seattle/Saskatoon), but only in Quebec City is it all together. The league would be crazy to burn its only solid Plan B on an expansion franchise, and have no way out should a team need to move.
Apparently the NHL's m.o. is to groom one city at a time. Winnipeg was slowly brought a lot and they got first crack when it was time to move a team. Now its QC's turn. I suspect Southern Ontario and Seattle will be the next 2 in line.
Because expanding to places like Hamilton and Quebec would tap big expansion fees, and provide two more lucrative markets that would likely contribute to revenue sharing, thus helping out the poorer teams.
Thats not a solution.
The ideal situation is to have no one on welfare, not have a better welfare system. It is not a ridiculous concept to have 30 healthy franchises, though some teams may need to be put in a better environment. I really don't think I can name 32 truly viable, self-suffcient markets.
