CXL - UPDATE 12/9 - Coyotes settle bills after unpaid taxes come to light

[StickShift]

If anyone at the city is buying “human error” well boy I have got a bridge to sell you…

Seems to me that the team has major liquidity problems preventing them from paying this (among other things historically, like player bonuses).

 

[MNNumbers]

Having been to Cleveland multiple times. It did seem to help rejuvenate downtown a bit, but the poverty just east of it is astonishing. But, the question really is, why aren't Billionaires paying for it, they've just managed to pit city against city. I don't think every city not paying for this stuff would dramatically reduce the number of pro-sports teams, and Cleveland got this the worst when their most beloved franchise was moved and they had to pay municipal money in a city that can't really afford it to get it back, despite being a profitable franchise.

The real question is? How financially hurt was Seattle by losing the Sonics? It seemed to rapidly grow without them.

Seattle is a different story. Their city council held the line and made the arena into two things:

1- They wanted the Key Arena site to stay, so the arena is a remodel of that facility
2- It was all done with private money.

This is a model for how things should be.

 

[93LEAFS]

Seattle is a different story. Their city council held the line and made the arena into two things:

1- They wanted the Key Arena site to stay, so the arena is a remodel of that facility
2- It was all done with private money.

This is a model for how things should be.

My point was Seattle is a great example for not using public money. Seattle got extorted by a greedy Billionaire which cost them a beloved franchise. I don't think the growth of downtown Seattle and surrounding areas were impacted by it. All arenas/stadiums should be privately funded. This threat of you won't get a team is solely a construct of billionaires pitting municipalities against each other.

 

[Voight]

I don’t really buy that. The league was fully prepared to move the team to Winnipeg at one point. The bigger issue Bettman /NHL had was with Balsille and the way he went about trying to get a team imo. Not so much saving the Phoenix market. The NHL ownership of the club was direct result of the Balsille shananigans. Since then they’ve had an owner that has been willing to bleed money. I don’t believe the NHL would keep the team there if the owner came to them and said I’m out.

Bettman has moved heaven and earth to keep the team where it is, knowing that if/when they move, it'll be the league waving the white flag on one of his ideas. You are not wrong about Balsille, but Bettman would rather have them hemorrhage money than move them.

This has already been posted and mocked several times.

Welp, I'd say that Bettman has his scapegoat now for moving the team. And you know, fair enough!

I'll always be curious to see if the NHL could have worked in Phoenix. If the 2008 real estate meltdown hadn't have happened, the story could have been much different.

Edit:

To expand on this a little more, the Coyotes sucked before the 2008 lockout. 6 straight seasons of missed playoffs. But most of that was before the cap era where they had no chance of competing.

Even then, they were regularly drawing 15000 people. Even if you just adjust for 30% population growth in the Phoenix area since then, the Glendale arena would be bursting at the seams. And with a competitive team? I could see the Coyotes being a very successful business.

But the team has been cursed with a string of absolutely horrible owners. And the product on the ice has been horrific.

Maybe Bettman smartens up, forces Meruelo to sell, and goes back to Glendale with the offer of a long term lease.

This doesn't have to be a failure.

They had a good team in the early 2010's but attendance didn't exactly improve. Its just not going to work in Arizona.

 

[Ernie]

They had a good team in the early 2010's but attendance didn't exactly improve. Its just not going to work in Arizona.

They had a brief window where the team was good.

And at that time the NHL owned the franchise directly and its future was up in the air.

If you're going to make that statement about Arizona, explain to me why all the other similar markets in the league do manage to work.

 

[wpgallday1960]

Continue on as in restart RFP process?

After all of what's gone down and I don't think this chapter is done, if they still move forward with this plan them those politicians are dumber than anyone in Glendale in the past 20 years.

If the city of Tempe gets into bed with Meurelo and the Coyotes, the resulting STD will be their own fault. That being said I wouldn’t be surprised at the Coyotes project going ahead if the team isn’t sold/moved in the meantime.

