Balsillie wins his right to bid

by James Mirtle on Aug 6, 2009 7:30 AM CDT Comment 88 comments

"We remain confident that the successful bidder will be one who is committed to continuing to operate the Coyotes in Glendale for the long term. We also remain confident that Mr. Balsillie’s bid for the team will never be approved by the Court for a variety of reasons, including that his application for ownership was overwhelmingly rejected by the NHL Board of Governors last week. We look forward to making significant steps toward resolution of this unfortunate situation over the next several weeks."

— NHL deputy commissioner Bill Daly

The NHL's been confident a lot during this crazy process, from the beginning when it argued this was a "sham" bankruptcy to earlier this week when it called for the relocation auction to be done away with completely.

Now, Jim Balsillie will be bidding in bankruptcy court to relocate the club alongside the NHL's hand-picked suitor Jerry Reinsdorf five days before the team's preseason schedule opens in Glendale and Los Angeles.

Which I'm sure will do wonders for ticket sales in Arizona.

(As an aside, can you imagine what the attendance figures will be like this season? I haven't heard from a single Coyotes fan that reupped their season tickets this summer, as they all were — wisely, I might add — waiting for some sort of resolution before buying in.)

Here's David Shoalts of The Globe and Mail on some of the issues to be worked out in the next month:

Judge Baum recognized including Balsillie in the Sept. 10 hearing and sale will raise a lot of legal issues that could drag the proceedings out for days. He called for a hearing on Aug. 11 to draw up a schedule for pre-trial motions and discovery requests. He will also decide which issues will be heard on Sept. 10 and asked all parties to try to agree on them before the Aug. 11 hearing.

That the judge hasn't already thrown out Balsillie's bid says to me he won't feel obliged to do so before the auction itself, although we're certainly going to hear plenty of new arguments from the league on that front. And while some of the information presented by the NHL certainly paints Balsillie in such a way that makes it easy to see why they dislike him, the fact his dealings in Pittsburgh and Nashville were aimed solely at moving a team to Hamilton will not likely "taint" him in the eyes of the court.

Think of it from the court's perspective: If the biggest issues surrounding Balsillie's conduct relate to his push for a franchise in his backyard, would his winning the Coyotes bidding process not solve those issues?

"Dislike" is not really enough, in other words, to convince a judge to stick creditors with a loss. Balsillie's dealings with the NHL have thus far been legal, as has the current process, and walking away from a previous deal can't be the basis for killing this one.

Which isn't to say there aren't more hurdles for the Balsillie camp to get over — only that the arguments presented against him to this point haven't been all that pursuasive to the judge.

I know I've been saying this for a while now, but there remains the very real danger that the so-called local bids don't make it to the auction. If, for any reason, Reinsdorf backs out — a distinct possibility given I do not believe he can win close to the concessions he's apparently asked for — what then is left to decide in terms of the bidding process?

If I was involved here, on either side of the process, I don't know that "confident" is a word I'd be throwing around right now. We're a long way from settling this, in any fashion, and a winning bid will be anything but a sure thing come September.

And that big top I mentioned Tuesday? Well, it might be time to start making room for some more bidders.

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the league execs are prettty stupid. a hockey team in glendale arizona is never going to be able to make money. move the damn team to quebec or hamilton. god gary is an idiot.

by asmallvictory31 on Aug 6, 2009 7:57 AM CDT reply actions 0 recs

So long as someone is willing to own and operate a team in Phoenix, the league should give them the opportunity. The challenge, of course, is finding someone willing to do so. Especially given Reinsdorf’s bid is getting shaky.

by Resolute on Aug 6, 2009 10:10 AM CDT up reply actions 0 recs

Do you have any factual basis for claiming this, apart for the fact that the Coyotes themselves have not worked out?
How can you be so sure that “a hockey team in glendale arizona is never going to be able to make money” ?

by Habs on Aug 6, 2009 4:58 PM CDT up reply actions 0 recs

Well, what did you expect Daly to say

“ok – we’re done. It’s a foregone conclusion so we’ll just fold our tents right now.” They have been sticking to their approved media lines since the beginning of the year. They are not going to go off-script now.

by hockeycountry on Aug 6, 2009 8:04 AM CDT reply actions 0 recs

TV Ratings

I was under the impression that the original plan for expansion to Phoenix was for a franchise in the Southwest to promote TV contract deals. If so, I never understood why that would facilitate any leverage for the NHL to use to increase the money involved with TV.

What was actually gained by having a franchise in Phoenix, and what would be gained by keeping it there given the proven lack of a market there for hockey?

by hockeysully on Aug 6, 2009 8:38 AM CDT reply actions 0 recs

Well if that’s the case then the problem lies in the NHL’s TV partners choosing to show any team that plays further west than Chicago. NBC doesn’t seem to think anybody in the Western conference besides Detroit and Chicago even exist.

http://accordingtwomey.blogspot.com

by hawksfan21 on Aug 6, 2009 10:39 AM CDT up reply actions 0 recs

I’m sure they know that those teams exist. They probably suspect that those team’s national ratings don’t exist, though, and they’re probably a lot less wrong on that point.

Time zones hurt, too.

by RyanV on Aug 6, 2009 10:46 AM CDT up reply actions 0 recs

I never understood why NBC insists on the game being so early. In Chicago, most of the games start at noon. On the west coast, thats a 10 AM start time. I don’t have any data to back it up, but my guess would be that the 10-1 time slot isn’t the most attractive.

twitter.com/kaner88

by Original Six on Aug 6, 2009 12:40 PM CDT up reply actions 0 recs

To me, it’s a chicken and the egg scenario.

By having the games on at 1, you cater to East Coast hockey fans. You’re not going to get the ratings from the West at 10am, so that further justifies putting Eastern teams on just to get the ratings. If they played any later than that, they run into local news.

by Afino on Aug 6, 2009 1:54 PM CDT up reply actions 0 recs

Wouldn’t 2 work at least a little better? There’s more people up and about at 11 AM than 10.

