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Report: NHL will fund part of Coyotes purchase

May 30, 2013, 4:00 PM EDT

Gary Bettman AP

The NHL may end up selling the Phoenix Coyotes to the Renaissance Sports & Entertainment group led by Alberta investment banker George Gosbee, but it doesn’t sound like the league will be able to completely cut its exposure to the perpetually money-losing franchise.

From Forbes:

A source close to the negotiations, who traded candor for anonymity, revealed the purchase price as $170 million. The capital structure would consist of RS&E putting in $45 million of equity, Fortress Investment Group lending $120 million (to be repaid by the fee Glendale taxpayers are going to pay the team to run the arena), and an $85 million loan from the NHL.

The $80 million the total capital investment ($250 million) exceeds the enterprise value of the purchase ($170 million) will be used as working capital.

Vendor financing isn’t wholly unusual in business transactions, but an NHL loan that will partly fund the Coyotes’ operations isn’t ideal from an optics standpoint. The NHL will eventually want that money back, people will say, and what better way to help the Coyotes’ bottom line than by helping Phoenix win hockey games?

Cue the wild conspiracy theories.

At any rate, the deal isn’t done yet. There’s still the matter of getting a favorable lease from the City of Glendale.

  1. jcmeyer10 - May 30, 2013 at 4:06 PM

    Oh my god this is getting ridiculous.

    • jcmeyer10 - May 30, 2013 at 4:42 PM

      This is like the Simpsons episode where Homer tries to roast a pig that gets away and during each event that sullies the cleanliness of the pig, he keeps insisting, “it’s still good,”

  2. ron05342 - May 30, 2013 at 4:26 PM

    I’m shocked!

    Absolutely shocked, I tell you!

  3. atwatercrushesokoye - May 30, 2013 at 4:57 PM

    So what you’re saying is they’re buying the team for $45 million? I wonder how the Glendale taxpayers will feel about the fact they’re going to end up essentially paying $120 million of the purchase price of a team that only about 12,000 people care about. Money well spent I’m sure….

    • thenewraoulduke - May 30, 2013 at 7:24 PM

      You don’t understand the concept of the word “loan” do you. Its when someone gives you money and then you pay them that money back in the future with interest. Its a key word in the quoted section.

      • atwatercrushesokoye - May 30, 2013 at 8:22 PM

        The $120 million is to be repaid by the fee the city of Glendale will give the Coyotes for managing the arena. It’s a loan that the Glendale taxpayers are paying back.

        The NHL loan is semantics so the league can say they sold the team for $250 million, in reality the team was bought for $45 million.

  4. chanceoffleury1 - May 30, 2013 at 5:00 PM

    After seeing some of these playoff ticket prices ( God Bless you poor Toronto fans) I definitely feel like there are at least 1.7 million hockey fans willing to throw $100 in a pot to buy the Coyotes. Forget the fact you’d now own 1/1,700,00 of an NHL team, the fact we’d be able to stop hearing about their financial woes and the pitiful way the NHL handles their situation would be worth the $100 alone! At least fans would figure out the logical thing to do and give them to Seattle….

    • jcmeyer10 - May 30, 2013 at 5:02 PM

      The question is, would you allow people to buy multiple shares and would you need a mere 51% or 66% to approve decisions?

    • atwatercrushesokoye - May 30, 2013 at 5:06 PM

      Can we do that and move the franchise to QC or TO and then sell with a massive profit?

      • elvispocomo - May 30, 2013 at 5:51 PM

        Figured that could use at least one plus, since with all the complaints during the lockout about how owners didn’t make any money it sure seems they’re able to sell them for a hell of a lot.

  5. atwatercrushesokoye - May 30, 2013 at 5:05 PM

    I wonder how many NHL owners are mad that Napoleon…I mean Bettman, didn’t just allow Jim Ballsillie to pay real money for the team and move them to Hamilton? Instead of losing $30 million per season the franchise would be making $30 million a year.

