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, expansion and relocation, and NHL revenues.

Forbes: Phoenix Coyotes $170 Million Sale To Be Partially Funded By NHL

Reply
 
Thread Tools
Old
05-30-2013, 02:13 PM
  #1
QcBlizzard
Regis-tered fan
 
QcBlizzard's Avatar
 
Join Date: Sep 2011
Location: Saguenay, Qc
Country: Canada
Posts: 1,816
vCash: 500
Seems that was/is the deal, financed in part by the NHL

http://www.forbes.com/sites/mikeozan...funded-by-nhl/

QcBlizzard is offline   Reply With Quote
Old
05-30-2013, 02:41 PM
  #2
Fugu
Administrator
HFBoards
 
Fugu's Avatar
 
Join Date: Nov 2005
Location: Pac NW
Country: United States
Posts: 30,708
vCash: 500
I copied this out as a separate thread, Qc. Too much juice here to leave it buried in the party thread.

So:
* Purchase price of $170 MM
* RSE with $45 MM of equity (26% of purchase price, NHL requires 50% normally)
* Financed by $120 MM loan from Fortress Investment Group, debt serviced by arena management fee paid to RSE by COG
* NHL to loan an additional $85 MM (to be used as working capital)
* NHL ensuring maximum revenue sharing contribution possible [me: in spite of CBA requirements?]-- revenue sharing, revenue transfer and Industry Growth Fund
* No repayment on loan to NHL for first five years
*Fortress with option to swap debt for equity of up to 20% stake in team

Fugu is offline   Reply With Quote
Old
05-30-2013, 02:43 PM
  #3
viper0220
Go Jets Go
 
viper0220's Avatar
 
Join Date: Oct 2008
Posts: 2,602
vCash: 500
So is it a done deal, are they staying put? Is this the end for Quebec City?


Sure looks like it

viper0220 is offline   Reply With Quote
Old
05-30-2013, 02:44 PM
  #4
Tinalera
Registered User
 
Tinalera's Avatar
 
Join Date: Feb 2007
Location: The Known Universe
Posts: 6,118
vCash: 500
Wow.....just....wow.

Tinalera is offline   Reply With Quote
Old
05-30-2013, 02:45 PM
  #5
viper0220
Go Jets Go
 
viper0220's Avatar
 
Join Date: Oct 2008
Posts: 2,602
vCash: 500
Quote:
Originally Posted by Fugu View Post
I copied this out as a separate thread, Qc. Too much juice here to leave it buried in the party thread.

So:
* Purchase price of $170 MM
* RSE with $45 MM of equity (26% of purchase price, NHL requires 50% normally)
* Financed by $120 MM loan from Fortress Investment Group, debt serviced by arena management fee paid to RSE by COG
* NHL to loan an additional $85 MM (to be used as working capital)
* NHL ensuring maximum revenue sharing contribution possible [me: in spite of CBA requirements?]-- revenue sharing, revenue transfer and Industry Growth Fund
* No repayment on loan to NHL for first five years
*Fortress with option to swap debt for equity of up to 20% stake in team




Why would they want to do this? They will be losing money.

viper0220 is offline   Reply With Quote
Old
05-30-2013, 02:46 PM
  #6
Tinalera
Registered User
 
Tinalera's Avatar
 
Join Date: Feb 2007
Location: The Known Universe
Posts: 6,118
vCash: 500
Quote:
Originally Posted by viper0220 View Post
So is it a done deal, are they staying put? Is this the end for Quebec City?
CoG still wants to go through the other RFP offers tomorrow.

What is being suggested on the other thread is that it's hard to see how this would actually fly, and I myself pondered this might be why NHL pretty much dusted RES with it's comment about leaving RES and CoG to try to work out a deal-they're washing their hands of it.

Tinalera is offline   Reply With Quote
Old
05-30-2013, 02:47 PM
  #7
viper0220
Go Jets Go
 
viper0220's Avatar
 
Join Date: Oct 2008
Posts: 2,602
vCash: 500
Quote:
Originally Posted by Tinalera View Post
Wow.....just....wow.

You and me both Wow

viper0220 is offline   Reply With Quote
Old
05-30-2013, 02:49 PM
  #8
CanadienShark
Registered User
 
CanadienShark's Avatar
 
Join Date: Dec 2012
Country: Canada
Posts: 13,691
vCash: 500
Quebec... city...