SNN Sports - A theoretical Oilers blog (i.e. theoretically, I write stuff there)

by Doogie2K on Aug 6, 2009 1:56 PM CDT up reply actions 0 recs

You are assuming that NBC has nothing on after its NHL window. Some weeks, that may be true, but there are certainly weeks (coughhorseracingpregameshowscough) when they slot it in around whatever other higher-rated programming they have lined up.

by dzuunmod on Aug 6, 2009 8:08 PM CDT up reply actions 0 recs

/sigh…Yeah, you’re right.

/kick dirt

SNN Sports - A theoretical Oilers blog (i.e. theoretically, I write stuff there)

by Doogie2K on Aug 7, 2009 11:55 AM CDT up reply actions 0 recs

The NHL gets decent (not good, not great, not spectacular, but decent) ratings on US network TV a handful of times per year. If I’m running a network, why am I giving the NHL a plum timeslot?

by dzuunmod on Aug 6, 2009 8:03 PM CDT up reply actions 0 recs

Just as James said, the bankruptcy court doesn’t care so much how the rest of the NHL feels about Balsillie — they just care that he’s going to pay the most money, thereby giving the most money to the many creditors.

It’s obvious that hockey in Arizona has failed. They’ve failed on the ice (no playoffs in 7 of the past 8 seasons, never won a playoff series) and they’ve failed to bring people to the rink and watch it on television. I’m not sure if Balsillie’s the answer to all their problems, but at least he’s an answer to some of them (and more than anyone else has given).

by RCheli on Aug 6, 2009 9:20 AM CDT reply actions 0 recs

This has ALWAYS been the overriding principal with the Court, take care of the creditors first, its just amazing that we are finally getting back to that concept (because of all of the issues surrounding franchises and the NHL Constitution). JB might be the only one left standing because it really seems that he is the only one with the money at this point.

The population of Pominville keeps rising!

by Blackcapricorn on Aug 6, 2009 9:45 AM CDT up reply actions 0 recs

My first attempt with block quotes, epic fail.

The population of Pominville keeps rising!

by Blackcapricorn on Aug 6, 2009 9:45 AM CDT up reply actions 0 recs

Actually it’s kind of funky looking – maybe you’ll start a new trend =)

by Habs on Aug 6, 2009 5:01 PM CDT up reply actions 0 recs

I’m not even sure how you did that.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 6, 2009 5:04 PM CDT up reply actions 0 recs

He typed the text in between two separate sets of blockquote tags

As in the above

by Big Picture Guy on Aug 6, 2009 6:42 PM CDT up reply actions 0 recs

I kind of like it. It has a certain flourish. :)

"Be kind, for everyone you meet is fighting a great battle." -- Philo of Alexandria

by Baroque on Aug 6, 2009 6:52 PM CDT up reply actions 0 recs

Again this is heading to the appeals court and then possibly the Supreme Court and that means this thing will be going on a year from now. It is still an uphill battle for JB as it looks like the NHL has precedent on their side. I think the fact that the Supreme Court took the NFL v. American Needle is an indication that the more this move up the legal ladder the more successful the NHL might be. If the court took that case they are likely to take this if it gets that far. Also, remember that if it gets to the appeals and antitrust stage that will also bring the NBA and most importantly the NFL in on the fight on the NHL’s side.

JB ultimately has to prove the NHL’s rules violate antitrust law if he actually wants to get control of the team. So far there has been no ruling on that matter but I’m guessing that is coming soon.

Where this is a major ruling is that as you mention it basically allow groups from KC, Winnipeg, Ect. to come in. The Coyotes might move but I don’t think it will be to Hamilton under JB.

by jkrdevil on Aug 6, 2009 9:54 AM CDT reply actions 0 recs

With regards to NFL v. American Needle, I think the court is going to blink before siding entirely with the NFL. The consequences of doing so would be so extreme that I have a hard time believing that they want to go that route. The fact that they granted certiorari tells me that there’s a pretty good possibility that there is a block of justices prepared to overturn the 7th Circuit. If I had to guess (and Gerald will be quick to point out that I’m a young, inexperienced accountant rather than a lawyer), I’d say that the Supremes knock down the single entity claim while holding for the NFL on different grounds.

When the case came up on a different, baseball related, forum, I asked a question that never got answered. If the Supreme Court were to uphold that the leagues are single entities, how does that affect the leagues’ position with regards to the bankruptcy of one of their teams? Does that leave them liable for all of the debts? That would not necessarily be true for a single entity comprised of wholly owned subsidiaries, depending upon how that ownership is structured. That clearly wouldn’t be the theory under which the NHL would be considered a single entity, though. I never got an answer.

For those who aren’t familiar with the case we’re talking about, some descriptions are here:

http://abovethelaw.com/2009/03/sports_and_the_law_supreme_cou_1.php
http://sportsjudge.blogspot.com/2009/06/american-needle-v-nfl-case-going-to.html

For a truly apocalyptic (and probably over the top) description of the possible results of a complete acceptance of the NFL’s position, there’s ESPN’s Lester Munson:

http://sports.espn.go.com/espn/columns/story?columnist=munson_lester&id=4336261

by J. Michael Neal on Aug 6, 2009 12:11 PM CDT up reply actions 0 recs

Where's Odie when I need him?

I’m tired of fighting this battle by myself, so I will just throw in my $0.02 and be gone because the whole affair annoys me to no end and I have more important things I need to be doing (like working)…

There are plenty of hockey fans in Phoenix…there are issues in getting them to come out to the arena and watch a crappy team. But when they were downtown in the early 2000s and had a playoff-caliber team, they drew just fine. A playoff caliber team (which the current roster has the potential to be with some luck and decent coaching) will draw fans…and the playoff white-out will be phenomenal. But losing hockey, like losing football, basketball or baseball does not draw fans in Phoenix which is generally made up of transplants from other parts of the country that come out to see their “real” teams play (for me, Philly). But there are some that just love hockey and will go to see the ‘yotes regardless and have already re-upped on the season tickets (3,000+ fans showed up for the open house event to renew tickets in June). Based on James’ graphs from a few months back that showed team revenues, there are only a few teams that truly make a ton of revenue (Toronto, Philly, NYR, Detroit, Montreal, Boston, etc.) and plenty of teams that struggle at the gate…Phoenix is no worse than any of those teams struggling like Atlanta, Florida, Tampa, NYI…they just have incompetent ownership and management that compounds these problems and a fairly crappy lease for their arena.

