Looking at his history, this is the fourth team he has tried to buy in recent years.
In 2006, he had a deal to buy the Philadelphia 76ers, but that fell apart because he couldn't get the money together. Last summer, he was looking at buying the Devils, but eventually pulled out of the deal. Then, earlier this year, he was in talks to buy the Islanders until Wang pulled out (he he).
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Looking at his history, this is the fourth team he has tried to buy in recent years.
In 2006, he had a deal to buy the Philadelphia 76ers, but that fell apart because he couldn't get the money together. Last summer, he was looking at buying the Devils, but eventually pulled out of the deal. Then, earlier this year, he was in talks to buy the Islanders until Wang pulled out (he he).
He sounds like a bit of a flake.
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it does seem odd that Barroway just didn't buy the team straight up last year when he could have gotten 100% of the team for close to what he is paying for 51% of the team now
either he sees an opportunity that he didn't see before (e.g. moving the team or reassured by the lease agreement) or Brooks is completely out to lunch on this one
He's still got controlling interest, he gets to under write half the losses instead of all of them.
FOR IMMEDIATE RELEASE:
Thursday, October 2, 2014
GLENDALE, ARIZONA --- The Arizona Coyotes issued the following statement today:
“In response to media reports today, the Arizona Coyotes can confirm that IceArizona has been in discussions with an unsolicited potential investor who is interested in joining the partnership. This should be viewed as an incredibly positive development and is due to the successful first year of IceArizona’s ownership. This is all about the long-term stability and viability of the franchise in Arizona. By no means are any members of the current IceArizona group departing the ownership. While there has been no confirmation of any transaction, this is something that the current ownership group is exploring.”
The Coyotes will have no further comment at this time.
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it does seem odd that Barroway just didn't buy the team straight up last year when he could have gotten 100% of the team for close to what he is paying for 51% of the team now
either he sees an opportunity that he didn't see before (e.g. moving the team or reassured by the lease agreement) or Brooks is completely out to lunch on this one
Team appreciated by 100% after the name.....people from all over the state are clamouring for tickets now....this is a cash cow now!!
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Ice Arizona were likely never more than caretaker owners until a real money man could be found. The purchase was almost entirely financed. If they lost $25 M last year they must need an injection of operating capital. They are likely to lose more this year, if the product on the ice is no good.
Hard to see how the franchise is worth $300 M in that market. I don't see how any of this is good news for the team staying past four years.
Hard to see how the franchise is worth $300 M in that market.
Given that the 51% interest is being sold by a group that had to borrow most of the money to buy the team, to a man who had a previous deal fall through because he didn't have the money and couldn't even borrow it, I'd say that $300m valuation is worth its weight in unicorn poop. It's very easy to throw around huge amounts of money that you haven't got.
Hell, if you can buy NHL teams with money you don't have and can't get, I'll up the ante. I'll offer to buy the Coyotes for . . .
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That really only works though if someone is really willing to step up to buy that other chunk of the ownership puzzle.
the only thing that they have right now is the right to absorb half of the team losses til they dump the loser.
Not really. Either losses will vanish or they'll cash in after five years when the franchise moves and the value skyrockets. Even if they eat half of $100 million in losses over the next four years, they are still coming out well ahead - unless the value of the team plummets quickly and never recovers. That is decidedly unlikely.
Quote:
Originally Posted by MattyC
Sad that they're halfway there after one season.
Sad, but also an improvement over the past few seasons. Unfortunately (or fortunately depending on your POV), the general expectation is that the team will be a laughingstock on the ice this year, which would not help attendance at all.
While talks are under way, sources familiar with the Coyotes’ finances say it is unlikely a sale is imminent.
NHL deputy commissioner Bill Daly declined to discuss the situation, but he did indicate something “positive” may be in store for the Coyotes.
“There’s nothing I can share other than to say that there is no concern at all about the franchise or its future in Arizona,” Daly wrote in an e-mail message. “If anything happens, and nothing has to this point, it will only be a positive for the franchise.”
