Arena Negotiation Discussion v2

[Locke]

Originally Posted by Robbob

Correct me if I am wrong, but I don't believe expansion fees are currently shared with players.

Actually I believe that is correct. Expansion revenue is not HRR.

[Major Major]

Originally Posted by Robbob

Correct me if I am wrong, but I don't believe expansion fees are currently shared with players.

Ah, may be misremembering.

Well, he will fight to keep it that way then!

[Robbob]

Originally Posted by Major Major

Ah, may be misremembering.

Well, he will fight to keep it that way then!

I don't think the PA cares that much considering it creates a bunch of more permanent jobs.

[Major Major]

Originally Posted by Robbob

I don't think the PA cares that much considering it creates a bunch of more permanent jobs.

You might be right, and if they've learned anything, caring enough to fight for it will cost them. Still, that's a ton of revenue that is protected from them.

[DiracSpike]

Originally Posted by Major Major

Who's decision is it though? It is exactly this type of "shred of doubt" thinking that froths the masses into a panic. Play it out logically. Who benefits from a flames sale and relocation at this point? I feel the answer is clear as day... No one

Is this a serious question?

The owners bought in when the franchise was valued around 20-50 million and now it's in the hundreds of millions. They've already made >10X on their investment.

So the answer is the Owners. The owners would benefit from a sale. Clear as day.

[8sPOT]

Right, the current owners benefit. But who is buying a successful Canadian NHL team and moving it elsewhere? Thats a big risk to take IMO.

[Lanny_McDonald]

Originally Posted by Bleeding Red

Forget that - how about this math for the NHL:


Seattle - $500 million
Houston - $500 million
Quebec City - $500 million


What would the NHL get for a "relocation fee"? $50 mil? $100 mil?


I believe Bettman (and the other owners) sees $1.5 billion in the not too distant future.

Quebec City will not pay $500M for a team. Quebecor balked at the price tag in the last expansion. If they were game to pay that, there would be a team in Quebec City right now. No one in Canada is ponying up $500M USD for an expansion team. Not even someone in Toronto.


Houston is probably not in the mix for expansion either. Expansion will be a result of a market wanting to plant their flag and beat out the competition from the other leagues. Las Vegas was game, because they knew they would be able to have a two year lead on the the NFL coming to town. Houston will be a secondary tenant to the Rockets, so it will be a cheaper relocation scenario (Calgary or Arizona IMO). Seattle might be willing to cough up that money for expansion, just to force the hands of the NBA. This is a situation that will need monitoring as I think it could go either way. The Seattle market is great sports market, but you have acknowledge pecking order for the sports ticket dollar.

[Locke]

Originally Posted by New Era

Quebec City will not pay $500M for a team. Quebecor balked at the price tag in the last expansion. If they were game to pay that, there would be a team in Quebec City right now. No one in Canada is ponying up $500M USD for an expansion team. Not even someone in Toronto.


Houston is probably not in the mix for expansion either. Expansion will be a result of a market wanting to plant their flag and beat out the competition from the other leagues. Las Vegas was game, because they knew they would be able to have a two year lead on the the NFL coming to town. Houston will be a secondary tenant to the Rockets, so it will be a cheaper relocation scenario (Calgary or Arizona IMO). Seattle might be willing to cough up that money for expansion, just to force the hands of the NBA. This is a situation that will need monitoring as I think it could go either way. The Seattle market is great sports market, but you have acknowledge pecking order for the sports ticket dollar.

Tough. Thats the price now.

You want to know why we're not going to see a lot of relocations? Because expansion fees are lucrative.

A team that has yet to make a dollar has to pay 31 other teams $500M and they're not lining up to say 'No.'

[Flamenspiel]

Originally Posted by 8sPOT

Right, the current owners benefit. But who is buying a successful Canadian NHL team and moving it elsewhere? Thats a big risk to take IMO.

That is a good question, if you look at past franchise moves in the NHL, they had very obvious weaknesses. Atlanta(twice), Quebec, Winnipeg, California, Cleveland, Kansas City, Minnesota, and Colorado are not really in any way comparable to Calgary. Pittsburg in the pre-Crosby years was the closest but the NHL was very patient with them and they never moved.

[Major Major]

Originally Posted by DiracSpike

Is this a serious question?

The owners bought in when the franchise was valued around 20-50 million and now it's in the hundreds of millions. They've already made >10X on their investment.

So the answer is the Owners. The owners would benefit from a sale. Clear as day.

Lol, when Edwards looks at his business Holdings, do you think he weighs potential returns against what it was originally worth? Welcome to candy land if so!

I feel he is shrewd enough to look at what it's worth now Vs what it will be worth later.

[Locke]

Originally Posted by Major Major

Lol, when Edwards looks at his business Holdings, do you think he weighs potential returns against what it was originally worth? Welcome to candy land if so!

I feel he is shrewd enough to look at what it's worth now Vs what it will be worth later.