 

[Melrose Munch]

Having been to Cleveland multiple times. It did seem to help rejuvenate downtown a bit, but the poverty just east of it is astonishing. But, the question really is, why aren't Billionaires paying for it, they've just managed to pit city against city. I don't think every city not paying for this stuff would dramatically reduce the number of pro-sports teams, and Cleveland got this the worst when their most beloved franchise was moved and they had to pay municipal money in a city that can't really afford it to get it back, despite being a profitable franchise.

The real question is? How financially hurt was Seattle by losing the Sonics? It seemed to rapidly grow without them.

Totally agree. There are cities that are still standing without pro sports. Seattle is fine. Norfolk, VA hasn't fallen into the sea. I don't think less of Louisville, KY for not having pro sports. Las Vegas had a huge profile and Golden Knights/Raiders/Soon to be Athletics are hardly the first thing you think of when you talk Vegas.

These venues should be private, seeing as most revenue does not go directly to the city or county/region.

 

[Voight]

Seattle is a different story. Their city council held the line and made the arena into two things:

1- They wanted the Key Arena site to stay, so the arena is a remodel of that facility
2- It was all done with private money.

This is a model for how things should be.

Its also a registered historic landmark, so they couldn't tear it down

 

[aqib]

Shortsighted or realistic? How did the Cavs going to the finals help poverty in Cleveland? How did it improve city services? How does spending almost 400 million on the Guardians solve anything? I don't think the degrees apply here, since you admit you can't quantify this (no one really 100% can). You act like he's the only one saying this but multiple studies have been done saying the same thing. There's little to no return on spending money on sports. This is a fact that can be talked about in the context of the coyotes: all this money spent by Glendale...and its been a loss overall.

A larger question I would ask is why we need 30 teams in each league, but that's for another day.

There is an old saying that not everything that counts can be counted and not everything that can be counted counts. Compare the state of downtown Cleveland before and after the building of the baseball and basketball venues. It not only spawned a lot of development downtown but actually increased the population. Whenever the Cavs or Guardians played a team from a city within driving distance there were thousands of out of town fans. Now you can't properly track which dollars spent in Cleveland over the course of a 3 game series against the Tigers or what 2K Raptors fans spent when in town for a game. So its not going to show up on a spreadsheet. Not everything will. But without 3 major league team Cleveland would be Dayton.

Look at Nashville. When Bud Adams died someone wrote a column about what the arrival of the Predators and Titans did for the city. It certified them as a "big city." Now would Nashville have gotten 5K jobs from the Amazon HQ2 search if they didn't have sports teams? We don't know which is why I say you can't quantify everything.

 

[MNNumbers]

All of which is the reason that the Tempe proposal looks like poison.

It was first advertised as '100% privately funded'. Then we found out that Meruelo wanted 200M in tax kickbacks.

Now, given what we know of how he does business, does it not seem clear that his moves going forward would be:
1-Take the 200M and build the arena
2- Delay the rest of the development
3- Enjoy an arena half paid for by taxpayers, and all the money that comes with having the arena
4- Skip paying anything until you are forced to.

And, the result for Tempe?
- Land not developed out
- 200M given away which cannot be recovered because there is no development from which to generate it

Conclusion: Any arena in Tempe needs to be 100% private financed. Meruelo has proven himself completely untrustworthy. Lease him the land, or sell it to him cheap. Work with him on zoning. But, don't give him a penny.

 

[MNNumbers]

Its also a registered historic landmark, so they couldn't tear it down

Yes, but they could have put the new arena in South Downtown. That would have negated the historic site. My point was that the City Council knew what they wanted, and they forced the sports guys to do what the city wanted, instead of serving themselves.

 

[aqib]

Having been to Cleveland multiple times. It did seem to help rejuvenate downtown a bit, but the poverty just east of it is astonishing. But, the question really is, why aren't Billionaires paying for it, they've just managed to pit city against city. I don't think every city not paying for this stuff would dramatically reduce the number of pro-sports teams, and Cleveland got this the worst when their most beloved franchise was moved and they had to pay municipal money in a city that can't really afford it to get it back, despite being a profitable franchise.

