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PKP offer for Coyotes may be 230 million (mod: to QC w/relo $$)
PKP offer for Coyotes may be 230 million (mod: to QC w/relo $$)
Just on TSN and listening to TSN radio 990 Montreal and they just quickly talked about PKP and that they are hearing rumors that PKP might be willing to go to 230 Million Dollars for the Coyotes(170 Million for the team and 60 Million relocation fees).
Of course he does!
-He's installing a 30 million dollars of TV equipment (a whole studio!) in the New Colisée. -He's paying very high fees (relatively to other NHL cities) to the City of Québec to manage the new arena for the next 30 years.
-He recently started a brand new National Sports channel that will only make money for him when he gets an NHL team!
He doesn't just want an NHL team, he's based his gigantic corporation's future business plans around getting an NHL team!
Of course he does!
-He's installing a 30 million dollars of TV equipment (a whole studio!) in the New Colisée. -He's paying very high fees (relatively to other NHL cities) to the City of Québec to manage the new arena for the next 30 years.
-He recently started a brand new National Sports channel that will only make money for him when he gets an NHL team!
He doesn't just want an NHL team, he's based his gigantic corporation's future business plans around getting an NHL team!
Yeah but is that not a bit too much. The team is proably worth 90-100 million.
Of course he does!
-He's installing a 30 million dollars of TV equipment (a whole studio!) in the New Colisée. -He's paying very high fees (relatively to other NHL cities) to the City of Québec to manage the new arena for the next 30 years.-He recently started a brand new National Sports channel that will only make money for him when he gets an NHL team!
He doesn't just want an NHL team, he's based his gigantic corporation's future business plans around getting an NHL team!
Why is he doing this, can't he get a better deal or will their be tax relief or something.
In the agreement with the bankruptcy court any profits the NHL makes (beyond the $140 million they paid to buy the team + losses the last 3 years) has to go to the creditors. I wonder if the relo fee would be included. I would think the creditors could sue for that.
But how can they justify that price when the Thrashers were sold just a year ago for $110mil + $60 mil relocation? YOu can argue that certain teams are more valuable than others due to their location, but once you're moving the team anyways isn't one franchise worth pretty much the same as the other?
I am finding myself more and more cynical about the whole business. I think the league is very dishonest. Not in the legal sense, but in the ethical sense.
Here's how it should work. They can set one of 2 prices:
1) Worth of team in PHX (debateable, but maybe $100M) + relo fee ($70M max - inflation since last year, plus I am being generous).
Or,
2) Worth of franchise in a generic way. Similar to expansion fees. This would be the price to put the team in any hypothetical market. Maybe $170M?? I don't know the exact. There should, in fairness, be no relo fee associated with this pricing.
But (assuming PKP buys the team), the league will want to combine the 2, and charge PKP $170M PLUS the relo fee, so they get to charge him for moving to Quebec twice.
In case or relo and especially as the league owns the club, the league sells the franchise for its value in its new city. We could think that in the end, a NHL franchise for a market like QC city will have a higher value then in PHX, which seems logiccal to me.
One must make the distinction and understand the face value is not the same.
The official reason they gave for a $60 million relo fee for the Thrashers was to make it easier for a buyer interested in keeping the team in Atlanta to compete with TNSE. If someone was to offer $120 million to keep the team in Atlanta that would have been a better deal for Atlanta Spirit.
My theory is that the NHL felt a team in Winnipeg was worth $170 million and a team in Atlanta was worth $110 so they didn't want ASG to get the value of a Winnipeg team by selling an Atlanta team. Part of it was also punishing ASG for being bad owners.
I am finding myself more and more cynical about the whole business. I think the league is very dishonest. Not in the legal sense, but in the ethical sense.
Here's how it should work. They can set one of 2 prices:
1) Worth of team in PHX (debateable, but maybe $100M) + relo fee ($70M max - inflation since last year, plus I am being generous).
Or,
2) Worth of franchise in a generic way. Similar to expansion fees. This would be the price to put the team in any hypothetical market. Maybe $170M?? I don't know the exact. There should, in fairness, be no relo fee associated with this pricing.
But (assuming PKP buys the team), the league will want to combine the 2, and charge PKP $170M PLUS the relo fee, so they get to charge him for moving to Quebec twice.
