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Phoenix XCVII: Forget it, Jake. It's Glendale.

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Old
07-07-2013, 07:49 AM
  #51
fishbert
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Originally Posted by MNNumbers View Post
Quote:
Originally Posted by Llama19 View Post
To quote:

"In the short term, Glendale would be better off rejecting a request by the Coyotes’ proposed new owners to increase the city’s financial stake in hockey, according to an analysis presented Friday by Glendale Financial Services Department Executive Director Sherry Schurhammer.

City officials have projected that keeping the team, according to the current proposed agreement, would cost the city about $2 million a year more than letting the team go. [Emphasis mine]

However, Schurhammer noted that neither the city’s nor the proposed team owners’ projections are certain, and few can project what would happen to Westgate."

Source: http://www.azcentral.com/community/g...cing-vote.html
Which is the reason the Bowers continued to point out to the Council the RISK involved in this lease. City barely on secure footing (and maybe not really, but with a plan to get there), Is it really worth the risk to keep the Coyotes, when the projections 'suggest' that it costs 2M/yr?
Those projections did not account for the $1.50 supplemental surcharge on all hockey and non-hockey event tickets. Ms. Schurhammer explicitly noted that last point prior to presenting the information on 6/28, yet for some reason the AZ Republic decided to run with the projection they knew was already out of date and bogus, and now everyone keeps mindlessly repeating it.

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Originally Posted by blues10 View Post
I may not be caught up on all of the discussion here. However, i see ticket surchsrges being discussed. If i remember correctly the cog previously collected a ticket surcharge in lieu of free parking. This surcharge will not be a new revenue stream. The new stream is actually charging for parking. This serves to highlght someone like "tree stump" Martinez actual understanding of the deal. How was the kool-aid Manny?
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Originally Posted by Whileee View Post
Well, actually, this deal will have them collect an extra nickel in hockey ticket surcharge compared to what was already planned. It was so miniscule that the RSE guys agreed to cover that for the ticket buyers.
Ticket surcharges for hockey events were not included in the FY 2014 budget, and neither were the increased surcharges for non-hockey events, nor the supplemental surcharge added to both. It is entirely appropriate to count these ticket surcharge revenue streams as "new" to the FY 2014 budget.

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The main problem for the COG is that they have to find a way in an already over-stretched budget to find the money for the AMF. Even if the revenue streams perform up to the most optimistic projections, they will be another $2 million in the whole.
On the first point, they have $40M+ budgeted in their contingency fund and $15M of the NHL's 2nd $25M payment that will be freed up in escrow when this deal is finalized because only $5M of the $20M in there now is due this year. Paying the AMF within the FY 2014 budget is not an issue.

On the 2nd point, "the most optimistic projections"?! They average the past 4 ownerless years together to arrive at an assumed average hockey attendance that's 10% lower than this past season... I fail to see how that equates to "the most optimistic projection". Even their non-hockey attendance assumptions come in under the actual non-hockey event attendance in FY 2010 (the last year before the NHL took over management, and right in the middle of the recession).


Last edited by fishbert: 07-07-2013 at 08:06 AM.
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07-07-2013, 07:59 AM
  #52
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Glendale 'lost' $2M on the 2008 Super Bowl, too.

To quote:

"The city spent $3.2 million in such areas as police radios, spruced-up street landscaping and trips for planners to observe preparations by other Super Bowl host cities.

The game brought in only $1.2 million in sales-tax revenue for the city from Glendale's hotels, restaurants and gas stations to offset the costs, according to a city-commissioned study."

Source: http://www.azcentral.com/community/g...uper-bowl.html
Quote:
trips for planners to observe preparations by other Super Bowl host cities.
And here in that short line is exactly why Glendale is sinking all that cash in stupid projects. It an excuse for city peoples like managers, lawyers, councilman and councilwoman to travel, vacation and be treated like VIP on the city dime. Almost every mid size to major cities in the world does that but way cheaper with the twin town or sister cities program. The scam is simple I pay you to travel to my city you pay me to travel to yours. Off course a small suburb on the edge of Phoenix might not interest any interesting destination!

