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Old
05-20-2009, 12:08 AM
  #1
mouser
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Coyotes Financial/Ownership Situation #4

Continue on.

Please be respectful to your fellow HFBoards members.

previous thread:
http://hfboards.com/showthread.php?t=640041

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05-20-2009, 12:22 AM
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DekeTretiak
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Originally Posted by leek View Post
In all fairness, many teams seem to inflate their attendance. Watch games from Detroit or Toronto where they claim every game is a sellout -SRO and you will see plenty of empty seats.
Quote:
Lot of fans disguised as empty seats in the ACC.

I can't speak about Detroit but the empty seats you see in the platinum (premium) seats in Toronto are because those people have access to restaurants and other luxury amenities where there are large TV screens. Consequently, they don't feel the need to rush back to their seats from the intermissions. About five minutes into the period those seats are full again.

The Star ran a story months ago (can't find the link) where they interviewed some of those season's ticket holders who freely admitted that when the team was playing badly they decided to hang out in these bars and restaurants rather than return to their seats.

Another reason for empty seats might be that many people buy season's tickets as an investment and attempt to sell individual game tickets at a profit. Depending on the opponent, the seats may or may not sell.

The ACC holds 18,819 for hockey. I've heard that only 2000 tickets are available for sale to the general public, the rest are held as season's tickets. There is fierce competition for those remaining tickets many of which are purchased by ticket scalpers and ticket brokers who attempt to re-sell them at a profit. Again, depending on the opponent, those seats may or may not get re-sold.

I'm willing to bet that the number of seats that go unfilled are far fewer than most in the league.

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05-20-2009, 12:32 AM
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@ Art. Vandelay - I'm sorry if I gave the impression that I didn't believe what you wrote. That's not the case. As a person who has been taught to research only valid sources, I tend to question, literally, every source that I come across. You could be the most well respected newspaper in all of England and I would still question your credentials only because I personally haven't heard of you. That's just the way I do business these days. Again, I didn't want you to think that I didn't believe your comments, but since I've never heard of you (via Twitter, not here) then I had to call into question the validity of the statements. I hope you understand. Of course, now that I know it was you, I believe everything you wrote. Kudos and thanks!

It sounds like this whole mess just turned into one big cluster F. I have no idea what is going to get done in mediation. "I want to sell the team to a buyer who will in turn move the team out of Glendale." "No." "Great, who wants to order a pizza?"

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05-20-2009, 12:36 AM
  #4
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Originally Posted by pck21 View Post
@ Art. Vandelay - I'm sorry if I gave the impression that I didn't believe what you wrote. That's not the case. As a person who has been taught to research only valid sources, I tend to question, literally, every source that I come across. You could be the most well respected newspaper in all of England and I would still question your credentials only because I personally haven't heard of you. That's just the way I do business these days. Again, I didn't want you to think that I didn't believe your comments, but since I've never heard of you (via Twitter, not here) then I had to call into question the validity of the statements. I hope you understand. Of course, now that I know it was you, I believe everything you wrote. Kudos and thanks!

It sounds like this whole mess just turned into one big cluster F. I have no idea what is going to get done in mediation. "I want to sell the team to a buyer who will in turn move the team out of Glendale." "No." "Great, who wants to order a pizza?"
How have you been here since '04 and never noticed Art Vandelay? He's got one of the most distinctive avatars on the Coyotes board. Not a Seinfeld fan, I suppose.

EDIT: Nevermind. Note to self: LEARN HOW TO READ.

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05-20-2009, 12:36 AM
  #5
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Originally Posted by TeamTurris
Quote:
Were still bigger than Hamilton and Winnipeg combined? But I guess that fact is lost on some.
While the city of Hamilton (population: 714,900) itself may not be enough to support a team, it is in the middle of the Golden Horseshoe, a region with a population of 5.3 million within an hour's drive of the city.

The Golden Horseshoe runs from Toronto around the western end of Lake Ontario and encompasses Hamilton and Burlington and all the way down to Niagara Falls.

There is more than enough of a population and hockey fans for a team in this market.

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05-20-2009, 12:48 AM
  #6
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Originally Posted by pck21 View Post
@ Art. Vandelay - I'm sorry if I gave the impression that I didn't believe what you wrote. That's not the case. As a person who has been taught to research only valid sources, I tend to question, literally, every source that I come across. You could be the most well respected newspaper in all of England and I would still question your credentials only because I personally haven't heard of you. That's just the way I do business these days. Again, I didn't want you to think that I didn't believe your comments, but since I've never heard of you (via Twitter, not here) then I had to call into question the validity of the statements. I hope you understand. Of course, now that I know it was you, I believe everything you wrote. Kudos and thanks!

