NHL Anti-Thread: Bad Business Decision Aggregator

[Lee.]

They're charging each season ticket holder $1M as a license fee.

[TheOldRoman]

Far be it from ME of all people to grouse about a thread going off topic, but this one's my baby, and I won't shed no tears if Major-Junior Roll Call were to find itself spun off.

But yeah, I don't think this is the slam dunk that the Arizona people make it out to be. Between the huge arena management fees (paying $300 million for them to pay you $10 million? pear), the handing over of the very same parking lots that Glendale claimed it had to buy from Fax Hulsizer, and the surrendering of various ancillary revenue streams, it shouts illegal subsidy. All that plus no one's sure the guy has enough money.

Yeah, but we have been saying this for three years now. This team shouldn't exist. It's not legal. But here they are - pissing us off. Another playoff run and another owner trotted out. The endgame is moving the team, but who knows when that will come. We have probably a week after the Kings lift the Cup before it becomes official they will stay in Glendale for another disastrous year. As maddening as this is, as much as we know Jamison doesn't have the money and the deal is unconstitutional, we know that they won't move this offseason. Every time I see a new post in this thread, I get excited, opening it hoping to read "moving trucks seen at team facility, press conference called for QC townhall," but to no avail.

[bosrs1]

I'm guessing that would be a pretty expensive proposition, even if possible in the first place.

But Prokhorov is rich enough, and has apparently been involved in hockey in Russia, so who knows?

He's not going to retrofit his brand new arena.

[Gothamite]

I agree it's extremely unlikely. But with him, who knows? Maybe he'll stop funding the Russian national teams since they wouldn't give him the Presidency...

[The_Admiral]

Seems like the Arizona Republic is slowly turning on the team. They'd been kind of a booster all along.

A proposed 20-year agreement with a likely Phoenix Coyotes buyer may cost Glendale more than $45 per resident each year over the life of the deal.

The city appears poised to pay a group led by former San Jose Sharks chief executive Greg Jamison nearly $325 million over 20 years to operate and make improvements to the city-owned Jobing.com Arena.

An Arizona Republic analysis of a draft released Monday by the city showed Glendale expects to collect less than half that amount via ticket surcharges, rent, sales tax and other team fees during the same period.

hmm.

A Republic analysis revealed that even if the Coyotes went to the Stanley Cup Finals for the next 20 seasons and the arena booked 30 sold-out concerts each year for the next 20 years, Glendale could still expect to lose about $9 million annually.

That figure does not include the city's annual arena debt payments, which will average about $12.6 million a year over the next 20 years.

Longtime Glendale Mayor Elaine Scruggs, who has said next year's budgeted $17 million arena management fee is too steep, said Monday she cannot support the deal.

The current deal allows Jamison to keep all revenues to offset expenses and anything left over from the city's arena fee of $10 million to $20 million a year will help run the hockey team, Scruggs said.

even if the Coyotes went to the Stanley Cup Finals for the next 20 seasons and the arena booked 30 sold-out concerts each year for the next 20 years, Glendale could still expect to lose about $9 million annually.

You idiots!

[Still MIGHTY]

even if the Coyotes went to the Stanley Cup Finals for the next 20 seasons and the arena booked 30 sold-out concerts each year for the next 20 years, Glendale could still expect to lose about $9 million annually.

I've read a ton of statistics, figures, and projections throughout the course of this thing, but that is one of the most astounding ones I've seen. Good God.

As seen, I've been an advocate of having the team stay for hockey reasons, if it was something even remotely reasonable. It's just never going to be reasonable. Hell even if the team moves, Glendale is still going to be in their own world of .

[Gothamite]

As seen, I've been an advocate of having the team stay for hockey reasons, if it was something even remotely reasonable. It's just never going to be reasonable. Hell even if the team moves, Glendale is still going to be in their own world of .

If the team moves, then Glendale can use the arena for concerts etc without having to pay the exorbitant hockey subsidy. I've seen reports that the city could actually make money on the arena if they didn't have to support the Coyotes.

[TheOldRoman]

As seen, I've been an advocate of having the team stay for hockey reasons, if it was something even remotely reasonable. It's just never going to be reasonable. Hell even if the team moves, Glendale is still going to be in their own world of .

If the team moves, then Glendale can use the arena for concerts etc without having to pay the exorbitant hockey subsidy. I've seen reports that the city could actually make money on the arena if they didn't have to support the Coyotes.

Somone provided a stat that the only year the arena made money was during the lockout year of 2005.

[Waffles]

The seating chart for the Islanders-Devils preseason game in Brooklyn has reverted back to the original, non-horseshoe arrangement on the game's Ticketmaster page:

(FWIW, the Barclays Center site is still showing the horseshoe)

[Still MIGHTY]

As seen, I've been an advocate of having the team stay for hockey reasons, if it was something even remotely reasonable. It's just never going to be reasonable. Hell even if the team moves, Glendale is still going to be in their own world of .

If the team moves, then Glendale can use the arena for concerts etc without having to pay the exorbitant hockey subsidy. I've seen reports that the city could actually make money on the arena if they didn't have to support the Coyotes.

