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Phoenix XCVII: Forget it, Jake. It's Glendale.

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07-09-2013, 11:10 AM
  #326
Whileee
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Originally Posted by Tinalera View Post
Somehow I had forgotten about the bonds and related debt: 152 million? This reminds me and answers a big part of why Glendale really seems nervous about the Yotes leaving: the concern of having an arena with no real tenant and 150 million owed-yes I can see that now.
...except that having the Coyotes has caused them to exacerbate their financial woes and made it even more difficult to pay off the arena debt. They are literally trying to get out of the hole by keeping on digging deeper

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07-09-2013, 11:11 AM
  #327
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Originally Posted by cbcwpg View Post
http://www.forbes.com/sites/mikeozan...ew-arena-deal/


Bond investors do not like the arena deal for Jobing.com Arena that was agreed to by Glendale, Arizona’s city counsel and the prospective buyers of the NHL’s Phoenix Coyotes, Renaissance Sports and Entertainment Group.

At the beginning of the year, Glendale, Arizona restructured the debt it took on for Jobing.com Arena, issuing $39.5 million of senior-lien notes backed by the city’s excise tax. Proceeds of the bonds will refund debt used to build the $220 million arena (Glendale still owes $152 million) that opened in 2003, and are structured to provide budget relief by reducing near-term debt service requirements. Those bonds have been hammered, with their yield jumping to $4.35% from 3.33% since January.
Meh. Interest rates are up broadly since January. That's probably the bigger driver than this deal.

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07-09-2013, 11:12 AM
  #328
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...except that having the Coyotes has caused them to exacerbate their financial woes and made it even more difficult to pay off the arena debt. They are literally trying to get out of the hole by keeping on digging deeper
Oh I agree. I was just seeing their mindset from their POV, something that bugged me for awhile. I agree that they seem to think by spending more money will get them their money back, and it's just making the situation worse.

Are there any numbers that show what sort of dent/sliver of payments to the bond fund have been made over time-just wonder if they're managing to actually pay off the base amount and not just interest.

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07-09-2013, 11:15 AM
  #329
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Originally Posted by Tinalera View Post
Oh I agree. I was just seeing their mindset from their POV, something that bugged me for awhile. I agree that they seem to think by spending more money will get them their money back, and it's just making the situation worse.

Actually the situation has been getting better, not worse.

It remains to be seen if it will get good enough, but better it is.

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07-09-2013, 11:16 AM
  #330
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No but PR wise this is just idiotic of Leblanc.
For anyone wanting to continually pick out the negative in this whole story, I am sure it looks that way.

The guy is moving from Canada. And he's moving to metropolitan Phoenix, not California. I am sure that's close enough to be as hands on with team operations as he needs to be.

Next thing we know, he'll be blamed for not doing all his clothes shopping at Westgate.

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07-09-2013, 11:18 AM
  #331
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Originally Posted by Tinalera View Post
Oh I agree. I was just seeing their mindset from their POV, something that bugged me for awhile. I agree that they seem to think by spending more money will get them their money back, and it's just making the situation worse.

Are there any numbers that show what sort of dent/sliver of payments to the bond fund have been made over time-just wonder if they're managing to actually pay off the base amount and not just interest.
The debt schedules are at Glendale's website and have been posted here numerous times. 2003 series A and series B. They have paid off a few million but have substantially all the debt remaining.

This is however a sunk cost.

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Actually the situation has been getting better, not worse.

It remains to be seen if it will get good enough, but better it is.
You've got to be kidding me. You must've intentionally ignored the entire recent budget process.

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07-09-2013, 11:19 AM
  #332
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Originally Posted by kihekah19 View Post
Actually the situation has been getting better, not worse.

It remains to be seen if it will get good enough, but better it is.
I agree to the point they may not be losing as MUCH money-I just (my own gut feelings) don't see RSE being a benefit in the long run-I don't trust them.

We'll see what the numbers are in future-but honestly I just think (pure speculation and gut-no numbers) this situation is going to seriously harm Glendale in the future-already hurt them to this point-at the end of it we'll see a bunch of people make money on a resale, Glendale left with a while elephant and the taxpayers hurting big time.

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07-09-2013, 11:24 AM
  #333
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For anyone wanting to continually pick out the negative in this whole story, I am sure it looks that way.

The guy is moving from Canada. And he's moving to metropolitan Phoenix, not California. I am sure that's close enough to be as hands on with team operations as he needs to be.

Next thing we know, he'll be blamed for not doing all his clothes shopping at Westgate.
It looks bad optically is all. He could choose to support the city that's providing the largess he benefits from but decided against it. Oh well. Too bad for Glendale.

And I don't think he's moving there... just buying a place.

