HFBoards

Go Back   HFBoards > General Hockey Discussion > The Business of Hockey
Mobile Hockey's Future Become a Sponsor Site Rules Support Forum vBookie Page 2
The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, and NHL revenues.

Phoenix LXVI: Get Your Kicks On Thread LXVI

Closed Thread
 
Thread Tools
Old
12-11-2012, 08:16 AM
  #726
OthmarAmmann
Money making machine
 
OthmarAmmann's Avatar
 
Join Date: Jul 2010
Location: NYC
Posts: 2,571
vCash: 500
Quote:
Originally Posted by powerstuck View Post
Clarkonomics at their best !
Huh?

OthmarAmmann is offline  
Old
12-11-2012, 08:38 AM
  #727
powerstuck
User Registered
 
powerstuck's Avatar
 
Join Date: Jan 2012
Location: Quebec City
Country: Serbia
Posts: 2,467
vCash: 500
Quote:
Originally Posted by Thomas L View Post
Huh?
Now that their interest rates are going to be higher, they expect to save money by refinancing. That's like signing a new mortage the day after the rates go from 3% to 13%.

powerstuck is offline  
Old
12-11-2012, 08:57 AM
  #728
barneyg
Registered User
 
Join Date: Apr 2007
Posts: 2,250
vCash: 500
Quote:
Originally Posted by powerstuck View Post
Now that their interest rates are going to be higher, they expect to save money by refinancing. That's like signing a new mortage the day after the rates go from 3% to 13%.
Apparently you missed the earlier discussion we had on this subject. Glendale's current debt was issued at a time interest rates on high-grade debt were higher than current rates on medium-grade debt, so Glendale is indeed likely to save some dough by refinancing (depending on how much they can call the outstanding bonds for).

I know it's in vogue but Clarkonomics isn't an excuse for brushing off everything the COG does. You still need to understand what's going on.

barneyg is offline  
Old
12-11-2012, 08:58 AM
  #729
OthmarAmmann
Money making machine
 
OthmarAmmann's Avatar
 
Join Date: Jul 2010
Location: NYC
Posts: 2,571
vCash: 500
Quote:
Originally Posted by powerstuck View Post
Now that their interest rates are going to be higher, they expect to save money by refinancing. That's like signing a new mortage the day after the rates go from 3% to 13%.
These are all excise bonds. Barney checked quotes last week showing some of their excise bond issues to trade above par. Certainly market rates now are lower than when the original bonds were issued. If they can move the issue they should be able to save some $.

CF has typically used the term Clarkonomics to refer to the rationale used to qualify doubling down on a losing investment.

OthmarAmmann is offline  
Old
12-11-2012, 09:20 AM
  #730
CasualFan
Tortious Beadicus
 
Join Date: Nov 2009
Location: Bay Area, CA
Country: United States
Posts: 2,256
vCash: 500
Quote:
Originally Posted by Whileee View Post
You know, I could understand if this was a town or city that was so passionate about hockey that they put it as a top priority to maintain quality of life, etc.
It still wouldn't make sense but at least they wouldn't be subsidizing an entertainment business that has already proven itself not viable. With all due respect to the fan perspective and the various excuses for why consumers avoid the NHL product in the market, no reasonable person would expect consumers to suddenly respond to the NHL product simply because Glendale threw good money after bad. The market has already soundly rejected the option of NHL entertainment. But there are some pretty obtuse folks in the Glendale administration. I suppose they think a leopard would change its spots if they just paid it a large enough Spot Management Fee.

I understand that the visionaries and revisionists have convinced themselves that Greg Jamison is a hybrid of Santa Claus, Lee Iacocca, and Lewis/Gilbert from Revenge of the Nerds; but those in the city administration suggesting that Jamison is a magician who inherited a failing Sharks franchise and turned it around are pretty much completely detached from reality. It's just another comical attempt at justifying their position; another attempt to show that they know what they're doing despite the mountain of debt as evidence that they're laughable idiots. Ironically, the most probable scenario under the current structure is JIG pocketing the subsidy and then using their subleasing ability to walk away from operations of the arena entirely.

CasualFan is offline  
Old
12-11-2012, 09:32 AM
  #731
powerstuck
User Registered
 
powerstuck's Avatar
 
Join Date: Jan 2012
Location: Quebec City
Country: Serbia
Posts: 2,467
vCash: 500
Quote:
Originally Posted by barneyg View Post
Apparently you missed the earlier discussion we had on this subject. Glendale's current debt was issued at a time interest rates on high-grade debt were higher than current rates on medium-grade debt, so Glendale is indeed likely to save some dough by refinancing (depending on how much they can call the outstanding bonds for).