Having lived 10 minutes from the arena and based on the number and type of non-Coyotes events that roll through the Jobber, I have a hard time believing that. Unless they make money by simply not turning things on. Most of the higher profile events go on at the Univervisty of Phoenix Stadium, US Airways Arena, and even the Ashley Furninture Pavilion. I don't know how many more of those events would transfer to the Jobber, but I just don't see that.

[NJTank]

As seen, I've been an advocate of having the team stay for hockey reasons, if it was something even remotely reasonable. It's just never going to be reasonable. Hell even if the team moves, Glendale is still going to be in their own world of .

If the team moves, then Glendale can use the arena for concerts etc without having to pay the exorbitant hockey subsidy. I've seen reports that the city could actually make money on the arena if they didn't have to support the Coyotes.

Having lived 10 minutes from the arena and based on the number and type of non-Coyotes events that roll through the Jobber, I have a hard time believing that. Unless they make money by simply not turning things on. Most of the higher profile events go on at the Univervisty of Phoenix Stadium, US Airways Arena, and even the Ashley Furninture Pavilion. I don't know how many more of those events would transfer to the Jobber, but I just don't see that.

Jobbing.Com Arena

University of Phoenix Stadium

Ashley Furniture Pavillion

Is it me or does Arizona have the absolute worst sponsorhip venue names.

[Gothamite]

As seen, I've been an advocate of having the team stay for hockey reasons, if it was something even remotely reasonable. It's just never going to be reasonable. Hell even if the team moves, Glendale is still going to be in their own world of .

If the team moves, then Glendale can use the arena for concerts etc without having to pay the exorbitant hockey subsidy. I've seen reports that the city could actually make money on the arena if they didn't have to support the Coyotes.

Having lived 10 minutes from the arena and based on the number and type of non-Coyotes events that roll through the Jobber, I have a hard time believing that. Unless they make money by simply not turning things on. Most of the higher profile events go on at the Univervisty of Phoenix Stadium, US Airways Arena, and even the Ashley Furninture Pavilion. I don't know how many more of those events would transfer to the Jobber, but I just don't see that.

I can believe it. "Arena management" fees would be greatly reduced in that case. They wouldn't need to fill it every night. And you have to remember that $25M of what the city has been losing every season would melt away like ice in the desert.

[RyanMcD29]

The seating chart for the Islanders-Devils preseason game in Brooklyn has reverted back to the original, non-horseshoe arrangement on the game's Ticketmaster page:

(FWIW, the Barclays Center site is still showing the horseshoe)

Hmm, so the plot thickens..

If they can get this to work and the demand's decently high, even if it's via Devil fans in addition to Islander fans, I'd welcome it as an alternative to Nassau and would be excellent for keeping the Isles here in the NYC area

[Gothamite]

Lost in all the news about the awful deal Glendale is trying to push for the future is this gem about the bad deal they have now:

$25 million NHL payment will come from Glendale utility fund

Glendale's second $25 million pledge to the National Hockey League largely came from city water and sewer funds, which is not what city administrators said would happen.

Actually, city staff said the money wouldn't be needed at all because they expected the Phoenix Coyotes to be sold. If that had occurred, the pledge to help the NHL cover team losses during the 2011-12 season would have been moot.

That didn't happen and the biggest chunk of the pledge, $15 million, was siphoned from the utility fund into an escrow account awaiting the NHL's bill, which is expected any day.

It's the second year in a row that the city made good on its NHL pledge with help from the utility accounts, which is largely funded by fees, such as water and sanitation, paid by residents and businesses. The enterprise funds are suppose to pay for long-term utility projects, such as sewer plants or pipe replacement.

It gets better:

Councilman Manny Martinez said council was told early this year that the utility funds were used again.

"I wished it didn't happen that way but the options were limited," Martinez said.

That said, Martinez said he is not concerned that the money came out of the enterprise fund because it must be repaid. Glendale begins reimbursing the first $25 million payment next budget year at $1.1 million for 25 years.

So not only are they committing to spend money they don't have in the future, they're already on the hook for repaying in the future money they don't have to cover bills they can't pay today.

This is beyond farce. Time to move the team.

[bosrs1]

Lost in all the news about the awful deal Glendale is trying to push for the future is this gem about the bad deal they have now:

$25 million NHL payment will come from Glendale utility fund

Glendale's second $25 million pledge to the National Hockey League largely came from city water and sewer funds, which is not what city administrators said would happen.

Actually, city staff said the money wouldn't be needed at all because they expected the Phoenix Coyotes to be sold. If that had occurred, the pledge to help the NHL cover team losses during the 2011-12 season would have been moot.

That didn't happen and the biggest chunk of the pledge, $15 million, was siphoned from the utility fund into an escrow account awaiting the NHL's bill, which is expected any day.

It's the second year in a row that the city made good on its NHL pledge with help from the utility accounts, which is largely funded by fees, such as water and sanitation, paid by residents and businesses. The enterprise funds are suppose to pay for long-term utility projects, such as sewer plants or pipe replacement.

