General Ongoing Coyotes saga thread

[Jay Random]

Originally Posted by valo403

Why would you lose money on a game? The majority of your costs are fixed overhead, you're paying them either way. I can't see opening the doors costing you more than the gate revenue.

$44m salary floor. Divide that by 41 home games, and you need to gross $1.1m every night just to pay the minimum player salaries. According to Forbes, the Coyotes' total gate receipts for 2011-12 were $22m.

The total revenue for the team, as estimated by Forbes, was $83m (and I confess I don't see where they got $61m in non-gate revenues; that's more than the Flames had). Expenses were about $104m. Once again, they would have needed something over $40m in gate receipts to break even.

If you don't operate the team, you save 100% of the salaries of players, plus all the other hockey personnel, and all hockey-specific overhead. So those costs are not fixed overhead. You're paying them if you run the hockey team; you are not paying them if you don't.

If the hockey team is losing more money than it pays in rent to the arena, then owning it will make the arena's finances worse, not better. That's been the case with the Coyotes.

[Sidney Crosby's Hat]

Originally Posted by Jay Random

$44m salary floor. Divide that by 41 home games, and you need to gross $1.1m every night just to pay the minimum player salaries. According to Forbes, the Coyotes' total gate receipts for 2011-12 were $22m.

The total revenue for the team, as estimated by Forbes, was $83m (and I confess I don't see where they got $61m in non-gate revenues; that's more than the Flames had). Expenses were about $104m. Once again, they would have needed something over $40m in gate receipts to break even.

If you don't operate the team, you save 100% of the salaries of players, plus all the other hockey personnel, and all hockey-specific overhead. So those costs are not fixed overhead. You're paying them if you run the hockey team; you are not paying them if you don't.

If the hockey team is losing more money than it pays in rent to the arena, then owning it will make the arena's finances worse, not better. That's been the case with the Coyotes.

I think that they count government handouts as "revenue".

[valo403]

Originally Posted by Jay Random

$44m salary floor. Divide that by 41 home games, and you need to gross $1.1m every night just to pay the minimum player salaries. According to Forbes, the Coyotes' total gate receipts for 2011-12 were $22m.

The total revenue for the team, as estimated by Forbes, was $83m (and I confess I don't see where they got $61m in non-gate revenues; that's more than the Flames had). Expenses were about $104m. Once again, they would have needed something over $40m in gate receipts to break even.

If you don't operate the team, you save 100% of the salaries of players, plus all the other hockey personnel, and all hockey-specific overhead. So those costs are not fixed overhead. You're paying them if you run the hockey team; you are not paying them if you don't.

If the hockey team is losing more money than it pays in rent to the arena, then owning it will make the arena's finances worse, not better. That's been the case with the Coyotes.

Whoa, whoa, whoa, what do salaries have to do with running the arena? We must have been working under an entirely different set of assumptions here, as I was at no point talking about the city operating the team.

[troutman]

Paul Giblin ‏@PaulGiblinAriz
@saraAZ83 Friday's public #Glendale council meeting also will be a great time to read the tea leaves to predict Tuesday's #Coyotes votes.

[troutman]

David Leibowitz ‏@leiboaz Great #Coyotes reading: Economic study paid for by #Glendale. Coyotes leaving: "Worst of all possible scenarios." http://www.glendaleaz.com/documents/AnalysisandComparisonofthePhoenixCoyotesandJobingA rena.pdf …

[Jay Random]

Originally Posted by valo403

Whoa, whoa, whoa, what do salaries have to do with running the arena? We must have been working under an entirely different set of assumptions here, as I was at no point talking about the city operating the team.

The city isn't going to be operating the arena, either. However, they are going to be paying out a fat arena management fee to the owners of the team — which means they will be subsidizing the team's losses. Without those teams, those losses go away. Therefore, I strongly suspect it would be cheaper to operate the arena without a hockey team in it.

Am I being clear now? Sorry if I wasn't before.

[Jordan!]

The lesser of two evils for the city of glendale is the Coyotes staying, that's just a fact. They never should have built that arena but there is stands today. I'm sure a motorcycle show and the Backstreet Boys will keep it afloat.

[valo403]

Originally Posted by Jay Random

The city isn't going to be operating the arena, either. However, they are going to be paying out a fat arena management fee to the owners of the team — which means they will be subsidizing the team's losses. Without those teams, those losses go away. Therefore, I strongly suspect it would be cheaper to operate the arena without a hockey team in it.

Am I being clear now? Sorry if I wasn't before.

I don't know, what were the bids offered by other management companies? Were any of those going to bring 41 additional dates to the city or generate any of the other revenues the arena has the ability to generate? The fact that an economic study shows that the team leaving is a worst case scenario makes me think your assumption is incorrect, but who knows what the study considered.

