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The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, NHL revenues, relocation and expansion.

Part VIII: Phoenix Coyotes Post-bankruptcy

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Old
06-07-2010, 03:47 PM
  #26
cbcwpg
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I'm not sure if this $25M/exclusivity clause is at all directed at Reinsdorf specifically, but I can understand why IEH wants it. I think they are as fed-up with this mess as most people are, and don't want to be used by the CoG anymore to get a better deal out of Riensdorf or some other party.

IEH has put a lot of work into the process, the CoG turns down thier MOU and tells them thanks but no thanks, then a few weeks later comes begging back to IEH to resubmit their MOU, knowing full well they are just trying to use IEH again. I said a long time ago that IEH should have told the CoG to xxxx-off , but I guess they really want the team.

Part 8 of this thread. Whoo-Hooo . How many parts are allowed? Will we fillup the Internet? lol

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06-07-2010, 03:50 PM
  #27
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Why "touch it" if you don't need to? This deal is already complicated enough, so if you can eliminate one of the steps, you do it.
Do you think that ownership can be transfered from the NHL to a new owner by June 30? If not, I suppose the clock starts ticking on the escrow unless Glendale and the NHL agree to amend this by mutual consent. That is what I think might be behind this. As long as Glendale puts forward one or more bona fide ownership bids to the NHL, the NHL might be willing to change their agreement to avoid the sticky situation. Presumably, any new owner would then be required to pick up any of the operating costs from the NHL that accrue from July 1, presumably through an adjustment of the purchase price.

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06-07-2010, 03:56 PM
  #28
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Originally Posted by cbcwpg View Post
I'm not sure if this $25M/exclusivity clause is at all directed at Reinsdorf specifically, but I can understand why IEH wants it. I think they are as fed-up with this mess as most people are, and don't want to be used by the CoG anymore to get a better deal out of Riensdorf or some other party.

IEH has put a lot of work into the process, the CoG turns down thier MOU and tells them thanks but no thanks, then a few weeks later comes begging back to IEH to resubmit their MOU, knowing full well they are just trying to use IEH again. I said a long time ago that IEH should have told the CoG to xxxx-off , but I guess they really want the team.

Part 8 of this thread. Whoo-Hooo . How many parts are allowed? Will we fillup the Internet? lol
But how does the exclusivity help IEH deal with Reinsdorf, if he already has a deal worked out with the City of Glendale? In that case, IEH should know that Glendale will be forwarding both their and JR's bids to the NHL, and that JR will have the decided edge with the NHL. After all, JR is reportedly already approved as an owner by the BOG.

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06-07-2010, 04:09 PM
  #29
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But how does the exclusivity help IEH deal with Reinsdorf, if he already has a deal worked out with the City of Glendale? In that case, IEH should know that Glendale will be forwarding both their and JR's bids to the NHL, and that JR will have the decided edge with the NHL. After all, JR is reportedly already approved as an owner by the BOG.
Precisely. That's a "blanket" exclusivity clause. Or are we to believe that IE is working in collusion with Reinsdorf/Kaites, that a nod is as good as a wink to a blind horse, that its' attorneys in drafting their MOU didnt mention JR because of a secret side-deal?. Unless otherwise stipulated, "exclusivity is exclusivity". Where is the section that says "all offers from this day forward shall be subject to a $25M non-exclusive fee" or whatever?. Even that would give us a hint that maybe, just maybe, JR/COG have a deal. I love the theory, but....

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06-07-2010, 04:11 PM
  #30
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I am just wondering, for the sake of discussion ...

What makes all you guys think that this $25M/exclusivity clause is at all directed at Reinsdorf?

Is it possible that JR has his deal worked out with the CoG (hence no need to worry about him in terms of exclusivity any more), and the CoG is simply covering its bases by sending two fully negotiated transactions to the NHL? In this scenario, if asked "well, if JR has his deal worked out already, then why does IEH need exclusivity?", the answer of course would be "because bidder #3 is sniffing around, but has not gone far enough along with their due diligence to indicate their seriousness, and until they do by submitting a $25M deposit, IEH wants CoG to ignore them."