    Now cue the Phoenix fans who will come on and take shots at people who think its ludicrous to keep the team there but will not even bother to refute the facts of 12,000 per game, $30 million lost per year, not making even $1 in profit in the years they’ve been in Phoenix/Glendale, having the team go bankrupt, the NHL forced to buy the franchise and own it for 3+ years, not to mention the endless stream of losers who have tried to buy the franchise with very little cash (relatively speaking) while taking massive handout from the City of Glendale.

    • tdrusher225 - May 30, 2013 at 11:05 PM

      You are right on. The NHL could utilize a pretty quick fix in moving these teams into hockey-hungry Canadian markets. Even US markets like Seattle and Wisconsin are sure bets to be better. But no, let’s stick with the city that fills 70% of its stadium on a good night and has been losing money on its team the minute they went there. It makes so little sense.

  6. jernster21 - May 30, 2013 at 5:28 PM

    With a new mayor that has said he’s not going to be at the NHL and a new potential owner’s beck and call, there’s still a real chance that this doesn’t happen. Hope they have a back up plan when Glendale says no thanks as they bulldoze Westgate.

  7. packerswin96 - May 30, 2013 at 6:23 PM

    This is unfreakingbelievable, this team and the NHL could be making millions in Quebec, southern Ontario or even in Seattle, yet that pip squeak Bettman insists on keeping the damn team in Arizona where it never should have been in the first place and does nothing but lose big $! How stupid is that?

  8. valoisjoeybfeld69 - May 30, 2013 at 6:59 PM

    Heard a guess on. TV sports show who is close to the game say that there is big advertising money in Arizona, which is why the NHL can’t afford to lose their exposure there. They apparently have millions and millions of dollars paid by sponsors that would be lost if the team moved. If I remember correctly, he said Arizona is the 6th biggest TV market in the states, and Atlanta was eight. In other words, after losing Atlanta they don’t want to lose another big market. I don’t know how credible his information is, but I don’t believe he’s the type to go on record and blow smoke. Anyway! This theory is as good as any that I’ve heard regarding why the NHL is hell bent on keeping the Yotes in AZ.

    • atwatercrushesokoye - May 30, 2013 at 7:06 PM

      They have 9 seasons left on the US tv contract, I don’t think the tv market size is a factor, especially since they get 0.0 and 0.1 ratings in Phoenix.

    • jernster21 - May 30, 2013 at 8:05 PM

      Phoenix is a huge market, no doubt. Unfortunately, everyone is watching NHL Center Ice, not the Coyotes, because no one from Phoenix lives in Phoenix (I’m exaggerating, slightly…the majority migrate there from somewhere else and that’s no joke. There is truth to all that though – part of the reason why NBC Sports signed on with the NHL is because they have teams in the majority of the big market cities. Maybe the NHL makes money off the Coyotes when they make none, but considering they have owned the team for years, I can’t imagine they’re breaking even, even if that was the case.

      • valoisjoeybfeld69 - May 30, 2013 at 9:39 PM

        Why else other than making money would the NHL help fund the team? Question: is the NBC sports TV market bigger in Quebec than it is in Phoenix? I don’t have the data, but Quebec is such a small anglophone market compared to Phoenix. I’m fairly certain it’ economically profitable to keep the team in Phoenix if the NHL is willing to help finance the team.

      • jernster21 - May 30, 2013 at 9:45 PM

        There is no NBC Sports market in Quebec…that’s why they have contracts with TSN and CBC in Canada.

      • jernster21 - May 30, 2013 at 9:47 PM

        Those contracts aren’t nearly as profitable I would assume – less teams, less money. With that said, a franchise wouldn’t suffer up there, and they also get relocation fees out of it…so it’s really a no brainer, unless your name is Bettman.

      • greatminnesotasportsmind - May 31, 2013 at 1:45 AM

        The Canadian TV contract is massive compared to the US contract.

