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.
Sale of Coyotes to Jamison in Question (UPD: deadline won't be extended)
If Jamieson doesn't get the funding for the lease does this mean that relocation moves closer?
It should. It seems that this new COG council is less Coyotes friendly. It'll be really interesting to see how any re-negotiation of the lease plays out.
David Shoalts @dshoalts
Greg Jamison is out as prospective Phoenix Coyotes owner. Someone is making attempts to put a new group together but it's a huge longshot.
David Shoalts @dshoalts
The Coyotes situation is as bad as it's ever been. Back to square one for the NHL. Working on this today. Stay tuned.
The new ownership group, which, according to sources, has arranged for financing that would allow for the purchase of the team from the league at a reported price of $170 million, is hoping to discuss parameters for a new lease agreement in the next few days, perhaps as early as Thursday.
The league has established no deadlines in relation to selling the team, although it's clear a lease agreement between potential buyers and the city is integral to keeping the team in Arizona.
"It's still a work in progress, and we'll see how the week plays out," NHL deputy commissioner Bill Daly told ESPN.com on Wednesday morning. If this new group and the city cannot come to an agreement on a lease agreement it likely would be the final act in the long drama that has been the Coyotes' ownership sage.
This is the last season for the Coyotes, no doubt.
Yeah, it's technically not done, but if they couldn't get a deal done with a massive public subsidy on the table, does anyone honestly think that they could get the deal done without it?
The Yotes would effectively become dead men walking. The NHL will try and say that they're still working, so as to try to prevent a mass exodus of the few remaining fans and potentially to cover their butts from possible litigation from Glendale if they don't appear to be giving it their all and quitting early, but the second the Yotes are eliminated the real countdown begins in all likelihood.
There were two main problems with Reinsdorf's plan. 1) He wanted to have an "out" in case things didn't work out on the revenue side; 2) the main source of subsidy revenue was from a magical CFD that was supposed to generate $25 million annually from parking and Westgate businesses. In retrospect, that whole concept was a howler. At the time, it seemed remarkable how many folks thought it was a viable proposition.
The subsidy level, whatever you wanted to call it-- selling their own parking rights, arena mgt fee, outright support like Moyes had wanted (and noting it was always much higher than anything Moyes people had suggested) --- was usually right around that $20-25 MM mark. Add in the max NHL revenue transfer, revenue sharing and the subsidy.... and you just begin to cover an NHL team's operating costs.
I'm not saying it was a howler as much as pointing out just how much money needed to go in the direction of the team. Reinsdorf agreed to steer the ship but he didn't want to be stuck with it if he couldn't turn things around, hence the relo/out-clause. He was willing to guy them time and manage it, but he wasn't going to bet with his own money.
Why didn't the NHL simply let Balsillie buy the team? I'm really confused about that.
Because he could buy the team for about half of what the NHL believed that territory (greater TO) was worth.
If they expand to TO, the other 30 teams get to split the expansion fee, allegedly worth $400 MM+.
If someone buys an existing team, the owner of that team gets his money ($220 MM per JB's bid, iirc) and the rest of the teams split the relocation fee. At that time, I think a sports economist was saying the relo fee would be an additional ____ (less than $100 MM iirc).
Why didn't the NHL simply let Balsillie buy the team? I'm really confused about that.
MOD
He essentially went about everything in the wrong way, and in the process ticked off the NHL owners to no end. Repeatedly trying to yank teams away from their markets without BoG review and trying to make it a Canadian nationalism issue in his moronic "Make it 7" campaign essentially killed whatever limited chance he and Hamilton had with Leafs/Sabres opposition already holding them down.
Last edited by Fugu: 01-31-2013 at 12:23 PM.
Reason: ...
The subsidy level, whatever you wanted to call it-- selling their own parking rights, arena mgt fee, outright support like Moyes had wanted (and noting it was always much higher than anything Moyes people had suggested) --- was usually right around that $20-25 MM mark. Add in the max NHL revenue transfer, revenue sharing and the subsidy.... and you just begin to cover an NHL team's operating costs.