The problem for the latest owners is the same as it was for all the previous owners – despite any claims to a successful first year, the Coyotes’ cash flow is not enough to service the franchise’s enormous debt. The team’s hockey-related revenue (HRR) for the 2013-14 season was said to be just $40-million, last among the NHL’s 30 clubs.
Gosbee and LeBlanc borrowed $120-million from Fortress Investment Group and $85-million from the NHL to finance the team and have some working capital left over. While the NHL loan is at favourable terms, one source pegs the interest rate for the Fortress loan at 10 per cent.
Thus the NHL’s announcement this week it secured a $1.4-billion credit facility, backed by the collateral of the league’s billion-dollar television contracts with NBC in the United States and Rogers Communications Inc., in Canada, was welcome news for the Coyotes. This allows the league’s poorer clubs to borrow money at a good interest rate with the NHL providing the security.
It is possible Gosbee and LeBlanc could refinance the Fortress loan and the existing NHL loan at a better interest rate. This could allow them to accept new partners on their terms and retain control of the club.
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Why don't they just move them to Seattle already? It's pretty evident that the league is hot to have a team in that market.
Two good reasons:
1. The league is hot to collect a fat expansion fee to put a team in that market. Moving an existing franchise there would destroy that.
2. The market ain't so hot to have the league. What they really want in Seattle is an NBA team. They won't even consider building a proper arena unless they get one.
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Why don't they just move them to Seattle already? It's pretty evident that the league is hot to have a team in that market.
"They" don't really have a say in the matter right now. The Coyotes have a lease with the city that doesn't allow for a relocation until after five years.
Also, as noted, there is nothing in Seattle that approaches being a suitable venue, and little immediate prospect of that changing.
it does seem odd that Barroway just didn't buy the team straight up last year when he could have gotten 100% of the team for close to what he is paying for 51% of the team now
either he sees an opportunity that he didn't see before (e.g. moving the team or reassured by the lease agreement) or Brooks is completely out to lunch on this one
IMO, I think you answered your own question:
Quote:
Originally Posted by sureLoss
according to Brooks RSE is claiming $24 million in loses last season and by the terms of the new lease agreement the franchise can leave if total losses exceed $50 million over a 5 year period (starting last year)
Is probably exactly the reason. The break in lease either wasn't negotiated then, he didn't know about it or the $24 million ALREADY amassed is considerably more than he thought. He let RSE take the risk, and he is paying more of the a much lower risk deal.
While talks are under way, sources familiar with the Coyotes’ finances say it is unlikely a sale is imminent.
NHL deputy commissioner Bill Daly declined to discuss the situation, but he did indicate something “positive” may be in store for the Coyotes.
“There’s nothing I can share other than to say that there is no concern at all about the franchise or its future in Arizona,” Daly wrote in an e-mail message. “If anything happens, and nothing has to this point, it will only be a positive for the franchise.”
The problem for the latest owners is the same as it was for all the previous owners – despite any claims to a successful first year, the Coyotes’ cash flow is not enough to service the franchise’s enormous debt. The team’s hockey-related revenue (HRR) for the 2013-14 season was said to be just $40-million, last among the NHL’s 30 clubs.
Gosbee and LeBlanc borrowed $120-million from Fortress Investment Group and $85-million from the NHL to finance the team and have some working capital left over. While the NHL loan is at favourable terms, one source pegs the interest rate for the Fortress loan at 10 per cent.
Thus the NHL’s announcement this week it secured a $1.4-billion credit facility, backed by the collateral of the league’s billion-dollar television contracts with NBC in the United States and Rogers Communications Inc., in Canada, was welcome news for the Coyotes. This allows the league’s poorer clubs to borrow money at a good interest rate with the NHL providing the security.
It is possible Gosbee and LeBlanc could refinance the Fortress loan and the existing NHL loan at a better interest rate. This could allow them to accept new partners on their terms and retain control of the club.
