[News] Coyotes to Change Franchise Name

[Vulcan]

Originally Posted by Resolute 14

Well, the league will make that money back through a relocation fee. Especially if, say Bell and Rogers decide they can't play nice together as Maple Leafs owners and one company gives up their stake in exchange for a free relocation into the Toronto market for the other.

If the Coyotes can't figure out how to draw fans in the next couple seasons, it is Glendale that will be left holding the bag. Everyone else breaks even or turns a profit.

Well I brought up the Bell and Rogers scenario in the other thread but as you say, if that happens the relocation fee is waived, so how does the NHL get their money back? I think people are confused with a relocation fee and territorial rights which the league in Toronto's case, contends doesn't exist. An amicable split between Rogers and Bell would avoid a court case over territorial rights but that there would be a relocation fee as well for the new team, as you say probably not.

They may be able to get a relocation fee to make the Seattle or Quebec C. move but I don't think these owners have bottomless pockets and will have to start paying the principal in 5 years. They are already heavily leveraged.

Personally, with the recent re-alignment and the need of staying in the US for TV, I don't see Gary giving Quebec City the Coyotes franchise or even an expansion franchise. Their best option is moving a Eastern conference team.

[jayswin]

Wow, so basically what this boils down to is; The league will keep taking losses in it's lame duck location, and around the same time they reach $50 mil in losses a group and arena in another desired location should be ready, then they get that $50 back and then some, in the form of relocation fee?

[Resolute 14]

The league no longer owns the Coyotes, so it isn't losing anything. It is owed a debt by RSE, but otherwise won't accrue any further losses. Its RSE that is on tab to eat that $50 million+ if the market doesn't turn around.

And I doubt the relocation fee gets waived in that scenario, Vulcan. The league will make sure it gets its money back. Its the indemnity for moving into the Leafs territory that would be waived as part of a transfer of ownership shares.

[Vulcan]

Originally Posted by flameswin

Wow, so basically what this boils down to is; The league will keep taking losses in it's lame duck location, and around the same time they reach $50 mil in losses a group and arena in another desired location should be ready, then they get that $50 back and then some, in the form of relocation fee?

No it's the owners who have to eat the $50M in losses and than they will need to pay a re-location fee, so the NHL can recoup their $104M in losses.

[Vulcan]

Originally Posted by Resolute 14

The league no longer owns the Coyotes, so it isn't losing anything. It is owed a debt by RSE, but otherwise won't accrue any further losses. Its RSE that is on tab to eat that $50 million+ if the market doesn't turn around.

And I doubt the relocation fee gets waived in that scenario, Vulcan. The league will make sure it gets its money back. Its the indemnity for moving into the Leafs territory that would be waived as part of a transfer of ownership shares.

That's what I said, the Leafs territorial fee would be waived. You said it was the relocation fee.

I can see the relocation fee being waived as well as a they are already giving up 50% of the Leafs and you want them to pay a relocation fee too?

and yeah, the NHL won't have any further loses but they are already in the hole for $104M.

[Resolute 14]

Trust me, the NHL will get that money back. Primarily because they won't just let RSE sell and make a large profit. Bettman will, at worst, take enough out of their hide to ensure the league breaks even. But selling into a market like that would leave enough left over for RSE to come out even as well.

It gets dicier if they end up looking at more questionable markets like Quebec City or Seattle. In that case, I still expect the league comes out even, but RSE faces higher risk.

[Vulcan]

RSE is in for $250M for the Coyotes with the high interest principal payments starting in 5 years.. Even if they get charged the $104M and are in a position to pay the relocation fees, making the NHL break even, the NHL didn't need to stay in Phoenix losing the $146M in the first place. They could have been moved after the bankruptcy and pocketed the relocation fee.

So in a nutshell, maybe the NHL can break even but they could have pocketed the relocation fee.

On a side note, it would be hilarious if the new Toronto team is owned by Calgary oil men.

[Alberta_Beef]

Wasn't the name change sfter this season announced at the time of the sale?