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07-07-2013, 08:58 AM
  #53
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Originally Posted by fishbert View Post
Those projections did not account for the $1.50 supplemental surcharge on all hockey and non-hockey event tickets. Ms. Schurhammer explicitly noted that last point prior to presenting the information on 6/28, yet for some reason the AZ Republic decided to run with the projection they knew was already out of date and bogus, and now everyone keeps mindlessly repeating it.

Ticket surcharges for hockey events were not included in the FY 2014 budget, and neither were the increased surcharges for non-hockey events, nor the supplemental surcharge added to both. It is entirely appropriate to count these ticket surcharge revenue streams as "new" to the FY 2014 budget.

On the first point, they have $40M+ budgeted in their contingency fund and $15M of the NHL's 2nd $25M payment that will be freed up in escrow when this deal is finalized because only $5M of the $20M in there now is due this year. Paying the AMF within the FY 2014 budget is not an issue.

On the 2nd point, "the most optimistic projections"?! They average the past 4 ownerless years together to arrive at an assumed average hockey attendance that's 10% lower than this past season... I fail to see how that equates to "the most optimistic projection". Even their non-hockey attendance assumptions come in under the actual non-hockey event attendance in FY 2010 (the last year before the NHL took over management, and right in the middle of the recession).
Fishbert,

I appreciate the information. Question:

Was it you that put together that nice Excel spreadsheet of the ancillary revenue available to Glendale in this deal?

Because that spreadsheet assumes 15,000 in average attendance, and lots of cars parking, and comes out with Glendale about 1M/yr in the hole.

And, that spreadsheet does not take into account the loss of the surcharges that are replaced by these surcharges, which of course makes it worse for Glendale.

EDIT: I see that you indicate that surcharges were not included in the 2014 budget. Please show this to be true. I am not arguing, I would just like to verify that, because I remember hearing Bowers and/or Birnbaum state that they were. Also, is that true IYO for 2015-2018 as well?

Thank you.


Last edited by MNNumbers: 07-07-2013 at 10:05 AM.
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07-07-2013, 10:32 AM
  #54
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Deal been signed yet? What the hell why not? RSE should have closed almost immediately considering the only piece of the puzzle they needed was the required $15M AMF....

Dare I say it.... 2 more weeks

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07-07-2013, 10:38 AM
  #55
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Deal been signed yet? What the hell why not? RSE should have closed almost immediately considering the only piece of the puzzle they needed was the required $15M AMF....

Dare I say it.... 2 more weeks
Deal is contingent on there being no successful referendum. Hence the August 5th closing date.

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07-07-2013, 10:45 AM
  #56
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Deal is contingent on there being no successful referendum. Hence the August 5th closing date.
Ugh another month!!

I can't take this anymore. It will end up the way of Jamison with RSE unable to close (not because of the referendum), and people will slowly start to forget, again, about Anthony Leblanc and his dreams with other peoples' money.

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07-07-2013, 11:02 AM
  #57
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Indeed, and they could well be.... so put on your tinfoil hat panda, cuz here goes, and this Conspiracy Theories a real beaut.... ya ever hear of Mubadala Development Corporation? Its the investment arm of the beyond wealthy UAE State of Abu Dhabi. Over $900B in investment funds, dwarfing similar pension & hedge funds in North America.

The COO of Mubadala, one Waleed Al Mokarrb Al Muhairi is an extremely influential individual in investment circles worldwide including political connections up the yazoo, including but not limited to the Bush Family & John McCain, with the Carlyle Group, John Buck Intl, Michael Dell, MDS Capital, AEG, Alan Levental, owner of Beacon Sports Capital Partners and so on & so forth, and are rumoured to have invested heavily in the Southwest, most notably around Phoenix, with Phoenix CityNorth, rumoured but unconfirmed one time and possibly still major holder of Glendale Arena Bonds (and Westgate itself through Ellman) etc.

Alan Leventhal is of course connected to the Reinsdorfs and through business interests in Boston with Onex Corporation, where Daryl Jones of RSE/IceAz, formerly IceEdge & ongoing Hedgeye once worked, and is still cosy with Leventhal, as to are his Buddies Dey, Gosbee & Le Blanc. Due to the far reaching nature of these relationships, through both State & Federal politics, the enormous amounts of wealth & investment involved.... multi-leage interests, MLB, the NFL & the NHL, the NBA... well, see where Im goin here? Follow the money, connect the dots.
Someone PM with some dots connected for me, why would they bother with this hockey team? If the team is supported by the government, it serves to support a cog in the wheel which is the Phoenix area economy, thus boosting someone's profits?