But I’m tired of hearing people say how crappy everything is here and how it can’t work…everything is in place to have this team succeed except an owner willing to invest wisely in the franchise. And if any of the teams that I mentioned before start struggling, they will be just as bad off as Phoenix. There are very few hockey franchises that can survive the type of mediocrity (I’m being generous) that the Coyotes have had over the last 7 years…if this sale and relocation happens, then unless you are one of the lucky few fanbases that will always be able to support your team, then I would recommend against investing much in your team.

There may not be an established fan base in Phoenix that some other relocated franchises have been able to develop (helps when you win a cup like Carolina, Colorado and Dallas)…but there is plenty of potential…Phoenix is the 5th largest metropolitan area in the US, I refuse to believe that with a brand spanking new arena and a decent team that it will fail…but what do I know, I just live here as opposed to the vast majority of the posters here that have never even been in the Valley.

World Ph*cking Champs! That was fun - let's do it again...

by Moridin417 on Aug 6, 2009 10:43 AM CDT reply actions 0 recs

The thing that bugs me about all this is that in the 5th largest metropolitan area in the US, only carpetbaggers are willing to invest in this team right now. I know times are tough, but it seems the short term losses are just too much for anyone to bear… and even the carpetbaggers are trying to find ways around it. Nashville scraped together a local-ish bid (admittedly with the fraud Boots on board as an outsider), but Phoenix hasn’t. I know not every team is owned by a local, and sometimes to great success, but it’d make this whole mess look a little better if someone from the area stepped forward with a legitimate bid.

Hockey blogging can't get any flatter.

by saskhab on Aug 6, 2009 11:30 AM CDT up reply actions 0 recs

The thing that bugs me about all this is that in the 5th largest metropolitan area in the US, only carpetbaggers are willing to invest in this team right now. I know times are tough, but it seems the short term losses are just too much for anyone to bear… and even the carpetbaggers are trying to find ways around it.

That’s the thing that I wonder about, too. There is clearly a population base of potential fans, but no local interest in owning the team. Do locals not have the money, or not have the interest? And if it is lack of interest, is it lack of interest because they themselves aren’t interested in hockey, or because they don’t think the population as a whole has enough interest to make it a viable team?

"Be kind, for everyone you meet is fighting a great battle." -- Philo of Alexandria

by Baroque on Aug 6, 2009 12:01 PM CDT up reply actions 0 recs

I think the problem has to do with the financial climate. Would the local investors have stepped up to save the Preds in this economy?

by Gusinabox on Aug 6, 2009 12:26 PM CDT up reply actions 0 recs

That’s possible, but then why are there bidders for this franchise from outside the community? It’s not like the bad economy is limited to the state of Arizona.

Hockey blogging can't get any flatter.

by saskhab on Aug 6, 2009 1:15 PM CDT up reply actions 0 recs

It’s not like the bad economy is limited to the state of Arizona.

True, but things are much worse in some portions of the continent (California, Nevada, Arizona, Florida, Great Lakes region of US) than others. I don’t live there (AZ), but would be willing to hazard a guess that those local parties with the potential means to have participated in an ownership bid up until last year are likely to have major portions of their net worth impaired by other investments in the local economy, which is in much worse shape than the N American economy as a whole.

2009-2010 Colorado Avalanche - "Hey Brother, can you spare a Left Winger?"

by Hopfenkopf on Aug 6, 2009 2:27 PM CDT up reply actions 0 recs

But I’m tired of hearing people say how crappy everything is here and how it can’t work…everything is in place to have this team succeed except an owner willing to invest wisely in the franchise.

Moridin, the owner is the most important part of the entire equation. If Nashville didn’t have the local group step up, they’d be gone, too. I know there are a lot of potential fans there, but what matters is the situation as it stands currently, and it’s a complete disaster.

Teams cannot be expected to be saved by winning — there are just too many teams in a 30 team league that will never win a thing.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 6, 2009 12:49 PM CDT up reply actions 0 recs

the owner is the most important part of the entire equation

Indeed. North America’s most lucrative sport, the NFL, lost two franchises out of Los Angeles. Granted, the NFL’s revenue juggernaut (and sharing) and local stadium “issues” made those departures more possible, but those cases reflect that it’s not always about whether there are fans in the market.

Lighthouse Hockey: Side effects may include Weight gain and frequent game loss.

by Dominik on Aug 6, 2009 1:09 PM CDT up reply actions 0 recs

Winning is relative...

I’m not saying this team needs to win a cup – I’m from Philly, so I understand how hard it can be to win championships in any sport…but a bit of winning, being over .500 and making the playoffs will be good enough.

As to some of the other points, I think one of the big problems is that you don’t have a lot of very wealthy folks that call Phoenix home – they’ll have a place here to vacation in the winters, but I’m not sure we have the type of truly weatlhy folks that are buying sports franchises – I could be wrong.

Second, someone mentioned the fact that Dallas was successful from the start, I’d argue that Phoenix was too…let’s not forget that this team moved here in 1996 and went to the playoffs a lot in those first years. I don’t know the details, but I don’t think there were fears that the team would fail then…but combine the lockout season that ended up costing the Coyotes an All-Star Game (really the Olympics following the lockout, but same difference), and the 7 failing years since, and that is different than just failing out of the gate…

World Ph*cking Champs! That was fun - let's do it again...

by Moridin417 on Aug 6, 2009 2:36 PM CDT up reply actions 0 recs

The lockout cost Atlanta the All-Star game. I have a limited edition “2005 NHL All Star Game” shirt to prove it :)

All things Thrashers + stats: www.birdwatchersanonymous.com

by The Falconer on Aug 7, 2009 8:27 AM CDT up reply actions 0 recs

They were to host the 2005 game with the Coyotes getting the 2006 game. The new CBA though said that there would be no allstar games in Olympic years so we got scratched.

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by Travis Hair on Aug 9, 2009 3:32 AM CDT up reply actions 0 recs

Fail

Phoenix is NOT the 5th largest metropolitan area. Sorry, but this is a personal pet peeve of mine (people overexaggerating the size, wealth, or importance of a geographical area). Phoenix is 12th.

http://en.wikipedia.org/wiki/United_States_metropolitan_area

Conceivably, Phoenix could someday be 5th, but I’m willing to wager it settles in around 7th tops (no way does it ever catch NY, LA, or CHI, and DFW, HOU, and ATL are larger and have similar growth explosions).