Yeah but is that not a bit too much. The team is proably worth 90-100 million.
The value of the team in Phoenix is irrelevant to what the NHL could/would ask for from a relocation owner.
It's just a question of what's defined as Purchase Price and what's defined as Relocation fee. Here we just have the unusual case that both of those monies happen to go to the same party, the NHL.
There is legal precedent under Raiders II that the League owns the rights to the relocation market and may demand a Relocation Fee equal to the difference in the franchise value in the new location minus it's value in it's original one.
edit:
Quote:
Originally Posted by aqib
In the agreement with the bankruptcy court any profits the NHL makes (beyond the $140 million they paid to buy the team + losses the last 3 years) has to go to the creditors. I wonder if the relo fee would be included. I would think the creditors could sue for that.
It is clear under Raiders II that the NHL has the right to collect a Relocation Fee - a separate payment for a different purpose, ie acquiring the rights to the Quebec market from the NHL, than the purchase of the team. The creditors could sue (well, hey, anybody can sue) but it is very unlikely that they would have any claim on the Relocation Fee. What they might be able to sue over is how the NHL allocates an offer from PKP between sales price and relocation fee - that the NHL is unjustly devaluing the Franchise sales price. However, then the burden will likely be on the plaintiffs to argue/prove that the value of the 'Yotes in Phoenix is higher than the NHL's claim - a high bar, IMHO, since it could be argued - due to the complete lack of offers without some subsidy - that the value of the franchise in Phoenix is $0.
In case or relo and especially as the league owns the club, the league sells the franchise for its value in its new city. We could think that in the end, a NHL franchise for a market like QC city will have a higher value then in PHX, which seems logiccal to me.
Fair enough. But how is a franchise in QC worth $230 when a franchise in WPG was worth $170 one year ago?
I can understand that. And, have thought of it as well. It's a little dicey to make a supply and demand argument here.
I suppose one thing that bugs me is that it seems the wording amounts to talking out of both sides of their mouth.
Calling something a relo fee makes it sound like a standardized tax or something. "Oh, we have this policy. If you move, it costs you...." However, in the event Mr Wang moves the Islanders to Seattle (I am not predicting that, only using it as an example), there won't be a $60M relo fee, will there?
We all know how to read between the lines. Coyotes as a franchise don't have much value in PHX. Worth much more in PHX (probably in SEA, too). League needs to get something for that. Call it a relo fee... Whatever.
It's still all smoke and mirrors. What they are really saying is, "We are going to get lots of $ from you. And, we are going to make it look like NHL franchises in general are worth lots and lots..." When, in reality, we all know that the value of an NHL franchise is highly dependent on location, and in new markets, while there is lots of potential, the value may actually not be so high. And, really, if the info get abotu StL is true, even some established markets...
Fair enough. But how is a franchise in QC worth $230 when a franchise in WPG was worth $170 one year ago?
Yes it doesn't make sense and I doubt PKP would pay that amount of money when he knows the NHL is stuck with a team in a market that doesn't generate profits, ever...
PKP is in no rush to buy the team as he will lose money when the team plays in the Old Colisee until the next arena is ready in 2015. The less years there the better!
Yes it doesn't make sense and I doubt PKP would pay that amount of money when he knows the NHL is stuck with a team in a market that doesn't generate profits, ever...
PKP is in no rush to buy the team as he will lose money when the team plays in the Old Colisee until the next arena is ready in 2015. The less years there the better!
he will lose a lot of money without a team to show on TVAsport.
And if he has to put 15 million renovation in the Colisée for only 1 year... no it is not better.
Yes it doesn't make sense and I doubt PKP would pay that amount of money when he knows the NHL is stuck with a team in a market that doesn't generate profits, ever...
PKP is in no rush to buy the team as he will lose money when the team plays in the Old Colisee until the next arena is ready in 2015. The less years there the better!
With the ticket prices they will be able to demand they will make money in the Colisee
I can't see the NHL selling the team for less than $170 million for relocation, while refusing to reduce the purchase price for a local sale.
Therefore, the main question will be whether the NHL will also demand a relocation fee.
I can certainly see how QC might balk at being asked to pay $170 plus a substantial relocation fee. I doubt that an NHL franchise is worth considerably more in QC than in Wpg.
