Arizona Coyotes going for 1 Billion, does this increase other Franchises?

[LPHabsFan]

If you really want to be technical $1 billion in 5 years is about $900M today.

That being said I am curious about Atlanta. Someone could have bought the Thrashers for $120M and then built an arena in the suburbs (back then arenas cost $300M) for a for $420M. Even if they took losses for 3 years playing at State Farm lets call it $520M. That would be a little over $700M today. Now you're talking $1.2B for the team + another $1B for an arena. What's changed that dramatically between 2011 and now?

1 - They were able to find an idiot (or group of idiots) thinking that this is a smart investment and won't backfire.......again.

2 - The nature of arenas have changed a bit in certain areas with more ED's popping up which makes it easier to meet the qualifications for number 1.

3 - Specifically for Atlanta, there's the belief that this can work out in suburbia due to the Braves success despite the fact that countless other NHL ventures have failed/and or are failing and actively working on downtown arenas.

 

[Yukon Joe]

3 - Specifically for Atlanta, there's the belief that this can work out in suburbia due to the Braves success despite the fact that countless other NHL ventures have failed/and or are failing and actively working on downtown arenas.

The reason a number of teams have had success with downtown arenas is because the local municipality is actively trying to promote downtown development, and as such give generous subsidies to teams to build downtown.

While having a team to far out in the suburbs can be a problem (see Kanata, or Glendale), there's nothing intrinsically wrong with having a suburban arena as long as it's still easily accessible by fans.

 

[tucker3434]

1 - They were able to find an idiot (or group of idiots) thinking that this is a smart investment and won't backfire.......again.

2 - The nature of arenas have changed a bit in certain areas with more ED's popping up which makes it easier to meet the qualifications for number 1.

3 - Specifically for Atlanta, there's the belief that this can work out in suburbia due to the Braves success despite the fact that countless other NHL ventures have failed/and or are failing and actively working on downtown arenas.

The only problem with the NHL in Atlanta is having a place to play. Under the former clown show ownership, attendance matched on ice performance, which wasn't even the bottom. It's weird that Atlanta gets singled out as a horrible market, because there are no actual metrics to support it.

But at this point, you'll see. It's happening. The arena could've gone downtown, if there was space (and no direct conflict with SFA). But we also have more than 2m people in our northern burbs, more than some NHL markets' entire metro areas. So that'll be fine too.

 

[aqib]

The only problem with the NHL in Atlanta is having a place to play. Under the former clown show ownership, attendance matched on ice performance, which wasn't even the bottom. It's weird that Atlanta gets singled out as a horrible market, because there are no actual metrics to support it.

But at this point, you'll see. It's happening. The arena could've gone downtown, if there was space (and no direct conflict with SFA). But we also have more than 2m people in our northern burbs, more than some NHL markets' entire metro areas. So that'll be fine too.

Well I only asked about it here because it's the most recent market to lose a team that is bidding to get one back. Basically the team and new arena would be a $2 billion investment now vs $500 million investment in 2011.

 

[StreetHawk]

The reason a number of teams have had success with downtown arenas is because the local municipality is actively trying to promote downtown development, and as such give generous subsidies to teams to build downtown.

While having a team to far out in the suburbs can be a problem (see Kanata, or Glendale), there's nothing intrinsically wrong with having a suburban arena as long as it's still easily accessible by fans.

that's the main concern with a Suburban arena. How accessible is it going to be on weekdays?

Prior to Covid, probably the majority of fans attending games worked in the city's downtown, so getting off work and heading over to the game was easy and convenient.

Now, with more Hybrid work and WFH options, how convenient is either option for the majority of the fans?

 

[tucker3434]

Well I only asked about it here because it's the most recent market to lose a team that is bidding to get one back. Basically the team and new arena would be a $2 billion investment now vs $500 million investment in 2011.

I wasn’t calling you out.

Like we saw in AZ, a new arena isn’t a given. Back in 2011, the local prospective owners would’ve been flying totally blind and with only 43% of HRR. But if they knew they could get an arena built in ~3 years, it probably would’ve happened.

The current group(s) has the benefit of the team being contingent on the arena and vice versa. It’s a different level of risk.

 

[Voight]

Sports franchises are more or less analogous to houses in a desirable neighborhood. The more someone pays for a house there, the higher the asking price neighborhood-wide goes up.

Obviously, bigger houses will be worth more, and houses closer to the community pond will be worth more, and houses that have been better upkept will be worth more, but deep down everyone in the neighbood is damn glad when the smallish, run down house on the corner furthest from the pond sells for above asking price because, in the long run, that means that their selling price went up, too.

I'm still convinced that the shocking overpay for the Clippers instigated a continent-wide shift in pricing regardless of sports. Prior to that, the Thrashers could be moved for a mere $170 million, the Texas Rangers went for under $600 million, and the Sacramento Bucks and Milwaukee Bucks fetched only a bit over a half billion apiece.