I know it's in vogue but Clarkonomics isn't an excuse for brushing off everything the COG does. You still need to understand what's going on.
Quote:
Originally Posted by Thomas L View Post
These are all excise bonds. Barney checked quotes last week showing some of their excise bond issues to trade above par. Certainly market rates now are lower than when the original bonds were issued. If they can move the issue they should be able to save some $.

CF has typically used the term Clarkonomics to refer to the rationale used to qualify doubling down on a losing investment.
Thanks to both of you for those clarifications. I failed miserably.

I guess all it's left is to age a few years and see how 2033 plays out.

powerstuck is offline  
Old
12-11-2012, 10:25 AM
  #732
OthmarAmmann
Money making machine
 
OthmarAmmann's Avatar
 
Join Date: Jul 2010
Location: NYC
Posts: 2,571
vCash: 500
Quote:
Glendale's longtime mayor and vice mayor are formally saying goodbye to their constituents this week.

A farewell reception in honor of outgoing Mayor Elaine Scruggs and Vice Mayor Steve Frate is being held from 5 p.m.-6:45 p.m. Tuesday, Dec. 11 in the Council Chambers Gallery at the Glendale City Hall complex, 5850 W. Glendale Ave.
http://arizona.newszap.com/westvalle...yor-vice-mayor

OthmarAmmann is offline  
Old
12-11-2012, 10:35 AM
  #733
Tommy Hawk
Registered User
 
Tommy Hawk's Avatar
 
Join Date: May 2006
Posts: 3,560
vCash: 500
Quote:
Originally Posted by barneyg View Post
Apparently you missed the earlier discussion we had on this subject. Glendale's current debt was issued at a time interest rates on high-grade debt were higher than current rates on medium-grade debt, so Glendale is indeed likely to save some dough by refinancing (depending on how much they can call the outstanding bonds for).

I know it's in vogue but Clarkonomics isn't an excuse for brushing off everything the COG does. You still need to understand what's going on.
Quote:
Originally Posted by powerstuck View Post
Thanks to both of you for those clarifications. I failed miserably.

I guess all it's left is to age a few years and see how 2033 plays out.
The rates are only part of the costs of the bonds. ALMOST ALL of you are completely ignoring that the last time they tried to issue bonds, they FAILED. They can only save money if the EFFECTIVE rate of the bonds is lower than what they are currently paying assuming anyone is even out there to buy the things from them, which did NOT happen last time.

For example, the rate on the bonds may be 2.5% but if no one is willing to pay that rate they either nee to raise the rate or sell them at a discount so the effective rate is higher. What is a discount? How does this effect the rate?

Simple. A discount is where you sell the bonds below face value. A bond being issued for 10 year $1,000,000 @2.5% is sold at a 10% discount so the proceeds before broker fees is $900,000. So the issuer receives less money than the face value. The issuer, however, still has to pay the interest on the face value of $1,000,000 (25k per year). So I am now earning 25k per year on an investment of 900k so I am receiving a 2.78% interest payment on my 900k investment. The bond matures and I will receive a $1,000,000 payment since the issuer has to pay me the face value. This is another $100k profit I make on my 900k investment. So I am going to simplify it for every.

900k investment
100k discount = 10k per year amortization
25k per year interest payment
35k per year overall investment income on bond

35k/900k = 3.89% interest rate

I am not taking into account time value of money on the 100k etc. but this gives you the general idea.

All of this only works if they are actually able to sell the bonds, which I doubt they will since there are better options for municipalities with the same ratings but without negative outlooks.

There is also the removal of tax breaks uncertainty as well as a limited pool of funds for investing with all these governments, etc. competing for that pool


Last edited by Tommy Hawk: 12-11-2012 at 11:19 AM.
Tommy Hawk is offline  
Old
12-11-2012, 10:50 AM
  #734
OthmarAmmann
Money making machine
 
OthmarAmmann's Avatar
 
Join Date: Jul 2010
Location: NYC
Posts: 2,571
vCash: 500
Quote:
Originally Posted by Tommy Hawk View Post
ALL of you are completely ignoring that the last time they tried to issue bonds, they FAILED.
Well I've brought up that several times myself. There were however two concurrent issues at the time: a sewer and water issue and a general obligation issue. The GO issue failed (miserably) but the sewer and water was oversubscribed. The market was comfortable with the secured bonds.