Honestly, this idea of connecting JR to the $25M clause seems a little absurd.
Good point except for the absurd comment. No announcement was made that JR and COG reached any sort of deal on the AMULA or anything else. It is reasonable to apply it to JR but the point is valid that it MAY be someone else.

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06-07-2010, 04:19 PM
  #31
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I'm confused by how a new owner would be replenishing the excrow. The NHL owns the team not the COG. A new buyer would be paying money to the NHL not the COG. Would a new lease then stipulate they pay the COG money (to the tune of losses upto that point) for the privaledge of playing at jobing?
Buyer would replenish until the transaction with the NHL closes. Even if CoG gives the NHL only one approved buyer with lease, the NHL still has to go through all the hoops to close the transactions, comply with any and all of the applicable bankruptcy court rulings, etc. Those take time. Until then, instead of CoG financing any moneys that the NHL may potentially need to draw on at September 1, the new owners will.

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06-07-2010, 04:27 PM
  #32
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I think it's far easier to question a significant amount of wealth than to assume it's there.

I'd prefer if someone did come up with some indication that these guys have 'hundreds of millions of dollars' in net worth.

People assumed Boots had a lot of money too. I guess he did, but it wasn't his own.
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Linking these guys to a convicted fraud artist is WAY out of line, if truth be told. Sarcasm icon or no sarcasm icon.
Funny thing about Boots, the NHL knew and approved him. So, those people that assumed Boots had a lot of money were not the BOG of the NHL. They knew where he got his money for the team and they didn't care.

People are also assuming the wealth of Reinsdorf. Wealth means nothing if you cannot access it. So JR owns a piece of the Sox and of the Bulls. Let's say it is 25%. Let's use $600 million as the total value of the two franchises. That gives him $150 million. How is he going to access that money to put into the Yotes? Sell some of the Bulls or the Sox? Doubt it. Does he other investments, probably. Does he have some cash? probably. Does he have enough to plop down $103 million? I do not know.

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06-07-2010, 04:57 PM
  #33
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Do you think that ownership can be transfered from the NHL to a new owner by June 30? If not, I suppose the clock starts ticking on the escrow unless Glendale and the NHL agree to amend this by mutual consent. That is what I think might be behind this. As long as Glendale puts forward one or more bona fide ownership bids to the NHL, the NHL might be willing to change their agreement to avoid the sticky situation. Presumably, any new owner would then be required to pick up any of the operating costs from the NHL that accrue from July 1, presumably through an adjustment of the purchase price.
No clue. I think the goal is no later than Sept. 1.

I don't know what the books of NHL teams typically look like over the summer months, but I know this is considered the busiest time for ticket, corporate sponsorship, and suite sales. IOW this is the time to start developing strong cash flow. There are certainly expenses going out, but I don't expect they're close to the outlays once the season begins.

I also don't know if the players salaries are paid out over the calendar year, or just during the season.

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06-07-2010, 05:25 PM
  #34
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No clue. I think the goal is no later than Sept. 1. I don't know what the books of NHL teams typically look like over the summer months, but I know this is considered the busiest time for ticket, corporate sponsorship, and suite sales. IOW this is the time to start developing strong cash flow. There are certainly expenses going out, but I don't expect they're close to the outlays once the season begins. I also don't know if the players salaries are paid out over the calendar year, or just during the season.
Players salaries are paid out during the season, October-April, with the exception of some performance & signing bonuses. The summer months, May-Sept are indeed the time most teams are actively promoting & soliciting sponsorships, suite, seasons & multi-game ticket packages with much of the upcoming seasons box office success determined during these crucial months. I dont know what the NHL has on the ground in Phoenix beyond its' direct-mail campaigning for 2010-11 ST's nor the state of its sales force, however, I'm assuming its fairly lean. If we move the goalposts to September, thats two months of prime selling time gone; budgets set. The longer this drags on the deeper the hole the NHL, COG & potential owners are digging for themselves.