I'm not saying it was a howler as much as pointing out just how much money needed to go in the direction of the team. Reinsdorf agreed to steer the ship but he didn't want to be stuck with it if he couldn't turn things around, hence the relo/out-clause. He was willing to guy them time and manage it, but he wasn't going to bet with his own money.
Seems an absolutely fair arrangement, more than fair for the city actually. Hell, if they're going to lose the team otherwise, and if the alternative is a guy who will buy the team, keep it there at least a few years and demonstrate a good faith effort to make it work but if it doesn't then... I mean, at least with that Glendale gets a shot at hoping the Coyotes ship can be turned around.
Posing a question from the "dumb question/speculation" department.
Any chance that this deal was in part basing things on the new CBA, and that after things shook down the way they did the investors didn't think it went far enough for their needs and said "no thanks"?
Or am I reaching way too far here?
I think this is a reasonable argument. Phoenix has been losing around $25M per year, haven't they? I can't see the New CBA bringing them even close to out of the red.
David Shoalts @dshoalts
Greg Jamison is out as prospective Phoenix Coyotes owner. Someone is making attempts to put a new group together but it's a huge longshot.
David Shoalts @dshoalts
The Coyotes situation is as bad as it's ever been. Back to square one for the NHL. Working on this today. Stay tuned.
Is it really "back" to square one though.
By the looks of it, any prospective buyers never got beyond square one to start with.
My take... Jamison might get about a week to finalize deal with NHL and then have to get deal with COG. If not, open bidding (with relocation) on the table, with a possible deadline by end of February (if they want to relocate by start of 13-14 season).
Why didn't the NHL simply let Balsillie buy the team? I'm really confused about that.
Seems RIM has about the same life expectancy as the Coyotes, and Balsillie would be on the verge of going the same way as Hicks, or some other owners, who's financial empire crumbled.
There are never any consequences for rich people are there?
Anyways, if the deal is dead then does that mean that the COG has a change to change the agreement so that they don't get screwed over like before meaning that they will likely not approve a deal?
Why didn't the NHL simply let Balsillie buy the team? I'm really confused about that.
He had already established a poor track record with the league, relating to his previous efforts to sneak the Pens and Preds out of town, and in this case he tried to subvert the whole process with a backroom deal. As Fugu mentioned above, he was essentially trying to make an easy $200 million at the league's expense, and in the process landed the league in court against a former owner and set this whole mess in motion. Balsillie's name is mud as far as future ownership is concerned.
So now they are talking about another potential buyer group.
I'll state the following :
Deal #1 = $324M over 20 years.
Deal #2 = $308M over 20 years.
Deal #3 = ???
How much lower would Jamison and/or another buyer group have to go down with the subsidy to a) please the new mayor and council of Glendale and b) not look shady.
I can't explain that the deal that's about to expire (#2) required $308M and that a new one could require what $200M, $100M ? There is no way any investors group could explain that.
He essentially went about everything in the wrong way, and in the process ticked off the NHL owners to no end. Repeatedly trying to yank teams away from their markets without BoG review and trying to make it a Canadian nationalism issue in his moronic "Make it 7" campaign essentially killed whatever limited chance he and Hamilton had with Leafs/Sabres opposition already holding them down.
So they were willing to lose 100 millions of dollars for their egos? Got it.
If Jamison couldn't attract investors with the absolutely asinine deal that he got from Glendale, then it's over. Time to move on. Like those before him, Jamison had this chance - he couldn't get it done. If this new group has the money, and can get a deal, then it's time to come forth now. Not in 4 months, not next year.
With everything that has gone on, do you really think the team is done in Glendale?
Pretty much. Glendale's not going to drop any more money into it, I doubt that the NHL wants to keep holding on to a white elephant next season, and if the league couldn't find an owner with a massive public subsidy on the table, what chance is there for a deal now without all that assistance?
It won't be announced until after the Yotes are eliminated, and I'm sure that a few "interested buyers" will be trotted out now and then, but at this point.... yeah, the Yotes are effectively a dead team skating.
