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I drive to Indy when da bulls are in town. I also drive to Chicago to watch da bulls. I don't have any other options. Chicago is a pro sports town like Louisville is a college town. How many of you were against the Colts coming to Louisville? Bet some of you wish they would have come here instead of Indy. There are a ton of nfl fans on this board and I'm sure would much rather drive a couple miles then drive an hour and a half to watch football.
Good points JYC.
IMO, the only real problem with UofL's arena lease is the additional lock out time before and after any UofL game. There is no rational reason to prevent events the day before or after - except to prevent the NBA from playing there. There probably is not a way to relax that without drawing up a complete new lease.
To understand UofL's impact - the Fairgrounds use to be a money maker for the state. Since UofL quit playing at Freedom Hall (plus the closing of KY Kingdom) that has changed. Now the Fairgrounds is running in the red...
That's a whole other topic, but man I would love an NFL team in Louisville.
Per that rah-rah article, it indicates that there are 1.3 million inhabitants of Louisville and the many others that live in Louisville’s surrounding area and " There is also a petition that people can sign to show their support for an NBA franchise in Louisville. Over 1,500 signatures have been received to date." 1,536 to be exact.
Wow, I mean simply WOW - in over a month the website, Bring Professional Basketball Back Home To Louisville, has been able to sign up a WHOPPING 0.118% of the local population for FREE. That truly is a bunch of nba supporters.
Wonder how many would signup to be supporters if they had to put a down payment on tickets of say, $1000 or $2000.
This post was edited by Bhamcard 16 months ago
My main concern is that if the arena goes into default, which I think is a very real possibility, then all bets are off. And that iron clad lease we have could be broken due to a foreclosure proceeding. That would make an NBA team a very real possibility.
I really don't know the answer to that though. Who knows how it would turn out. But it's better to be safe than sorry. So I think it is very much in U of L's interest to do all it can to get the arena into the black, short of agreeing to host an NBA team. That is unless Jurich figures a way for that to work as well, which I highly doubt he will. But if it's cool with him, it's cool with me.
I thought I read that UofL has an option to buy the arena if the bonds go into default?
If so, is there a play on the bonds for the arena out there? Buying them for pennies on the dollar and UofL buying them at full price?
I just did a search on market price of the bonds and found this:
This post was edited by Finishline 16 months ago
I agree, but some refuse to listen. They care more about Louisville getting an NBA team than they do the Louisville Cardinals. It's Louisville First NBA Never!
A default on the bond would not void UofL's lease, which would survive any foreclosure proceeding. But bondholders don't foreclose on property. They don't want property, they want money.
Anyway, that's not how it would happen. More likely than not, the entity that runs the arena would have to declare bankruptcy and try to rework its debt. It is possible at this time that a bankruptcy judge could look at the lease with UofL and force it to be renegotiated.
AKA Big Game James
That's what I mean. There would be tremendous political pressure there. U of L is basically an agency of state government. So in effect, the U of L lease is not "arm's length" because the landlord and the tenant are parts of the same entity.
If the bond holders go into court after a default and basically say "this U of L lease isn't even arm's length, and it is screwing us over, and we have an NBA team ready, willing and able to come in and pay more rent and generate more revenue for us" then that court is going to have to listen.
I don't know how that would turn out, but CLEARLY there is some risk there for U of L. I am just saying we need to acknowledge this and plan for it.
As BigRed said, bonds are not stock...they don't have opwnership properties of the underlying asset (in this case, the arena).
If UofL bought the bonds, they'd be owed the interest on the bonds, plus the principal at maturity. Nothing more. If the arena defaulted on the bonds, UofL would be out all the money they spent, though they might have a claim on some future revenues of the arena.
As much as it's been a great boon to UofL, the deal the city gave us in the arena is very unnecessarily one-sided in our favor, to the detriment of the city. It probably needs to be renegotiated regardless of whether an NBA team comes here or not. If we're really partners with this city, that's what needs to happen.
I am not sure if this would hold up on court because of the non-arm's-length nature of the lease. Basically, the tenant (U of L) is an entity of the borrower (the Commonwealth of Kentucky). So allowing U of L to buy the arena based on a lease option would be the same as allowing the borrower to just screw the lender out of the loan proceeds.
Honestly, I an stunned that such a provision is included in the lease. Think about it. What reason is for the state or U of L to want the bonds paid off?? From a purely business standpoint, they should default as soon as possible so U of L can buy the place.
If I am the lender (the bond holders in this case), there is just no way in hell I allow for that provision.
If the city of Louisville can't pay for the arena then it should have let Louisville build an arena on campus like they wanted to do. If the university had built on campus it wouldn't of been as nice or as big but it would have cost half of what the YUM! Center did and they would have been able to keep all of the funds from naming rights, suite sales, concessions and parking as well as any money from other hosted events. Without UofL there is no Yum! Center and without UofL branding of the arena and revues from suite sales UofL doesn't not agree to play in an arena they don't own. If the city breaks the lease they have with UofL then I hope Jurich immediately starts fund raising for a on campus arena and the city can roll the dice on the NBA.
First, the arean is bringing in money with all the concerts they have had recently. Didn't the arena make more monty last year than projected?
Secondly, where would UofL get the money to build an on campus arena?
U of L wouldn't have been able to afford it either in all likelihood. Many of the events at the YUM would probably not come to an arena on a college campus. More importantly, the state probably wouldn't have issued the bonds for that location. One little known fact in all this is that the state wanted an arena downtown as well in order to complete all the pieces to the convention puzzle - the KICC, the 4SL entertainment district, the two convention hotels, and finally, the arena.
Putting the arena anywhere else totally blows that deal up.
Honestly, this deal should have been easy, but nobody would take "yes" for an answer. U of L inexplicably never wanted downtown. The city would never give in on NBA potential. As a result, we have an overpriced disaster in the making.
The main thing definitely in U of L's favor is that the YUM is most certainly NOT an NBA arena. It's got about 2,000 too many seats, and probably 20 or 30 too few luxury suites. Those details matter a lot because they limit the potential profit that an NBA team can make. The building is missing suites they could sell, and it has a bunch of seats they probably can't. Good for us.
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