As I’ve said before, Phoenix is a huge market and certainly should have a team… But maybe it just shouldn’t have a team at this moment. Perhaps the league would be better served investing in Phoenix area youth hockey first and growing the market.

Also, whoever said winning a cup helped in places like “Carolina, Colorado, and Dallas,” this is only a half-truth. I grew up in Dallas and the support there was strong from the start. I’d also say that Colorado is a natural hockey market. I’ll grant it helped in Carolina, but it didn’t do much in Tampa Bay, so I really hate this line of logic.

by VA Libertarian on Aug 6, 2009 1:16 PM CDT via mobile up reply actions 0 recs

Tampa’s a bit of a red herring. They ran into the lockout, then the team’s been bullshit ever since. Even at that, though, their attendance numbers were perfectly reasonable until this year, when they finally (and justifiably) went over the cliff.

SNN Sports - A theoretical Oilers blog (i.e. theoretically, I write stuff there)

by Doogie2K on Aug 6, 2009 2:16 PM CDT up reply actions 0 recs

Apologies...

I believe Phoenix is the 5th largest city as determined by population within its physical boundaries…I know it keeps flip-flopping with Philadelphia. The point is that there are plenty of people here, more than plenty of markets where there are hockey teams…

World Ph*cking Champs! That was fun - let's do it again...

by Moridin417 on Aug 6, 2009 2:39 PM CDT up reply actions 0 recs

The market size/importance thing is just a pet peeve – sorry if it sounded harsh. Anyways… on to your actual argument….

“The point is that there are plenty of people here, more than plenty of markets where there are hockey teams…”

That doesn’t necessarily guarantee success. I’ve always maintained that some markets are prone to over-saturation of sports/entertainment options (the Phoenix area already has NBA, NFL, and MLB teams); I’ve also always maintained that markets need to be ready for a product if they’re not gigantic (think top 4 or 5). I’ve been very active in the rugby community for years and if the U.S. were ever to get a pro league I’d be horrified at the prospect of NHL-style expansion, “potential revenues” be damned. The rugby community in America is strongest on the west coast, and as such, I would expect a disproportionate number of teams to be located out west.

You also say there are more people in Phoenix than in many other markets, but that is besides the point. Look at that list of largest metropolitan areas again, but this time look above.

Houston – no team
Miami – struggling
Atlanta – struggling

Notice those three markets are also in non-traditional markets. Notice also that they have teams in the NBA, NFL, and MLB. The NHL would be better served avoiding the Phoenix market for now until it is strong enough to support a franchise sustainably. This means either scaling back the money involved in the NHL (highly unlikely) or growing the hockey market there before plopping a team down in the desert. Dallas is a rare exception to the model, but Dallas is the 4th largest metropolitan area and had a winner on the ice from the get-go. Carolina was wobbly for a while, but is also the only pro game in Raleigh. Florida, Nashville, Phoenix, Atlanta, and Tampa Bay (short of a brief run) have more or less been disasters. The NHL would be better served to grow the game in these markets through youth hockey and AHL franchises (to prove product/market strength).

Personally, I’ve always wished North American sports leagues would adopt the European model of promotion/relegation, but that certainly has its ups and downs too in a sports marketplace driven by television revenue.

by VA Libertarian on Aug 7, 2009 1:46 AM CDT up reply actions 0 recs

You left out Anaheim and LA Kings from your sunbelt list. Anaheim is yet another example of “win and they will attend”
Tampa also has had solid attendance after their brief 3 year window of competitiveness. Now they are back to being terrible again the last two seasons.

The quality of the hockey product matters in MOST NHL markets, not just sunbelt ones. Detroit, Chicago and Boston have all drawn poorly in my lifetime.

All things Thrashers + stats: www.birdwatchersanonymous.com

by The Falconer on Aug 7, 2009 8:31 AM CDT up reply actions 0 recs

Actually

If you had read what I wrote, I didn’t ‘leave out’ Anaheim or LA. Quote: “I’ve also always maintained that markets need to be ready for a product if they’re not gigantic (think top 4 or 5).” Los Angeles is the second largest metropolitan area in the United States. Hell, you could divide the LA market into 2 metropolitan areas, and the two halves would still be 3rd and 4th in size.

I also gave Tampa credit for its brief run. However, to be a ‘sustainable’ market, teams can’t be losing tons of money when they’re not at their competitive peak. Tampa Bay fails in this regard.

You also said: “The quality of the hockey product matters in MOST NHL markets, not just sunbelt ones. Detroit, Chicago and Boston have all drawn poorly in my lifetime.” I’m not arguing against that. I am, however, saying that those clubs were able to sustain themselves financially when they were down whereas the southern clubs (save for Dallas and/or possibly Carolina) have not. That’s the major distinction for me. And I say this as a hockey-loving Southerner.

by VA Libertarian on Aug 7, 2009 3:01 PM CDT up reply actions 0 recs

Tampa’s very difficult to judge given what the new owners have done to the franchise. Who’s to say the city couldn’t have supported a more reasonable rebuild?

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 7, 2009 6:17 PM CDT up reply actions 0 recs

Possible, but unlikely. Tampa’s not that big of an area, and with the Rays finally doing well, USF football coming about, and the Bucs playing in the NFL, there are only so many sports dollars to go around. It’d be great if Tampa had a big enough base of hockey fans, but it doesn’t – it requires the attention of a lot of casual sports fans to be profitable. I think it’s fully possible that even without the lockout or the bad new ownership this could have happened when the team started playing poorly.

by VA Libertarian on Aug 7, 2009 6:55 PM CDT up reply actions 0 recs

VA, do you have evidence to support your claims of Tampa “losing tons of money” or Tamp Bay not having “a big enough base of hockey fans”?

Just wondering.

by Gerald on Aug 8, 2009 8:40 AM CDT up reply actions 0 recs

For starters, Tampa Bay had the biggest drop-off in attendance (-2,379) when James checked in last December. I suspect that will get worse this year with a worse product and the ownership situation.

http://www.fromtherink.com/2008/12/5/682296/an-updated-look-at-nhl-att

Also, let’s take a look at where they stood in 2000 before their brief run:

http://www.sptimes.com/News/112900/news_pf/Business/Forbes_lowers_Lightni.shtml

(in 99-00) " Last season, the team averaged 13,600 fans a game in the 20,686-seat Ice Palace, but about 2,000 of those seats were filled by folks who got free tickets — a practice the team has since abandoned. "

That made paid attendance about 11,600, or slightly over 50%.