I imagine that if the NEP somehow survived and resulted in the creation of a foreign investment fund, all the NHL teams would be secretly owned by the Canadian government. I'm only joking, of course.

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07-07-2013, 11:32 AM
  #58
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Ugh another month!!

I can't take this anymore. It will end up the way of Jamison with RSE unable to close (not because of the referendum), and people will slowly start to forget, again, about Anthony Leblanc and his dreams with other peoples' money.
Just think of it as 2 more weeks, and then another two more weeks just for old time sake.

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07-07-2013, 11:42 AM
  #59
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It will end up the way of Jamison with RSE unable to close (not because of the referendum)

Why then?

Because of the wishes of the minions of detractors?

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07-07-2013, 11:44 AM
  #60
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Wow. Read that link from the previous thread. Malfeasance, thy name is Glendale. Looks like the next plot twist to look forward to is the audit. I hope none of these schemers even think of silencing Alvarez. In such instances, the cover-up always ends up worse than the crime and the motives here and suspects (or at least accomplices) are soooo transparent. kdb209... I hope that wasn't ominous foreshadowing.

What happens if the audit has major ramifications, like it brings the deal to a screeching halt (prohibits its signing or the deal falls apart because there are major indictments or investigations that might prohibit Glendale's involvement in the deal)? How fast can they relocate the Coyotes in that scenario, especially if its mid-late July? Did Quebec City order/get that ice-making equipment? Or would the alternative just be more road games? Is that even possible at many arenas (due to their bookings)?

That scenario reminds me of MLB in 1970 with the Seattle Pilots' gear parked in UT days before the season, waiting for court action to decide whether they go to Seattle or Milwaukee. They ended up being sold so last-minute, they had to wear Pilots uniforms that season with the Pilots badges ripped off and a Brewers badge hastily sewed on.

And Llama19, I've loved your avatars of late... and your links. Glendale *lost* money on the Super Bowl? How many cities have done that? Can Glendale make money on anything?
Living in Detroit in 06, they lost money on the superbowl.
Living in Indianapolis in 12, they lost money on the superbowl.
http://profootballtalk.nbcsports.com...t-complaining/
the cities take the hit, while the bars, restaurants and hotels cash in

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07-07-2013, 11:46 AM
  #61
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Why then?

Because of the wishes of the minions of detractors?
Because funding/financing will fall through, why else? There are many volatile factors involved, of which if one fails to deliver will otherwise absolve the deal.

I'm sure Fortress is going through the deal tooth and nail before signing over the majority of the financing. *Further RSE is relying on committed funding from the CoG, if it isn't there, well then there isn't any deal. From what I read the default clauses were nothing short of the deal being null and void.


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07-07-2013, 11:50 AM
  #62
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Ticket surcharges for hockey events were not included in the FY 2014 budget, and neither were the increased surcharges for non-hockey events, nor the supplemental surcharge added to both. It is entirely appropriate to count these ticket surcharge revenue streams as "new" to the FY 2014 budget.

On the first point, they have $40M+ budgeted in their contingency fund and $15M of the NHL's 2nd $25M payment that will be freed up in escrow when this deal is finalized because only $5M of the $20M in there now is due this year. Paying the AMF within the FY 2014 budget is not an issue.

On the 2nd point, "the most optimistic projections"?! They average the past 4 ownerless years together to arrive at an assumed average hockey attendance that's 10% lower than this past season... I fail to see how that equates to "the most optimistic projection". Even their non-hockey attendance assumptions come in under the actual non-hockey event attendance in FY 2010 (the last year before the NHL took over management, and right in the middle of the recession).
Thanks for clarifying regarding the ticket surcharge and the FY 2014 budget. They also weren't budgeting for a $15 million AMF, so I'm sure that they'll have a few adjustments to make.