CanadienShark is offline   Reply With Quote
Old
05-30-2013, 02:51 PM
  #9
Killion
Global Moderator
 
Killion's Avatar
 
Join Date: Feb 2010
Location: Casablanca
Country: Morocco
Posts: 23,995
vCash: 500
Absent at minimum $13M per annum from Glendale this doesnt work for Fortress. Then theres the little matter of, y'know, like actually paying the arena management costs?.... I cant see this flying at all, and interesting it would make it into the media as it has right now.

Killion is offline   Reply With Quote
Old
05-30-2013, 02:51 PM
  #10
cheswick
Non-registered User
 
cheswick's Avatar
 
Join Date: Mar 2010
Location: Peg City
Country: Canada
Posts: 4,444
vCash: 595
Quote:
Originally Posted by Fugu View Post
I copied this out as a separate thread, Qc. Too much juice here to leave it buried in the party thread.

So:
* Purchase price of $170 MM
* RSE with $45 MM of equity (26% of purchase price, NHL requires 50% normally)
* Financed by $120 MM loan from Fortress Investment Group, debt serviced by arena management fee paid to RSE by COG
* NHL to loan an additional $85 MM (to be used as working capital)
* NHL ensuring maximum revenue sharing contribution possible [me: in spite of CBA requirements?]-- revenue sharing, revenue transfer and Industry Growth Fund
* No repayment on loan to NHL for first five years
*Fortress with option to swap debt for equity of up to 20% stake in team


You read the article wrong. It says the NFL is ensuring the maximum, not the NHL.

cheswick is offline   Reply With Quote
Old
05-30-2013, 02:52 PM
  #11
goyotes
Registered User
 
Join Date: May 2007
Location: Arizona
Posts: 1,575
vCash: 500
Basically the same equity down as the Blues and Stars recent deals. So... I'm guessing RSE is going to ask the CoG for $12M a year on a 10 year lease? Maybe something like that? If I had to guess, the CoG will pull the trigger on that deal. All the other arena managers can't bring at least 41 dates with 13,000+ attending. It goes beyond just the arena, and the CoG has to factor in Westgate. I'm not suggesting $12M is a good deal for the CoG. I'm just suggesting they may go along with that in terms of a management fee in excess of $6M, and an agreement to funnel some additional revenue to the arena manager that Moyes and the NHL did not enjoy.

goyotes is offline   Reply With Quote
Old
05-30-2013, 02:53 PM
  #12
SpokedLightning
Overpaid 4th Liner
 
SpokedLightning's Avatar
 
Join Date: Mar 2010
Location: Tampa
Country: United States
Posts: 6,788
vCash: 500
Quote:
Originally Posted by viper0220 View Post
So is it a done deal, are they staying put? Is this the end for Quebec City?


Sure looks like it
Am I missing something?

SpokedLightning is offline   Reply With Quote
Old
05-30-2013, 02:55 PM
  #13
Fugu
Administrator
HFBoards
 
Fugu's Avatar
 
Join Date: Nov 2005
Location: Pac NW
Country: United States
Posts: 30,708
vCash: 500
Quote:
Originally Posted by viper0220 View Post
[/B]

Why would they want to do this? They will be losing money.

From Forbes:
And Fortress has something akin to warrants that will allow the hedge fund to swap its loan for equity that could ultimately give the firm a 20% equity stake in the hockey team.

I'm going to guess the language on this is pretty tight, but what it does do is fix terms and prices regardless of other market factors. It will be an option they may choose to exercise IF the team appreciates in value or is moved. I'm willing to bet the NHL has removed some of the risk they'd normally undertake. They're not the buyer of the team, but the 'bank'. The NHL and RSE are being creative financially to structure this deal. I think Fortress is a secured creditor in this case.

Fugu is offline   Reply With Quote
Old
05-30-2013, 02:56 PM
  #14
Mightygoose
I Am Groot
 
Mightygoose's Avatar
 
Join Date: Nov 2012
Location: Ajax, ON
Country: Canada
Posts: 1,605
vCash: 500
Quote:
Originally Posted by viper0220 View Post
So is it a done deal, are they staying put? Is this the end for Quebec City?