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06-07-2010, 05:26 PM
  #35
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Thanks for the clarification.

Do you have any insights or opinions as to why city officials are so focused on the June 30th date for completing this, and why they have linked this timeline to the $25 million escrow account?
NHL was eating the losses up until June 30th, the end of their year. They will not fund losses next year (Starting July 1st). The Cof G is responsible for up to 25 million in losses next year, starting July 1st. That is if the team is not sold. Until the team is sold the Cof G has to start paying expenses.

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06-07-2010, 05:38 PM
  #36
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Players salaries are paid out during the season, October-April, with the exception of some performance & signing bonuses. The summer months, May-Sept are indeed the time most teams are actively promoting & soliciting sponsorships, suite, seasons & multi-game ticket packages with much of the upcoming seasons box office success determined during these crucial months. I dont know what the NHL has on the ground in Phoenix beyond its' direct-mail campaigning for 2010-11 ST's nor the state of its sales force, however, I'm assuming its fairly lean. If we move the goalposts to September, thats two months of prime selling time gone; budgets set. The longer this drags on the deeper the hole the NHL, COG & potential owners are digging for themselves.
What about player signing bonuses? Given the number of Coyotes that are free agents, might there not be considerable amounts in signing bonuses due this summer? Does anyone know when those would need to be paid?

Sorry for diverting back to the parking issue, but could someone clarify whether the University of Phoenix stadium (and parking lot) would be part of the CFD or parking agreement with IEH? If it is a separate entity, would they not be able to provide discount-priced parking to Coyotes fans and other patrons on their parking lots and generate some additional revenue for themselves? If so, then I suppose this would impinge on the parking revenue plans under the IEH agreement.

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06-07-2010, 05:49 PM
  #37
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What about player signing bonuses? Given the number of Coyotes that are free agents, might there not be considerable amounts in signing bonuses due this summer? Does anyone know when those would need to be paid?

Not too many teams use the signing bonus route. Typically the contract would stipulate when the bonus is paid out. One recent example was Dany Heatley. His bonus for the 09-10 year was due around July 1, hence Melnyk's desire to trade him ahead of the payout date.

Finally, if the league is running the team's finances come UFA season, I 'doubt' that the Yotes will be offering many signing bonuses-- meaning a team can control this aspect.

 
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06-07-2010, 05:51 PM
  #38
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What about player signing bonuses? Given the number of Coyotes that are free agents, might there not be considerable amounts in signing bonuses due this summer? Does anyone know when those would need to be paid?
What I said above Whileee. Signing & Performance Bonuses' are often paid out during the summer. I dont know what the status is with any number of the Coyotes' players' (UFA's, RFA's etc). Unfortunately, the players status continues to be left to simmer on the backburner for as long as this is going to take to resolve, soft date of June 30, hard date of December 1st. Buckle up.

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06-07-2010, 05:53 PM
  #39
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The greater point is that without something that does show there's a substantial net worth, it's rather pointless to write up paragraphs about what it can be. I'd like proof that it is, not for someone to prove the hypothesis is indeed false. There's nothing to back up the hypothesis much either.
It doesn't matter one whit what any of us think about IEH's wealth. The two entities whose opinion have any bearing on this are: 1) the bank that is financing them and, 2) the NHL and its Board of Governors. So far, it appears that neither of those two have given them the necessary approvals. That might not turn out to be a serious issue for IEH going forward, but it's worth noting that Reinsdorf has already been approved by the NHL, and IEH has not.

