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Monday, July 20, 2009

Arena lease update? Beuhler??


From marketwatch:

Worthington Industries reported Wednesday a fiscal fourth-quarter loss as a steep drop in steel sales, inventory writedowns and restructuring costs carved into the bottom line.

For the three months ended May 31, Worthington /quotes/comstock/13*!wor/quotes/nls/wor (WOR 13.63, +0.60, +4.57%) said it lost $13.7 million, or 17 cents a share. The company had net earnings of $53.9 million, or 68 cents a share, a year ago.

Revenue for the quarter fell 46% to $471.6 million, the result of a sharply lower demand for processed steel, the Columbus, Ohio, company's core business. The crisis in the automotive industry, which included the bankruptcies of General Motors Corp. and Chrysler LLC, was a major factor behind slumping steel demand.

Much of the loss, the equivalent of 15 cents a share, was tied to a $6.3 million pre-tax inventory writedown and $6 million in restructuring charges.

Excluding these and other one-time items, the company posted a loss of 2 cents a share, less than the 3-cent a share loss analysts surveyed by FactSet Research had predicted, prompting shares to rally nearly 7% to $12.86 at the open.


I have to wonder what impact these kind of losses can have on the hockey team, which of course is propped up by Worthington Industries.

It's been extremely quiet on the arena lease issue since the initial news broke a few weeks ago. Once the "sin-tax" proposal was shelved I couldn't help but think that another "sin".... gambling.... could be the white knight that rides in and saves the day.

Then news of the following broke recently:

Ted Strickland will authorize racetrack slots by executive order and lawmakers will provide him legal protection under a stalemate-ending budget compromise struck Friday.

The order is the linchpin of a compromise with Senate Republicans, who have in turn agreed to include language in the $54 billion, two-year state budget that clarifies the state gambling law allows the lottery to include slots-like video lottery terminals.


I know this is primarily being used to balance the budget but my first thought was if the Jackets could get any piece of this to assist with their arena lease issue? Certainly doesn't look that way at the moment.

Something has to be stewing though.

Have the Jackets gotten any traction with the local politicians?

Is plan B in the works behind the scenes?

Is this just the calm before storm before the Jackets drop the re-locate hammer?

Or is this a calculated move to keep this topic buried for a bit after all the bad press that was generated earlier this offseason?

It's been a great past couple of weeks for the hockey department with the long term extension of 61 and also with the pickups of Pahlsson and Garon. That certainly stopped the bad PR bleeding.

Although this issue may be out of the hearts/minds of fans and politicians for the moment you can bet it will start generating headlines again - hopefully of the positive variety. I would like nothing better than to focus on red lines and blue lines rather than bottom lines.

Remember to keep on your county commissioners Jacket fans (contact info on right side of page) to make sure this issue doesn't sit on the backburner for long.

Of course if I get any updated information I'll certainly pass that info along.

-LTL

3 comments:

snappy said...

I have to believe that the CBJ front office is still working (very quietly) behind the scenes to re-do the Nationwide lease. Most would agree (including Bettman) that this has to be done for the future viability of this franchise. But, these are not good times to be asking the State or City for any financial assistance. The State just finished a very, very difficult struggle to pass a "balanced" (is it really?) budget. The City of Columbus is looking to voters to approve a substantial increase in the city income tax (from 2% to 2.5%) to meet its own financial problems. So, no new requests from The CBJ for funds will be perceived favorable, I would say. In fact, the timing of the release of the "sin tax" couldn't have been worse in terms of PR. (Of course, Anheuser Bush "spilled the beans" when it did for selective advantage--to kill any new beer tax).

I expect (well, really hope) that something will eventually get done to correct a bad arena lease for th CBJ. Nationwide Insurance will like assist. But, the economic situation has to stabilize a bit first or the PR nightmare will continue. Also, the earnings report for Worthington Industries isn't really that bad, IMO. As I understand it, this is the first time that this company has reported substantial annual losses and some of those were one-time accounting issues as was reported. Finally, if the McConnells find themselves in a difficult finincial situation, I expect they could find other co-owners to invest in this franchise, which is only going to get better. My two cents.

JAL said...

Now that I am back from vacation, and almost out from under the backlog at work, I will be posting part II of my series on the Arena issue, which deals with how we got here.

Part III, next week, will focus on what happens going forward. I will be following up with both O'Grady and the CBJ on the status of current efforts.

Based upon the conversations I have had to date, I really, really do not think that relocation is anywhere in the cards, or will it be for the foreseeable future. There is too much to lose, and despite the public aversion to the "tax" word, the Commissioners understand that the CBJ cannot be permitted to leave.

While this is pure speculation at this point, I would surmise that the ultimate resolution will consist of a combination of a new lease for the CBJ that addresses the revenue issues, some form of cooperative ownership between Nationwide, the FCCFA, and the CBJ themselves, and some measure of public support garnered from existing hotel and convention revenues.

I know from my research that the County Administrator is involved in exploring options, that the CBJ and Nationwide were going to talk, and that the ball was going to keep rolling.

I would not expect that a whole bunch has been accomplished yet, given that we marched right into draft and free agent season.

More to come . . .

--JAL
A Shot From The Point

LTL said...

I certainly look forward to that JAL. Please give us a heads up once you publish!

-LTL