Sure looks like it
If CoG says no way to the AMF needed to repay the 120M, this may actually enhances QC's chances.

Well, it sheds a bit of light to why no numbers were discussed at Tuesday's meetings.

Mightygoose is offline   Reply With Quote
Old
05-30-2013, 02:56 PM
  #15
Fugu
Administrator
HFBoards
 
Fugu's Avatar
 
Join Date: Nov 2005
Location: Pac NW
Country: United States
Posts: 30,708
vCash: 500
Quote:
Originally Posted by cheswick View Post
You read the article wrong. It says the NFL is ensuring the maximum, not the NHL.

I read that as a Forbes typo. Why would the NFL ensure the max revenue sharing contribution?

Fugu is offline   Reply With Quote
Old
05-30-2013, 02:57 PM
  #16
jimmycrackcorn
Registered User
 
jimmycrackcorn's Avatar
 
Join Date: Sep 2011
Location: Winnipeg
Country: Canada
Posts: 1,430
vCash: 500
Par for the course for The Count and his brain damaged Lackey. Pathetic.

jimmycrackcorn is offline   Reply With Quote
Old
05-30-2013, 02:57 PM
  #17
Fugu
Administrator
HFBoards
 
Fugu's Avatar
 
Join Date: Nov 2005
Location: Pac NW
Country: United States
Posts: 30,708
vCash: 500
Quote:
Originally Posted by goyotes View Post
Basically the same equity down as the Blues and Stars recent deals. So... I'm guessing RSE is going to ask the CoG for $12M a year on a 10 year lease? Maybe something like that? If I had to guess, the CoG will pull the trigger on that deal. All the other arena managers can't bring at least 41 dates with 13,000+ attending. It goes beyond just the arena, and the CoG has to factor in Westgate. I'm not suggesting $12M is a good deal for the CoG. I'm just suggesting they may go along with that in terms of a management fee in excess of $6M, and an agreement to funnel some additional revenue to the arena manager that Moyes and the NHL did not enjoy.
The numbers always come out about the same. Moyes wanted about $14 MM to make a go of it. In retrospect, it appears they were being very reasonable, in spite of all the claims of mismanagement and overspending.

Fugu is offline   Reply With Quote
Old
05-30-2013, 03:00 PM
  #18
Stephen
Registered User
 
Stephen's Avatar
 
Join Date: Feb 2002
Posts: 33,692
vCash: 500
Maybe Phoenix is the real hill Gary and Bill will die on...

Stephen is online now   Reply With Quote
Old
05-30-2013, 03:03 PM
  #19
rj
Registered User
 
Join Date: Jan 2007
Location: Indiana
Posts: 1,098
vCash: 500
Quote:
Originally Posted by Fugu View Post
I copied this out as a separate thread, Qc. Too much juice here to leave it buried in the party thread.

So:
* Purchase price of $170 MM
* RSE with $45 MM of equity (26% of purchase price, NHL requires 50% normally)
* Financed by $120 MM loan from Fortress Investment Group, debt serviced by arena management fee paid to RSE by COG
* NHL to loan an additional $85 MM (to be used as working capital)
* NHL ensuring maximum revenue sharing contribution possible [me: in spite of CBA requirements?]-- revenue sharing, revenue transfer and Industry Growth Fund
* No repayment on loan to NHL for first five years
*Fortress with option to swap debt for equity of up to 20% stake in team
Can we rename the thread:

Coyotes Sold for $45 Million

rj is offline   Reply With Quote
Old
05-30-2013, 03:04 PM
  #20
OthmarAmmann
Money making machine
 
OthmarAmmann's Avatar
 
Join Date: Jul 2010
Location: NYC
Posts: 2,586
vCash: 500
Quote:
Originally Posted by Fugu View Post
From Forbes:
And Fortress has something akin to warrants that will allow the hedge fund to swap its loan for equity that could ultimately give the firm a 20% equity stake in the hockey team.

I'm going to guess the language on this is pretty tight, but what it does do is fix terms and prices regardless of other market factors. It will be an option they may choose to exercise IF the team appreciates in value or is moved. I'm willing to bet the NHL has removed some of the risk they'd normally undertake. They're not the buyer of the team, but the 'bank'. The NHL and RSE are being creative financially to structure this deal. I think Fortress is a secured creditor in this case.
It's fairly standard in distressed asset lending if I'm not mistaken.

