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Phoenix LXXII: Send in the Clowns

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Old
02-19-2013, 03:27 PM
  #276
GF
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Originally Posted by NHLfan4life View Post
Uh, I'm not sure I follow you. Those markets are not proven, they couldn't support their teams enough for them to stay.

I still don't see why Seattle is a better market. I actually don't see why any of these places are good markets since nobody is equipped to take an NHL team and wont' be for quite a while.
Well back in 95, the can$ was about .65U$, there were no salary cap and there were no revenue sharing. At the time, QC mayor didn't want to build a new arena, Quebec PM didn't want it either. It was a perfect storm. But it had nothing to do with "market not supporting the team".

Today, the new arena is being built (with a 100 corporate box vs about 20 in the current arena), the dollar is at par, there is both revenue sharing and salary cap and both the mayor and elected provincials are on board. The old arena can be used while the new gets done too.

If Seatle was to get a relocating Coyotes franchise instead of QC it would be scandalous.

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02-19-2013, 03:29 PM
  #277
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So even though the NHL might prefer Seattle the reality is its not practical for Seattle to land both an NBA and NHL team at the same time with seperate owners and have both playing next year...
I hear what you're saying. Would just point out that there is no requirement that it happen "next year".

When it comes down to it, Jobing.com is as good a temporary facility as Key Arena.

 
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02-19-2013, 03:32 PM
  #278
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Originally Posted by Major4Boarding View Post
* Hansen stands to lose $80M from Seattle towards the Arena if there's no NHL team.
Which brings the effective price from $170M down to $90M.

 
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02-19-2013, 03:36 PM
  #279
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this is true.. but Bettman also likes to reward people who play by his rules.. which means keep your mouth shut and do what I say. Winnipeg did that and now Quebec City is doing the same...

...one of the issues for seattle is ownership... assuming the Seattle NBA deal closes that wont happen for at least another month...and then you have until May to find an owner that is willing to pay 170 mill or more on a team that will have to pay rent on the arena and doesnt collect the arena revenues... and will have only a few short months to sell 12k plus season tickets in a new market... not to mention renovations at the key arena where the new owner will likely take a big binancial hit for a few years. Now compare that to Quebec. So even though the NHL might prefer Seattle the reality is its not practical for Seattle to land both an NBA and NHL team at the same time with seperate owners and have both playing next year.. I just dont see it happening
IMO, this is a huge obstacle to the long term viability of any Seattle team. Most, if not all, non traditional American markets rely on sweetheart arena deals to indirectly subsidize their operations. From what I understand, the group that wants to build the Seattle arena and own the NBA team doesn't want any part of nhl ownership. Any potential Seattle nhl ownership will not share in any ancillary arena revenue, and will actually be expected to pay fair value rent to the NBA/arena owners. In a saturated (NBA, NFL, MLB, MLS etc), non traditional American market, this is just another disaster waiting to happen. Having said that, however, I have no doubt that bettman will be able to find some sucker to own a team in the market.

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02-19-2013, 03:38 PM
  #280
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I have the deepest respects for any STH of the Coyotes ( or any team for that matter ) , but I know for a fact that if I lived in Phoenix I would never buy STs when I know I can get into any game I want at a reduced price.
Just as a data point, as an STH here this season I pay $15/game for seats that retail for $40.

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02-19-2013, 03:47 PM
  #281
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Originally Posted by Major4Boarding View Post

* Hansen stands to lose $80M from Seattle towards the Arena if there's no NHL team.
It's also possible that Hansen could save that much money if he makes it primarily a basketball facility, like in Phoenix, Brooklyn, Indianapolis, etc. By making it a basketball facility, the arena itself will be smaller, thus saving some money from building it. Until final designs are released, we won't know what will happen.

To me, the biggest obstacle to Seattle is that Hansen hasn't shown that he is willing to let others, namely a perspective NHL owner, be a partner in the arena. The NHL team will have to share in the arena revenue to be successful.


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02-19-2013, 03:55 PM
  #282
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Originally Posted by Dado View Post
Which brings the effective price from $170M down to $90M.
Which is pretty much the true value of most US based NHL teams (67 expanion teams excluded). Tampa went for a reported 80-100 million in true cash when it sold last time.

