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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 X: Phoenix Coyotes - Between Scylla and Charybdis

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Old
07-27-2010, 09:29 PM
  #101
peter sullivan
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no way the team moves this year....the NHL signed the deal that allowed them to walk away and say to glendale...good luck, let us know how it all works out....we'll be back in january....they have clearly stepped back and washed their hands of the whole debacle ,letting glendale sink or swim on their own....they will evaluate the situation when the deadline arrives and no earlier.

glendale cant take back their money...they are locked in for better or worse....if this fails they will certainly make one last, last ditch effort to engage another owner....they are beyond the point of no return and can not throw in the towel anymore....they will work until the curtain closes on them because they have no choice anymore.

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07-27-2010, 09:55 PM
  #102
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Quote:
Originally Posted by Running Riot View Post
For what it's worth, Stephen Brunt was on the Team 1040 this afternoon and speculated that if the deal between COG and IEH falls apart within the next few days (I assume he meant by August 6th), he believes the team will be playing in Winnipeg for the 2010-2011 season. He said he can't imagine a situation where COG pays the 25 million to keep the team in Glendale for another year.

He also said that the Goldwater Institute have continued to monitor the situation.
Brunt's interview is about halfway through the hour.
http://www.team1040.ca/podcast/pratt_taylor/Pratt_and_Taylor_july_27_Hour2~.mp3

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07-27-2010, 10:16 PM
  #103
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Originally Posted by Running Riot View Post
For what it's worth, Stephen Brunt was on the Team 1040 this afternoon and speculated that if the deal between COG and IEH falls apart within the next few days (I assume he meant by August 6th), he believes the team will be playing in Winnipeg for the 2010-2011 season. He said he can't imagine a situation where COG pays the 25 million to keep the team in Glendale for another year.

He also said that the Goldwater Institute have continued to monitor the situation.
There is NO WAY the Coyotes would move at this point and start next season anywhere but Glendale. Teams have made flight arrangments, hotel bookings, etc. to play in Glendale and thats that. You can't ask teams at this point in time to make alternative arrangements. Sorry, but even if only 10 people show up to watch the Coyotes this season, it will be in Glendale, and the CoG is on the hook for the losses ( at least the first $25 million, after that who knows )

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07-27-2010, 10:17 PM
  #104
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if the ice edge deal fails they will also have the difficult task of finding an owner who will be willing to pay back the $25m in the escrow account without having any ability to reduce the damages for the season....essentially increasing the purchase price to $190m.

becomes a much more difficult task if they return to square one with the season only a few weeks away.

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07-27-2010, 10:20 PM
  #105
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Why do I get the impression that Glendale staff really do not want to do business with Ice Edge?

Whether the paperwork has been submitted or not, it's pretty darn crazy for the city staff to be making public comments like this with just over a week to go in negotiations.

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07-27-2010, 10:26 PM
  #106
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Originally Posted by Scottrocks58 View Post
Mexico makes as little sense to the NHL as Winnipeg. Neither place does anything but spike their chances of landing a big US TV contract in the upcoming years.
If the NHL has to eventually make a choice between a team in Phoenix that has no ownership possibilities because a deal can't be worked out and moving it to somewhere that will pay for the team, its moving. It either moves or it folds, and the NHL is not going to let a team fold, and if it means Winnipeg, then that's where its going.

Having a team fold will do more damage to the NHL image then moving a team somewhere that doesn't help land the big US TV contract.

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07-27-2010, 10:42 PM
  #107
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If the buying opportunities look grim, could the NHL just move the team for the next season?

It seems like a really tall order with the way they've released this years schedule already. Season ticket sales would have to be rearranged and people would have to repick their packages because of the movement of the franchise.

It's gotta happen like, next week or I doubt it happens at all.

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07-27-2010, 10:57 PM
  #108
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Quote:
Originally Posted by TheHMan View Post
If the buying opportunities look grim, could the NHL just move the team for the next season?

It seems like a really tall order with the way they've released this years schedule already. Season ticket sales would have to be rearranged and people would have to repick their packages because of the movement of the franchise.