It sounds like this whole mess just turned into one big cluster F. I have no idea what is going to get done in mediation. "I want to sell the team to a buyer who will in turn move the team out of Glendale." "No." "Great, who wants to order a pizza?"
No problem. After drying the tears from my keyboard due to crying about having my intregrity brought into question on a hockey forum.........i got better........twas only a fleshwound.


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05-20-2009, 12:58 AM
  #7
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Originally Posted by Art.Vandelay View Post
No problem. After drying the tears from my keyboard due to crying about having my intregrity brought into question on a hockey forum.........i got better........twas only a fleshwound.

Seriously thanks for keeping us updated. I was supposed to go today but at the last minute I was unable to. I couldn't wait to get to a computer and your tweets were the only thing that kept me sain for those four hours.


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05-20-2009, 01:02 AM
  #8
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Quote from Sinurgy:
Quote:
He invests very little and rakes in the money thanks to the sellouts that are expected to come just because it's hockey, because apparently it doesn't matter if it's good hockey, it just has to be hockey!
It always amazes me how you can look at the same situation from two opposing viewpoints.

To me, fans who fill an arena "just because it's hockey" are the true fans of the game. The bandwagon jumpers who only go to see a winner can't really call themselves fans. I guess the "discriminating" fans of the Phoenix Coyotes are reaping the results of their "loyalty."

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05-20-2009, 01:17 AM
  #9
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Quote:
Originally Posted by DekeTretiak View Post
Quote from Sinurgy:


It always amazes me how you can look at the same situation from two opposing viewpoints.

To me, fans who fill an arena "just because it's hockey" are the true fans of the game. The bandwagon jumpers who only go to see a winner can't really call themselves fans. I guess the "discriminating" fans of the Phoenix Coyotes are reaping the results of their "loyalty."
Can't you guys just get what we are trying to deal with? Someone is trying to uproot our team prematurely (IMO) just because the opportunity is there to take advantage of the court system.

Most of us don't doubt the abilty for a franchise to thrive in S. Ontario but just because the opportunity is there doesn't make it yours to take. I hope you get your 7th team someday. I also hope that it is happens in a manner that is repectful of all parties involved and done without trying to take someone else's team. If it happens as a last result to an existing team then so be it but the way Balsillie is going about things is just wrong.

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05-20-2009, 01:38 AM
  #10
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Originally Posted by DekeTretiak View Post
I can't speak about Detroit but the empty seats you see in the platinum (premium) seats in Toronto are because those people have access to restaurants and other luxury amenities where there are large TV screens. Consequently, they don't feel the need to rush back to their seats from the intermissions. About five minutes into the period those seats are full again.

The Star ran a story months ago (can't find the link) where they interviewed some of those season's ticket holders who freely admitted that when the team was playing badly they decided to hang out in these bars and restaurants rather than return to their seats.

Another reason for empty seats might be that many people buy season's tickets as an investment and attempt to sell individual game tickets at a profit. Depending on the opponent, the seats may or may not sell.

The ACC holds 18,819 for hockey. I've heard that only 2000 tickets are available for sale to the general public, the rest are held as season's tickets. There is fierce competition for those remaining tickets many of which are purchased by ticket scalpers and ticket brokers who attempt to re-sell them at a profit. Again, depending on the opponent, those seats may or may not get re-sold.

I'm willing to bet that the number of seats that go unfilled are far fewer than most in the league.
It's the same thing for Detroit especially in this year's playoffs. If you look at the seats in the beginning of the period compared to the middle of the period there's a huge difference. Joe Louis Arena has terrible lines for bathrooms and sometimes you're wasting the entire intermission in lines. Plus the ushers won't let you go to your seat while the play is going on. During the regular season there are more seats unoccupied because season ticket holders especially in the lower bowl don't go to some games. Also, because of the economy the resale market is a lot less than it was ten years ago so sometimes people end up eating tickets that they could have sold before.

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05-20-2009, 01:40 AM
  #11
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Quote:
Originally Posted by DekeTretiak View Post
Quote from Sinurgy:


It always amazes me how you can look at the same situation from two opposing viewpoints.