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06-07-2010, 05:53 PM
  #40
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MOD NOTE:

Can you guys learn to use the multi-quote feature? Click on Multi on the bottom right hand corner of the box that contains the post to which you wish to reply. After selecting all your posts, hit Reply, or just Quote for the last post in the group selected. No need to have 3-4 successive posts if you're just offering a few sentences in comments.

 
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06-07-2010, 05:56 PM
  #41
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It doesn't matter one whit what any of us think about IEH's wealth. The two entities whose opinion have any bearing on this are: 1) the bank that is financing them and, 2) the NHL and its Board of Governors. So far, it appears that neither of those two have given them the necessary approvals. That might not turn out to be a serious issue for IEH going forward, but it's worth noting that Reinsdorf has already been approved by the NHL, and IEH has not.
It may not matter to the NHL, who of course will have their due diligence process. It is however an interesting point to raise in discussing how seriously to take these guy's offer. I'd personally like some glimpse of whether or not these guys deserve to have a few thousand posts dedicated to their offer.

 
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06-07-2010, 06:11 PM
  #42
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It's not a link to these guys, but an example of someone who was approved by the NHL and still had no money. He was held up as someone who should have money because his family came from the banking industry and he had that association with the financial sector.
Net worth does not matter if they have no access to funds. The NHL is supposed to look at financial viability and if the buyer has the financial resources to cover their obligations and funding requirements of the team.

Personal wealth matters little. Boots issue was he lied. He got nailed for getting money from the kings and wild owners, he forged documents to get his loan from the bank to finance. The first part got him in trouble with the nhl, the second got him in trouble with the law.

http://www.thestar.com/sports/article/447764

http://www.sportingnews.com/nhl/arti...ces-fraud-suit



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NHL was eating the losses up until June 30th, the end of their year. They will not fund losses next year (Starting July 1st). The Cof G is responsible for up to 25 million in losses next year, starting July 1st. That is if the team is not sold. Until the team is sold the Cof G has to start paying expenses.
Actually, they are not paying expenses, they are paying if there is a loss. That payment is not available to the NHL until September 1. If the team is sold before then, those amounts would be factored into the purchase price.

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No clue. I think the goal is no later than Sept. 1.

I don't know what the books of NHL teams typically look like over the summer months, but I know this is considered the busiest time for ticket, corporate sponsorship, and suite sales. IOW this is the time to start developing strong cash flow. There are certainly expenses going out, but I don't expect they're close to the outlays once the season begins.

I also don't know if the players salaries are paid out over the calendar year, or just during the season.
Now is definitely when they want to start generating the revenues for the upcoming season.

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06-07-2010, 06:23 PM
  #43
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I would be interested to know how much IEH has invested in the process to date. There has been a great deal of speculation on their net worth. To get this far in the process they must have spent quite a bit on lawyer fees and other costs.

What do you think it would have cost them to get this far?

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06-07-2010, 06:40 PM
  #44
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I also don't know if the players salaries are paid out over the calendar year, or just during the season.
13 semi-monthly payments from mid-October to mid-April. (Players haven't had any escrow $$s returned in years; don't recall when that happened, but I'd guess in July. But that $$ is already accounted for by teams, so isn't an extra payment as it was put in the escrow account as the season went by.)

Usually only ELS contracts have signing bonuses (not so much RFA and UFA or re-signers). When the signing bonus(es) are paid is stipulated in the contract. (There are also "reporting" bonuses, usually only ELS contracts, that often come into play with September training camp arrivals.)

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06-07-2010, 06:44 PM
  #45
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What about player signing bonuses? Given the number of Coyotes that are free agents, might there not be considerable amounts in signing bonuses due this summer? Does anyone know when those would need to be paid?