As I understand it, their plan to free up funds to repay the NHL was based on the plan to lease-lease back city hall. As far as I can tell, they haven't yet passed that plan. Perhaps you can clarify. They still need to come up with $5 million annually to pay back the NHL, and that will need to come from somewhere. Do you see options within the current budget beyond the lease-lease back plan to finance that? Remember, they still have firm targets to address the depleted reserve fund. Even if you assume much better attendance performance, the revenues have to be balanced against what I believe to be very optimistic projections on parking and naming rights, but time will tell. I would speculate that after this season wherein RSE will maintain ticket prices (hard to raise them now, for a variety of reasons), I expect that RSE will have to increase prices to make the business model work. I think that will affect the potential for revenue growth.

It should be a fascinating time for the COG.

Would you agree that city council is facing some very difficult budget decisions in the coming five years, considering their need to: 1) replenish the reserve funds, 2) pay out the $15 million AMF annually, 3) cope with the sunsetting of the sales tax?

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07-07-2013, 11:50 AM
  #63
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Originally Posted by ajmidd12 View Post
Because funding/financing will fall through, why else? There are many volatile factors involved, of which if one fails to deliver will otherwise absolve the deal.

I'm sure Fortress is going through the deal tooth and nail before signing over the majority of the financing. *Further RSE is relying on committed funding from the CoG, if it isn't there, well then there isn't any deal. From what I read the default clauses were nothing short of the deal being null and void.

So this is a hunch, speculation.... an opinion of yours.

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07-07-2013, 11:55 AM
  #64
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So this is a hunch, speculation.... an opinion of yours.
Based on the track record of the previous suitors, an argument can easily be made to back that up. This opinion is shared with many people, including those who are residents of Glendale.

RSE is no different from the others in demanding more than the CoG can afford in a subsidy AMF.

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07-07-2013, 11:56 AM
  #65
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So this is a hunch, speculation.... an opinion of yours.
Not very good speculation at that. The NHL approved RSE contingent on them getting the $120m Fortress loan and $80m NHL working capital. The only reason the deal hasn't closed is due to the referendum period. No lender wants money tied up in the courts.

There are a lot of reasons to think the deal won't work. RSE not closing isn't a legitimate one. That'd be absolutely daft, even by the standards of this saga, after that whole three ring circus of a meeting.

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07-07-2013, 11:58 AM
  #66
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Not very good speculation at that. The NHL approved RSE contingent on them getting the $120m Fortress loan and $80m NHL working capital. The only reason the deal hasn't closed is due to the referendum period. No lender wants money tied up in the courts.

There are a lot of reasons to think the deal won't work. RSE not closing isn't a legitimate one. That'd be absolutely daft, even by the standards of this saga, after that whole three ring circus of a meeting.
Oh c'mon, you actually think they are worried about the referendum? It's pretty obvious it will fail just like the last time. I'm sure they could move forward in signing the deal with no issues.

They (NHL, RSE, Fortress) are just using the referendum as an excuse to buy more time.

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07-07-2013, 11:58 AM
  #67
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Can someone explain to me how this isn't just a shell game. The player in a shell game (COG) always walks away empty-handed, somehow.

The statement in the Republic is either way out of context, I am totally misunderstanding or this is some kind of scam where I say I'll pay a nickel out of my money for 8.5 million from you....

Can one of the math guys explain this to me?
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Originally Posted by MNNumbers View Post
EDIT: I see that you indicate that surcharges were not included in the 2014 budget. Please show this to be true. I am not arguing, I would just like to verify that, because I remember hearing Bowers and/or Birnbaum state that they were. Also, is that true IYO for 2015-2018 as well?
My understanding (based on Schurrhammer's presentation on 6/28) is that while most of the 'new' hockey surcharges aren't really 'new', the FY14 budget was based on the assumption that the team would be gone. So it only included $350k in non-hockey surcharges instead of RSE's $4.5M projection ($1.5 hockey, $1.7 non-hockey, $1.3 additional). The budget also assumed no rent (vs. $500k), no parking revenue (vs. $2.2M projection), and no naming rights (vs. $672k projection).

To answer davemac's question more generally -- the fans won't see anything, other than having to pay for parking (IF they park in RSE-operated lots). City revenue streams will be much the same as before, but they hadn't budgeted those streams because they thought the Coyotes would be gone (and, given 350k in non-hockey surcharges, they thought the replacement arena manager would do a pretty crappy job too).