The real question is? How financially hurt was Seattle by losing the Sonics? It seemed to rapidly grow without them.

Seattle paid a boatload to keep the Seahawks and Mariners. Seattle already had Boeing, Microsoft, and Amazon. Now they had Microsoft because Bill Gates and Paul Allen happened to be from there. Cleveland doesn't have that. In fact the biggest companies to come into Cleveland in the last couple of decades have been Quicken Loans and Rock Gaming. Both of whom came because Dan Gilbert owned the Cavs. That wouldn't show up in the FOS calculations either.

 

[Ernie]

Yes, but they could have put the new arena in South Downtown. That would have negated the historic site. My point was that the City Council knew what they wanted, and they forced the sports guys to do what the city wanted, instead of serving themselves.

That's interesting thing. The "Seattle Process" is much maligned for being slow and inefficient. But it works pretty well in the end.

There's something to be said for not ramming through approvals quickly based on pie in the sky projections..

 

[93LEAFS]

Seattle paid a boatload to keep the Seahawks and Mariners. Seattle already had Boeing, Microsoft, and Amazon. Now they had Microsoft because Bill Gates and Paul Allen happened to be from there. Cleveland doesn't have that. In fact the biggest companies to come into Cleveland in the last couple of decades have been Quicken Loans and Rock Gaming. Both of whom came because Dan Gilbert owned the Cavs. That wouldn't show up in the FOS calculations either.

A predatory lending and gambling company would likely end up there anyway.

And again. Why do these need to be publicly subsidized? Why can't billionaires pay for their own stadiums? You've ignored the primary question. How dramatically do you think professional sports would contract in North America if no municipalities paid for arenas? You are just justifying pitting them against each other. And, Quicken Loans is still headquartered in Detroit.

 

[Ernie]

How dramatically do you think professional sports would contract in North America if no municipalities paid for arenas?

They would be totally fine if they paid their own way. Instead of NHL teams having a $80m payroll, they'd have a $50m payroll. That is far from the end of the world.

 

[aqib]

A predatory lending and gambling company would likely end up there anyway.

And again. Why do these need to be publicly subsidized? Why can't billionaires pay for their own stadiums? You've ignored the primary question. How dramatically do you think professional sports would contract in North America if no municipalities paid for arenas? You are just justifying pitting them against each other. And, Quicken Loans is still headquartered in Detroit.

I lived there for 13 years. There is nothing about Cleveland you can tell me that I don't already know. Quicken wouldn't have created almost 1000 jobs in Cleveland if Gilbert didn't own the Cavs. Companies had been leaving and the city was bleeding jobs for years. No one was looking at coming in. Casinos had been talked about for years and only he got the deal done. As long as they are more cities wanting teams then there are teams to go around you'll have this.

You could say the same thing about any corporate incentives but sports are the only ones that get this much attention. Look at how much money was thrown around for Amazon HQ2 only to have them go where Jeff Bezos wanted to live anyway.

 

[93LEAFS]

I lived there for 13 years. There is nothing about Cleveland you can tell me that I don't already know. Quicken wouldn't have created almost 1000 jobs in Cleveland if Gilbert didn't own the Cavs. Companies had been leaving and the city was bleeding jobs for years. No one was looking at coming in. Casinos had been talked about for years and only he got the deal done. As long as they are more cities wanting teams then there are teams to go around you'll have this.

You could say the same thing about any corporate incentives but sports are the only ones that get this much attention. Look at how much money was thrown around for Amazon HQ2 only to have them go where Jeff Bezos wanted to live anyway.

But, your justification exists only because some cities agree to do this. Wouldn't these positives exist still if no city did it. You've again sidestepped the main question. How dramatically do you think we would see a reduction in pro-sports if no cities subsidized arenas? I don't think we would. You've just justified billionaires using highly emotional leverage to pit city against city.