All of these bonds are excise bonds, so there is some security. Moody's however is a bit concerned because they're refinancing some third-lien bonds with second-lien bonds, thus diluting the latter. I guess we'll see how the issue is received on Thursday.

OthmarAmmann is offline  
Old
12-11-2012, 11:20 AM
  #735
Tommy Hawk
Registered User
 
Tommy Hawk's Avatar
 
Join Date: May 2006
Posts: 3,560
vCash: 500
Quote:
Originally Posted by Thomas L View Post
Well I've brought up that several times myself. There were however two concurrent issues at the time: a sewer and water issue and a general obligation issue. The GO issue failed (miserably) but the sewer and water was oversubscribed. The market was comfortable with the secured bonds.

All of these bonds are excise bonds, so there is some security. Moody's however is a bit concerned because they're refinancing some third-lien bonds with second-lien bonds, thus diluting the latter. I guess we'll see how the issue is received on Thursday.

Fixed it for you........

Tommy Hawk is offline  
Old
12-11-2012, 11:40 AM
  #736
barneyg
Registered User
 
Join Date: Apr 2007
Posts: 2,250
vCash: 500
Quote:
Originally Posted by Tommy Hawk View Post
All of this only works if they are actually able to sell the bonds, which I doubt they will since there are better options for municipalities with the same ratings but without negative outlooks.
The GO issue failed because the asking price was too high given the (then) negative outlook. Of course if Wells Fargo tries to sell those 2012 series as if they were priced like Aa1 with stable outlook they will fail. My point was that other excise bonds by Glendale seem to be trading above par, which implies that the decline in the market rate for debt had a greater impact than the downgrades the COG received in the past few years.

barneyg is offline  
Old
12-11-2012, 12:05 PM
  #737
Killion
Global Moderator
 
Killion's Avatar
 
Join Date: Feb 2010
Location: Casablanca
Country: Morocco
Posts: 22,478
vCash: 500
Quote:
Originally Posted by CasualFan View Post
...but those in the city administration suggesting that Jamison is a magician who inherited a failing Sharks franchise and turned it around are pretty much completely detached from reality.
Its just beyond bizarre really. I mean, the guy has basically said next to nothing publicly with any meat on the bone, barely scraps; putting their faith, going all-in, banking on a Mute RainMaker who doesnt even come equipped with a set of Magical Divining Rods. You'd think that in a dry, desert state like Arizona they'd have cottoned on to False Messiahs' of such ilk, water & wealth precious commodities. Apparently learned nothing through their experiences with Steve Ellman, Jerry Moyes & the NHL. Perhaps theyve never seen the 1956 Hal B. Wallis film of the same name starring former circus act Burt Lancaster...

Killion is online now  
Old
12-11-2012, 12:15 PM
  #738
OthmarAmmann
Money making machine
 
OthmarAmmann's Avatar
 
Join Date: Jul 2010
Location: NYC
Posts: 2,571
vCash: 500
Quote:
Originally Posted by CasualFan View Post
but those in the city administration suggesting that Jamison is a magician who inherited a failing Sharks franchise and turned it around are pretty much completely detached from reality
So they're still a failing franchise?


OthmarAmmann is offline  
Old
12-11-2012, 12:37 PM
  #739
Killion
Global Moderator
 
Killion's Avatar
 
Join Date: Feb 2010
Location: Casablanca
Country: Morocco
Posts: 22,478
vCash: 500
Quote:
Originally Posted by Thomas L View Post
So they're still a failing franchise?
Always honesty in humour, sarcasm, and as Jamisons said next to nothing about his plans, just exactly how he intends to perform this $300M+ Resurrection, we should be taking a good, long hard look at his history in San Jose', how he operated, what he accomplished, what led to him being deposed, which as I understand it had to do with the majority partners wishing to re-focus on core business activities. That GJ was casting an oversized & overarching net with non hockey & concert/event activities, some of which were risky & or half baked conceptually, the actual money guys wanting no part of it so see ya. The franchise did claim a loss of $5M or thereabouts last season however, the building & operations overall have proven to be extremely successful, well run & managed. Whether this was because of Jamisons influence or despite it, I have no idea.