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07-07-2013, 12:01 PM
  #68
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Oh c'mon, you actually think they are worried about the referendum? It's pretty obvious it will fail just like the last time. I'm sure they could move forward in signing the deal with no issues.
That's not how risk management works. And you are floating the 'buying more time' theory as if the NHL isn't on the hook for the losses in the event RSE fails to close.

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07-07-2013, 12:02 PM
  #69
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Welp, I spent the last hour searching Mubadala and names like Ice Edge, Phoenix CityNorth, Dell, Goldman Sachs, Hulsizer, Moyes started creeping in. Secret bonds, mystery investors, Bettman backed into a corner with no escape, council just puppets running amuck, yea Killion, I think you nailed it down. My heads a little bent after seeing some of it.
Indeed.

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If the team is supported by the government, it serves to support a cog in the wheel which is the Phoenix area economy, thus boosting someone's profits?
Phoenix CityNorth. Came out in court proceedings that Mubadala & Waleed Al Mokarrb Al Muhairi up to their necks in it. City winds up paying/subsidizing $480,000 per parking spot to a foreign investment firm with ties to the UAE in a garage scheme. Just the tip of the iceberg. Real Estate investments all over the US and all of it on the down-low, particularly so after 9-11. But theres more, much more. Heavily invested in Lockheed Martin, the supplier of the new F-35's with Luke AFB right there in Phoenix, the local economy, real estate and housing starts a direct beneficiary. And who owns all that vacant land? Quite possibly Waleed and friends of friends of the NHL, MLB, the NFL & the NBA. Its a small World. If Gary Bettman knows he's gotta answer to some of these investors from Boston to Abu Dhabi, Manhattan to Georgetown DC, would it not go far in explaining the beyond weird & strange state of events & positions since 2008? That theyd have absolutely no problem in dealing with Fortress Investments, Anthony Le Blanc, Daryl Jones, Dey & Gosbee, who are essentially Puppets to the former? Front men. Oh yes, I could go on & on, but better you just brace yourself with some pure grain alcohol & rainwater, avoid anything from the tap, flouridation, and just forget about this post.... Comrade Vladimir Putin & FIFA. World Cups in desert Kingdoms. AEG. Delaware North. MDS Capital. Beacon. Leventhal. Senator John McCain. Carlyle Group. Michael Dell. IFG. Proskauer Rose....

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07-07-2013, 12:17 PM
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That's not how risk management works. And you are floating the 'buying more time' theory as if the NHL isn't on the hook for the losses in the event RSE fails to close.
Of course that's not how risk management works.

The NHL is on the hook for the losses, RSE is the only variable who isn't rushing the deal for whatever reason. IF they were smart they would have signed the deal the next day after the CoG approval, this would mitigate any chances of buyers remorse or a referendum being sought.

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07-07-2013, 12:25 PM
  #71
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Oh c'mon, you actually think they are worried about the referendum? It's pretty obvious it will fail just like the last time. I'm sure they could move forward in signing the deal with no issues.

They (NHL, RSE, Fortress) are just using the referendum as an excuse to buy more time.



More ABSOLUTELY WILD speculation!

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07-07-2013, 12:27 PM
  #72
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Those projections did not account for the $1.50 supplemental surcharge on all hockey and non-hockey event tickets. Ms. Schurhammer explicitly noted that last point prior to presenting the information on 6/28, yet for some reason the AZ Republic decided to run with the projection they knew was already out of date and bogus, and now everyone keeps mindlessly repeating it.
Notwithstanding your clear disapproval for how the AZ Republic reported this event, perhaps the paper simply used the only data set published by the city. I'm pretty sure that Page 4 of the slide deck is the item in question.

The presentation is clearly missing the supplemental surcharge revenue. It's also using highly questionable methodology of comparing against budget instead of comparing against competitive bid. That would seem to be the more glaring omission, right? The known details of the SMG bid are completely missing. Page 3 of the presentation is a complete mess.

Anyway, I'm not sure how anyone could assert that the AZ Republic knowingly omitted RSE supplemental surcharge revenues without, at the same time, asserting that the AZ Republic knowingly omitted the SMG management structure and noting the entire presentation used an invalid comparison method.