It's gotta happen like, next week or I doubt it happens at all.
http://www.team1040.ca/podcast/pratt..._27_Hour2~.mp3

Steven Brunt of the globe and mail seems to think so! 28 minute mark

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07-28-2010, 12:12 AM
  #109
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Ice Edge insists progress is still being made. Rose coloured glasses or Zeiss lenses???

http://www.theglobeandmail.com/sport...rticle1654098/


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07-28-2010, 12:29 AM
  #110
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Originally Posted by smokes View Post
Ice Edge insists progress is still being made. Rose coloured glasses or Zeiss lenses???

http://www.theglobeandmail.com/sport...rticle1654098/

Progress on what?? Their spokesman who is making statements about the progress still has the goofy idea that IEH is going to buy the team from the NHL and then negotiate with Glendale. Glendale has basically indicated that IEH still hasn't provided the required documentation of their financial capacity. I think that the only way this can be successful is if IEH is able to rope in a partner with sufficient financial clout. Maybe that is what they are still working on. That seems like the best hope.

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07-28-2010, 08:02 AM
  #111
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Originally Posted by Scottrocks58 View Post
Mexico makes as little sense to the NHL as Winnipeg. Neither place does anything but spike their chances of landing a big US TV contract in the upcoming years.
At some point the NHL has to decide if their goal is to have an alleged chance at this mythical big time US TV contract or if they actually want to have healthy franchises. If the most important goal is the TV contract, and a team in Phoenix is an absolute necessity, then they obviously can no longer find a sucker who will own the team in Glendale and lose money hand over fist to help accomplish that goal. Therefore, if the TV contract trumps everything else, then the league should continue to own the team and fund all the losses, offset of course by the increased revenues from the magical TV contract.

More realistically, they will figure out that it makes more sense for the team to move elsewhere. Having a money-losing team with very few fans in a large Southwest market will not be the difference between a $12 TV contract and a $900 million TV contract. It's marginal at best. And at this point I think everyone else agrees that, although the next TV contract should be better than the last one, the NFL-style TV deal just doesn't exist and never will.

Your fixation on a US TV contract is a little bit misplaced - why is it better to try (in vain) to max out on TV revenue alone? Shouldn't the NHL actually be trying to max out on TOTAL revenue? Getting the Coyotes out of Phoenix would do that, even if the mythical next TV contract takes a small hit.

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Old
07-28-2010, 08:46 AM
  #112
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Quote:
Originally Posted by TheHMan View Post
If the buying opportunities look grim, could the NHL just move the team for the next season?

It seems like a really tall order with the way they've released this years schedule already. Season ticket sales would have to be rearranged and people would have to repick their packages because of the movement of the franchise.

It's gotta happen like, next week or I doubt it happens at all.
If in the case Phoenix moves it will be not this season.

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07-28-2010, 09:05 AM
  #113
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Originally Posted by headsigh View Post
If in the case Phoenix moves it will be not this season.
I agree, the Yotes are not moving this hockey season; however, I could see the sale to True North soon with True north sucking up the losses (or a portion of them?) for the year in lieu of having to pay a relocation fee to the NHL.

This way Glendale is off the hook for the 25mil and the NHL is off the hook for any loses above the 25 mil.

It is possible that you also could see the odd game played in Winnipeg during the year if the opposing team agrees; however, I suspect this is unlikely. Then again, True North could try for the 5 games in Saskatoon...

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07-28-2010, 09:10 AM
  #114
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since IEH would be on the hook for the losses this year if they do end up buying the team, negative publicity, creating significant doubt in the ticket buying public's mind will affect their ability to minimize those damages for this season.....something they would obvioulsy be interested in doing if they were really staring down the possibility of owning the team for this year.

because of this, the only logcal conclusion is that they do not have the funding or if they do they barely do.

the city making this information public is damaging to market confidence at a time when it needs to be as high as possible....im sure IEH would have done everyting possible to avoid such a release if they were able to....if they had financing or even close to it, they would have made sure glendale was confident and fully aware before being forced to take it public....if they had the ability to purchase the team they would not leave ambiguity with glendale, risking this public announcement....im sure glendale warned them before they did it.

that suggests to me that they do not have the financing and the speculation regarding their financial capacity is begining to expose itself.

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Old
07-28-2010, 09:32 AM
  #115
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Here is a question, where does all the money go from the people who already bought season tickets if the team ends up moving, either before the season starts or in Dec?

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07-28-2010, 09:48 AM
  #116
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Originally Posted by tnatibaH View Post
Here is a question, where does all the money go from the people who already bought season tickets if the team ends up moving, either before the season starts or in Dec?
They would be refunded their money. The NHL isn't going to sting people.