It gets better:

Councilman Manny Martinez said council was told early this year that the utility funds were used again.

"I wished it didn't happen that way but the options were limited," Martinez said.

That said, Martinez said he is not concerned that the money came out of the enterprise fund because it must be repaid. Glendale begins reimbursing the first $25 million payment next budget year at $1.1 million for 25 years.

So not only are they committing to spend money they don't have in the future, they're already on the hook for repaying in the future money they don't have to cover bills they can't pay today.

This is beyond farce. Time to move the team.

It's mind boggling as to why they're hanging on to the team. They're hemorrhaging money they don't have and would lose far less if they let the team go and just imploded their mistake of an arena.

[wildwing64]

Hang on. Let me get this straight.

So basically, the one year the arena operated without a tenant, the city made money from it. Every year the NHL has been in control of the franchise, it has been costing the city money. Glendale are desperate to keep the Coyotes around for whatever reason, probably because they're the only tenant of the arena, and it's costing them more money every year. They're willing to cut public services in order to shell out even more money to attract an owner for the Coyotes franchise that's losing money every year. The city will continue to lose money from this franchise every year the Phoenix Coyotes still exist, even with an owner, and even 20 years down the line if the team is consistently the best team in the NHL every year. They're willing to continue to drain the city of its money to keep the Coyotes around, even though they profited that one year the Coyotes didn't play in the arena and would be better off without them there...

[Gothamite]

I don't know for a fact that they made money on the arena in the lockout season.

But we do know that they're bankrupting themselves to keep a team the city doesn't actually like very much. We do know that they are cutting back on city services to do so. We do know that they're proposing to break Arizona law in the process.

[The_Admiral]

Forbes says he doesn't have the money yet.

http://www.forbes.com/sites/mikeozanian/2012/06/06/jamison-still-trying-to-raise-money-to-purchase-coyotes/

Although the Glendale City Council votes this Friday on new 20-year lease (located at the bottom of this post) at Jobing.com Arena for Greg Jamison, the prospective buyer of the Phoenix Coyotes, sources familiar with the matter say the former CEO of the San Jose Sharks still has not raised enough money to buy the National Hockey League team.

According to these sources Jamison is having trouble raising the money to make the $170 million purchase because investors believe that even with a $15 million a year taxpayer subsidy over the course of the new lease the Coyotes will have difficulty turning a profit. The Coyotes, bought by the NHL while in bankruptcy in 2009 for $140 million, have been losing money even though they have been getting a $25 million a year subsidy from Glendale.

. . .

Don't be shocked if the NHL lowers its asking price well below $170 million or the deal with Jamison falls through, just like the previous negotiations to sell the team to Jerry Reinsdorf and Matthew Hulsizer fell apart. In November we valued the Coyotes at $134 million, last in the 30-team league.

Oh and they're ramrodding the vote through on a Friday morning when no one can address City Council.

[ninersdd]

As seen, I've been an advocate of having the team stay for hockey reasons, if it was something even remotely reasonable. It's just never going to be reasonable. Hell even if the team moves, Glendale is still going to be in their own world of .

If the team moves, then Glendale can use the arena for concerts etc without having to pay the exorbitant hockey

subsidy. I've seen reports that the city could actually make money on the arena if they didn't have to support the Coyotes.

Having lived 10 minutes from the arena and based on the number and type of non-Coyotes events that roll through the Jobber, I have a hard time believing that. Unless they

make money by simply not turning things on. Most of the higher profile events go on at the Univervisty of Phoenix Stadium, US Airways Arena, and even the Ashley Furninture Pavilion. I don't know how many more of those events would transfer to the Jobber, but I just don't see that.

Don't forget the Arena on the Fairgrounds where the Suns used to play. (Though I don't know if they use that for events). Also the next event at Jobing.com isn't till a month and a half(Some skateboarding tour).

[The_Admiral]

This is interesting:

http://www.azcentral.com/sports/coyotes/articles/2012/06/05/20120605big-time-market-feeling-bit-small.html

Phoenix native Phil Motta has a marketing firm and a background in sports. He said the "use of 'Arizona' as a bland, imprecise compromised alternative to the urban, big-league name 'Phoenix' contributes to a diminished sense of urban patriotism." He believes this contributes to the small-market behavior too often prevalent in these parts, one born from a small-market self-perception.

It's also partly why he moved his business to Los Angeles.

"I hated doing that," Motta said. "But things like the Cardinals dumping Phoenix as its identity -- and thus telling the country and the world that the place called 'Phoenix' wasn't really a major-league city like Chicago or Seattle or LA -- badly hurt the place's image and affected its suitability as a headquarters location for firms like mine, which solicit clients all over the country and the world."

See, I told you guys naming teams for states was stupid.

Yet even with a stake in the game, Kendrick said he'd resist changing his team's name to the Phoenix Diamondbacks. Alas, once you use the state name as a moniker, you can't go back without appearing small.

"I think we feel a responsibility to be the state's baseball team," he said. "And as much as I love Phoenix, I think Arizona is more representative of who we are and what we want to be."

Marlins just did it! So too can Phoenix and Denver's teams.