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02-19-2013, 04:17 PM
  #283
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Originally Posted by Dado View Post
I hear what you're saying. Would just point out that there is no requirement that it happen "next year".

When it comes down to it, Jobing.com is as good a temporary facility as Key Arena.
Bear in mind that I'm firmly in the "I see the League waiting one more season" camp, but if push came to shove... is Glendale as good as Seattle in that regard? Again, if Seattle is the landing spot?

I guess it would depend on the lame duck aspect. Will the fanbase turn out or turn away for the farewell? What impact would there be on revenues staying versus going? A down tick if the Jobing faithful stay away, uptick if they show up for the last hoorah? Conversely, given what... about 10K being plausible for attendance at Key arena, at equal to or greater than average ticket prices currently at Jobing.com? Other new revenue streams (signage, board adverstising, other corporate sponsorships, etc from a broader corporate base than current at the Job)? I guess it could go the other way too, as it all could be "priced to intice".

Quote:
Originally Posted by Dado View Post
Which brings the effective price from $170M down to $90M.
How so, Dado? Not understanding your intent with that statement.

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02-19-2013, 04:33 PM
  #284
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Originally Posted by Northender View Post
Which is pretty much the true value of most US based NHL teams (67 expanion teams excluded). Tampa went for a reported 80-100 million in true cash when it sold last time.
Let me ask you a hypothetical question. Let's pretend for a minute that we're not dealing with nhl franchises here. What if [a league commissioner] approached you and said that he had an 'asset' to sell to you. Upon doing your due diligence, you discovered that this 'asset' would likely lose between 10 and 20 million bucks per year. How much would you pay the [commissioner] for this 'asset'? Or, alternatively, would you possibly demand that the [commissioner] pay money to you for taking on the annual losses of the 'asset'?


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02-19-2013, 04:47 PM
  #285
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Originally Posted by HamiltonFan View Post
Let me ask you a hypothetical question. Let's pretend for a minute that we're not dealing with nhl franchises here. What if a pompous, arrogant little midget approached you and said that he had an 'asset' to sell to you. Upon doing your due diligence, you discovered that this 'asset' would likely lose between 10 and 20 million bucks per year. How much would you pay the midget for this 'asset'? Or, alternatively, would you possibly demand that the midget pay money to you for taking on the annual losses of the 'asset'?
That's not a fair statement. If your analysis showed losses, like any struggling business, but considerable upside, you'd have a case for buying that asset. It doesn't matter if it's 10 million or 100 million. If you find it a worthwhile venture, the selling price is agreeable. $90 million seems like the market agreed upon bottom value for an NHL team, regardless of history or market. There's little to no built in value beyond simply being an NHL club. If these assets were 100% portable with no concern for leases or anything of the sort, the value would be higher.

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02-19-2013, 05:40 PM
  #286
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That's not a fair statement. If your analysis showed losses, like any struggling business, but considerable upside, you'd have a case for buying that asset. It doesn't matter if it's 10 million or 100 million. If you find it a worthwhile venture, the selling price is agreeable. $90 million seems like the market agreed upon bottom value for an NHL team, regardless of history or market. There's little to no built in value beyond simply being an NHL club. If these assets were 100% portable with no concern for leases or anything of the sort, the value would be higher.

The recent Tampa sale of around $90M also included real estate, so we know that the team itself was sold for less than $90M. Cohen's 'shares' in Florida went for nothing 4 years ago. In Phoenix, a $320M subsidy over 20 years was not enough to entice any buyer at $170M. Do the math.

[mod edit]


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02-19-2013, 06:08 PM
  #287
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It's also possible that Hansen could save that much money if he makes it primarily a basketball facility, like in Phoenix, Brooklyn, Indianapolis, etc. By making it a basketball facility, the arena itself will be smaller, thus saving some money from building it. Until final designs are released, we won't know what will happen.
Because of several decisions by the former Seattle SuperSonics ownership (the Ackerleys), and city and state politicians, KeyArena was refurbished in the mid-1990s as a basketball-only venue. In my opinion, the new arena project would defiantly correct past short-sighted decisions.

FYI: from a 2006 article:
Obermeyer, Jeff. “Seattle and the NHL: So Close Yet So Far Away.” NW Hockey Report 4, no. 3 (2006): 8, 20.

