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Phoenix XCVIII: 5tayin' Alive

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07-29-2013, 12:48 PM
  #326
Mork
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Originally Posted by enarwpg View Post
A southern Ontario expansion team in the year following the collapse in Glendale, complete with a guarantee that any losses incurred under their ownership of the Coyotes will be deducted from the expansion fee?

Highly irrational, but hey this is the NHL we're taking about.....
I really doubt that.

I can't imagine the NHL giving these guys a sweetheart deal on a transfer to the nuch coveted Southern Ontario market. How on Earth would you sell that to Jacobs and crew?

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07-29-2013, 12:53 PM
  #327
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I'll give you the answers. The deal closes, the coyotes stay for 5 years at least, end of story. In 2018, there will be lots of new stories in the NHL, this one might or might not be one of them...
Quick question; This latest group of charlatans is purchasing the team from the NHL with next to no financial wherewithal, how do they even begin to cover the first year losses?

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07-29-2013, 01:02 PM
  #328
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I'll give you the answers. The deal closes, the coyotes stay for 5 years at least, end of story. In 2018, there will be lots of new stories in the NHL, this one might or might not be one of them...
Stay for five years "at least" then end of story? Nice.

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Quick question; This latest group of charlatans is purchasing the team from the NHL with next to no financial wherewithal, how do they even begin to cover the first year losses?
That's what the $85 million from the NHL is for. It needs to be repaid though, so they have to hit operating profitability within five years unless the NHL forgives it.

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07-29-2013, 01:07 PM
  #329
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Quick question; This latest group of charlatans is purchasing the team from the NHL with next to no financial wherewithal, how do they even begin to cover the first year losses?
I wonder if RSE has that thought out? They have probably never thought about it! Seriously, the RSE group has some sophisticated investors, not there first rodeo. Too answer your question, usually how it work is, the investors get capital calls as needed, you pony up, or get diluted. It is a big boys game, but they all know the game.

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07-29-2013, 01:24 PM
  #330
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I don't get Gosbee in this case. If it was 10 guys putting in 4.5 million each, I could see each one going "hey I can be an NHL owner for 5 years for 4.5 million and maybe I get that money back in 5 years when we bail but at worst I lose 4.5 million." But Gosbee taking $35 million worth of risk, he may be rich but he isn't David Thomson rich
I stand to be corrected, but I don't think any of other NHL owners are even close to being "David Thomson rich"...

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07-29-2013, 01:24 PM
  #331
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I can't imagine the NHL giving these guys a sweetheart deal on a transfer to the nuch coveted Southern Ontario market. How on Earth would you sell that to Jacobs and crew?
No idea. But some strange goings on with how this thing is structured, Global-Spectrum, just a lot of unanswered questions & questions likely to remain unanswered until such time as actual events occur at ground level. Either they pull it off with modest successes over the next several seasons or whatever Plan 'B' might be kicks-in. We could speculate until the cows come home what that might be but absent so much information, the veils of secrecy & self dealing practised by this league, well, an exercise in futility. Your absolutely correct its unimaginable the NHL's BOG's would give these guys carte-blanche to sell or move into lets say Hamilton, however, they just might do so as Global-Spectrum is now the manager of Copps & the Convention Centre, and thats Ed Snider, as powerful if not more so than Jeremy Jacobs, Chairman of the Executive Committee. Just no idea.

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07-29-2013, 01:31 PM
  #332
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Originally Posted by cobra427 View Post
I wonder if RSE has that thought out? They have probably never thought about it! Seriously, the RSE group has some sophisticated investors, not there first rodeo. Too answer your question, usually how it work is, the investors get capital calls as needed, you pony up, or get diluted. It is a big boys game, but they all know the game.
Wrong on that one! This IS RSE`s first rodeo running an NHL team!

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07-29-2013, 02:05 PM
  #333
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I stand to be corrected, but I don't think any of other NHL owners are even close to being "David Thomson rich"...
True. I just meant that $35 million isn't a trivial amount to Gosbee.

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07-29-2013, 02:12 PM
  #334
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BeavisPAC is at it again

Seems like they didn't learn their lesson after they filed that awful amicus brief in the sales tax initiative litigation.