To me, fans who fill an arena "just because it's hockey" are the true fans of the game. The bandwagon jumpers who only go to see a winner can't really call themselves fans. I guess the "discriminating" fans of the Phoenix Coyotes are reaping the results of their "loyalty."
And I guess Maple Leafs fans are reaping the rewards of their loyalty as well.

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05-20-2009, 02:48 AM
  #12
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Originally Posted by DekeTretiak View Post
To me, fans who fill an arena "just because it's hockey" are the true fans of the game. The bandwagon jumpers who only go to see a winner can't really call themselves fans. I guess the "discriminating" fans of the Phoenix Coyotes are reaping the results of their "loyalty."
Oh please, using your hard earned money to watch a crappy hockey team in person doesn't make you special or any more of a fan than the guy who saves his money and watches the game at home on TV.

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05-20-2009, 06:05 AM
  #13
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Good article from the G&M on the backstory to all of this:

http://sports.theglobeandmail.com/se...beSportsHockey

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05-20-2009, 06:13 AM
  #14
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Bottom line is that without a quality product, any franchise in any sport will eventually have problems. The NHL needs to focus a bit more on competitive parity...

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05-20-2009, 09:25 AM
  #15
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I would have commented earlier, but I was at a concert late last night bla bla....

Quote:
From Art: Going into today, I thought the NHL was going to try to sell the team outside of bankruptcy. It looks like they are ok with bankruptcy, but want to control it. Whether Moyes has control or the NHL does, it looks like there will be an auction for the team.

As things progressed, it seemed like the whole control issue was going to be moot point. The relocation factor is going to be the big decision here and the judge touched on that.
]

I think Art hit the nail, (even Ballsie said this) But the team is dieing and is insolvent no matter who controls the proxys, so lets get the darn thing sold ASAP, hence medeation.

Except for the 10 min Gold B.S. at the beginning I like the Judge, he is funny, a wise ass with the lawyers and their 700 pages of motions, he plays devils advocate with both sides and does seem fair and impartial.

Naively speeking, but I hope Moyes comes to his sense here and realizes how long and drawn out this is going to be if he wants to peruse the Ballsie offer, and Moyes is willing to accept the Reinsdorf or this other phantom offer just to be done with this team.

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05-20-2009, 09:31 AM
  #16
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from teh G&M piece and here is why Moyes is a lie sack of poo and not worth the air he breaths.

Quote:
Mr. Scudder kept negotiating with Mr. Balsillie and they came to a deal on April 17, worth $212.5-million. Mr. Balsillie was ready to put $20-million down and fund the Coyotes through the Chapter 11 process.
10 days before the STH renewal Deadline.

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05-20-2009, 09:37 AM
  #17
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There was one more significant matter adddressed in court yesterday.

There was an exchange between Judge Baum and Baslilie's lawyer Lisa Freeman where Freeman had to explain what the clause in the proposed auction notice "on terms no less favorable than enjoyed the Toronto Maple Leafs" means. She explained than if the team relocates to Hamilton, there can't be a situation where the Leafs demand payment from JB or the TV networks are unwilling to give the new team the same TV deal as the Leafs have.

The Judge struck the clause Balsilie wanted referencing the Leafs. The Judge analogized the situation to the the way things were at his former law firm when he was in private practice. Paraphrasing, Judge Baum said: "the old guys had a better deal than the new guys, that's just the way it was and I don't have a problem with that."

Further, the Judge highly doubted that the bankruptcy court had the power/jurisdiction to put any such conditions on the sale/auction. He believed that entire procedure and dispute with the Leafs to be something to be argued in another forum/court. For one, he noted, besides his limited jurisdiction, the Toronto Maple Leafs had not appeared in the case and were not in the courtroom.

In any event, it was fairly clear that what the Leafs/Sabres must/can do will not be part of any auction procedure so Balsilie is going to have to bear that risk of additional cost (hundreds of millions on top of his 212.5) even if he wins the legal dispute on the motion addressing "what asset does Moyes own to sell, a team in Arizona or a team anywhere." He will still be bidding with risk that he still has to pay something to the Leafs/Sabres so the real cost to JB may be far more than $212.5.

In hindsight, after sleeping on it and reflecting what I saw yesterday, not too many issues went Balsilie's and Moyes' way in court yesterday.


Last edited by Jake16: 05-20-2009 at 11:16 AM.
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05-20-2009, 10:08 AM
  #18
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Originally Posted by rt View Post
How have you been here since '04 and never noticed Art Vandelay? He's got one of the most distinctive avatars on the Coyotes board. Not a Seinfeld fan, I suppose.