Quote:
To me, the biggest obstacle to Seattle is that Hansen hasn't shown that he is willing to let others, namely a perspective NHL owner, be a partner in the arena. The NHL team will have to share in the arena revenue to be successful.
The major factor for the Seattle arena project to proceed would be to purchase an NBA team. It's fair to say that Hansen and his ownership group are concentrating more on purchasing the Sacramento Kings and moving the team to Seattle than on finding an NHL tenant.

Publicly, the only person that has shown interest in starting a NHL team in Seattle is AHL Chicago Wolves owner Don Levin, who was part of a group that wanted to build a new arena in Bellevue, Washington, east of Seattle.

As far as arena revenue for a potential NHL Seattle team, whether it's a relocated (Phoenix?) or expansion team, that's something I'd feel more comfortable discussing in the future, not now.

The waiting is the hardest part...


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02-19-2013, 07:32 PM
  #288
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Just curious: does the NHL monitor the finances of teams and prevent teams from taking on too much debt? Shouldn't have signed off on transactions like Moyes borrowing $80 million from MSD Capital against the team if the team was worth $90-100 million?

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02-19-2013, 08:58 PM
  #289
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I'm not sure if the league is too concerned of any team taking on too much debt. As long as there's someone or group o write a cheque every year or find a city/county willing to fund significant capital, they're good.

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02-19-2013, 09:03 PM
  #290
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Quote:
Originally Posted by Major4Boarding View Post
* Hansen stands to lose $80M from Seattle towards the Arena if there's no NHL team.
Quote:
Originally Posted by Dado View Post
Which brings the effective price from $170M down to $90M.
The $80 Million is part of the $200M public funds for the new Seattle arena if a NHL team is secured (expansion or relocation). If there is no NHL team in Seattle, $120M of public funds will go to the arena project.

Seattle P-I website from May 16, 2012:
"Only NBA team needed for Seattle arena to move forward"

Those additional $80M public funds for the Seattle arena has everything to do with getting the NHL in Seattle. I'm not certain how those public funds would be tied to the NHL's $170M asking price to buying the Coyotes. I think those are two separate (and expensive) issues.

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02-19-2013, 09:18 PM
  #291
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IMO, this is a huge obstacle to the long term viability of any Seattle team. Most, if not all, non traditional American markets rely on sweetheart arena deals to indirectly subsidize their operations. From what I understand, the group that wants to build the Seattle arena and own the NBA team doesn't want any part of nhl ownership. Any potential Seattle nhl ownership will not share in any ancillary arena revenue, and will actually be expected to pay fair value rent to the NBA/arena owners. In a saturated (NBA, NFL, MLB, MLS etc), non traditional American market, this is just another disaster waiting to happen. Having said that, however, I have no doubt that bettman will be able to find some sucker to own a team in the market.
Ownership in seattle should be not be a problem for the BOG and GB! Send in the clowns and the rest of the circus act starring Matty Hulsi, Greggy jamison. Sprinkle a little jerry rheinfart in and Seattle has the makings of wonderful ownership brought to them by the incomparable Gary Butthead! Seattle your problems are solved!

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02-19-2013, 09:21 PM
  #292
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Just as a data point, as an STH here this season I pay $15/game for seats that retail for $40.
That says it all! The Coyotes have been giving away seats for years at prices that are below womens Roller derby. yet all of the delusionals continue to think that if they can average 15,000 ayear things will be hunky dory, think again.

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02-19-2013, 09:31 PM
  #293
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That's not a fair statement. If your analysis showed losses, like any struggling business, but considerable upside, you'd have a case for buying that asset. It doesn't matter if it's 10 million or 100 million. If you find it a worthwhile venture, the selling price is agreeable. $90 million seems like the market agreed upon bottom value for an NHL team, regardless of history or market. There's little to no built in value beyond simply being an NHL club. If these assets were 100% portable with no concern for leases or anything of the sort, the value would be higher.
Not sure i know what you are referring to regarding upside? In my eyes there is little to no upside for anyone interested in paying 170MM for an asset that will guarantee losses for as far as the eye can see!

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02-19-2013, 09:48 PM
  #294
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I certainly don't agree that the speculated $170M asking price is asinine. The BoG is now likely as much as $230M into their BofA LoC after having purchased the team and financed both its operations/losses and its various legal wranglings these past 4 years - even after a few palettes of cash from the city. Even if the TNSE $60M relo fee were to be applied to Phoenix (which isn't a safe assumption, I think) an asking price of $170M would still be in order. Bottom line, we dont know what the asking price is to keep the team in town or to move it to another city.