Notwithstanding the determination by TeamBeavis, ARS 16-902(D) does not constitute a fatal flaw nor is the strict compliance assertion timely. Only violations of 19-112 et seq are fatal. It seems like the brain trust at TeamBeavis doesn't grasp the concept of jurisprudence. They certainly don't know how to read Western Devcor, Inc. or Van Riper.

It's totally irrelevant because without funding Jones was never going to get a significant amount of signatures anyway. But it is still pretty funny that had Jones collected enough signatures, the premature BeavisPAC press release would have notified him of the need to cure the defect prior to the referendum period expiring, thus preserving the validity of the signatures.

Another gem from the Low Wattage All-Stars

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07-29-2013, 02:21 PM
  #335
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No idea. But some strange goings on with how this thing is structured, Global-Spectrum, just a lot of unanswered questions & questions likely to remain unanswered until such time as actual events occur at ground level. Either they pull it off with modest successes over the next several seasons or whatever Plan 'B' might be kicks-in. We could speculate until the cows come home what that might be but absent so much information, the veils of secrecy & self dealing practised by this league, well, an exercise in futility. Your absolutely correct its unimaginable the NHL's BOG's would give these guys carte-blanche to sell or move into lets say Hamilton, however, they just might do so as Global-Spectrum is now the manager of Copps & the Convention Centre, and thats Ed Snider, as powerful if not more so than Jeremy Jacobs, Chairman of the Executive Committee. Just no idea.
I also wonder if adding Global Spectrum and agreeing to reimburse Glendale for costs above $6.5 million makes the deal less attractive to Fortress. Before there was $15 million that was coming in no strings attached and no partners. Does this deal still work for them?

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07-29-2013, 02:22 PM
  #336
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Updated article with an 'image' of the city's response to the State Attorney General's inquiry on the Open Meeting Law complaint.

Source: http://www.azcentral.com/community/g...-meetings.html

For those who cannot view the article, a PDF of the letter is attached.


Last edited by Llama19: 08-05-2013 at 11:55 AM.
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07-29-2013, 02:56 PM
  #337
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I also wonder if adding Global Spectrum and agreeing to reimburse Glendale for costs above $6.5 million makes the deal less attractive to Fortress. Before there was $15 million that was coming in no strings attached and no partners. Does this deal still work for them?
Im not sure I follow aqib?

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For those who cannot view the article, a PDF of the letter is attached.
Thanks for the pdf. Interesting and as expected.

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07-29-2013, 03:01 PM
  #338
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Puck Daddy just came out with an article about the Wilds loses last year of $30MM! They spent to the salary cap but sold out every game and had one round of playoffs!

Now look at the Coyotes: they had a salary cap hit of low 50`s (about $10-12MM less than Minnesota). Averaged 12,000 fans at half the average ticket price as Minnesota, and no playoff money. There is no way the Coyotes loses were anything less than $40MM a year ago! Given those numbers, why in the world would anyone want this money pit?
Correct, Coyote ticket prices are 57.7% of the Wild's ticket prices..... And these guys think they can turn it around.....


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07-29-2013, 03:05 PM
  #339
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I really doubt that.

I can't imagine the NHL giving these guys a sweetheart deal on a transfer to the nuch coveted Southern Ontario market. How on Earth would you sell that to Jacobs and crew?
The same way the Coyote deal is being sold to the BOG ... " it's a good thing, trust us it'll work "

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07-29-2013, 03:12 PM
  #340
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Im not sure I follow aqib?



Thanks for the pdf. Interesting and as expected.
When Fortress agreed to finance this monstrosity the team was to receive $15 million per season and could bolt after 5 years with the full amount in its coffers. Now part of it has to be paid to Global Spectrum and if the out-clause is exercised they may owe Glendale money too. Therefore Fortress's position is somewhat diminished.

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07-29-2013, 03:14 PM
  #341
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Wrong on that one! This IS RSE`s first rodeo running an NHL team!
Not the first business/rodeo for anyone in the RSE group, and running an NHL team is just not complicated. It is a pretty basic business, no atom splitting required. Are there risks? Sure, but they have been quantified and accepted, nobody is blind, all big boys...

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07-29-2013, 03:27 PM
  #342
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Correct, Coyote ticket prices are 57.7% of the Wild's ticket prices..... And these guys think they can turn it around.....

Top 6 average ticket prices are Canadian teams. Yeah no potential for more teams up there. That would be a horrible idea!