" The Lightning had an operating loss of $5.1-million for the 1999-2000 season, according to Forbes, and its estimated revenue figure of $44.6-million was dwarfed by the numbers posted by top-level teams such as the New York Rangers ($97.6-million) and the Philadelphia Flyers ($88.9-million). "

You don’t say?

This article also mentions that for 00-01, “Lightning officials have said they anticipate a loss of about $6-million this year.”

2000 is understandably old. Now, let’s take a look at where they stood in 2004

http://pqasb.pqarchiver.com/tampatribune/access/690813521.html?dids=690813521:690813521&FMT=ABS&FMTS=ABS:FT&type=current&date=Sep+10%2C+2004&author=ALAN+SNEL&pub=Tampa+Tribune&desc=Lightning+Finally+Score+A+Profit%3B&pqatl=google

“One of the reasons the Lightning opened their books to the public is they are hoping it helps persuade Hillsborough County commissioners and Tampa officials to exempt the St. Pete Times Forum, where the Lightning play their homes games, from the tax rolls.”

Ah, so they tried to become subsidized.

I can’t access that full document without buying it, but here are the tidbits I found from it by google search:

“Sep 10, 2004 – In fact, the Lightning will have to generate more revenue next season — given there is one — to make a profit because the payroll is expected to jump … 1999-2000: Loss of $12.1 million. Overall five-year net loss under owner Bill Davidson: $53.9 million. Source: Tampa Bay Lightning … "

http://www.google.com/search?q=Tampa+Bay+Lightning+revenue+history&hl=en&client=firefox-a&rls=org.mozilla:en-US:official&hs=wCD&tbs=tl:1&tbo=u&ei=RxB_Sv7dMZmqtgfxhLTqAQ&sa=X&oi=timeline_result&ct=title&resnum=11

53.9 million in losses over 5 years? Ouch. And that’s in ’04. Before the brief run. As I said.

Here’s also a tidbit even after the club was doing decent (by Forbes’ own summary):
“Fan support for hockey in Florida is suspect. But the value of the franchise is solid because the team controls their building and also get a $2 million a year tax subsidy from the state. After capturing the Stanley Cup in 2004, the Lightning’s bottom line was hurt last year due to a higher payroll and fewer playoff games.”

Subsidized? Yuck. Also, “fan support for hockey in Florida is suspect.” This from Forbes, not just my opinion. And that’s even when the club is successful. Wait ‘til these next few years when it’s not. Oh, what a catastrophe this will be to watch.

Granted, this is all cupcakes compared to where Tampa was. “In late 1997, Forbes magazine called the Lightning the worst-off franchise in any of the major pro sports, with a debt equal to an astronomical 236% of its value.” Yikes.

How about this article from May of this year?

http://www.tampabay.com/sports/hockey/lightning/article999768.ece

" This team is carrying close to $100 million in loans, which means considerable debt payments. It also has seen its attendance drop dramatically, which means less revenue.

Considering the previous owner, Palace Sports and Entertainment, claimed it was losing a ton of money with less debt and more attendance, it would stand to reason the new owners are drowning in losses. Unless Palace Sports was fibbing. (Possible.) Or unless Koules and Barrie are trying to hide their problems. (Also possible.)

These are not just random issues for a single offseason. At worst, there are concerns about the viability of the Lightning in Tampa Bay. The Phoenix Coyotes filed for bankruptcy last week, and the Lightning has had similar revenue problems for years. *"

More fun:

http://www.examiner.com/x-8838-Tampa-Bay-Lightning-Examiner~y2009m5d11-OK-Hockey-not-so-OK

“But… Erik Erlendsson of the Tampa Tribune reports that the team is delinquent on at least $213,410.87 in realty taxes”

" * My source informed me that all St. Pete Times Forum and Lightning employees were informed by OK Hockey that payroll checks would no longer be direct deposited into their bank accounts. Pay dates were moved to Friday’s with paychecks becoming available after 2:00 p.m. on said day. I have no information if this actually did happen or not. Or if continued or has been reinstated.
* There was talk at this time of the possibility that all Forum employees would no longer have free parking. It became reality in March. All employees must pay $30 dollars a month to park in the employee/media lot two blocks away from the Forum.
* Team payroll and a contract bonus due to Vincent Lecavalier in January were in jeopardy. Payroll and the bonus were met, on schedule January 15th. The story was also reported in Montreal’s La Presse French newspaper."

“Over a month’s period of time, OK Hockey eliminated 30 jobs that included, Marketing Executive Mark Gullett, ThunderBug’s (team mascot) portrayer Matt Hitchcock, Director of Fan Development David Cole and Jay Preble, the Lightning’s Media Relations Director for the past 13-years.”

“One way to help reduce debt is that you need to get the fans back. Attendance dropped significantly (12 percent) this past season, which is roughly the loss of 2100 fans per game. In attempts to gain back those fans, keep what current one they have and get new fans aboard for next season, the team lowered season ticket prices for close to 90 percent of the seats. Renewals were sent out before the end of February – six weeks earlier than in past years.”

http://www.forbes.com/lists/2008/31/nhl08_Tampa-Bay-Lightning_319451.html

“"The new owners believe they can increase cash flow by $18 million a year. They better. Their purchase was financed with a $105 million, three-year bullet loan, meaning in 2011 they will either have to pay the loan off or refinance it."

So, Gerald… why don’t you get off your high horse, buddy? You’re not half as smart as you think you are.

by VA Libertarian on Aug 9, 2009 1:28 PM CDT up reply actions 0 recs

Whoops, missed the Forbes link::

http://www.forbes.com/lists/2006/31/biz_06nhl_Tampa-Bay-Lightning_319451.html

by VA Libertarian on Aug 9, 2009 1:29 PM CDT up reply actions 0 recs

They still averaged over 85% capacity last year, despite everything, and something in the high 90s the year before that. There’s been a dip, no question, but it’s not like they’re staying away in droves. If the Lightning can compete for a playoff spot, I bet that arena will be full again.