I find it funny how people are making statements like "the team will never move this season" because nobody knows a damned thing of what will happen. The chances of it moving are slim to none but there is still that slim chance.

If the COG turned around and said we do not have a buyer at this point, is it possible to move the team so we don't have to fund the losses...I think the NHL would at least look into it. From the NHL's standpoint the city is only going to cover 25 million, what if the losses are more because nobody shows up to the games if they know the teams gone next year? That's also a risk for the NHL. Seriously, I'm really surprised the NHL didn't ask for a 35 million fund.

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Old
07-28-2010, 10:08 AM
  #117
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Some new quotes to add to the story:

Quote:
"We have been at this since June 8 when the Glendale City Council approved the memo of understanding and seven weeks later, we are making great progress," wrote Johnson. "Our focus is on buying the team from the NHL and we remain confident in our ability to complete the deal. We are in constant communication with all parties involved in this process and are committed to a successful outcome."
http://www.winnipegfreepress.com/spo...-99447579.html

Quote:
"I will confirm for the record that the Coyotes will be playing in Glendale for the 2010-11 season," Daly said.
http://www.winnipegfreepress.com/bre.../99332254.html

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07-28-2010, 10:15 AM
  #118
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Quote:
Ice Edge Bid Trouble Should Equal End of Line for Hockey in the Desert

Jim Neveau, THW Roving Reporter

As a matter of disclosure, I would like to point out that I have long been a proponent of hockey staying in the desert. I have written several articles about how the NHL needed to give the Valley of the Sun a chance to sustain the team before cutting ties and letting the Coyotes move. I have advocated patience, implored fans in Arizona to support their local hockey team, and pretty much chained myself to a tree to defend the existence of the Coyotes in Glendale.
http://thehockeywriters.com/ice-edge...in-the-desert/


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07-28-2010, 10:15 AM
  #119
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Quote:
Originally Posted by Running Riot View Post
Some new quotes to add to the story:
Which is supported by the comment from Johnson a day earlier in the Arizona Republic which restarted this thread...

"Ice Edge spokesman Robert Johnson acknowledged the group has not begun arena lease talks with Glendale because it would be "putting the cart before the horse," since the group has not yet bought the team from the NHL."

Read more: http://www.azcentral.com/community/g...#ixzz0uzSNmiuh

You know, I would tend to go with the first comment since it was made before they realized what had happened.

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07-28-2010, 10:24 AM
  #120
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Originally Posted by aj8000 View Post
Which is supported by the comment from Johnson a day earlier in the Arizona Republic which restarted this thread...

"Ice Edge spokesman Robert Johnson acknowledged the group has not begun arena lease talks with Glendale because it would be "putting the cart before the horse," since the group has not yet bought the team from the NHL."

Read more: http://www.azcentral.com/community/g...#ixzz0uzSNmiuh

You know, I would tend to go with the first comment since it was made before they realized what had happened.
These statements by Johnson (IEH's PR guy) actually make the group look witless. His first statement makes it sound like they don't even know the process. Then he makes statements that directly contradict his initial statements. He actually makes Daryl Jones look like a PR guru...

My interpretation.... Glendale is still waiting for sufficient evidence of IEH's financial capacity to own and operate the team. This is consistent with their first statement several weeks ago when they first received information. At that time, they made it clear that they had received "some of the financial information" required from IEH, and would review it. In the past several weeks there might have been lease-related discussions between Glendale and IEH, but there has been no exclusivity because of IEH's failure to satisfy Glendale with the financial information. IEH is still scrambling to put financing together, and Glendale is getting very impatient. If IEH is not able to come up with the financial goods very soon, Glendale is going to cease dealing with IEH.

Whether or not there are other potential ownership groups out there is a matter for speculation. However, since IEH apparently has not had exclusive negotiating rights, presumably Glendale and the NHL will have been looking around already.

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07-28-2010, 10:39 AM
  #121
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Quote:
Originally Posted by LT View Post
I find it funny how people are making statements like "the team will never move this season" because nobody knows a damned thing of what will happen. The chances of it moving are slim to none but there is still that slim chance.
.

the NHL and glendale have a contract and the money is in the bank to cover the losses for next year....they cant simply back out leaving the NHL holding the bag....that is precisely why the NHL was so adamant about having the money in the bank that they could draw from at their own discression...that money is owned by the NHL...unless glendale can find someone to pay them back it is lost to them.

the team will not move no matter what until the begining of next season....the logistics of moving team now would be impossible...selling tickets, changing flights and schedules.....it would be an economic disaster for everyone....who would anyone take that on when they can simply wait a year on glendale's dime?