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07-29-2013, 03:34 PM
  #343
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When Fortress agreed to finance this monstrosity the team was to receive $15 million per season and could bolt after 5 years with the full amount in its coffers. Now part of it has to be paid to Global Spectrum and if the out-clause is exercised they may owe Glendale money too. Therefore Fortress's position is somewhat diminished.
Oh ok. Unfortunately we dont know, likely will never know what Globals end is on all of this. I cant imagine their working solely on a %, that doesnt add up, but nothing here does. Perhaps a "reward" of some sort through relocation? Just no idea. Maybe a minimal amount with %? Absolutely shots in the dark. Fortress appears to be covered though, even if a portion of the $15M is funnelled to GS, maybe a sweetheart deal, like $2.5M retainer & some % of gates, I just dont know. But with Maxed out Revenue Sharing proceeds & support from the Development Fund etc, it would certainly appear that RSE has its nut covered and by rote, Fortress in realizing its interest on the principal for at least 5yrs barring a complete meltdown at the gate, the market refusing to attend, paying higher prices, paying for parking & so on; that GS like the NHL does absolutely nothing to fill the buildings calendar.

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07-29-2013, 03:34 PM
  #344
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BeavisPAC is at it again

Seems like they didn't learn their lesson after they filed that awful amicus brief in the sales tax initiative litigation.

Notwithstanding the determination by TeamBeavis, ARS 16-902(D) does not constitute a fatal flaw nor is the strict compliance assertion timely. Only violations of 19-112 et seq are fatal. It seems like the brain trust at TeamBeavis doesn't grasp the concept of jurisprudence. They certainly don't know how to read Western Devcor, Inc. or Van Riper.

It's totally irrelevant because without funding Jones was never going to get a significant amount of signatures anyway. But it is still pretty funny that had Jones collected enough signatures, the premature BeavisPAC press release would have notified him of the need to cure the defect prior to the referendum period expiring, thus preserving the validity of the signatures.

Another gem from the Low Wattage All-Stars
"Glendale First! political action committee" .... They sound like a formidable opponent, wouldn't want to mess with them!

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07-29-2013, 03:40 PM
  #345
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Not the first business/rodeo for anyone in the RSE group, and running an NHL team is just not complicated. It is a pretty basic business, no atom splitting required. Are there risks? Sure, but they have been quantified and accepted, nobody is blind, all big boys...
Ya, fundamentally I agree with this. RSE's already working with Global-Spectrum here so theres that experience, certainly on the hockey side covered. Hire professionals and let them do their jobs with minimal to no interference, good to go. It appears Le Blanc's focus will be on marketing & promotion, programs from Florida to Nashville to wherever fairly easily replicated & implemented. He doesnt have to get all that creative in borrowing templates.

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07-29-2013, 03:49 PM
  #346
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"Glendale First! political action committee" .... They sound like a formidable opponent, wouldn't want to mess with them!
Laugh if you will but they've been pretty effective in preventing/stifling/stopping an even lower wattage attack of KJ. There is no doubt they've been very very effective in the pro-Coyotes arena.

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07-29-2013, 04:08 PM
  #347
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Originally Posted by MNNumbers View Post
Aqib,

Let me try to be more clear about what I am saying:

It is my understanding that the RevSharing and DevFund $$ do not count in the lease as part of the 50M loss trigger point for the out-clause. In other words, the 50M of losses are losses without counting the Contribution from the league.
...
Are you quite certain of this? Also, I think what you're calling revenue sharing is revenue transfer to cover salaries? There's revenue sharing in which all teams get centrally generated monies.


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i too am talking out of my ass here, but would fortress not be entitled to some sort of compensation on the remaining 10 years of lost interest on that outstanding $96M of principal? sharks gotta eat too, ya know.

do we know that IA can just pay up and walk away from fortress after 5 years? other than the reported 15 year period and 9% rate, what exactly do we know about the fortress part of the whole equation?
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Good point cbc.

To speculate a little:
I think the out-clause actually is a negative for Fortress. Remember, as long as CoG guarantees the 15M/yr, Fortress is guaranteed to get their money back. Especially if it is true, as has been rumored, that Fortress has some right to ownership if the loan goes default. So, the 15 years is what Fortress expects.

The out-clause really does nothing for Fortress other than cut the terms of the loan back.... Rather than 225M on a 120M loan, they would essentially make 75M on a 24M loan. The only risk is that RSE opts out, and then can't repay....