Killion is online now  
Old
12-11-2012, 12:57 PM
  #740
aqib
Registered User
 
Join Date: Feb 2012
Posts: 2,427
vCash: 500
Quote:
Originally Posted by JimAnchower View Post
There have been a few success stories with modern sports facilities bringing a lot of investment and money to an area, but the vast majority of these success stories were started with private investment. And there's a good reason for this. If private investers really think a lot of money will be made, they will want to share as little of it as possible with others. The best examples of these success stories are the Staples Center in LA, the Verizon Center in Washington DC, the Barclays Center in Brooklyn (if it all works out), and the United Center in Chicago. So if I were a city councilman in a city and someone came to me with the great idea that a new sports arena/stadium was going to bring untold riches to my city if I were to only spend hundreds of millions of dollars building a sports facility, my first question should probably be "If this is going to make as much money as you think, why aren't you building it yourself?". Now there are other good reasons to build sports facilities, but if making money is your number one reason, it's probably going to fail.
A couple of things:

1) Three cities you reference (NY, LA, Chicago) are the 3 biggest cities in the US and DC is up there. The dynamics are different in the largest cities. Largest cities don't have to give any business or developers all that much in tax breaks and incentives to come in. Also, the larger cities don't really need the sports team for prestige and image purposes like mid-sized and smaller cities do. LA hasn't had football in 17 years and no one thinks less of LA. Take the NFL out of Cleveland, Cinci, Green Bay, etc its a huge blow to the cities image

2) Brooklyn and LA the developer of the venue owns everything around it so they capture all the spill over.

aqib is offline  
Old
12-11-2012, 01:02 PM
  #741
cbcwpg
Registered User
 
cbcwpg's Avatar
 
Join Date: May 2010
Location: Between the Pipes
Country: United Nations
Posts: 6,075
vCash: 500
Quote:
Originally Posted by Killion View Post
Always honesty in humour, sarcasm, and as Jamisons said next to nothing about his plans, just exactly how he intends to perform this $300M+ Resurrection, we should be taking a good, long hard look at his history in San Jose', how he operated, what he accomplished, what led to him being deposed, which as I understand it had to do with the majority partners wishing to re-focus on core business activities. That GJ was casting an oversized & overarching net with non hockey & concert/event activities, some of which were risky & or half baked conceptually, the actual money guys wanting no part of it so see ya. The franchise did claim a loss of $5M or thereabouts last season however, the building & operations overall have proven to be extremely successful, well run & managed. Whether this was because of Jamisons influence or despite it, I have no idea.
According to an article I have a link to somewhere around here... TNSE ( owner of the Jets 2.0 ) said they have based their business model on what San Jose has done in the past to make the Sharks organization viable. It all has to do with diversifying. Have your fingers in many pies to generate as much revenue as you can, so you can cover those lean years that every sports team will go thru. Example: You not only own the building and the team, but you own the hotel that the visiting team stays in, and you own the stores that sell your merchandise, etc. Lots of opportunities if you think outside the box.

Don't know how much Jamison had to do with what was done in SJ, but it does sound like a plan. It's all a question of what Jamison can do.

I really don't care what city your team resides in... If the only source of income you have as the owner of the team, is just the revenue from the team itself... your just not going to be viable. Not when it costs upwards of $80M+ to just break even.

cbcwpg is offline  
Old
12-11-2012, 02:30 PM
  #742
GF
Registered User
 
GF's Avatar
 
Join Date: Nov 2012
Posts: 413
vCash: 500
Quote:
Originally Posted by Killion View Post
Always honesty in humour, sarcasm, and as Jamisons said next to nothing about his plans
Didn't he said that luck was part of his plan? I can't find the article but I read it here.

GJ: So CoG, how about that 320m$ subsidy, I mean AMF, that you said you'd give me?
CoG: Will you tell us who your investors (speculators) are?
GJ: No.
CoG: What is your plan to make this franchise work based on?
GJ: Luck.
CoG: 4 against 2, here's your 320m$.

Only in Glendale!

GF is offline  
Old
12-11-2012, 03:13 PM
  #743
JimAnchower
Registered User
 
Join Date: Dec 2012
Country: Isle of Man
Posts: 405
vCash: 500
Quote:
Originally Posted by aqib View Post
A couple of things:

1) Three cities you reference (NY, LA, Chicago) are the 3 biggest cities in the US and DC is up there. The dynamics are different in the largest cities. Largest cities don't have to give any business or developers all that much in tax breaks and incentives to come in. Also, the larger cities don't really need the sports team for prestige and image purposes like mid-sized and smaller cities do. LA hasn't had football in 17 years and no one thinks less of LA. Take the NFL out of Cleveland, Cinci, Green Bay, etc its a huge blow to the cities image

2) Brooklyn and LA the developer of the venue owns everything around it so they capture all the spill over.
And that is covered when I said there are other good reasons than purely economic reasons to build a modern sports facility. But Glendale made the decision to build the arena (and ballpark) purely on economics, so it should be judged based on them.