Seems like it might not be an agenda fueled bias reporting scheme by the paper; might just be that the PPT was the only document published, no?

Quote:
On the 2nd point, "the most optimistic projections"?! They average the past 4 ownerless years together to arrive at an assumed average hockey attendance that's 10% lower than this past season... I fail to see how that equates to "the most optimistic projection". Even their non-hockey attendance assumptions come in under the actual non-hockey event attendance in FY 2010 (the last year before the NHL took over management, and right in the middle of the recession).
That's the other interesting part of the economic comparison: much of the RSE bid is built on the non-hockey events. FWIW, it seems fair and reasonable to estimate that RSE/Global Spec can deliver that total attendance number (their attendance-per-event projection is very screwy, but the total attendance number looks on par).
However, then it would also have to be fair and reasonable to project that SMG would deliver that same number non-hockey attendance as well. Which brings us back to Schurhammer's presentation and the city's apparent desire to avoid directly comparing the RSE bid against the SMG bid. Had that comparison occurred, it would have been a significantly greater disparity in direct benefits to Glendale.

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07-07-2013, 12:27 PM
  #73
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Originally Posted by Killion View Post
Indeed.



Phoenix CityNorth. Came out in court proceedings that Mubadala & Waleed Al Mokarrb Al Muhairi up to their necks in it. City winds up paying/subsidizing $480,000 per parking spot to a foreign investment firm with ties to the UAE in a garage scheme. Just the tip of the iceberg. Real Estate investments all over the US and all of it on the down-low, particularly so after 9-11. But theres more, much more. Heavily invested in Lockheed Martin, the supplier of the new F-35's with Luke AFB right there in Phoenix, the local economy, real estate and housing starts a direct beneficiary. And who owns all that vacant land? Quite possibly Waleed and friends of friends of the NHL, MLB, the NFL & the NBA. Its a small World. If Gary Bettman knows he's gotta answer to some of these investors from Boston to Abu Dhabi, Manhattan to Georgetown DC, would it not go far in explaining the beyond weird & strange state of events & positions since 2008? That theyd have absolutely no problem in dealing with Fortress Investments, Anthony Le Blanc, Daryl Jones, Dey & Gosbee, who are essentially Puppets to the former? Front men. Oh yes, I could go on & on, but better you just brace yourself with some pure grain alcohol & rainwater, avoid anything from the tap, flouridation, and just forget about this post.... Comrade Vladimir Putin & FIFA. World Cups in desert Kingdoms. AEG. Delaware North. MDS Capital. Beacon. Leventhal. Senator John McCain. Carlyle Group. Michael Dell. IFG. Proskauer Rose....
Ah, I think it's a bit of a stretch, I imagine if the conspiracy was really there the team would be in either Scottsdale or north Phoenix by now.

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07-07-2013, 12:35 PM
  #74
Killion
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Originally Posted by Concordski View Post
Ah, I think it's a bit of a stretch...
... Old hat. Entertaining. Semi-plausible. Just for fun.

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07-07-2013, 12:39 PM
  #75
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Originally Posted by barneyg View Post
My understanding (based on Schurrhammer's presentation on 6/28) ...

(and, given 350k in non-hockey surcharges, they thought the replacement arena manager would do a pretty crappy job too).
I was just responding to this same topic.

@ Bold
The city appears to consistently use the "per-ticket surcharge" methodology even when calculating "Without Team" scenarios. It's a completely fictional data set. The SMG response doesn't utilize per ticket fees. They divide total revenue so the city gets a much more equitable position in the performance of the arena.

When compared side-by-side, which of course Glendale would never do, the bids would end up direct revenue of somewhere around:

RSE ("With Team")
-$8MM per year

SMG ("Without Team")
+$2MM per year

It's roughly a $10MM swing on the direct. Also, separately and even though lockout numbers don't really show it, credit the Coyotes with $2.5MM indirect revenues that could not be recovered if the team left, the gap comes down to around $7.5MM per year. Plus you have to measure the intangibles somehow. In the end, IMO, if you squint, it's close. It's a heck of a lot better than JIG I or II.

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