Tuesday, 9 June 2015

Here We Go Again

Knowing what month it is based on NHL news is almost like clockwork at this point. It must be June since rumors of the demise, sale, or relocation of the Arizona Coyotes is back at the forefront. I thought we'd be through this after the team secured an owner who apparently has deep enough pockets to absorb some losses. I thought this would be over when the city of Glendale finally agreed to help the Coyotes manage their losses with some rather large cash payments to the team. Instead, it appears that the city of Glendale is none too happy with the Coyotes and the Coyotes aren't very pleased with city council members who have suddenly raised several issues surrounding the team and its finances. With the Coyotes being in the news every summer since 2009, why should this summer be any different?

Look, I'm not here to crap all over the Coyotes and their fans. This saga has gone on for way too long, and it's actually quite depressing that each side can't find a happy medium in which to exist with the other. Whether it's the NHL fighting with former and potential owners, the NHL fighting with Glendale, Glendale fighting with owners, or any other piece of the drama, it's reached a point of ridiculousness. If Glendale, who is looking at ending their agreement with the Coyotes, doesn't want the team any longer, the NHL needs to cut ties and move on. It sucks for the fans and I feel for them, but it's clear that the city and the team are never going to be on the same playing field.

So in the interest of fairness, let's get to the crux of the issues arising this summer.

The city of Glendale is going to meet today after calling a special meeting to determine whether they should terminate the arena lease agreement with the team after citing an Arizona statute that "allows an agency to cancel a contract if an an employee significantly involved with the agreement becomes an employee or agent of the other party to the contract". The person in question is former Glendale city attorney Craig Tindall who joined the Coyotes' general counsel in 2013 after stepping down from his position with the city. Technically, the city has every right to play this card if one goes by the letter of the law, but why are they doing so when the Coyotes' situation appeared to be settled?

It appears that this technicality could have been spurred by the thought that the 15-year, $225 million arena lease deal with the city was costing Glendale far too much money when many civic improvements are needed. The city was concerned that the $15 million being paid to the Coyotes annually was being used to pay down outstanding debts rather than being used by the team to manage the 12-year-old Gila River Arena. The city asserts that the money is going directly to Fortress Investment Group, New York-based asset manager which financed holding company IceArizona's purchase of the Coyotes. According to Glendale Vice-Mayor Ian Hugh, that violates the contract signed by both parties and the losses incurred by the city of Glendale under the deal are hindering infrastructure and city services.

"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," Hugh 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."

The fact that Hugh asked what would happen if the Coyotes left is pretty remarkable considering that, if Glendale is successful in their killing the lease agreement, the Coyotes would have to move since there's no NHL arena suitable for them to move into in the area. The longer that this drags on, the more precarious the season gets for the Coyotes as home dates are no longer guaranteed without the arena lease agreement. Working against the Coyotes are that two of the four members who voted in the 4-3 vote to give the deal to the Coyotes have left Glendale city council while two of the more outspoken against the deal - Hugh and Glendale Mayor Jerry Weiers - remain. Count that as an 0-2 vote right now meaning that the Coyotes need four of the five remaining councilors to vote in favor of the deal. Things are not looking good.

According to TSN, the opt-out clause in the agreement that says that if the team's total losses exceed $50 million the team can move will surpass that total in the second year of the current agreement. Even with the money pouring in from Glendale and some creative accounting practices, the losses continue to mount for the Coyotes. Fan attendance is among the lowest in the NHL annually, achieving just three sellouts this past season. The per-capita income in Glendale is 60th in the state, and remains an hour away the from the affluent Scottsdale area which has the fourth-best per-capita income. The TV deal the Coyotes have is horrendous, and viewership of the team's games on local TV is down. Way down.

In other words, the struggle is very real for the ownership group despite all of their commitments and comments about staying in Glendale, and this new twist with the city of Glendale is only driving another nail into the coffin that the Coyotes annually find themselves sitting in. In what has to be a statement of frustration, Coyotes co-owner, President and CEO Anthony LeBlanc said, "This action by the City of Glendale is completely ludicrous, especially in light of the fact that myself and Andrew Barroway visited with the City yesterday and the particulars of this were never raised. In fact, we to this moment have not been advised of this other than the notification on the City website. The City of Glendale is displaying a complete lack of good faith, business acumen or an understanding of a business partnership. We want to reassure our great fans that the Arizona Coyotes are committed to Glendale and playing at Gila River Arena."

The vote happens tomorrow evening at 6pm Glendale time. With all of the foreshadowing done by the city of Glendale, I expect this vote to go against the Coyotes which will trigger another long summer of legal maneuverings, lawsuits, and accusations from both sides. Lost in all of this, again, are the fans and staff of the Coyotes who simply want a team to cheer and work for in the coming NHL season.

Let the annual NHL summer fun begin. The drama never stops in the desert.

Until next time, keep your sticks on the ice!

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