EDIT: Nevermind. Note to self: LEARN HOW TO READ.
Haha no problem rt. Yep I've known of him since I joined way, way back. When he stated that he was the "twitterer" (or "twatterer" according to you ) then I knew the information was good and sound.

Quote:
Originally Posted by Art.Vandelay View Post
No problem. After drying the tears from my keyboard due to crying about having my intregrity brought into question on a hockey forum.........i got better........twas only a fleshwound.

Glad to see you take it like a man! Just kidding of course! Thanks again for posting such a detailed account of yesterday's events. I honestly thought yours was the most complete out of everything I read yesterday.

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05-20-2009, 10:27 AM
  #19
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Quote:
Originally Posted by DekeTretiak View Post
Quote from Sinurgy:


It always amazes me how you can look at the same situation from two opposing viewpoints.

To me, fans who fill an arena "just because it's hockey" are the true fans of the game. The bandwagon jumpers who only go to see a winner can't really call themselves fans. I guess the "discriminating" fans of the Phoenix Coyotes are reaping the results of their "loyalty."
I'll turn your logic of a "true fan" on its ear and state that, by your own definition, true fans are then mindless, brainless, lemmings, who only support a cause because its there. A quick glance at history proves that mindless lemmings who follow a particular group "just because" often invoke the worst in society.

True fans are fans that support their team in the best and the worst of times, but especially the worst of times. Are we, the loyal fans of the Phoenix Coyotes, going down without a fight? I certainly hope that our small rally and forum posts have suggested that we are here until the end, whatever that might be. In the immortal words of T.S. Elliot's "The Hollow Men,"

This is the way the world ends
This is the way the world ends
This is the way the world ends
Not with a bang but a whimper.


A poem, in my view, that fits in with our current situation.

Quote:
Originally Posted by Jake16 View Post
There was one more significant matter adddressed in court yesterday.

There was an exchange between Judge Baum and Baslilie's lawyer Lisa Freeman where Freeman had to explain what the clause in the proposed auction notice "on terms no less favorable than enjoyed the Toronto Maple Leafs" means. She explained than if the team relocates to Hamilton, there can't be a situation where the Leafs demand payment from JB or the TV networks are unwilling to give the new team the same TV deal as the Leafs have.

The Judge struck the clause Balsilie wanted referencing the Leafs. The Judge analogized the situation to the the way things were at his former law firm when he was in private practice. Paraphrasing, Judge Baum said: "the old guys had a better deal than the new guys, that's just the way it was and I don't have a problem with that."

Further, the Judge highly doubted that the bankruptcy court had the power/jurisdiction to put any such conditions on the sale/auction. He belived that entire procedure and dispute with teh leafs to be something to be argued in another forum/court. For one, he noted, besides his limited jurisdiction, the Toronto Maple Leafs had not appeared in the case and were not in the courtroom.

In any event, it was fairly clear that what the Leafs/Sabres must/can do will not be part of any auction procedure so Balsilie is going to have to bear that risk of additional cost (hundreds of millions on top of his 212.5) even if he wins the legal dispute on the motion addressing "what asset does Moyes own to sell, a team in Arizona or a team anywhere." He will still be bidding with risk that he still has to pay something to the Leafs/Sabres so the real cost to JB may be far more than $212.5.

In hindsight, after sleeping on it and reflecting what I saw yesterday, not too many issues went Balsilie's and Moyes' way in court yesterday.
Great abstract on the situation Jake16. I was thinking about Art. Vandelay's post (focusing on the $500m that Glendale is asking for as a creditor) and this post because it's beginning to make me wonder exactly how much money is being thrown around? Simple math tells me...$212m+$500m+unknown amount of fees associated with move to SO= a ton of damn money. Balsillie may have, in that laymen scenario, bit off way more than he can chew. Plus he has to pay lawyers (damn fine ones at that, not cheap), pay for the Copps arena re-build (for lack of a better term) and so on and so forth. That measly $212m offer that he initially put forth may turn into more than $1 billion at the end of all this. Does he truly want to spend that much for a hockey team that will potentially lose him money in the long run? Let's face it, we love our team, but they're not very good. If they move to a hockey rich region like Southern Ontario, there will be competition for their services. Why see the "Hamilton Coyotes" at an old arena, when you can go see historic teams like the Wings or Leafs, or a good team like Buffalo? The law of diminishing returns begins to factor in, but I don't think Balsillie understands that.