Nowadays we're basically looking at teams across the board being worth in the very high nine figures at the absolute lowest, and the Yotes probably set a standard that a billion is the new floor.

Ballmer overpaid for the Clippers (at the time) because he desperately wanted to own a sports team.

But leading off your analogy, there's only so many to be had in North America so prices will always be going up. There's only 124 franchises between the big 4 leagues.

There's over a thousand billionaires in North America so there's a lot of guys with the money to buy in and not enough teams to go around.

 

[Yukon Joe]

that's the main concern with a Suburban arena. How accessible is it going to be on weekdays?

Prior to Covid, probably the majority of fans attending games worked in the city's downtown, so getting off work and heading over to the game was easy and convenient.

Now, with more Hybrid work and WFH options, how convenient is either option for the majority of the fans?

So, I don't think it's been true for a long time that "the majority of fans attending games worked in the city's downtown". That's what the whole hollowing-out of downtowns has been about - and why cities want to revitalize downtowns. It's been happening long before Covid.

What downtowns do have going for them is a lot of transportation infrastructure, which is why transportation can still be an issue for suburban arenas.

 

[TheLegend]

If you really want to be technical $1 billion in 5 years is about $900M today.

Well if you want to compare apples to kumquats, yes.

That being said I am curious about Atlanta. Someone could have bought the Thrashers for $120M and then built an arena in the suburbs (back then arenas cost $300M) for a for $420M. Even if they took losses for 3 years playing at State Farm lets call it $520M. That would be a little over $700M today. Now you're talking $1.2B for the team + another $1B for an arena. What's changed that dramatically between 2011 and now?

Meh… you’re in coulda woulda shoulda land.

You thinking Alex Meruelo should have bought the Thrashers instead of trying to buy the Hawks and play in say….. Gwinnett for three years while trying to build a competing arena in the Atlanta area??

What’s changed in your proposed universe is Meruelo bought two hotel casinos in Nevada in the mean time.

 

[aqib]

1) Well if you want to compare apples to kumquats, yes.



Meh… you’re in coulda woulda shoulda land.

2) You thinking Alex Meruelo should have bought the Thrashers instead of trying to buy the Hawks and play in say….. Gwinnett for three years while trying to build a competing arena in the Atlanta area??

What’s changed in your proposed universe is Meruelo bought two hotel casinos in Nevada in the mean time.

Numbers were added my me.

1) No thats simple time value of money

2) Not saying Meruelo should have bought the Thrashers (Although he said during his aborted bid for the Hawks he was never interested in them). Just saying if the problem was the arena wouldn't it have made sense for someone to buy the team and build a new arena back then when both franchise values and arena construction costs were a fraction of what they are now. The question is what's changed between 2011 and now to such and extent that $420-500 million didn't make sense for an investor in 2011 but $2+ billion makes sense now?

 

[ponder719]

2) Not saying Meruelo should have bought the Thrashers (Although he said during his aborted bid for the Hawks he was never interested in them). Just saying if the problem was the arena wouldn't it have made sense for someone to buy the team and build a new arena back then when both franchise values and arena construction costs were a fraction of what they are now.

That would only have made sense if they had somewhere to play until that arena was built. The Thrashers were not going to be permitted to play at Phillips, so they'd have needed some sort of temporary solution. I'm not super well versed, so I don't know for sure if there was one available in Atlanta, but I don't recall there being one.

 

[Skidooboy]

The only problem with the NHL in Atlanta is having a place to play. Under the former clown show ownership, attendance matched on ice performance, which wasn't even the bottom. It's weird that Atlanta gets singled out as a horrible market, because there are no actual metrics to support it.

But at this point, you'll see. It's happening. The arena could've gone downtown, if there was space (and no direct conflict with SFA). But we also have more than 2m people in our northern burbs, more than some NHL markets' entire metro areas. So that'll be fine too.

well. they lost money from pretty much day1....

attendance number doesn't matter if the tickets are to cheap to return the investment.

problems and politics existed...but if the team had made a profit it would be there.... no matter the confounding arguments, lawsuits and claims...the team never made money. and it was more profitable to let it go and fill up the arena with concerts and monster trucks than keep the thrashers.

this is the thing 99% of the people on this board won't admit... but the team never made money. and that more than anything is why it is gone. you can moan about ASG all you want... but rich people don't throw away profits..profitable assets are kept...

The thrashers were attended, loved, and missed by the market....but they were never financially viable. and Making up excuses and stories and lies that ignore that fact...is childish.

 

[tucker3434]

well. they lost money from pretty much day1....

attendance number doesn't matter if the tickets are to cheap to return the investment.

problems and politics existed...but if the team had made a profit it would be there.... no matter the confounding arguments, lawsuits and claims...the team never made money. and it was more profitable to let it go and fill up the arena with concerts and monster trucks than keep the thrashers.

this is the thing 99% of the people on this board won't admit... but the team never made money. and that more than anything is why it is gone. you can moan about ASG all you want... but rich people don't throw away profits..profitable assets are kept...

