Ever since the NHL principals and Renaissance Sports and Entertainment group (RSE) principals descended upon Glendale on Tuesday, May 28, 2013 new speculation blossoms. On May 30, 2013 Forbes online posted an article by Mike Ozanian entitled Phoenix Coyotes $170 million sale to be partially funded by NHL. Here’s the link: http://www.forbes.com/sites/mikeozanian/2013/05/30/phoenix-coyotes-170-million-sale-to-be-partially-funded-by-nhl/. The article appears to be factually correct and correlates with the information learned several days ago about the Renaissance deal. Thank God, at least it’s not a hatchet job from the Arizona Republic (or as it is fondly called in some circles, the Arizona Repulsive).
Breaking it down RSE gets a $120M loan (or 70% of the purchase price of $170M) from Fortress Investment group. Unconfirmed sources say the interest rate is 9% but I have no information on the length of the loan. It gets another loan from the NHL of $80M (50% but no info on rate or length of time) and RSE puts in $45M (26% equity investment). Sources indicate that George Gosbee’s participation is $10M with minor investors contributing approximately $4M – $5M each to cover the $35M balance. But those figures total $250M you say…more than the purchase price of $170M. What’s the extra $80M for? To cover losses incurred over several years. Oh, and by the way, RSE doesn’t have to start paying the NHL for five years and they have been assured by the NHL that their revenue sharing will be “healthy.” This is a very, very sweet deal for RSE.
The best analogy I can come up with is this. You buy a $1700 refrigerator. You put $1200 of it on your credit card and you kick in $450 cash. Oh, and by the way, the company you are buying the fridge from doesn’t require payment for 5 years (of course, the interest is piling up) AND it will rebate you $800 that you can use for repairs, etc.
Now, you have three cousins, Darin (Pastor), Greg (Jamison) and Matt (Hulsizer) but the dealer will only offer his spectacular deal to one of the four of you. Darin is willing to pay $500 in cash; Greg is willing to put up $550 in cash and Matt is willing to pay $600 in cash. You would think that one of your three cousins was a lock to get the refrigerator deal but that’s not the case. Perhaps you and the dealer have an “understanding” and you end up with the deal. Go figure.
Joyce, the alternative is the city can have an empty arena and “hope” to compete with other venues in the valley for “Taylor Swift” types of events and maybe if possible for the “six million” almost break even…if lucky. IFG might manage to co-opt Weirs and Co. to believe that “six million” will replace 500K paid ticket surcharges/parking are worth the full “six million”. Of course with the low “bid” the City would be responsible for all “losses” incurred by such an “offer”, not to mention the high percentage of said revenue that any “rpf” would require for such a low bid.
Joyce, the Forbes article is written on purpose to “mislead”. For instance per the “Forbes” article I paid my mechanic recently $500 to fix my transmission. Apparently I was according to “Forbes” I was paying him to pay his house payment and not be a service rendered. Isn’t it funny.
and rather than deal with the content of your logic the carpet-baggers errrr i mean Fortress will just label you a conspiracy theorist.