SNN Sports - A theoretical Oilers blog (i.e. theoretically, I write stuff there)

by Doogie2K on Aug 8, 2009 12:52 PM CDT up reply actions 0 recs

That won’t happen this season.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 8, 2009 1:04 PM CDT up reply actions 0 recs

Probably not. Just saying, the market isn’t a complete disaster.

SNN Sports - A theoretical Oilers blog (i.e. theoretically, I write stuff there)

by Doogie2K on Aug 8, 2009 9:39 PM CDT up reply actions 0 recs

I have a hunch it will be.

by VA Libertarian on Aug 9, 2009 1:06 PM CDT up reply actions 0 recs

Unfortunately I can imagine this coming, too. If they don’t add Tanguay to that lineup, who will score goals this season? They have four offensive forwards and nothing else.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 9, 2009 1:30 PM CDT up reply actions 0 recs

“(As an aside, can you imagine what the attendance figures will be like this season? I haven’t heard from a single Coyotes fan that reupped their season tickets this summer, as they all were — wisely, I might add — waiting for some sort of resolution before buying in.)”

as an aside, James, I believe one of the financial filings indicated that the team had ~$2.5 million in ticket revenue on deposit as of the end of June or so. Accordingly, it seems like some of them have, albeit a low number.

by Gerald on Aug 6, 2009 11:06 AM CDT reply actions 0 recs

Gerald, the point isn’t that I’ve talked to 100 per cent of Coyotes fans and they’ve all not bought tickets.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 6, 2009 12:51 PM CDT up reply actions 0 recs

That is something I dont understand – why not buy tickets? Maybe one of the fans can explain their reasoning. If Im a season ticket holder, Im presumably a fan, and as a fan, Id be trying to show the world at larger the team does have local support – that would be important to the NHL, potential buyers, and the Court.

Whats the worst that could happen? At some point in the not-soon-future, the team is allowed to move? To fold? Whats to stop the Court from ordering, as a condition of final approval, that any existing fans who were damaged (say by a cancellation of partial season tickets?) get a refund. And lets be realistic – with all the potential litigation, the likelihood of any final result in this matter being done before the start of the 2009-10 season is so unlikely its not even worth thinking about.

I wonder how many of these non-renewers are actually not renewing for other reasons unrelated to this.

Glen Sather is a Hockey Genius.

http://glensathersucks.com/
http://twitter.com/ThGeneralissimo

by poploser on Aug 6, 2009 1:46 PM CDT up reply actions 0 recs

I don’t think any of them want to support a lame duck season. It would just be too disappointing.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 6, 2009 1:49 PM CDT up reply actions 0 recs

I guess I look at it a different way – Im not punishing the owners by staying away in that situation – Im punishing myself by not seeing live hockey, and punishing the players (home and away) who deserve to have fan involvement at games.

Glen Sather is a Hockey Genius.

http://glensathersucks.com/
http://twitter.com/ThGeneralissimo

by poploser on Aug 6, 2009 1:55 PM CDT up reply actions 0 recs

The fans I’ve talked to want to know if their emotional investment is going to be worth it. They don’t want to cheer for a team that’s already bound for Hamilton (or whatever) by September.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 6, 2009 2:06 PM CDT up reply actions 0 recs

Bigger concern...

If the team moved, and you have already put money down, you are considered an unsecured creditor and are not guaranteed any money that you paid more than 60 days ago (or something like that). So there was/is a lot of incentive to not buy in just yet.

World Ph*cking Champs! That was fun - let's do it again...

by Moridin417 on Aug 6, 2009 2:32 PM CDT up reply actions 0 recs

Absolutely.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 6, 2009 2:34 PM CDT up reply actions 0 recs

granted, I’ve renewed my tickets already, so I don’t know if that just makes me an idiot or what…

World Ph*cking Champs! That was fun - let's do it again...

by Moridin417 on Aug 6, 2009 2:37 PM CDT up reply actions 0 recs

well a financial risk is at least, in my mind, a legit reason. I wouldnt take that approach myself for two reasons (1) if a buyer can’t afford to lose money like that, the buyer shouldnt spend it, and (2) the likelihood of someone moving this team mid-season is just so out of the realm of likelihood to be worth the risk.

Glen Sather is a Hockey Genius.

http://glensathersucks.com/
http://twitter.com/ThGeneralissimo

by poploser on Aug 7, 2009 10:21 AM CDT up reply actions 0 recs

If it were me, I wouldn’t buy until I found out whether my money was going to the guy who’s trying to move my team. Regarding the chance to see live hockey, if said guy wins the auction, I’d bank on a lot of free or steeply discounted tickets coming my way all lame-duck season long.

Lighthouse Hockey: Side effects may include Weight gain and frequent game loss.

by Dominik on Aug 7, 2009 2:00 PM CDT up reply actions 0 recs

That’s another reason to wait before plunking down cash for season’s tickets
When you know that you’ll be able to buy cheap tickets-possibly cheaper than any package you might buy- even if you walk up why would you bother to commit a large amount of money up front.

by yrmom on Aug 7, 2009 2:05 PM CDT up reply actions 0 recs

Other cities have done so in the past. If that’s the case, buck up, Phoenicians, you have a team to support.

SNN Sports - A theoretical Oilers blog (i.e. theoretically, I write stuff there)

by Doogie2K on Aug 6, 2009 2:18 PM CDT up reply actions 0 recs

buck up, Phoenicians, you have a terrible team to support.

Yeah, that makes complete sense…

2008-2009 Colorado Avalanche: Dry Humping Mediocrity

by Mike @ MHH on Aug 7, 2009 12:55 PM CDT up reply actions 0 recs

A team that was still in a playoff spot as of Valentine’s Day is terrible?

SNN Sports - A theoretical Oilers blog (i.e. theoretically, I write stuff there)

by Doogie2K on Aug 8, 2009 12:54 PM CDT up reply actions 0 recs

I didn’t mean to imply that James, sorry. I just wanted to throw the data out there for consideration. Does that seem to equate to ~1500 season tickets? More or less?

by Gerald on Aug 6, 2009 3:43 PM CDT up reply actions 0 recs

I’ve really got no idea, but I wouldn’t be surprised if that’s the number. We could see games with six or seven thousand fans this year.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 6, 2009 4:15 PM CDT up reply actions 0 recs

Just to clarify something else.