 

[JimAnchower]

You could say the same thing about any corporate incentives but sports are the only ones that get this much attention. Look at how much money was thrown around for Amazon HQ2 only to have them go where Jeff Bezos wanted to live anyway.

I see people start to fight against corporate welfare now. Originally, Amazon's HQ2 was going to New York City until the size of the incentive package came out and there was a lot backlash. There was a Foxconn manufacturing facility in Wisconsin that received a lot of fanfare when it was announced, but it's five years later and very little has been built. It may not be as advanced as people fighting against sports facilities, but it does exist and it is growing.

 

[JimAnchower]

Nothing new from Tempe.

 

[Fatass]

If anyone at the city is buying “human error” well boy I have got a bridge to sell you…

Seems to me that the team has major liquidity problems preventing them from paying this (among other things historically, like player bonuses).

Weren't the Coyotes late on player bonuses too?

 

[Mightygoose]

Nothing new from Tempe.

Keeping their cards close to the vest and best not to make a knee jerk reaction right now. Council meets later today and tomorrow, those this is not on the agenda I'm sure it will be discussed.

Maybe their evaluation process is to let this drag on as long as possible forcing Meruelo off it without saying no

 

[cbcwpg]

The only "human error" was letting this become public. Looks like the tax debt is going back to June 2020. And in no way was this news to the Coyotes. They were probably warned multiple times that they had taxes owing. They choose not to pay them.

 

[Fish on The Sand]

Does the whole narrative of Balsille not playing by the Bettman rules stand up when we the decade long financial figures are tossed out like that though?

Balsille promptly ran Blackberry (Then RIM) into the ground right after that debacle and would have likely brought his own financial issues to the league shortly after, that that was a dodged bullet, even if the situation in Arizona is a dumpster fire.

Basically it was a matter of which dumpster fire do you want?

 

[cheswick]

Does the whole narrative of Balsille not playing by the Bettman rules stand up when we the decade long financial figures are tossed out like that though?

The NHL hasn’t been owning the team this whole time though. They took ownership after the bailsille thing then unloaded it. Has any owner since the NHL divested the team came to the league asking to relocate and they said no? I haven’t heard of any such instance. If an ownership group is willing to bleed money on owning the team not sure how that’s Bettman not giving up.

 

[Melrose Munch]

There is an old saying that not everything that counts can be counted and not everything that can be counted counts. Compare the state of downtown Cleveland before and after the building of the baseball and basketball venues. It not only spawned a lot of development downtown but actually increased the population. Whenever the Cavs or Guardians played a team from a city within driving distance there were thousands of out of town fans. Now you can't properly track which dollars spent in Cleveland over the course of a 3 game series against the Tigers or what 2K Raptors fans spent when in town for a game. So its not going to show up on a spreadsheet. Not everything will. But without 3 major league team Cleveland would be Dayton.

Look at Nashville. When Bud Adams died someone wrote a column about what the arrival of the Predators and Titans did for the city. It certified them as a "big city." Now would Nashville have gotten 5K jobs from the Amazon HQ2 search if they didn't have sports teams? We don't know which is why I say you can't quantify everything.

I have to disagree here. Nashville was probably going to grow anyway, as did Austin (and some would argue Austin is just as prominent.) I think Dayton is a nice city and besides Cincinnati is an hour away. I think the reality is there is about 5-7 cities in the US that consistently attract tourists, and that I don't think the away fans are enough of a bump to justify the money. Look, Cleveland as you know had close to 1 million people at the turn of the last century and now has less than half that in the city proper. I think don't sports teams would keep a person or business from necessarily staying or leaving.

A predatory lending and gambling company would likely end up there anyway.

And again. Why do these need to be publicly subsidized? Why can't billionaires pay for their own stadiums? You've ignored the primary question. How dramatically do you think professional sports would contract in North America if no municipalities paid for arenas? You are just justifying pitting them against each other. And, Quicken Loans is still headquartered in Detroit.

They would be totally fine if they paid their own way. Instead of NHL teams having a $80m payroll, they'd have a $50m payroll. That is far from the end of the world.

I agree.