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05-20-2009, 10:48 AM
  #20
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05-20-2009, 10:49 AM
  #21
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Great abstract on the situation Jake16. I was thinking about Art. Vandelay's post (focusing on the $500m that Glendale is asking for as a creditor) and this post because it's beginning to make me wonder exactly how much money is being thrown around? Simple math tells me...$212m+$500m+unknown amount of fees associated with move to SO= a ton of damn money. Balsillie may have, in that laymen scenario, bit off way more than he can chew. Plus he has to pay lawyers (damn fine ones at that, not cheap), pay for the Copps arena re-build (for lack of a better term) and so on and so forth. That measly $212m offer that he initially put forth may turn into more than $1 billion at the end of all this. Does he truly want to spend that much for a hockey team that will potentially lose him money in the long run? Let's face it, we love our team, but they're not very good. If they move to a hockey rich region like Southern Ontario, there will be competition for their services. Why see the "Hamilton Coyotes" at an old arena, when you can go see historic teams like the Wings or Leafs, or a good team like Buffalo? The law of diminishing returns begins to factor in, but I don't think Balsillie understands that.
That's not how it works. In bankruptcy, the amount of money thrown at the team will be whatever the highest bidder is willing to spend. That amount of cash then gets distributed to secured creditors first, unsecured next, until nothing's left. Whether the city can claim $ 500 M or $ 10 B is irrelevant at this point.

So here's an extremely ironic scenario.

- Balsillie buys team for $ 212 M.
- City gets awarded the right to be listed as creditor for let's say $100 M.
- Judge puts them first in the list of unsecured creitors because their contract is the oldest one in the list (I don't know that for a fact, I'm just extrapolating a bit).

Secured creditors get paid. City gets paid $ 100 M. Balsillie gets his team. Moyes gets nothing.

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05-20-2009, 10:51 AM
  #22
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Originally Posted by Sinurgy View Post
Oh please, using your hard earned money to watch a crappy hockey team in person doesn't make you special or any more of a fan than the guy who saves his money and watches the game at home on TV.
It sure does. So there. NYAHH!

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05-20-2009, 10:54 AM
  #23
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Originally Posted by Sinurgy View Post
Oh please, using your hard earned money to watch a crappy hockey team in person doesn't make you special or any more of a fan than the guy who saves his money and watches the game at home on TV.
It makes you a Leafs fan...

Although I shouldn't talk. I'd still go to Coyotes games even if they sucked-- er... wait a minute...

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05-20-2009, 11:01 AM
  #24
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Originally Posted by zz View Post
That's not how it works. In bankruptcy, the amount of money thrown at the team will be whatever the highest bidder is willing to spend. That amount of cash then gets distributed to secured creditors first, unsecured next, until nothing's left. Whether the city can claim $ 500 M or $ 10 B is irrelevant at this point.

So here's an extremely ironic scenario.

- Balsillie buys team for $ 212 M.
- City gets awarded the right to be listed as creditor for let's say $100 M.
- Judge puts them first in the list of unsecured creitors because their contract is the oldest one in the list (I don't know that for a fact, I'm just extrapolating a bit).

Secured creditors get paid. City gets paid $ 100 M. Balsillie gets his team. Moyes gets nothing.
I'm going to take a guess there's no ordering of the unsecured creditors and they all get a % return on their debt. If that's the case then whatever Glendale is awarded would dilute the return that the existing unsecured creditors of record before the court would get.

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05-20-2009, 11:10 AM
  #25
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Quote:
Originally Posted by zz View Post
That's not how it works. In bankruptcy, the amount of money thrown at the team will be whatever the highest bidder is willing to spend. That amount of cash then gets distributed to secured creditors first, unsecured next, until nothing's left. Whether the city can claim $ 500 M or $ 10 B is irrelevant at this point.
I think this case is more complicated than that. If Glendale wins their right to include damages and become a creditor in the event the team moves, things change.

Say Glendale gets full damages of $500mm. Add that to the $80mm for Dell, $15mm for NHL and $100mm for Moyes. That's around $700mm of debt. Ballsillie bids $212mm. That only satisfies 30% of the creditors claims.

Say Reinsdorf bids $130mm. Glendale's claim is pulled because the team is staying, so the total debt is $200mm. Reinsdorf's bid satifies 65% of the claims.

The judge has to pick the bid that best meets the needs of all the creditors. The highest dollar bid isn't necessarily the best one in bankruptcy. This point was mentioned a few times in the hearing yesterday.

I realize I summarized my numbers, but I am trying to provide an example.

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