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Phoenix LXXVI: Renaissance Men

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Old
05-06-2013, 02:08 AM
  #176
TheLegend
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Good article from Paul Giblin at the AZ Republic. Most comprehensive to date on arena costs.

And very timely as well with Tueday's meeting on the horizon.


http://www.azcentral.com/community/g...ena-costs.html

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05-06-2013, 02:14 AM
  #177
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Quote:
Originally Posted by MNNumbers View Post
Presumably GWI will sue CoG because they are gifting the new owners??!!??

Please see the humor in this. Please
Oh I see the humor..... you can't help it in this comedic tragedy.

However GWI is essentially a dead horse these days.

They were forced to back off on a threat against the city of Chandler this past month over a city-owned and operated fitness center (approved by the residents.). Turned into another PR nightmare for them.

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05-06-2013, 05:26 AM
  #178
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Quote:
Originally Posted by TheLegend View Post
Good article from Paul Giblin at the AZ Republic. Most comprehensive to date on arena costs.

And very timely as well with Tueday's meeting on the horizon.


http://www.azcentral.com/community/g...ena-costs.html
I Like this from the article:

"Arena Newco recorded a net loss of $2.1 million during the first seven months of the current fiscal year, a loss of $5.5 million in 2012, and a loss of $5.1 million in 2011, according to the documents."

And that is with minimal non-hockey events.

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05-06-2013, 07:13 AM
  #179
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That Arizona Republic piece cites figures from the RFP, which we've discussed previously. I had been somehow optimistic that the council members would have reviewed them, but not surprised that they haven't.

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Originally Posted by TheLegend View Post
I got that....

But still..... you made the blanket statement that publicly financed arenas are losers. Now that you've expanded on it you've effectively contradicted it.

Personally I don't care what Quebec City or Edmonton does as far as building new arenas. It's a risk they're willing to take. And if they end up failing somewhere down the road I'm not going to be wagging my finger saying "I told you so".

Glendale took the same risk 10 years ago when the economy was still growing and no one really saw the cliff it was headed for some 4 years later. The best thing now for them would be to get out from under it, but until (or if) that opportunity ever arises they have to do what they can to make it work.
Glendale actually took a much larger risk given the competing facilities in the area, the location far on the west side, and the size of their budget relative to the investment. They also conducted no due diligence whatsoever and reached an agreement in just a couple weeks.

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05-06-2013, 07:34 AM
  #180
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http://ktar.com/22/1632030/Glendale-...otes-Cardinals

"They have to find an owner that's capable and financially has the wherewithal to pull it off," Weiers said. "Once they do that, I hope to have something that we can present, I hope."

Weiers said he has not spoken with Greg Jamison for several months, and believes he no longer is a potential Coyotes owner. The city had been negotiating with Jamison on an arena lease deal.


Weiers wants the Coyotes to stay, but not at the expense of it costing the city money it should be spending on police, fire and other vital services. He said he's going to be cautious with negotiations to keep the team in Glendale.

"I'm a firm believer that when you want something really, really, really, really bad... you normally get it really, really, really, really bad," Weiers said.

He wants to make sure the Coyotes deal is "good" for the city.

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05-06-2013, 08:26 AM
  #181
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Quote:
Originally Posted by TheLegend View Post
Good article from Paul Giblin at the AZ Republic. Most comprehensive to date on arena costs.

And very timely as well with Tueday's meeting on the horizon.


http://www.azcentral.com/community/g...ena-costs.html
A few of items in the article were interesting.

1) Beasley is said to have misled city council about the cost of arena management and the purpose of the $25 million. It is shocking that city council members were so much in the dark about how they were spending that amount of money, and a terrible indictment of Beasley if he actually misled them so egregiously.

2) It appears that everyone is now realizing that any AMF beyond $5-6 million is a direct subsidy to support the Coyotes owners. It will be interesting to see how far the mayor and council are prepared to go to meet the demands of the NHL and Gosbee's group.

3) It appears that revenues tied to sales tax, etc. related to Westgate and associated businesses have been on the rise, even without the Coyotes. The increased collections noted below occurred during the first 8 months of fiscal 2013 (i.e. July-February). Most of that time was during the NHL lockout.

Quote:
The city collects revenue associated with the team and arena through leases, parking fees and tax collections for food and merchandise sales in the nearby Westgate Entertainment District. Those figures have been on the upswing, particularly since an outlet mall opened last fall.

Total collections were $4.7 million in fiscal 2011, and reached $6.4 million through just the first eight months of the 2013 fiscal year, according to the city. That money helps pay, but doesnít fully cover, the cityís debt to build the arena.

