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Adding up the Numbers in the Phoenix Jamison Bid

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Old
04-14-2012, 08:21 AM
  #76
Gotaf7
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Help me to understand, if this deal goes through as reported and the COG pays GJ the 16m managment fee, who would get the revenue from non hockey events at the arena? If the team left and they had to pay someone to manage the arena who would get the revenue generated by the arena?

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04-14-2012, 08:33 AM
  #77
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Quote:
Originally Posted by rt View Post
Why do we believe any of these numbers are legitimate?
Because these numbers reek suspicuously of the truth in regards to how much subsidy it will take for a new owner to not go straight into bankruptcy with this team....

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04-14-2012, 08:45 AM
  #78
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$25m hasn't and isn't stopping the bleeding, so not sure what $9m less a year is going to do.

Hard to find a compelling business argument for believing any of these deals will ever actually take place.

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04-14-2012, 10:11 AM
  #79
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Quote:
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Why do we believe any of these numbers are legitimate?
Because it's just as likely as they are legit as they aren't. As I speculated in post #44, these numbers can be spun in a certain way to sound legit and they could be. I see no one on this planet trying to buy the Coyotes without a subsidy ( or whatever you want to call it ) so why couldn't these numbers be close to the truth? They sound as legit as any other offer that has been made for the Coyotes.

Things get leaked to the press all the time in business. Sometimes legit numbers are leaked as a negotiating tactic. Happens every day.

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04-14-2012, 01:24 PM
  #80
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I may have missed in the other posts-but regardless of what numbers are-if CoG is fronting ANY money in this endeavor, does that not bring GWI back into things again?

Don't see how they get around the 40 million (nevermind the "arena fees")

Just don't see what's different this time from last.

I suspect that if this gets voted through, there's going to be a "whisleblower" to GWI.

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04-14-2012, 03:25 PM
  #81
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Quote:
Originally Posted by Scottrocks58 View Post
I honestly believe that the city manager kept that info from her until after that meeting. Her tune changed about a week later.

OT but who squished your floater?

I altered it for the playoffs.

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04-14-2012, 03:28 PM
  #82
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Quote:
Originally Posted by Cryogenic Man View Post
if you mean Beasley, my guess is one of two things.
I do.


Quote:
Originally Posted by Killion View Post
Dont think so my dear Fugu. Moyes had approached Beasley on numerous occasions seeking relief in 08, some reports suggesting as early as 07 looking for a life-line, scrabbling through the box looking to pickup a vowel (is that how you Yankee's spell it?). When he refused to provide Edouard with the requisite information, namely his books, pretty much demanding a blank cheque, it generated the impetus for Kaites, Jerry Reinsdorf & the league to move in and squeeze the guy out. Like a jar of Storm Cloud Sauerkraut from the Brinery at the AA Farmers Market on Detroit Street with a pretty near "best before date" set to expire, Dude had to go. Markdown. Thereafter, Michael Reinsdorfs company being awarded an untendered $60,000 contract to "evaluate" Glendale Arena, the pocket pack offer in Garys' suit jacket arriving on the very morning Jerry Moyes wanders into bankruptcy court, well, you know the rest of the story....
I know the history, but can't remember the numbers. Moyes had asked for $14-15 MM, which was unacceptable. You cited something around $23 MM or something far higher, which I believe was what JR was going to get when he first got sucked into the morasse, prompting the Moyes' camp to say they could have kept the team afloat if they'd gotten even less than that....

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04-14-2012, 03:51 PM
  #83
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Originally Posted by Fugu View Post
I know the history, but can't remember the numbers. Moyes had asked for $14-15 MM, which was unacceptable. You cited something around $23 MM or something far higher, which I believe was what JR was going to get when he first got sucked into the morasse, prompting the Moyes' camp to say they could have kept the team afloat if they'd gotten even less than that....
Well, its rather moot now of course, but I distinctly re-call a quote that was widely published during the BK that had Beasley telling Moyes "I could probably find you $15-20M per year". He then asked to see Jerrys' books, some form of documentation stating just how bad his losses were in order to take it to the Mayor & Council. Mr. Moyes decided not to do that, dropping the matter altogether, looking elsewhere for funds.... So no, Jerry Moyes was not told "no can do" he was told "likely can do", just needed to see some financials. I also remember the quote from his camp when Reinsdorfs offer hit the fan, "if Id have been able to get that the team would still be afloat". Well which is it?. You were offered help, money, yet you refused to fill out the application form & now 18 months later your complaining about it?.