Quote:
Originally Posted by Fugu View Post
I read that as a Forbes typo. Why would the NFL ensure the max revenue sharing contribution?
I think he was being flip. I thought it was amusing.

OthmarAmmann is offline   Reply With Quote
Old
05-30-2013, 03:06 PM
  #21
Brodie
see you space cowboy
 
Brodie's Avatar
 
Join Date: Mar 2009
Location: Michigan
Country: United Kingdom
Posts: 12,481
vCash: 500
this reads to me as more proof that

a.) the NHL doesn't want to go to Quebec City if there is any way possible to avoid it
b.) the NHL has no confidence in the Phoenix market in the medium term, or else they wouldn't go interest free for the first 5 and they wouldn't offer equity

this team is basically destined for Seattle in 5 years even if the sale goes through

Brodie is offline   Reply With Quote
Old
05-30-2013, 03:09 PM
  #22
goyotes
Registered User
 
Join Date: May 2007
Location: Arizona
Posts: 1,575
vCash: 500
Quote:
Originally Posted by Fugu View Post
The numbers always come out about the same. Moyes wanted about $14 MM to make a go of it. In retrospect, it appears they were being very reasonable, in spite of all the claims of mismanagement and overspending.
The Coyotes need full revenue sharing, a payroll in the bottom third, and probably another $5M+ from the CoG just to keep loses tolerable (below $10M a year), on top of increasing real attendance by another 2,000, and increasing the gate price on average about 20%.

I think the attendance numbers will go up after the cloud of ownership passes. I also think that some modest price increases can be absorbed. The real hurdle will be can the Coyotes attract similar corporate dollars out to the west side. Certainly, with the Suns going into a down period for a couple of years likely, there is some opportunity to get close to a breakeven point. But lots of things would need to fall into place. I would not be surprise to see a 5 year out clause that is not too difficult to execute. Say, minimum number of STHs, etc.

goyotes is offline   Reply With Quote
Old
05-30-2013, 03:11 PM
  #23
viper0220
Go Jets Go
 
viper0220's Avatar
 
Join Date: Oct 2008
Posts: 2,602
vCash: 500
Quote:
Originally Posted by Stephen View Post
Maybe Phoenix is the real hill Gary and Bill will die on...


Where are the NHL BOG's here, in Quebec City there is profit to be made and these clowns are going to lose money. This is the first business I heard of, that does not like money.

viper0220 is offline   Reply With Quote
Old
05-30-2013, 03:12 PM
  #24
rt
Usually Incorrect
 
rt's Avatar
 
Join Date: May 2004
Location: Rarely Sober
Country: United States
Posts: 44,780
vCash: 500
Any chance the NHL just wants to look like they're willing to do whatever it takes to save the Coyotes in Glendale when in reality they know with absolute certainty they'll never be able to squeeze 120M out of CoG and thus the whole deal is destined to fail. No actual risk if you know that the CoG won't play ball.

Is this "leak" of the details just further effort to control optics?

__________________
This poster should not be taken seriously under any circumstances.
rt is offline   Reply With Quote
Old
05-30-2013, 03:12 PM
  #25
goyotes
Registered User
 
Join Date: May 2007
Location: Arizona
Posts: 1,575
vCash: 500
Quote:
Originally Posted by Brodie View Post
this reads to me as more proof that

a.) the NHL doesn't want to go to Quebec City if there is any way possible to avoid it
b.) the NHL has no confidence in the Phoenix market in the medium term, or else they wouldn't go interest free for the first 5 and they wouldn't offer equity

this team is basically destined for Seattle in 5 years even if the sale goes through
Agreed. For me this is sad. If the Coyotes were going to leave Arizona, QC seemd to be the only reasonable location. That is a community that would truly support a new NHL team, ala what Winni has done.

goyotes is offline   Reply With Quote
Reply

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 08:13 AM.

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

vBulletin Copyright ©2000 - 2015, Jelsoft Enterprises Ltd.
HFBoards.com is a property of CraveOnline Media, LLC, an Evolve Media, LLC company. 2015 All Rights Reserved.