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05-06-2013, 08:27 AM
  #182
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Quote:
Originally Posted by cbcwpg View Post
http://ktar.com/22/1632030/Glendale-...otes-Cardinals

"Weiers wants the Coyotes to stay, but not at the expense of it costing the city money it should be spending on police, fire and other vital services. He said he's going to be cautious with negotiations to keep the team in Glendale.

"I'm a firm believer that when you want something really, really, really, really bad... you normally get it really, really, really, really bad," Weiers said.

He wants to make sure the Coyotes deal is "good" for the city.
Oh Jerry...douse one thinkith about what douse say before thy sayith?

To quote:

""I truly believe that, with the [Arizona Cardinals] summer camp, we will be pulling people in from all over Arizona and other states. We have the hotels, the restaurants and the gas stations. There will be income derived from it. The question is how does the cost compare with what Glendale will get out of it? I don't know.""

Thy Westgate complex doesn't have enough 'paid' parking spots for the hoards of horses and wagons, either!

Fare thee well!

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05-06-2013, 08:40 AM
  #183
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Quote:
Originally Posted by TheLegend View Post
Good article from Paul Giblin at the AZ Republic. Most comprehensive to date on arena costs.

http://www.azcentral.com/community/g...ena-costs.html
This article would seem to indicate there is no basis for a $10-$15M/year lease without it clearly being a subsidy. It's deplorable that someone like Martinez says "gee I wish I knew what the cost was" after he already voted for Jamison's payday previously.

I do hope Glendale trashes Bettman with information like this, and takes them to task for milking the city for $50M while booking almost nothing in extra events for the arena. I have a feeling though, that the NHL might offer that $20M in escrow as some sort of refund to sway the city to a new lease agreement.

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05-06-2013, 08:47 AM
  #184
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Quote:
Originally Posted by TheLegend View Post
Good article from Paul Giblin at the AZ Republic. Most comprehensive to date on arena costs.

And very timely as well with Tueday's meeting on the horizon.


http://www.azcentral.com/community/g...ena-costs.html
Manny Martinez sounds like he prefers to willingly stay in the dark.

Quote:
Less than two weeks before Tindallís memo, the arena-consulting firm International Facilities Group, of Chicago, told the city that a reasonable estimate to operate the arena without an anchor sports tenant would be in the range of $13.8 million to $14.7 million a year.

The firmís executive vice president, Kevin Greene, noted in a letter to Beasley that the estimate was based on a preliminary analysis. Jobing.com Arenaís unique maintenance costs, event-related expenses and repair costs would have to be considered to confirm the estimate, he said.
interesting figure. would that have included debt financing? granted, it's a hasty estimate, but for a professional consulting firm, it seems very high, even at that time of confusion. was that figure the basis for justifying the jamison deal?

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05-06-2013, 09:02 AM
  #185
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Quote:
Originally Posted by TheLegend View Post
Good article from Paul Giblin at the AZ Republic. Most comprehensive to date on arena costs.

And very timely as well with Tueday's meeting on the horizon.


http://www.azcentral.com/community/g...ena-costs.html
This text is rather devastating.

In fact, does the NHL of CoG confirmed there was a meeting scheduled?

We all rely on "sources" but nothing official been confirmed, which is normal as the "sources" thing went out on a weekend. Let's see.

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05-06-2013, 09:21 AM
  #186
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Quote:
Originally Posted by TheLegend View Post
Good article from Paul Giblin at the AZ Republic. Most comprehensive to date on arena costs.

And very timely as well with Tueday's meeting on the horizon.


http://www.azcentral.com/community/g...ena-costs.html
Thanks for the link. Things sure were easier for the NHL when they had a city staff willing to blatantly misrepresent the issue.

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05-06-2013, 09:32 AM
  #187
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Originally Posted by CasualFan View Post
Thanks for the link. Things sure were easier for the NHL when they had a city staff willing to blatantly misrepresent the issue.
City council members were happy to be treated like mushrooms, and city administrators were happy to oblige.

.... keep them in the dark and spread manure over them regularly.

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05-06-2013, 10:49 AM
  #188
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Quote:
Less than two weeks before Tindallís memo, the arena-consulting firm International Facilities Group, of Chicago, told the city that a reasonable estimate to operate the arena without an anchor sports tenant would be in the range of $13.8 million to $14.7 million a year.

The firmís executive vice president, Kevin Greene, noted in a letter to Beasley that the estimate was based on a preliminary analysis. Jobing.com Arenaís unique maintenance costs, event-related expenses and repair costs would have to be considered to confirm the estimate, he said.
I like how the above tip-toed around the mine field and excluded any reference to Michael Reinsdorf.

What say you, Killion?