The thrashers were attended, loved, and missed by the market....but they were never financially viable. and Making up excuses and stories and lies that ignore that fact...is childish.

At that time, half of the teams didn’t make money. There were many other teams losing more money than the Thrashers. Almost all of them have gone into the black since then. The last one just left for Utah.

There was nothing about Atlanta/the Thrashers that made them uniquely bad. They were no less viable at that time than the Islanders, Predators, Canes, Yotes, Panthers, CBJ, Ducks, etc. But they were all fortunate enough not to get bought by an ownership group that never wanted them to begin with. That’s it. That’s the difference.

 

[Skidooboy]

At that time, half of the teams didn’t make money. There were many other teams losing more money than the Thrashers. Almost all of them have gone into the black since then. The last one just left for Utah.

There was nothing about Atlanta/the Thrashers that made them uniquely bad. They were no less viable at that time than the Islanders, Predators, Canes, Yotes, Panthers, CBJ, Ducks, etc. But they were all fortunate enough not to get bought by an ownership group that never wanted them to begin with. That’s it. That’s the difference.

citation required because I think you are comparing apples and jetfighter's.


1. most of the teams you mention made money, maybe not consistently, but they made money at lost occasionally, and they didn't lose vast amounts of money year after year after year like Atlanta and AZ did...
2.Comparing any team to the 'Yotes , a disaster from day 1 in a market that hemorrhaged money for decades and only survived on the graces of the NHL and a bunch of liars conmen and criminals isn't a good thing....
3.

 

[TheLegend]

citation required because I think you are comparing apples and jetfighter's.


1. most of the teams you mention made money, maybe not consistently, but they made money at lost occasionally, and they didn't lose vast amounts of money year after year after year like Atlanta and AZ did...
2.Comparing any team to the 'Yotes , a disaster from day 1 in a market that hemorrhaged money for decades and only survived on the graces of the NHL and a bunch of liars conmen and criminals isn't a good thing....
3.

You keep requesting citations from everyone yet rarely back up any of your own assertions up with them.

The Coyotes in the first few years weren’t a “disaster” as you put it. They were a playoffs team and their attendance ranked in the middle third of the entire league.

But their situation wasn’t good for the long term. Richard Burke said in an interview that escalating salaries gave then about four more years before playing in downtown Phoenix before it was untenable.

Now you can definitely say what followed with the team was a cavalcade of errors. But to constantly make the blanket statement the team was a “disaster from day 1” is just embellishing things.

 

[tucker3434]

citation required because I think you are comparing apples and jetfighter's.


1. most of the teams you mention made money, maybe not consistently, but they made money at lost occasionally, and they didn't lose vast amounts of money year after year after year like Atlanta and AZ did...
2.Comparing any team to the 'Yotes , a disaster from day 1 in a market that hemorrhaged money for decades and only survived on the graces of the NHL and a bunch of liars conmen and criminals isn't a good thing....
3.

All of those teams had similar revenue to the Thrashers. If ASG was losing the amount of money they claimed they were, either they were reporting their numbers differently (which makes sense considering their goal) or they mismanaged the hell out of the team. Either way, not an indictment on the market.

The Yotes were just the worst of many teams in rough shape back then. The NHL was far less healthy as a whole prior to the 2013 CBA.

 

[Yukon Joe]

citation required because I think you are comparing apples and jetfighter's.


1. most of the teams you mention made money, maybe not consistently, but they made money at lost occasionally, and they didn't lose vast amounts of money year after year after year like Atlanta and AZ did...
2.Comparing any team to the 'Yotes , a disaster from day 1 in a market that hemorrhaged money for decades and only survived on the graces of the NHL and a bunch of liars conmen and criminals isn't a good thing....
3.

1. So there's nothing to suggest that the Thrashers were unique when compared to other teams in the region like Preds, Canes, etc. We don't have hard evidence but no reason to think the Thrashers were uniquely losing money at a rate well beyond any other team.

IN fact though losing money is only part of the game. If the Thrashers had remained in Atlanta they would be worth roughly 7x as much in 2024 as they were in 2011. That increase in value makes up for a lot of losses. I'm pretty sure if the ASG group had to do it over again they wouldn't have sold the team.

2. Yotes weren't a "disaster from day one". They turned into a disaster, sure, and by now a long time ago. But they had a long sequence of events that happened. I like to point to the sale of the Coyotes to Steve Ellman, which severed the Coyotes from the nearby mall development which could have helped fund the team. They then had the great idea to bring in Gretzky as head coach (despite no coaching history), then the 2008 financial crisis hit Arizona harder than anywhere else, then bankruptcy, the legal shenanigans to bring the team to Canada, etc. etc. etc.