[Major Major]

Originally Posted by New Era

Quebec City will not pay $500M for a team. Quebecor balked at the price tag in the last expansion. If they were game to pay that, there would be a team in Quebec City right now. No one in Canada is ponying up $500M USD for an expansion team. Not even someone in Toronto.


Houston is probably not in the mix for expansion either. Expansion will be a result of a market wanting to plant their flag and beat out the competition from the other leagues. Las Vegas was game, because they knew they would be able to have a two year lead on the the NFL coming to town. Houston will be a secondary tenant to the Rockets, so it will be a cheaper relocation scenario (Calgary or Arizona IMO). Seattle might be willing to cough up that money for expansion, just to force the hands of the NBA. This is a situation that will need monitoring as I think it could go either way. The Seattle market is great sports market, but you have acknowledge pecking order for the sports ticket dollar.

I think the league will agree to give Quebec a discount. Why? It will restore balance, they can argue it closes the loop on this round of expansion and therefore not precedent setting, and thirdly it's the only way to get their hands on say 400 mil.

[Locke]

Originally Posted by Major Major

I think the league will agree to give Quebec a discount. Why? It will restore balance, they can argue it closes the loop on this round of expansion and therefore not precedent setting, and thirdly it's the only way to get their hands on say 400 mil.

Really? And you think Vegas and potentially Seattle will be cool with that? After they paid their cool $500M?

The players have a union, so do the owners, thats why theres revenue sharing now.

[Major Major]

Originally Posted by Locke

Really? And you think Vegas and potentially Seattle will be cool with that? After they paid their cool $500M?

The players have a union, so do the owners, thats why theres revenue sharing now.

If it's maximizing the amount they can get, sure. That's money in their pocket. Assuming Quebec continues to not buy in at the going rate. Maybe another option comes up, but if they're stuck on 33 teams, I could see it happening. Thanks for replying with words this time though!

[Locke]

Originally Posted by Major Major

If it's maximizing the amount they can get, sure. That's money in their pocket. Assuming Quebec continues to not buy in at the going rate. Maybe another option comes up, but if they're stuck on 33 teams, I could see it happening. Thanks for replying with words this time though!

You're welcome. Thanks for not contradicting yourself in your own post. I'll reply as I see fit.

[Lanny_McDonald]

Originally Posted by Locke

Tough. Thats the price now.

You want to know why we're not going to see a lot of relocations? Because expansion fees are lucrative.

A team that has yet to make a dollar has to pay 31 other teams $500M and they're not lining up to say 'No.'

You can only get expansion fees if someone is willing to pay them. If there isn't interest, and the league seriously wants to get into a market, then the other avenue is relocation. That's just the reality. The league likely recognizes that it is a 32 team league - max. They will expand by one more team, but after that, they will play the NFL card and move teams around. There are only a few sacred cows that would be on the "never move" list, but Calgary is not one of those teams. Relocation is a possibility. I wouldn't say a great one, but if the arena deal doesn't go down soon, and ownership continues to see no light at the end of that tunnel, relocation becomes a viable strategy, especially if Houston is available as a target.

[DiracSpike]

Originally Posted by Major Major

Lol, when Edwards looks at his business Holdings, do you think he weighs potential returns against what it was originally worth? Welcome to candy land if so!

Yea.....that's how investing works. What a bizarre statement.

I feel he is shrewd enough to look at what it's worth now Vs what it will be worth later.

I'm sure he does this too. He probably looks at an oversaturated sports market, valuations approaching bubble levels, and an eroding building in a economically stagnant city with no solutions to either of those problems in sight.

Anyway, your original statement was that no one benefits from the team being sold. Clearly Edwards and the owners benefit. Not even debatable.

[Major Major]

Originally Posted by Locke

You're welcome. Thanks for not contradicting yourself in your own post. I'll reply as I see fit.

Power move dude, but I don't see a contradiction. Now does not mean originally... So it can't be that. Wish I knew!

[Locke]

Originally Posted by New Era

You can only get expansion fees if someone is willing to pay them. If there isn't interest, and the league seriously wants to get into a market, then the other avenue is relocation. That's just the reality. The league likely recognizes that it is a 32 team league - max. They will expand by one more team, but after that, they will play the NFL card and move teams around. There are only a few sacred cows that would be on the "never move" list, but Calgary is not one of those teams. Relocation is a possibility. I wouldn't say a great one, but if the arena deal doesn't go down soon, and ownership continues to see no light at the end of that tunnel, relocation becomes a viable strategy, especially if Houston is available as a target.

Bull.

In the modern era relocation is damned near unheard of respective of the NHL.

Winnipeg got the Jets back because of a perfect storm of economics. No local ownership interest etc.

But Phoenix, the Panthers, the lightning for a while, Blue Jackets, Islanders and Carolina have been hemorrhaging cash for years and they're not going anywhere.

In terms of 'moving teams to where they can succeed' Calgary is very, very low on the list.

[Frequitude]

Originally Posted by DiracSpike

Yea.....that's how investing works. What a bizarre statement.

With the exception of for tax purposes or bragging, no it’s not. Investing is about current value, the expected return on that value, and expected future value.