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05-06-2013, 11:11 AM
  #189
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Was reading the attached link that was posted, and in the article they mentioned May 24th as the deadline for the Arena RFP for arena management. Just throwing this out there, but is it presumptuous of the CoG to assume they will get someone or a few someones to put a bid in, or is it a for sure that someone will bid? Do the big arena management firms always throw their hats in the ring? I mean what happens if the CoG gets no one to respond to their RFP?

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05-06-2013, 11:30 AM
  #190
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Quote:
Originally Posted by Puckschmuck View Post
Looks like Phoenix fans are now back to blaming commuting times to Jobbing.Com for the teams current financial position
Not accurate at all. It is a pissing match proving how far they will come to see games.

The arena is fine where it is. Freeway accessable and very convenient.

Real time it is no more than a little over an hour from all parts of the valley. If one relies on Google maps or Mapquest (yes, it still exists!) to determine times, that is where the inaccuracy comes in.

Nobody is blaming the arena location seriously.

It just didn't fit into the BoH 'flavor of the week', so it probably stuck out to you.

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05-06-2013, 11:33 AM
  #191
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http://www.azcentral.com/insiders/da...egins-tuesday/

Quote: ''Word is, the investor group has raised $240 million, which is $70 million more than the asking price. Itís willing to absorb $40 million in losses over the first four years of a 15-year deal. It will be seeking an out clause if the economics havenít changed for the better, likely after five years.''

Is this me or this is really hard to believe?

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05-06-2013, 11:47 AM
  #192
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Quote:
Originally Posted by LouisOlivier View Post
http://www.azcentral.com/insiders/da...egins-tuesday/

Quote: ''Word is, the investor group has raised $240 million, which is $70 million more than the asking price. It’s willing to absorb $40 million in losses over the first four years of a 15-year deal. It will be seeking an out clause if the economics haven’t changed for the better, likely after five years.''

Is this me or this is really hard to believe?
It's plausible. The low interest rate environment has sent investors seeking yield in all kinds of different places.

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05-06-2013, 11:49 AM
  #193
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Quote:
Originally Posted by LouisOlivier View Post
http://www.azcentral.com/insiders/da...egins-tuesday/

Quote: ''Word is, the investor group has raised $240 million, which is $70 million more than the asking price. Itís willing to absorb $40 million in losses over the first four years of a 15-year deal. It will be seeking an out clause if the economics havenít changed for the better, likely after five years.''

Is this me or this is really hard to believe?
NHL probably leaked this number to get PKP to raise his purchase price.

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05-06-2013, 11:52 AM
  #194
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Couple of things from the article posted above

Quote:
Word is, the investor group has raised $240 million, which is $70 million more than the asking price. Itís willing to absorb $40 million in losses over the first four years of a 15-year deal. It will be seeking an out clause if the economics havenít changed for the better, likely after five years.
$10M annually and an out clause, if sources are to be believed and this does come to fruition.

Quote:
Sources say the city will be looking to land in the $6-12 million range.
Despite the optics presented over the last few months and revisited here yesterday.

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05-06-2013, 12:01 PM
  #195
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Quote:
Originally Posted by LouisOlivier View Post
http://www.azcentral.com/insiders/da...egins-tuesday/

Quote: ''Word is, the investor group has raised $240 million, which is $70 million more than the asking price. It’s willing to absorb $40 million in losses over the first four years of a 15-year deal. It will be seeking an out clause if the economics haven’t changed for the better, likely after five years.''
Purchase the team: $170M
Walking around money: $70M
Willing to cover losses: $40M ( or ~$10M per year for 4 years )

OK. So the big question for the CoG is, what are the real losses per year and will they cover the spread?

The $6M for the AMF is just that... arena management... it doesn't help cover the losses for the hockey team.

So if the "real" losses for the team over the next 4 years are say $20M / yr, then the CoG is going to be asked to kick in an AMF of $16M / yr ( $6M for AMF, $10M from the CoG for losses, $10M from the owners for losses ). We are back to Jamison numbers which the current council says don't work. If the CoG only kicks in an AMF of say $12M ( which is quoted as being the max. ), that still leaves the team owners $4M / yr short to cover the losses. That won't work for them.

Really depends on the real losses. Interesting negotiations going to be happening.


Last edited by cbcwpg: 05-06-2013 at 12:09 PM.
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05-06-2013, 12:01 PM
  #196
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I never said continue to use it as an arena I said sold the damn building for nothing but what left of the debt. After that it no longer the COG problem.
..and kk's point, which I agree with, is that the eventual buyer or an arena (whether to operate it or do something else with it) would NOT be ready to pay $1+the city's outstanding debt, because that would be more than the fair market value of the arena. so, while it's true that "after that it's no longer COG's problem", they would still be on the hook for part of the arena debt even if they sold the arena.