Legally speaking (and Baum J seems to be a stickler in restricting himself to only what is before him in his orders), he was issuing his order in respect of the motion that was before him.

That motion was the motion of the NHL to defer the August 5 auction and cancel/defer the relocation auction. What he has done in his order is to allow the first part of the motion but to decline the second part. What this means is that Glendale bids and non-Glendale bids get addressed in one auction, with the parties making objections to bids accordingly.

The matter that was NOt before him at the time was the question of what to do with JB’s bid. In order to finally dispose of the bid, what has to legally happen is that someone (the NHL and/or JB or Ice Edge) has to bring a motion requesting that the court reject the JB bid. To date, that motion is not before the court. It will be soon enough.
What the judge has done at this point is to order that all of those procedures – bidding, motions to reject bids, etc. – be handled in one process.

by Gerald on Aug 6, 2009 11:13 AM CDT reply actions 0 recs

Given where we are now, do you think they’ll simply reject Balsillie based on what we’ve heard to this point? In my opinion, the NHL’s going to have to present a stronger case in order to get its way here.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 6, 2009 12:52 PM CDT up reply actions 0 recs

What legal grounds would there be to reject the JB bid?

twitter.com/kaner88

by Original Six on Aug 6, 2009 12:57 PM CDT up reply actions 0 recs

Leaves the City of Glendale with a HUGE loss in the stadium and major penalties for breaking the lease. Now I think that’s part of the reason that they are in bankruptcy to void the lease, but regardless, the City of Glendale is going to have invested several hundred million dollars into an arena that is no longer being used 45 nights a year; this will also severely hurt the neighboring restaurants/bars that were built up to support the arena. So while the other creditors would be relieved of their debts, the local business and city are out hundreds of millions – and I believe that is one of the factors that the Judge is entitled to consider…

World Ph*cking Champs! That was fun - let's do it again...

by Moridin417 on Aug 6, 2009 2:42 PM CDT up reply actions 0 recs

The arena cost $180-million to build, and roughly $30-million of that has been paid back to this point. I believe the Coyotes are contributing approximately $2.5-million a season into the costs of paying off the rink.

Just some more accurate figures on the damages involved there.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 6, 2009 3:03 PM CDT up reply actions 0 recs

This is ugly. I went and looked at Glendale’s budgets. It’s a good thing I did, because the long post I had mostly written out had some bad assumptions in it. If anyone wants to look at the data, it’s here:

http://www.glendaleaz.com/Budget/AnnualBudgetBooks.cfm

I’m using the FY 2010 Annual Budget Book. I’m looking at the lines for the MPC Bonds – Series 2003A – Arena Tax Exempt, the MPC Bonds – Series 2003B – Arena Taxable, the AMFP Series 14 – Arena, and the AMFP Refunding Series 16 – Arena in the schedule for long term debt. Those look like the bonds I want. The first two series show principal being paid off each year, in addition to interest. The last two, which are much smaller, only show interest, so the principal is lurking in its entirety to be paid off eventually.

First, the $30 million James mentions is payments on the principal, though that’s a little tricky. Anything they paid in interest over those years is in addition to that. The reason I say it’s tricky is that, in the years I looked at, they are only paying about $1.7 million a year in principal. My guess is that the rest of it was on shorter term bonds that are already paid off, but some searching hasn’t helped me find the whole list of debt they took on.

What the schedule shows is that over the coming years, on those lines, Glendale has to make approximately the following payments:

FY 09-10: $1,735,000 principal, $8,050,000 interest
FY 10-11: $1,635,000 principal, $7,397,000 interest
FY 11-12: $1,780,000 principal, $7,944,000 interest
FY 12-13: $1,855,000 principal, $7,885,000 interest
FY 14 & Beyond: $149,135,000 principal, $103,093,000 interest.

That’s kind of an odd amortization schedule, so my guess is that there’s some floating rate stuff in there, which would mean that these are estimates. That’s somewhere between $9 million and $10 million per year until the principal is due on the second two lines of debt.

Keep in mind that this is just the debt service. It looks like there’s an additional $1.5 – $2 million per year, roughly, in operating expenses. (This is programs 1282 and 1780 in the Operating Budget by Program and Fund section of the schedules. As an aside, I hate fund accounting.) That means that the city is paying out $11 – $12 million a year on this monstrosity.

It isn’t bringing in nearly that much. The relevant numbers are the same funds as in the operating expenses section, but in the Summary of Revenues by Fund part of the document. These total to about $6 million a year in revenues. This includes arena fees and the sales tax collected at arena events.

In other words, the city has been taking in at least $5 million less every year than it has paid out. Honestly, I’m really wondering whether the city might be better off financially by not making any concessions to a new owner, and just working out a settlement for damages to let the team go. With the numbers being thrown around as to what the Reinsdorf bid wants to make the deal, it wouldn’t take much of an up front cash payment from Ballsillie to have a present value larger than the revenues the city would be left with after making the concessions. Without pulling out a calculator, and just winging it, I wouldn’t be surprised if $100 million would do it, given that we’re talking about $3 – $4 million a year, tops, for about 24 years. That’s without taking into consideration the idea of the city putting up $15 million to cover losses after five years. Looking at these numbers, that’s a complete non-starter. The only thing that is is a fig leaf to keep the city from having to say up front that the team is leaving after that time frame if they are still losing money. There is no way in hell that Glendale will fork over that much when the time comes.

This is nuts. The citizens of Glendale should be marching on Cith Hall with pitchforks and torches.

by J. Michael Neal on Aug 7, 2009 1:15 AM CDT up reply actions 3 recs

Well, I’m not an accountant, but when this whole thing started I wondered if Glendale might be better off in the long run if, instead of spending so much time, effort, and lawyers fees on fighting to keep the Coyotes around against the wishes of the majority of their citizens, the city went to Balsillie and told him that for $100 million they would not only not fight the move of the Coyotes but support him. It wouldn’t help fill the arena, but at least they would get a lump sum to invest in community needs, and Balsillie would come out ahead because even $200 million for the team and $100 million to the city is still less than the bandied-about figure of $500 million for expansion fees for a team in Hamilton.