Sorry for diverting back to the parking issue, but could someone clarify whether the University of Phoenix stadium (and parking lot) would be part of the CFD or parking agreement with IEH? If it is a separate entity, would they not be able to provide discount-priced parking to Coyotes fans and other patrons on their parking lots and generate some additional revenue for themselves? If so, then I suppose this would impinge on the parking revenue plans under the IEH agreement.
UOP Stadium is not part of the proposed CFD. Cardinals fans do park at Westgate and up until last year did so for free. That changed early in the season and will continue, I'm sure. If you look at the parking maps for UOP Westgate parking is significantly closer to UOP then the primary lots for single-game ticket holders. All parking around UOP Itself is reserved for Carinas STH who pay anywhere from $10-$25 to park, depending on location. Parking fees are collected when you buy your season tickets.

The BLUE lots at Westgate do serve some season parking, but those entrances are clearly marked and lots are separated.

http://prod.static.cardinals.clubs.nfl.com/assets/docs/AZC_Jan10Parking.pdf

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06-07-2010, 07:27 PM
  #46
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Net worth does not matter if they have no access to funds. The NHL is supposed to look at financial viability and if the buyer has the financial resources to cover their obligations and funding requirements of the team.
I have no idea what it is you're trying to say.

How would you suggest that the NHL determine if they have the resources to cover their obligations? Prior to covering said obligations, they actually have to put up real cash to buy the team. They may only borrow a specific amount, usually up to 50% or less, but who knows how they would handle this particular case.




Quote:
Personal wealth matters little. Boots issue was he lied. He got nailed for getting money from the kings and wild owners, he forged documents to get his loan from the bank to finance. The first part got him in trouble with the nhl, the second got him in trouble with the law.
I'm very aware of the Boots debacle, but if personal wealth matters little, do you think I can buy the Coyotes? What do I need to show the NHL that I'd be qualified to do so?

 
Old
06-07-2010, 08:40 PM
  #47
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UOP Stadium is not part of the proposed CFD. Cardinals fans do park at Westgate and up until last year did so for free. That changed early in the season and will continue, I'm sure. If you look at the parking maps for UOP Westgate parking is significantly closer to UOP then the primary lots for single-game ticket holders. All parking around UOP Itself is reserved for Carinas STH who pay anywhere from $10-$25 to park, depending on location. Parking fees are collected when you buy your season tickets.

The BLUE lots at Westgate do serve some season parking, but those entrances are clearly marked and lots are separated.

http://prod.static.cardinals.clubs.nfl.com/assets/docs/AZC_Jan10Parking.pdf
Thanks. What about the other way around? Might Coyotes fans park at the UOP parking lots if they set up cheaper parking for Jobing events than Jobing and Westgate? If so, I suppose that might erode parking revenue within the CFD.

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06-07-2010, 08:49 PM
  #48
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^even reinsdorf's reported wealth of $250-300m isnt really all that substantial without any partners.

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06-07-2010, 09:21 PM
  #49
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I have no idea what it is you're trying to say.

How would you suggest that the NHL determine if they have the resources to cover their obligations? Prior to covering said obligations, they actually have to put up real cash to buy the team. They may only borrow a specific amount, usually up to 50% or less, but who knows how they would handle this particular case.


I'm very aware of the Boots debacle, but if personal wealth matters little, do you think I can buy the Coyotes? What do I need to show the NHL that I'd be qualified to do so?
How does the NHL make that determination? Not sure. I could guess that they would have to show the ability to be able to get cash from lines of credit, other loans, etc.

If you can raise $200 million and show you can raise another $100 million over the next 5 years to cover any losses, I am sure they would sell you the Yotes. Question is, can you raise that kind of money?


Look at the Stars situation. Do you really think Modano is worth hundreds of millions? I doubt it.

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06-07-2010, 09:32 PM
  #50
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Good point except for the absurd comment. No announcement was made that JR and COG reached any sort of deal on the AMULA or anything else. It is reasonable to apply it to JR but the point is valid that it MAY be someone else.
"Absurd" was a little strong. Frankly, i struggled over that word choice when I was writing the post. I couldn't think of the right term, so I went with that one. Ah well.

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