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04-14-2012, 03:58 PM
  #84
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Bettman claimed that before Moyes filed bankruptcy the situation was "5 minutes away from being solved" where the team was going to be sold to Reinsdorf. What was Reinsdorf going to ask for from Glendale?

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04-14-2012, 04:41 PM
  #85
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One of the key points that I get out of this story is that the NHL has finally come down on their requested purchase price of $170 million in a last-ditched attempt to find a deal that keeps the team in Glendale.

(It is also quite possible that the NHL dropped its price a little while back; in which case at least we now have confirmation that they have done so.)

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04-14-2012, 06:27 PM
  #86
OthmarAmmann
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Quote:
Originally Posted by Tinalera View Post
I may have missed in the other posts-but regardless of what numbers are-if CoG is fronting ANY money in this endeavor, does that not bring GWI back into things again?

Don't see how they get around the 40 million (nevermind the "arena fees")

Just don't see what's different this time from last.

I suspect that if this gets voted through, there's going to be a "whisleblower" to GWI.
$40 million is a loan (although interest free - seems like a nice subsidy right there)

They will argue $16 million is market value, regardless of whether it really is.

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04-14-2012, 06:30 PM
  #87
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So tell me, why is this Jamison dude in Glendale, and not in New Jersey picking up the pieces?

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04-14-2012, 06:52 PM
  #88
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So tell me, why is this Jamison dude in Glendale, and not in New Jersey picking up the pieces?
Because it's New Jersey?

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04-14-2012, 06:58 PM
  #89
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reposting from megathread

Quote:
Lisa Halverstadt ‏ @LisaHalverstadt
#Glendale staffers' proposed budget assumes the #Coyotes will play at http://Jobing.com Arena through 2017.

Proposal also assumes $20M arena management payouts for next four years, decreasing to $15M in 2017. #Glendale #Coyotes

Here's #Glendale's 608-page budget proposal. (Warning: It's a big PDF.) http://www.glendaleaz.com/Clerk/agen...41712-BW01.pdf

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04-14-2012, 07:16 PM
  #90
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Quote:
Originally Posted by tobo View Post
So tell me, why is this Jamison dude in Glendale, and not in New Jersey picking up the pieces?
Because this is all a front to keep people going to games until the Coyotes are eliminated?

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04-15-2012, 11:03 AM
  #91
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It seems to me that this new proposal has the support of at least 4 council members, and probably the mayor, when all is said and done.

I expect that the fact that this is coming so late is because the NHL and Jamison are playing brinksmanship. They want Glendale to consider this with the imminent threat of relocation, to sharpen the decision-making process and eliminate the opportunity for a public debate.

I understand how the arena management fee works ($95 million over 5 years) because we've seen it before, but how does the $40 million up-front work? Can the COG consider providing an interest-free loan without violating the gift clause? They ran into enough problems trying to give Hulsizer $100 million for the parking rights.

We should know very soon whether the GWI wants to put up a fight on this. I wonder whether the NHL will require a "no objection" pledge from the GWI to push this forward.

Regardless of the outcome, this is probably a smart play by the NHL, Jamison and the COG. If it works, everyone will be happy in the near term. If the GWI blocks it, everyone has their scapegoat and will forget all of the antics that preceded.

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04-15-2012, 11:06 AM
  #92
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Quote:
Originally Posted by tobo View Post
So tell me, why is this Jamison dude in Glendale, and not in New Jersey picking up the pieces?
Jersey is not offering $20 million a year in "arena management fees". Remember, the COG is probably competing with other markets for owners that are sniffing around for a sweet deal. Remember this guy?


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04-15-2012, 11:30 AM
  #93
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Quote:
Originally Posted by Whileee View Post
Jersey is not offering $20 million a year in "arena management fees". Remember, the COG is probably competing with other markets for owners that are sniffing around for a sweet deal. Remember this guy?

Ah yes, the prospective owner that the NHL had to buy a plane ticket for in order for him to attend a playoff game seven.