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07-28-2010, 10:47 AM
  #122
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I agree, I don't think we'll see the team move before the 2010-2011 season.

Just to put it into perspective, here's what aj8000 posted a few pages back:

Quote:
1995, Aug. 14 - The Spirit of Manitoba announces that they were unable to raise the required capital to proceed with the purchase of the Winnipeg Jets. The organization promptly disbands.

1995, Aug. 15 - The franchise announces that the 1995-96 season will be the final year for the Jets in Winnipeg since the team cannot be moved prior to 1995-96.

1995, Dec. 19 - The Winnipeg Jets ownership announces in a press conference that the new home of the franchise will be Phoenix, AZ.
I think we'll see a timeline almost identical to the one above.

It's possible that the official "lame duck season" announcement may take place later in the current situation, as I'm sure COG will get desperate and go crawling back to Reinsdorf or any other interested party to find out if they're interested. In fact, that may have been the reasoning behind Frisoni's announcement in the first place, to put other interested parties on notice that the IEH bid is having problems and that they no longer have/never had exclusivity.


Last edited by Jesus Christ Horburn: 07-28-2010 at 10:53 AM.
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07-28-2010, 10:49 AM
  #123
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The problem is the money, and perhaps that's related to the NHL's asking price.

If IEH had the money, this would have closed a while ago. Further complicating matters is the fact that the franchise price of ~$160m cannot be supported given the current condition. It's a distressed asset that the NHL itself doesn't want to take a bath on covering, so they're trying to find someone else who will pay.

IEH doesn't have deep pockets, but maybe they're not so dumb that they'd overpay either. $160m to close but immediate assumption of operating costs? Furthermore, if they have to get financing, banks may be willing to give them 50% of some price, but not the asking price.


It just seems like a game of chicken right now. The NHL doesn't want to blink because they don't want to underwrite losses by taking a lower price.

Glendale's hands are tied above and beyond the bond.

IEH is willing to do this, but they need financing and cash, so their ceiling may be lower than what the NHL would like.

The NHL doesn't "really" want to move the team, especially to Canada because it might actually validate JB's opinion. (Among other reasons that they'd prefer to leave the team where it is....)



Someone is going to have to blink, but I think only the NHL and IEH have any room to do so. Glendale does have to appear to be complying with Arizona law after all.

 
Old
07-28-2010, 10:49 AM
  #124
LT
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Originally Posted by peter sullivan View Post
the NHL and glendale have a contract and the money is in the bank to cover the losses for next year....they cant simply back out leaving the NHL holding the bag....that is precisely why the NHL was so adamant about having the money in the bank that they could draw from at their own discression...that money is owned by the NHL...unless glendale can find someone to pay them back it is lost to them.

the team will not move no matter what until the begining of next season....the logistics of moving team now would be impossible...selling tickets, changing flights and schedules.....it would be an economic disaster for everyone....who would anyone take that on when they can simply wait a year on glendale's dime?
There are a few things...one being that it would take the COG asking the NHL to move the team now because they can't risk paying the 25 million with no potential buyers left in the wings, doesn't mean the NHL would move them. Second if COG asked the NHL to move the team, why would the NHL want to, because if it's truly a lame duck season and the fans do not show up they could potentially lose more than 25 million of which the NHL would have to cover never mind the bad PR all season. The last point that comes to mind and Stephen Brunt actually brought it up was, the COG actually paying the 25 million just screams of being illegal in Arizona.

I wonder if the NHL and COG had a backout date in that agreement? I doubt it but it's possible.

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07-28-2010, 10:50 AM
  #125
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Originally Posted by Whileee View Post
If IEH is not able to come up with the financial goods very soon, Glendale is going to cease dealing with IEH. Whether or not there are other potential ownership groups out there is a matter for speculation. However, since IEH apparently has not had exclusive negotiating rights, presumably Glendale and the NHL will have been looking around already.
Cease dealing with IE and do what? There isn't anybody else, if there was Glendale would have told IE to take a hike. Ooops like they did 5 months ago.

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