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07-09-2013, 11:27 AM
  #334
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Meh. Interest rates are up broadly since January. That's probably the bigger driver than this deal.
Interesting. Thanks. At what point do the outlooks from credit rating agencies start to bite? In their downgrading action Moody's was pretty clear that it didn't like Glendale's fiscal plans, specifically mentioning the arena lease payments to support the Coyotes. Bowers mentioned it as an issue in his fiscal planning. I suppose it's difficult to assess how much these factors will affect Glendale's bottom line.

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07-09-2013, 11:29 AM
  #335
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Originally Posted by CasualFan View Post
Bond investors just don't know how to do the math. If Glendale used the SMG bid, we can easily see they would have lost over $10MM.

If we extend FY 2013 to 74 games (bringing it into parity with the SMG baseline year, FY 2012), that $1,592,308 in non-hockey event losses becomes $10,711,890.


Brain dead simple.
Huh....just when I think I understand the math, you put this out there. I'm not a Math guy, but how do you arrive at this, I can't figure this number being possible, are you adding Arena bond interest or something?

Dumb it down for me please

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07-09-2013, 11:30 AM
  #336
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Originally Posted by Thomas L View Post
It looks bad optically is all. He could choose to support the city that's providing the largess he benefits from but decided against it. Oh well. Too bad for Glendale.

And I don't think he's moving there... just buying a place.
It's not a bad idea along the lines of protecting against his downside risk. If RSE decides to use the "out clause" in five years and the Coyotes relocate, I can imagine a few reasons why LeBlanc might not want to own a house in Glendale.

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07-09-2013, 11:31 AM
  #337
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Originally Posted by Tinalera View Post
Somehow I had forgotten about the bonds and related debt: 152 million? This reminds me and answers a big part of why Glendale really seems nervous about the Yotes leaving: the concern of having an arena with no real tenant and 150 million owed-yes I can see that now.


Here's the question, : what type of event financially would have to take place for there to be someone/something to step in and say "enough is enough, you can't afford this agreement-we're taking matters into our own hands"-would Glendale legally going bankrupt be enough-would financial matters turn over to the state of AZ? Just wondering what would have to happen to have this matter literally taken out of CoG's hands? Sounds like even Moody's possible downgrading or problems with the bond people isn't enough.
Unless there was a change in Arizona law authorizing municipal takeovers with emergency managers appointed by the state (like what Michigan has) I don't think anything would take the decision out of the city of glendales hands. If things got so bad that borrowing costs were impossible or Glendale defaulted on its obligations/loans and faced an impossible monetary judgment from a creditors lawsuit then COG might have to declare bankruptcy protection to try to clear debts but I stil think that decision would remain the councils decision to make.

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07-09-2013, 11:33 AM
  #338
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Originally Posted by Whileee View Post
I can imagine a few reasons why LeBlanc might not want to own a house in Glendale.
It starts and ends with it being, you know, Glendale. Money lives in Scottsdale and Paradise Valley.

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07-09-2013, 11:38 AM
  #339
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Originally Posted by davemac1313 View Post
Huh....just when I think I understand the math, you put this out there. I'm not a Math guy, but how do you arrive at this, I can't figure this number being possible, are you adding Arena bond interest or something?

Dumb it down for me please
I think you need to allocate more of your budget to 'sarcasm detection'.

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07-09-2013, 11:44 AM
  #340
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Originally Posted by davemac1313 View Post
Huh....just when I think I understand the math, you put this out there. I'm not a Math guy, but how do you arrive at this, I can't figure this number being possible, are you adding Arena bond interest or something?

Dumb it down for me please
There's no such thing as fixed expenses, everything is variable.

Events make money... they made $2.6M in revenue over the first 7 months of FY 2013.
Unfortunately, it also costs money to put on events... $4.7M over the same period ($2.1M operating loss).

You know how much money events made in the benchmark year SMG uses in their bid? $4.1M.
Unfortunately, it still cost $9.6M to put them on ($5.5M operating loss).


More events = more losses

Brain dead simple.

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07-09-2013, 11:52 AM
  #341
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Originally Posted by CasualFan View Post
There's no such thing as fixed expenses, everything is variable.

Events make money... they made $2.6M in revenue over the first 7 months of FY 2013.
Unfortunately, it also costs money to put on events... $4.7M over the same period ($2.1M operating loss).

You know how much money events made in the benchmark year SMG uses in their bid? $4.1M.
Unfortunately, it still cost $9.6M to put them on ($5.5M operating loss).


More events = more losses

Brain dead simple.
Damn you.....quit playing with my mind....now I get your point.

I demand that the mods require you to use those smiley things for the benefit of us simple hockey fans......like maybe one of these

I truly appreciate your Math analysis...but you have to give me a hint when your gonna "play"

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07-09-2013, 12:01 PM
  #342
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For anyone wanting to continually pick out the negative in this whole story, I am sure it looks that way.

The guy is moving from Canada. And he's moving to metropolitan Phoenix, not California. I am sure that's close enough to be as hands on with team operations as he needs to be.