        Don’t forget the NHL in Canada is what the NFL is to the US. TSN has an 8 hour special at the trade deadline. The NHL draft to them, is what the NFL draft is to us. When Minnesota hosted the draft, I’m guessing at least a quarter of the building were Winnipeg and Edmonton fans.

    • atwatercrushesokoye - May 30, 2013 at 9:46 PM

      The problem with that theory is that the local rights generated by the Quebec tv deal and from the Canadian national deals which are up after this season will dwarf the Phoenix local rights and what they’re getting from NBC.

      Why they’re fighting so hard to keep this team there? I have no idea.

  9. Brian - May 30, 2013 at 8:25 PM

    I find this absolutely stunning. How pissed off would you be if you were an ex-Atlanta Thrasher season ticket holder right now? Because I’d be apoplectic. For the league to fund this team as long as they have, then put up a third of the purchase price as a “loan” they’re almost certainly never going to get back is just beyond the pale.

    • blackhawksdynasty - May 30, 2013 at 9:46 PM

      Whoa, dude, hang on a sec….there are about 4 people who comment on PHT that actually know what apoplectic means. Better to dumb it down ’round here….

      • Brian - May 30, 2013 at 10:05 PM

        Here’s a handy link then!

    • blackhawksdynasty - May 30, 2013 at 11:07 PM

      @Brian – very kind of you. Now the trick is to teach these kids how to use it in a sentence (with proper spelling, punctuation and grammar). Personally, I prefer conversing face to face, as I am very expressive and tend to use dramatic gesticulations when I speak.
      I must say, I’d be shocked if anyone actually clicked that link.

  10. desertfan - May 30, 2013 at 8:49 PM

    The 12,000 per game is a huge misuse of statistics.

    You can go to a Coyote game with your wife and two kids including two beers, 4 hotdogs and two cokes, and parking for less than one ticket in Winnipeg, TO, Mont and Vcr.

    Think about it!!!

    Attendance is really 3,000 per game or less economically.

    • atwatercrushesokoye - May 30, 2013 at 9:53 PM

      I can say Calgary isn’t much cheaper than those cities, I very rarely go to games because it’s so expensive, I would rather watch the games at home and not pay $10 for a beer or $8 for a slice of pizza and the $12 parking.

      The bonus of going to a game in Phoenix would be that you’d get a nice buffer zone between yourself and the person “next” to you.

  11. fiddytucker - May 30, 2013 at 9:51 PM

    A lot of number, a lot… They are staying. Big woop. No sweat off of any of your Asus. C u all in the playoffs. Go Yotes

    • greatminnesotasportsmind - May 31, 2013 at 1:48 AM

      Playoffs? Oh yeah that thing you didn’t make this year.

  12. ray2013 - May 30, 2013 at 11:56 PM

    The Canadian market isn’t going anywhere. So why not take a shot at one of those major tv deals by having hockey teams in most of the major markets? That seems to be what the goal is, however illusory it may be.

    (illusory means something based on illusion, not real. ex. Bettman knew his expansion plans were illusory, as he had not the skill or ability to negotiate major tv deals.)

    • greatminnesotasportsmind - May 31, 2013 at 1:54 AM

      The NHL is already in 8 of the top 10 US television markets. Atlanta and Houston both have lost hockey teams in the past 3 years. Atlanta is now Winnipeg and Houston lost the Aeros because AT&T Center felt they could make more in concert than Aero games.

      Phoenix is 12th, not working. Seattle is 14th and seems logical but needs a new arena. Then your getting into Cleveland, Orlando, and Sacramento to round out top 20. No chance on those 3. No, Columbus isn’t considered part of Cleveland. Columbus is 32nd

  13. badintent - May 31, 2013 at 2:31 AM

    Fortress Investments is the biggest bunch of con men douchebags going !! They pulled Chapter 7 two days before the Vancouver Olympics started at Whistler on their overpriced shoe box condos project that went bust thanks to people getting tired of getting the short end of the stick on their investments there. They sucked all the money out for many years to enrich their own pockets.

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