So, I think it is safe to say Fortress didn't insist on the out-clause.

The rest...? Well, who knows? The real mystery here is what LeBlanc is thinking....
I thought the initial report regarding Fortress was their right to exercise an option for up to 20% of the team value after five years (and perhaps under the assumption that the loss clause was triggered)?


@MNN. The Fortress money is a loan. On closing day, RSE assumes the money, and pays the NHL with it. Then they pay 9% interest per annum, funded by the COG money.

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07-29-2013, 04:14 PM
  #348
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Correct, Coyote ticket prices are 57.7% of the Wild's ticket prices..... And these guys think they can turn it around.....

A lot more "bang for your buck" in that middle ten, at least from a fan standpoint.

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07-29-2013, 04:32 PM
  #349
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Are you quite certain of this? Also, I think what you're calling revenue sharing is revenue transfer to cover salaries? There's revenue sharing in which all teams get centrally generated monies.
You are correct Fugu. My terminology is weak in this dept. I am referring to Bettman's promise which has been alluded by Killion on many occasions here. And, as I said on the prior page, I am going by memory, without time to search the prior threads, but I believe the Accounting on the Lease is such that these 2 things from the League (RevTrans and DevFund) do not count as revenues for purposes of calculating the out-clause trigger 50M in losses


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I thought the initial report regarding Fortress was their right to exercise an option for up to 20% of the team value after five years (and perhaps under the assumption that the loss clause was triggered)?
Let me get this straight... If RSE opts out, and there remains 96M on the loan, then Fortress has the option to convert that to team ownership? Wow. If that is true, Bettman better hope it doesn't happen. He should not want Fortress owning any part of a team. These guys play hardball, and sometimes find themselves in tight spots, too. That would not be a good thing. I thought the ownership option only applied if the team was sold, and there was principal left on the loan....


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@MNN. The Fortress money is a loan. On closing day, RSE assumes the money, and pays the NHL with it. Then they pay 9% interest per annum, funded by the COG money.
And, I assume this means that you are confirming that the 120M is a LOAN, not a line of credit. And, that, in actuality, it is CoG who are paying the loan. Correct?

And, how would that have looked in Council Session...

Weiers: Mr LeBlanc, let me ask you a question. I have heard through a Forbes article that you are taking a 120M from Fortress, for 15 years, with 9% interest. Is that correct?

LeBlanc: Well, I don't want to divulge the details..... ...... ......But, yes Fortress is offering RSE a loan to purchase the team.

W: Now, I have done the math, and, although I am not an accountant, it seems to me that the 15M you are asking from us is exactly what is needed to pay this loan back. Is that correct?

L: Well, I haven't really looked at that, but it might be the case.

W: Please have a look at this slide (Puts up amortization schedule, showing that 15M/yr exactly pays off a 120M loan in 15 years). Now, it seems to me that in actuality, you are asking us to pay your loan for you. In essence, we are buying the team for you. Is this correct?

L: {Crickets}

W: I simply think it inappropriate that the City of Glendale offer Mr LeBlanc a guarantee on his loan, and purchase his team for him. I vote against this Lease.

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07-29-2013, 04:38 PM
  #350
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Let me get this straight... If RSE opts out, and there remains 96M on the loan, then Fortress has the option to convert that to team ownership? Wow. If that is true, Bettman better hope it doesn't happen. He should not want Fortress owning any part of a team. These guys play hardball, and sometimes find themselves in tight spots, too. That would not be a good thing. I thought the ownership option only applied if the team was sold, and there was principal left on the loan....
The Forbes report from ~ May-June indicated the option existed.

Quote:
And, I assume this means that you are confirming that the 120M is a LOAN, not a line of credit. And, that, in actuality, it is CoG who are paying the loan. Correct?

And, how would that have looked in Council Session...
Well, it's just following the Money. Fortress loans RSE $120 MM. RSE gives that to the NHL at closing, ownership transferred from league to RSE (+the $45 MM cash). COG pays RSE $14MM per year to operate the arena, guaranteed money. RSE writes a check to Fortress to service their debt on the $120 MM, which just happens to be ~$14 MM.

The NHL turns around and gives RSE a line of credit for $85 MM, which if drawn upon, would have no interest due during the first 5 yrs, iirc. The NHL also guarantees $20 MM in revenue transfer, perhaps partially funded by the Industry Fund.

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