[Jordan!]

http://www.theglobeandmail.com/sport...ticle12883834/

"There is an interesting name in the mix with Gosbee and LeBlanc. Former NHL goaltender Mike Vernon is a Calgary native and a close friend of Gosbee, who is a Calgary financier. Vernon said he is not an investor at this point but is helping out with advice and may take a role in the Coyotes’ hockey and business operations if the arena lease is approved. “We’ll see,” he said.

If IceArizona gets the team, Gosbee and LeBlanc want to recruit more investors among the large group of Albertans who winter in the Phoenix area. Vernon, who is an affable fellow, would be a big help in that regard."

I wish I could've spilled the beans sooner, I've known this since April

[Jordan!]

There is a meeting taking place right now, follow @cmorganfoxaz

City proposes mutual 5 year, $50 million out clause.

[Jay Random]

Originally Posted by valo403

Were any of those going to bring 41 additional dates to the city or generate any of the other revenues the arena has the ability to generate?

Again, what matters is not the gross for those 41 dates, but the net. By bringing in those 41 dates, you also bring in a group of players who absolutely must be paid $44 million in salaries. If those 41 dates cause you to lose money because of the added expenses, you're better off without them.

The fact that an economic study shows that the team leaving is a worst case scenario makes me think your assumption is incorrect, but who knows what the study considered.

Frankly, when the team is losing $20 million a year, I have to be highly suspicious of any economic study that comes to such a conclusion.

[Resolute 14]

Originally Posted by Jay Random

Frankly, when the team is losing $20 million a year, I have to be highly suspicious of any economic study that comes to such a conclusion.

On the overall picture, you may well be right. But this report deals with the arena exclusively, and an arena without a tenant makes less money than an arena with one. Certainly it may make no sense at all for Glendale to own and operate the team by itself, but if someone else is eating the losses, Glendale really is better off with an NHL team there than without.

[Jay Random]

Originally Posted by Resolute 14

On the overall picture, you may well be right. But this report deals with the arena exclusively, and an arena without a tenant makes less money than an arena with one. Certainly it may make no sense at all for Glendale to own and operate the team by itself, but if someone else is eating the losses, Glendale really is better off with an NHL team there than without.

The trouble is, every proposal I've heard of so far requires Glendale to pay a big subsidy to cover those losses — which more than wipes out any rent they would receive from that tenant. So that's a pretty big if.

[Resolute 14]

Originally Posted by Jay Random

The trouble is, every proposal I've heard of so far requires Glendale to pay a big subsidy to cover those losses — which more than wipes out any rent they would receive from that tenant. So that's a pretty big if.

Losing the team also wipes out taxes paid by people drawn to Glendale by the team.

[$ven27]

So... As someone who hasn't followed this much, what do you say the percentage is for the Coyotes staying in Glendale?

[Jordan!]

Originally Posted by $ven27

so... As someone who hasn't followed this much, what do you say the percentage is for the coyotes staying in glendale?

50/50

[Cheese]

Originally Posted by $ven27

So... As someone who hasn't followed this much, what do you say the percentage is for the Coyotes staying in Glendale?

we will let you know on Monday!

[Jordan!]

Originally Posted by Cheese

we will let you know on Monday!

Tuesday is the new Monday.. didn't you know?

[Sidney Crosby's Hat]

Originally Posted by $ven27

So... As someone who hasn't followed this much, what do you say the percentage is for the Coyotes staying in Glendale?

99% next 5 years.

For next season, 100%.

6 years or further, 1%.

[Jay Random]

Originally Posted by Resolute 14

Losing the team also wipes out taxes paid by people drawn to Glendale by the team.

Which is, let's face it, a minuscule percentage of the money those people are spending in Glendale. The city sales tax is 2.9% (after a big 'temporary' hike last year). Even if you add in the extra property and business taxes collected from the arena district, it seems hugely unlikely that there would be enough to pay for the city's subsidy to the arena and the team.

Note that the city would still collect property and business taxes from the arena district, no matter what happened with the hockey team. You can only include the difference in the amount collected.

Remember, the city is now collecting those extra taxes, and still in such dire straits that it has to talk about mortgaging City Hall. Keeping the Coyotes will, at most, keep them in the terrible financial mess they're in now, with no escape for the foreseeable future. What they really need is to be off the hook for the team's operating losses — which means they have to find a real owner willing to pay his own bills, or else let the team move. Fish or cut bait.

I have nothing against Phoenix or Glendale or the Coyotes' fans, but after the length of time this has dragged on, it's beginning to look like time to cut bait.