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.
Not claiming any of this is accurate, but the G+M did post it:
Price of the team: $140M
Jamison's Money: $100M
Up Front Money from CoG: $40M ( to be added to Jamison's )
Arena Management Fee: $16M per year
According to one source, the plan to give Jamison $40-million up front comes from a section of the prospective lease agreement reached in December, 2010 with Chicago businessman Matthew Hulsizer. In section 19.3 of that lease, the city agreed to give Hulsizer $40-million in exchange for his agreement to buy Jobing.com Arena from the city for the same figure at the end of the 30-year lease. The plan was that represented fair value and did not violate the gift clause of the Arizona constitution that prohibits excessive public subsidies of private enterprises.
The theory is a lease with Jamison will employ the same language to provide him with $40-million. The city may borrow the money through its Enterprise Fund, which is for sewers and water, and pay $1-million per year back into that fund for 40 years from its General Fund.
In addition, the city would pay $16-million per year to Jamison as a management fee for the arena. The argument would be it is keeping the Coyotes for only $17-million per year (the loan payment plus the management fee) compared to the $25-million it paid for the 2010-11 season and this season.
the amount put into the deal by Jamison is said to be $100-million,
So the bottom line is the COG would have to pay 16-17 million a year or the team leaves.
Mayor said she can't go higher than 11, lets see what happens under the very real threat of relocation. If this article is right, things should get very interesting very soon.
So the league is going to take a $30+ million loss instead of making $60 million. So if I am an owner of any of the other 29 teams I am probably going "hey why am I forgoing $3 million?"
So the bottom line is the COG would have to pay 16-17 million a year or the team leaves.
Mayor said she can't go higher than 11, lets see what happens under the very real threat of relocation. If this article is right, things should get very interesting very soon.
It also hinges on the NHL losing $60+ million on the sale, which was always the best chance for the Coyotes to stay in Arizona. Perhaps the league took the advice of many on this board and applied the $60 million TNSE relocation fee to their LOC (wouldn't that be ironic? Winnipeg saving Phoenix), or alternatively, Bettman convinced the 29 other owners that losing $2+ million (each) would be worth it in the long-run.
According to the article, it has cost the NHL ~ $200M to run the Coyotes for the last 3 seasons plus what they paid for them out of BK.
If we take the $140M being offered to buy the team ( assuming the CoG kicks in thier share ) out of the $200M that it has cost the NHL, we are left with $60M.... which just happens to be what the NHL got for a relocation fee for the Jets.
We will see just how much the 29 teams want to keep the Coyotes in Glendale. Use the relocation fee or move the team.
Regardless, I just don't see the CoG coughing up $17M per year forever when they are going broke.
The plan was that represented fair value and did not violate the gift clause of the Arizona constitution that prohibits excessive public subsidies of private enterprises.
i dont recall glendale planning on giving hulsizer 40 mill..does anyone else? so they were gonna give hulsizer 100 mill plus another 40 mill?
it does not cost 16 mill to run an arena... there isnt an arena manager out there that gets paid that much....
According to the article, it has cost the NHL ~ $200M to run the Coyotes for the last 3 seasons plus what they paid for them out of BK.
If we take the $140M being offered to buy the team ( assuming the CoG kicks in thier share ) out of the $200M that it has cost the NHL, we are left with $60M.... which just happens to be what the NHL got for a relocation fee for the Jets.
We will see just how much the 29 teams want to keep the Coyotes in Glendale. Use the relocation fee or move the team.
Regardless, I just don't see the CoG coughing up $17M per year forever when they are going broke.
Even worse...... it's 40M up front (may not pass muster with the GWI) and then 16M per year.. forever.
How much interest is lost on 40 million over 40 years?
Well, Ms Scruggs said herself 11M is the real amount she should pay the NHL. Why 16M now? Because Greg asks it?
I'm sure they'll be able to get around that if necessary. Scruggs will just claim that her numbers were an educated guess and it turned out to be slightly more.
The biggest concern for Coyotes' fans IMO should be the $56 million Jamison is asking from Glendale up front. Its going to take some creative accounting to fit that into an already cash-strapped budget.
Well, Ms Scruggs said herself 11M is the real amount she should pay the NHL. Why 16M now? Because Greg asks it?
Even 11 million seems high, I did post about a year ago the cost to run Copps colliseum was about 6.5 million per year. The arena made about 6 million per year, so the city had a net loss of about 1/2 a million a year on the arena. So if the city paid 16 million to someone to run the arena, who gets the money the arena takes in? Even if the city still lost money, at least the money that did come in could offset some of their 16 million, no?
i dont recall glendale planning on giving hulsizer 40 mill..does anyone else? so they were gonna give hulsizer 100 mill plus another 40 mill?
it does not cost 16 mill to run an arena... there isnt an arena manager out there that gets paid that much....
but its still better than the hulsizer deal
True. At least it looks like Jamison is going to pay $100M out of pocket. Hulsizer wasn't going to pay anything out of pocket... He was trying to get the CoG to give him $100M for parking the CoG might have already owned.
25 + 25 +40 = 90 mill up front depleted from city reserves
plus another 16 mill * 25 years = 400 mill
this whole mess is going to cost a city of just over 200k almost half a billion dollars to keep a hockey team that 90% of taxpayers dont even care aboout
I'm sure they'll be able to get around that if necessary. Scruggs will just claim that her numbers were an educated guess and it turned out to be slightly more.
The biggest concern for Coyotes' fans IMO should be the $56 million Jamison is asking from Glendale up front. Its going to take some creative accounting to fit that into an already cash-strapped budget.
Okay but I mean, it would be the dream of any attorney to ask Ms Scruggs how can we give any crediblity to what she says..
I mean, if this is true, and its the Globe after all, its looking not good for the PHX folks.
funny... in other markets the owners pay the city an arena management fee......
we are too assume the NHL is willing to take the loss in sale price when an offer of 90M more is supposedly on the table from Quebecor?
You bet they would! GB needs to have a buyer in his back pocket for leverage in the next distressed market, used to be TNSE now it's PKP. If he can he'll use and abuse him for the better part of a decade before rewarding him with a relocation or expansion franchise.
Hilarious. Does anyone believe this has a chance of succeeding? Glendale clearly needs to cut expenses, not climb out even farther on the ledge and finance another $40 million to flush away. Oh, and add a permanent $16 million line item to the budget for "arena management."
Seriously, is anyone falling for this?
And how the hell can Beasely -- who works FOR council -- be turning down requests from council about this supposed deal he's arranging? Glendale seems totally out of control. Staff works for council, council does not work for staff.
Does he have the coin to cover the losses he will have for who knows how long? This team has lost over 300 million has never made a nickel of profit, something does not add up.
According to the article, it has cost the NHL ~ $200M to run the Coyotes for the last 3 seasons plus what they paid for them out of BK.
If we take the $140M being offered to buy the team ( assuming the CoG kicks in thier share ) out of the $200M that it has cost the NHL, we are left with $60M.... which just happens to be what the NHL got for a relocation fee for the Jets.
We will see just how much the 29 teams want to keep the Coyotes in Glendale. Use the relocation fee or move the team.
Regardless, I just don't see the CoG coughing up $17M per year forever when they are going broke.
If I'm a shareholder, I want my money back because I don't see Phoenix contributing anything longterm.