And let's also not fool ourselves into thinking that the 29 leather seats around the BoG table are of one mind, either in their opinion for the situation in Phoenix or in their level of support for the commissioner himself.
This may be a late response, but your opinion is noted and rejected. The NHL decided to make the play of purchasing the team from BK and holding on as long as they have. To insinuate any "True Cost" since the BK is more folly than stating a 170 mil asking price.

If I buy a used truck for 20k, then subsequently put in another 5k in repairs does it matter if the actual market value is 15k? I consciously paid too much to begin with, then willingly added to my net cost with the repairs. Just because I really really really want to get out net neutral, doesn't change the fact I'm 10k over market value.

The only way this equation worked in the past was because the COG was willing to kick in for the negative equity. Since they are no longer a willing partner in this plan there is only one choice. Take the truck to a market that is willing to pay 25k.

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02-19-2013, 11:59 PM
  #295
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So... Beacon Sports Capital, if you beleve a certain former Council Member's blog. Excuse me while I go offline and reflect and relive the past involving Beacon Sports Capital and the Tampa Bay Lightning... and a certain gentleman by the name of David LeFevre.

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02-20-2013, 12:17 AM
  #296
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Originally Posted by Major4Boarding View Post
So... Beacon Sports Capital, if you beleve a certain former Council Member's blog. Excuse me while I go offline and reflect and relive the past involving Beacon Sports Capital and the Tampa Bay Lightning... and a certain gentleman by the name of David LeFevre.
M4B - I am not sure to what you are referring here. Is BSC somehow going to get involved with the coyotes and the CoG?

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02-20-2013, 12:17 AM
  #297
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So... Beacon Sports Capital, if you beleve a certain former Council Member's blog. Excuse me while I go offline and reflect and relive the past involving Beacon Sports Capital and the Tampa Bay Lightning... and a certain gentleman by the name of David LeFevre.
LeFevre seems like a perfect tire kicker for Glendale.

http://books.google.ca/books?id=VuTT...ed=0CDQQ6AEwAQ

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02-20-2013, 12:26 AM
  #298
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M4B - I am not sure to what you are referring here. Is BSC somehow going to get involved with the coyotes and the CoG?
If their website is to be believed, they already are

Under "Advisory"

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Pittsburgh Penguins NHL team (represented owner in bankruptcy/restructuring plan)

Represented the City of Aberdeen Maryland as Financial Advisor in their stadium lease negotiations with Ripken Baseball and presented feasibility, recommendations and financial analysis.

Private group looking to bid on Minnesota Vikings (financial advisory)

The City of Glendale pertaining to preparing a Feasibility Study concerning the Phoenix Coyotes

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02-20-2013, 12:27 AM
  #299
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The other 29 owners have sunk north of 170 mil into this team! Hypothetically speaking if you were an owner and you were assured that buying this team out of BK you would get your money back, would you be ok with letting them go for 110 mil? This team could go for 75 mil yet they would still lose money, time to leave!
They put $140M buying the team out of the BK (not $170M).... that's the only known figure. For that price they got to protect their right to determine where they place franchises.

It is presumed that the additional $30M came from losses incurred that season and because Gary Bettman had promised the other 29 owners that he could flip the team onto a local buyer and not lose any money in the process.

So it appears that, from the beginning, the league wants to protect their location rights, and not pay for it in the end. I contend that the league needs to pay that price.

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02-20-2013, 12:36 AM
  #300
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I contend that the league needs to pay that price.
They are indeed externalizing a significant cost by passing the buck to the city in a form of subsidy required. I would say I'm surprised that no one on the council has thought to ask why they insist on twice the market value of the team, but I'm not. The real kicker is that they continue to go along with this charade. The NHL got to protect its rights, and now stands to reap the benefits of expansion. Expansion money they could have lost out on, had they stood idle while Balsille carted the team off. Now they want to have their cake and eat it too. All of this over an unnecessary promise to "not lose a dime" on the Coyotes.

Sorry Gary, but you should lose money when you fight a legal challenge to the way you do business.

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