Next thing we know, he'll be blamed for not doing all his clothes shopping at Westgate.
He's not moving there entirely, he's buying a home there. BIG difference.

Plenty of Canadians (two of my bosses included) own homes & condos in Scottsdale. Why? Cause they are cheap, it's a good time to buy as the market can't get much worse than it is, when it improves you get out with a good return on investment if you want too that is.

Leblanc's home in Scottsdale is nothing more than a getaway and has nothing to do with the team purchase. FWIW people don't buy in Glendale because Glendale isn't Scottsdale, we all know that. If the rink / team originally relocated to Scottsdale we probably wouldn't be discussing the financial troubles right now.

What I do find rather humorous is that the City of Glendale allows residents outside their borders to speak at their meetings, obviously people who don't reside in Glendale have one agenda and that's to keep the team at any and all costs considering it doesn't affect them at all.

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07-09-2013, 12:09 PM
  #343
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http://www.calgaryherald.com/busines...ors_picks=true

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Fellow investor Craig Stewart, executive chairman of RMP Energy Inc., agreed the financial part of the argument was important.

“One of the key things was we’re all very interested in hockey and very keen about the NHL,” he said. “But having said that, if it didn’t make economic sense, it’s a very expensive hobby.”

Yeah, it's an expensive hobby that the city of Glendale has taken all the risk in.

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07-09-2013, 12:32 PM
  #344
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Video interview with Gosbee.

Source: http://www.sportsnet.ca/hockey/nhl/g...be-profitable/

As Gosbee stated near the end of the interview, is he really pinning his hopes on Calgary, Edmonton, and Vancouver always selling out?

Really, other than two games in this shortened, lockout season, that has not been the case…

2012-13 (Lockout season)
Wed, Jan 30 Edmonton - 12,955
Mon, Feb 18 Calgary - 17,208
Thu, Mar 21 Vancouver - 17,220

2011-12
Sat, Nov 5 Edmonton - 13,381
Fri, Nov 25 Vancouver - 14,569
Thu, Dec 15 Edmonton - 9,397
Thu, Feb 9 Calgary - 10,048
Tue, Feb 28 Vancouver - 16,691
Thu, Mar 1 Calgary - 10,989

Source: espn

You get the idea...


Last edited by Llama19: 07-09-2013 at 12:33 PM. Reason: Added source (espn) for games
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07-09-2013, 12:54 PM
  #345
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Originally Posted by Llama19 View Post
Video interview with Gosbee.
Interesting. I suppose he couldve pointed to Detroit-Chicago-LA just as easily; popular tickets.
From his perspective in Western Canada, simply selected the 3 teams that came to top of mind.

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07-09-2013, 01:06 PM
  #346
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Interesting. I suppose he couldve pointed to Detroit-Chicago-LA just as easily; popular tickets.
From his perspective in Western Canada, simply selected the 3 teams that came to top of mind.
They probably came to mind not just because he's from Alberta but because they share a division with the Yotes. Chicago doesn't and Detroit isn't even in the same conference any more.

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07-09-2013, 01:18 PM
  #347
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Yeah, it's an expensive hobby that the city of Glendale has taken all the risk in.
Come on. He didn't say it's hobby for him - in fact he said the opposite.

 
Old
07-09-2013, 01:25 PM
  #348
Whileee
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http://www.calgaryherald.com/busines...ors_picks=true

Yeah, it's an expensive hobby that the city of Glendale has taken all the risk in.
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Originally Posted by Dado View Post
Come on. He didn't say it's hobby for him - in fact he said the opposite.
Well, sort of...

Quote:
“I said (to Gosbee), ‘I’m not a very good prospect,’ but when we went through it, there were things that started to make sense.”

Fellow investor Craig Stewart, executive chairman of RMP Energy Inc., agreed the financial part of the argument was important.

“One of the key things was we’re all very interested in hockey and very keen about the NHL,” he said. “But having said that, if it didn’t make economic sense, it’s a very expensive hobby.”
I'm pretty sure that a couple of the major reasons that it made "economic sense" is the $15 million AMF from the COG, and the "out clause" in case losses go beyond a threshold in five years. So, I don't think it's way off base to suggest that this would be more like an "expensive hobby" if Glendale hadn't borne so much of the cost and risk.

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07-09-2013, 01:25 PM
  #349
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That's strange, Fishbert hasn't been back to acknowledge the obvious flaws in his calculations.
He's sharpened his pencil and is currently formulating a huge offensive action involving spreadsheets with skillfully handcrafted formulas which turn losses into profits and or vice versa.

If he offers to send you the spreadsheets make sure you run them in a sandbox in case VBA code attempts to wipe out / format your hard drive.

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07-09-2013, 01:25 PM
  #350
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They probably came to mind not just because he's from Alberta but because they share a division with the Yotes. Chicago doesn't and Detroit isn't even in the same conference any more.
Ya, that too no doubt. Good points.

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