I wonder what the NHL’s argument would look like if the team was in that situation? The current owner filed for bankruptcy, he had a wiling buyer who wanted to relocate, the relocation market was potentially a solid one, and the current location for the team was giving its blessing to the move.

It still would be horrible to be a Coyote fan in the Phoenix area, but I wonder if it wouldn’t be a better option for the Glendale residents. Just a sad situation all around.

"Be kind, for everyone you meet is fighting a great battle." -- Philo of Alexandria

by Baroque on Aug 7, 2009 6:10 AM CDT up reply actions 0 recs

If JB’s bid does go all the way (and wins), does the NHL BOG consider paying off the creditors and taking control of the franchise themselves? Could Baum present that choice to them? (“Either accept this winning bid, or if your organization rejects JB as a partner, come up with the money for creditors yourselves.”)

Lighthouse Hockey: Side effects may include Weight gain and frequent game loss.

by Dominik on Aug 6, 2009 1:12 PM CDT up reply actions 0 recs

I think that may be an option, but find it hard to fathom every owner chipping in $7.5-million or so to make that happen. It’s one thing to reject Balsillie when it doesn’t cost anything, and another when every owner will have to pony up to bail the team out.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 6, 2009 1:35 PM CDT up reply actions 0 recs

…now THAT is a Board of Governors meeting I’d like to watch.

As I said from the moment this started – the teams will stand behind the League so long as its make financial sense for them to do so. You start making guys like Charles Wang come up with $10M, you might have a much different “NHL Position”. Can the League even force its owners to put up that type of money? I would assume there’s something in the Constitution/Bylaws about the League’s operating budget, but I dont know what type of “capital call” language would be allowed.

Glen Sather is a Hockey Genius.

http://glensathersucks.com/
http://twitter.com/ThGeneralissimo

by poploser on Aug 6, 2009 1:54 PM CDT up reply actions 0 recs

You start making guys like Charles Wang come up with $10M, you might have a much different "NHL Position"

What if that $10M preserves the Hamilton/K.C. opportunity for Wang himself? (No, that’s not right and I don’t subscribe to it. But it is funny to think about in a conspiracy theory sort of way.)

Lighthouse Hockey: Side effects may include Weight gain and frequent game loss.

by Dominik on Aug 7, 2009 12:28 AM CDT up reply actions 0 recs

When potential relocation markets become a hot commodity insofar as owners are (theoretically) willing to pony up millions to maintain them open, we know that we have one messed up league.

/semi sarcasm

by Habs on Aug 7, 2009 2:09 PM CDT up reply actions 0 recs

Happened to the Expos in MLB, right?

And that also seems the only way for the league to really take control of the franchise and decide what happens to it with the bankruptcy proceedings happening.

www.stlouisgametime.com

by Brad Lee on Aug 6, 2009 2:14 PM CDT up reply actions 0 recs

That was a completely different situation. With the Expos, MLB was clearly doing everything it possibly could to leave Montreal. Remember that they allowed Jeff Loria to run the team into the ground, and then gave him a chance to buy the Marlins at a discount as a reward. They greased the skids of the John Henry bid for the Red Sox while they were at it.

by J. Michael Neal on Aug 6, 2009 10:54 PM CDT up reply actions 0 recs

ACTUAL ORDER

http://docs.bmcgroup.com/phoenixcoyotes/docs/azb_2-09-bk-9488_572.pdf

by Gerald on Aug 6, 2009 11:15 AM CDT reply actions 0 recs

We remain confident that the successful bidder will be one who is committed to continuing to operate the Coyotes in Glendale for the long term.

Then that would exclude Jerry Reinsdorf, since he’s looking for an escape clause after five years. That’s only a long term commitment in a world where someone amortizes the entire value of their franchise over six years.

by J. Michael Neal on Aug 6, 2009 12:13 PM CDT reply actions 0 recs

A fine hockey blog

has turned into “Bankruptcy Filings Corner with your host James Mirtle.” And that’s a shame. It would also be a shame for the fans to lose their team in Phoenix.

Coming from a fan who almost lost his team to Saskatoon, I think it sucks. But I also think it’s a losing battle.

www.stlouisgametime.com

by Brad Lee on Aug 6, 2009 2:17 PM CDT reply actions 0 recs

The hell else is there to talk about in early August?

SNN Sports - A theoretical Oilers blog (i.e. theoretically, I write stuff there)

by Doogie2K on Aug 6, 2009 2:21 PM CDT up reply actions 0 recs

Agreed, plus this is really interesting stuff. I am as intrigued about the business of hockey and the rather ridiculous way its run and how that is being shown by these proceedings as I am about wondering about which Sabre will underperform this year.

The population of Pominville keeps rising!

by Blackcapricorn on Aug 6, 2009 2:25 PM CDT up reply actions 0 recs

Exactly. I have three other blogs to read for each team if I care to fret about the mediocrity of my Oilers and Habs. Phoenix, Chicago, and Long Island are pretty much where it’s been happening since the second week of July. Even the champs have been a bit of an afterthought with everything else going on, for better or for worse.

SNN Sports - A theoretical Oilers blog (i.e. theoretically, I write stuff there)

by Doogie2K on Aug 6, 2009 3:32 PM CDT up reply actions 0 recs

I’m afraid I’ve got too much other work piling up to post more than once or twice a day lately, and this Coyotes business is definitely the biggest story going.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 6, 2009 2:38 PM CDT up reply actions 0 recs

James, it would be interesting to know when all of this is said and done what kind of impact all of this has had on Bettman’s standing with the other owners.

Seem to remember a comment from Pierre LeBrun when all of this started breaking back in May that there seemed to be some sentiment among some of the owners towards Balsillie being allowed in at some point, but this situation ripped open the wound again. Now given the public embarrassment of Bettman with the revelation of the real numbers and the true state of the franchise, I would not expect any owners to publically back away from him. But, might there be some “moderates” who would look for a 3rd way – one that will not cost the league a fortune to operate the team in Glendale next season?

What a way to keep hockey in the headlines through the summer?

by oilerdago on Aug 6, 2009 4:39 PM CDT up reply actions 0 recs