JimAnchower is offline  
Old
12-11-2012, 03:45 PM
  #744
OthmarAmmann
Money making machine
 
OthmarAmmann's Avatar
 
Join Date: Jul 2010
Location: NYC
Posts: 2,571
vCash: 500
I do find it curious that Glendale is looking to refinance close to 20% of it's debt in a couple days but they still haven't released their comprehensive financials for 6/30/2012.

OthmarAmmann is offline  
Old
12-11-2012, 04:04 PM
  #745
aqib
Registered User
 
Join Date: Feb 2012
Posts: 2,427
vCash: 500
Quote:
Originally Posted by Thomas L View Post
I do find it curious that Glendale is looking to refinance close to 20% of it's debt in a couple days but they still haven't released their comprehensive financials for 6/30/2012.
its not uncommon for a city to take more than 6 months for that.

aqib is offline  
Old
12-11-2012, 04:11 PM
  #746
aqib
Registered User
 
Join Date: Feb 2012
Posts: 2,427
vCash: 500
Quote:
Originally Posted by JimAnchower View Post
And that is covered when I said there are other good reasons than purely economic reasons to build a modern sports facility. But Glendale made the decision to build the arena (and ballpark) purely on economics, so it should be judged based on them.
The ballpark I can see because spring training draws people from outside the area. The problem as Legend pointed out earlier is that the financial crisis derailed the plan to build hotels around the ball park. I figure those hotels would also cater to fans attending the Fiesta Bowl, BCS National Title Game, Super Bowl, or Final Four (if they ever get one). The arena is the one that doesn't make sense.

aqib is offline  
Old
12-11-2012, 04:13 PM
  #747
Killion
Global Moderator
 
Killion's Avatar
 
Join Date: Feb 2010
Location: Casablanca
Country: Morocco
Posts: 22,478
vCash: 500
Quote:
Originally Posted by Thomas L View Post
I do find it curious that Glendale is looking to refinance close to 20% of it's debt in a couple days but they still haven't released their comprehensive financials for 6/30/2012.
Yes that is curious. Chicken or Egg; which comes first? The answer patently obvious. You cant refinance without the financials so why then havent they been released as required by law? Because the time limits to do so havent expired yet, Tindall once again playing hide & go seek, fast & loose.

Killion is online now  
Old
12-11-2012, 04:23 PM
  #748
OthmarAmmann
Money making machine
 
OthmarAmmann's Avatar
 
Join Date: Jul 2010
Location: NYC
Posts: 2,571
vCash: 500
Quote:
Originally Posted by aqib View Post
its not uncommon for a city to take more than 6 months for that.
Yeah, I'd just think they might want to expedite it to get it out in advance of a significantly large (for them) debt issuance that is intended to reduce their financing costs enough to give them some breathing room. The last comprehensive statement of financial position is for 18 months ago.

Quote:
Originally Posted by Killion View Post
Yes that is curious. Chicken or Egg; which comes first? The answer patently obvious. You cant refinance without the financials so why then havent they been released as required by law? Because the time limits to do so havent expired yet, Tindall once again playing hide & go seek, fast & loose.
I'm not sure it's required by law?

OthmarAmmann is offline  
Old
12-11-2012, 04:29 PM
  #749
Killion
Global Moderator
 
Killion's Avatar
 
Join Date: Feb 2010
Location: Casablanca
Country: Morocco
Posts: 22,478
vCash: 500
Quote:
Originally Posted by Thomas L View Post
I'm not sure it's required by law?
A municipality isnt required by-law to release its year-end financials? Are you kidding me?

Killion is online now  
Old
12-11-2012, 04:47 PM
  #750
aqib
Registered User
 
Join Date: Feb 2012
Posts: 2,427
vCash: 500
Quote:
Originally Posted by Killion View Post
A municipality isnt required by-law to release its year-end financials? Are you kidding me?
They aren't required to release them before the statutory deadline just because they are doing an offering. Also, you have to factor in the fact that since just discovered all kinds of irregularities the release will take longer this time around.

aqib is offline  
Closed Thread

Forum Jump


Bookmarks

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off



All times are GMT -5. The time now is 12:35 PM.

monitoring_string = "e4251c93e2ba248d29da988d93bf5144"
Contact Us - HFBoards - Archive - Privacy Statement - Terms of Use - Advertise - Top - AdChoices

vBulletin Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
HFBoards.com is a property of CraveOnline Media, LLC, an Evolve Media, LLC company. 2014 All Rights Reserved.