Quote:
Originally Posted by GuelphStormer View Post
interesting figure. would that have included debt financing? granted, it's a hasty estimate, but for a professional consulting firm, it seems very high, even at that time of confusion. was that figure the basis for justifying the jamison deal?
who knows what this number includes. my conjecture is that it's like Hocking's "arena comparison" piece, i.e. where "operating costs" includes event costs.

Quote:
Originally Posted by Tommy Hawk View Post
I Like this from the article:

"Arena Newco recorded a net loss of $2.1 million during the first seven months of the current fiscal year, a loss of $5.5 million in 2012, and a loss of $5.1 million in 2011, according to the documents."

And that is with minimal non-hockey events.
Something that hasn't been brought up here before is that Newco's expenses include ~1.75 million/year for "overhead allocation" i.e. NHL HQ expenses that they charged back to Newco. that allocation scheme is arbitrary and there is no way to know the actual costs of running Newco as a stand-alone entity, but given the NHL's incentive to overstate expenses to get the COG to foot the bill, those costs would almost assuredly be lower.

tl;dr: the 'true' operating loss is likely a bit smaller than the reported numbers.

Quote:
Originally Posted by Whileee View Post
3) It appears that revenues tied to sales tax, etc. related to Westgate and associated businesses have been on the rise, even without the Coyotes. The increased collections noted below occurred during the first 8 months of fiscal 2013 (i.e. July-February). Most of that time was during the NHL lockout.
to be fair, that includes Tanger revenue. the more interesting part would be pre-Tanger revenue for FY 2013 (during the lockout) vs. FY 2012 (with Coyotes).

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05-06-2013, 12:08 PM
  #197
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Originally Posted by cbcwpg View Post
Purchase the team: $170M
Walking around money: $70M
Willing to cover losses: $40M ( or ~$10M per year for 4 years )

OK. So the big question for the CoG is, what are the real losses per year and will they cover the spread?
..with the obvious corollary -- given the (now) public numbers for actual Arena Newco operating costs, as well as the upcoming bids following the RFP, how does the city avoid a gift clause challenge if they agree to cover some of the Coyotes' losses?

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05-06-2013, 12:18 PM
  #198
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Originally Posted by Puckschmuck View Post
Looks like Phoenix fans are now back to blaming commuting times to Jobbing.Com for the teams current financial position
Quick, someone fly down to Glendale and pitch this ...


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05-06-2013, 12:25 PM
  #199
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Originally Posted by Major4Boarding View Post
I like how the above tip-toed around the mine field and excluded any reference to Michael Reinsdorf.

What say you, Killion?
Ya, not a word that IFG is none other than Michael Reinsdorf nor that he has close connections to the very company now serving as consultant & gatekeeper to the RFP; Beacon Sports Capital (and their hilariously sardonic "Arena Assessment Report" of some years ago that Beasley paid 48 grand for.).

Quote:
Originally Posted by LouisOlivier View Post
http://www.azcentral.com/insiders/da...egins-tuesday/

Quote: ''Word is, the investor group has raised $240 million, which is $70 million more than the asking price. Itís willing to absorb $40 million in losses over the first four years of a 15-year deal. It will be seeking an out clause if the economics havenít changed for the better, likely after five years.''

Is this me or this is really hard to believe?
Welcome to hf Louis. And do you mean "hard to believe" that theyve raised that kind of money or just "hard to believe" period?... Gosbee's loaded, so it doesnt surprise me that theyve got both the reputed asking price of $170M and the operating capital of app 50% of the sale price lined up as per the usual NHL requirements (if its true at all).

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05-06-2013, 12:40 PM
  #200
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Really depends on the real losses.
Bingo!. As per the linked article above as further proof & condemnation of the NHL's practices, remember way back when when I and another poster mentioned that we had contacts in the financial community who had seen Jamisons "Prospectus" and that losses were nowhere near those being claimed?

That Jamisons AMF's in being app treble the going rate were absolutely flat-out subsidies & graft, buffers to mitigating losses almost entirely even without doing much more than presenting 41 home games, a few pre-season, and the Gravy Train of playoff runs? That the whole thing was based on that AMC combined with tax write-off's & "rebates" that were so convoluted as to makes ones head spin?

Well, I dont make **** up, and slowly but surely the truths' leaking out. That the COG's current & past Mayor/Council Members are only just now waking up to reality I find beyond disingenuous. How could anyone possibly be that stupid, individually, collectively? They all had to have known they were being taken for a ride in a big black car & indeed, insisted its windows be completely smoked out so no one could see inside, who was driving, who was riding shotgun, who was in the back partying it up with champagne & strippers.

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