Glendale politicians try to void Coyotes arena deal
TSN released a report on the Arizona Coyotes. Though released would probably be an understatement. Unleashed might be more appropriate. And if the facts in Rick Westhead’s reporting are indeed accurate, the sentiment around the troubled franchise seems grim.
For one, elected officials are trying to void the arena contract with the Coyotes that asks for taxpayers to pay $15 million per-year.
They charge the money from the taxpayers is not being used to run the arena and instead is going to “Fortress Investment Group, the New York-based asset manager which financed holding company IceArizona's purchase of the Coyotes.”
But there’s more…
The city does receive a portion of revenue sharing from the arena's operations. Last year, the city received about $6.5 million from IceArizona, which means the deal cost the city about $8.5 million.
"I asked our finance director...if the hockey team packed up and left the next day, what would be the impact, and the answer was an $8.5 million windfall profit for us," (Glendale vice mayor Ian) Hughes said. "We increased sales tax to the citizens to cover this (arena management deal). We have needs in law enforcement and our fire department that we can't fund. We had to put off purchasing of new pumpers for the fire department. We have three libraries in Glendale and all of their hours have been cut way back."
Nice job playing the people card.
Also, the Coyotes ownership group reported $34.8 million in losses in its first fiscal year, but it said much of that stemmed from certain one-time circumstances, such as a buyout of center Mike Ribeiro. Glendale believes the losses to be greater per TSN:
That's because consultant Tony Tavares, the onetime president of both the Dallas Stars and Mighty Ducks of Anaheim, has delivered to Glendale city auditors a report that alleges IceArizona under-reported its losses last season during the first year of the 15-year arena management contract, sources tell TSN.
There was always a magic ‘$50 million’ number with the Coyotes that the team could opt out of its lease if it eclipsed this number in five seasons. If the losses are indeed greater than the $34.8 million, then this threshold could be hit sooner rather than later.
So what does this all mean?
The Coyotes protracted financial woes raise a hard to answer question: why is the team still playing in Phoenix?
One NHL owner said the most likely outcome over the next few years will see the team move. Rumoured landing spots are Seattle, Portland, Quebec City, Southern Ontario and Las Vegas.
And hope for Canada?
As for Quebec City or Southern Ontario? "Nope. Both of those cities make the balanced conference problem worse," said the NHL team owner, who declined to speak publicly for fear of being fined by the league. "I think it leaves us with Las Vegas as our best alternative. I could see them moving the Coyotes there when the new arena is done."
Calling Jim Balsillie! Oh wait, he doesn't know how to operate an iPhone.
Glendale and the Coyotes are an interesting situation. It’s just the perfect storm of a team asking for taxpayer money in a conservative part of the United States that tends to shun such queries.
On top of this, the arena is located in a spot that is far from major population centers in the Phoenix area. Scottsdale would have been a better spot, but the hope was Glendale would boom around the hockey arena and University of Phoenix Stadium. It simply has not.
So this never ending story continues seemingly. You have politicians that don’t want the team. A league that has bent over backwards to keep it there. A small yet loyal fanbase that doesn’t want to see its group moved. What should we call this soap opera?
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Josh Cooper is an editor for Puck Daddy on Yahoo Sports. Have a tip? Email him at puckdaddyblog@yahoo.com or follow him on Twitter! Follow @joshuacooper
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