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Old
04-16-2012, 06:59 AM
  #94
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If memory serves, the 40M up front payment will be taken out of the "Enterprise Fund" which contains around 400M. This money is used for sewer and water service upgrades. COG will take 40M from the fund and and "pay it back" at a rate of 1M per year for 40 years. Sounds like an interest free loan which means the 40M is way more than 40M due to the lost interest the fund would accrue over 40 years. I don't know what kind of interest rate the current Enterprise Fund receives but if it's say........... 2.5%....... 40M would generate 1M in interest alone every year. So the COG is in effect handing over 40M plus losing approx. 1M in accrued interest every year.

Feel free to correct me if my numbers are off.

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04-16-2012, 07:32 AM
  #95
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Originally Posted by JMT21 View Post
If memory serves, the 40M up front payment will be taken out of the "Enterprise Fund" which contains around 400M. This money is used for sewer and water service upgrades. COG will take 40M from the fund and and "pay it back" at a rate of 1M per year for 40 years. Sounds like an interest free loan which means the 40M is way more than 40M due to the lost interest the fund would accrue over 40 years. I don't know what kind of interest rate the current Enterprise Fund receives but if it's say........... 2.5%....... 40M would generate 1M in interest alone every year. So the COG is in effect handing over 40M plus losing approx. 1M in accrued interest every year.

Feel free to correct me if my numbers are off.
Well first, the enterprise fund has $400 million of NET assets as of June 30, 2011.

see page 34: http://www.glendaleaz.com/finance/do...Rwithlinks.pdf

The vast majority of those assets are capital assets, so stuff like the sewer system. Not exactly something you can lend out. They had only $90 million of current assets, of which $25 million was due from other city funds and $12 million was accounts receivable. They only had $46 million of invested assets. The P&L on page 35 doesn't break out investment income, which would imply that it is not material (not surprising since it's probably all in cash and short term stuff).

I think the interest-only thing is a subsidy, but mainly because the the Yotes franchise could not possibly get an interest free loan for 20 years. Speculative grade issues are somewhere around 8% per year for a 20 year issue right now. That's about $3.2 million per year or so.

A more significant issue (economically - not legally) is that, at least based on the 6/30/11 financial statement, they would effectively clear out the enterprise fund of any cash and investments.

edit: The cash flow statement on pg 36 breaks out the investment income: $500 per year. I also noticed there's $39 million of restricted cash and investments in the enterprise fund, but that is "restricted".


Last edited by OthmarAmmann: 04-16-2012 at 07:44 AM.
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04-16-2012, 12:10 PM
  #96
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Quote:
Originally Posted by JMT21 View Post
If memory serves, the 40M up front payment will be taken out of the "Enterprise Fund" which contains around 400M. This money is used for sewer and water service upgrades. COG will take 40M from the fund and and "pay it back" at a rate of 1M per year for 40 years. Sounds like an interest free loan which means the 40M is way more than 40M due to the lost interest the fund would accrue over 40 years. I don't know what kind of interest rate the current Enterprise Fund receives but if it's say........... 2.5%....... 40M would generate 1M in interest alone every year. So the COG is in effect handing over 40M plus losing approx. 1M in accrued interest every year.

Feel free to correct me if my numbers are off.
That cash generates less than 2.5%/year. But the opportunity cost is more than that because that extra cash prevents them from having to issue bonds for water/sewer construction and repairs. I don't know what the current yield on Glendale bonds is but I would assume 4-5% (which is what most of their outstanding long-term debt is at).

Quote:
Originally Posted by OthmarAmmann View Post
edit: The cash flow statement on pg 36 breaks out the investment income: $500 per year. I also noticed there's $39 million of restricted cash and investments in the enterprise fund, but that is "restricted".
It must also be noted that they've never used water/sewer funds to fund the arena. They used "other proprietary funds" (landfill/sanitation/housing) for 2010-11 from which they had extra cash, as well as 20 million from the general fund (IIRC), and they still don't know where they'll take the 5M (wasn't budgeted).

The way I see this, "it will taken out of the Enterprise Fund" is a rumor spawned by people who know next to nothing about accounting numbers, and if Glendale is really planning to "loan" 40M to Jamison, they're not planning to take it out of water/sewer. I'm 99% sure it will come from the general fund.

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04-16-2012, 11:41 PM
  #97
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"Goldwater Institute ready to scrutinize next shot at Phoenix Coyotes sale"

http://www.bizjournals.com/phoenix/n...to.html?page=2

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