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

[mouser]

There is still $900k in arena fees due by 12/20. The final paragraph detailing the constant disputes & the 2.4M in forgiveness is also part of what I referring to.

I replied to your comment:

That list of debt still outstanding is ugly. So embarrassing that the team operates on this level.

Business 101: collect your AR (accounts receivable) as quickly as possible, pay your AP (accounts payable) as late as possible.

If Dec 20th is the contractual due date for the $900k in arena fees then why pay it earlier?

 

[PCSPounder]

BOOM!

 

[JimAnchower]

Some thoughts I'm having:

- I believe it now. Glendale is done with the Coyotes, at least with the current ownership. They don't have any reasonable price that they would accept to bring them back next year.
- Considering AVMC is run by the State Fair board, how likely are they to come to a short term lease agreement considering state taxes were one of the things the team were late paying? Include the fact that even if they do agree, they'll have an ice plant to either uninstall or maintain once the team leaves.
- We don't know what Tempe is thinking, but it really seems the best way, and perhaps only, this team has a future is a new ownership group where the head is known and trusted locally. I can't see the current group getting very far, both short term and long term.

 

[aqib]

Incorrect interpretation of just looking at a table of numbers - Attendance downtown tailed off after that 3rd year as they got rid of their marquee name stars (Tkachuk, Roenick, Khabibulin)...you could tell they weren't gonna challenge Detroit, Dallas, Colorado any time soon. I didn't even know what I was watching in the 90s and I could figure that out.

Some of you people really do need to get off the "yeah, sure, they drew at first, but they stopped coming because the team got worse, they must never have been real fans" as a reason to relocate Arizona. It just doesn't hold water. Again, we may or may not ever get a "good" situation vis a vis owner and arena location - but if it can work in Tampa and Nashville it can work in Arizona and South Florida. To claim otherwise is flat out incorrect.

Chicago 94-07 Chicago Blackhawks yearly attendance at hockeydb.com
Pittsburgh 01-04 Pittsburgh Penguins yearly attendance at hockeydb.com
Islanders 86-92 New York Islanders yearly attendance at hockeydb.com
Colorado 06-10 Colorado Avalanche yearly attendance at hockeydb.com
Edmonton 91-96 Edmonton Oilers [NHL] yearly attendance at hockeydb.com
Detroit 17-22 Detroit Red Wings yearly attendance at hockeydb.com

They were still making the playoffs past the 3rd year. They did also get a bump when they moved to Glendale and were drawing more until the bankruptcy despite never making the playoffs.

My point was simply "they were fine downtown and moving to the suburbs is what killed them" isn't accurate. There are a lot of things that killed them starting with ownership, poor talent development, etc.

 

[Headshot77]

I have no doubt something is really wrong in Arizona.

BUT isn't stange Glendale doesn't mention the remaining debt when threatening to evict?. It only seems to be brought up after the team paid for the taxes and arena fees. Why not mention the rent before? It almost seems they were saving bringing it up in case the team actually paid up for the other expenses. "oh they finally paid us eh?,,well we can still make them look bad by now mentioning they also owe us rent",

Because they probably can't terminate the lease on the grounds of not paying rent, but they can revoke a business license for not paying state taxes.

 

[MNNumbers]

Some thoughts I'm having:

- I believe it now. Glendale is done with the Coyotes, at least with the current ownership. They don't have any reasonable price that they would accept to bring them back next year.
- Considering AVMC is run by the State Fair board, how likely are they to come to a short term lease agreement considering state taxes were one of the things the team were late paying? Include the fact that even if they do agree, they'll have an ice plant to either uninstall or maintain once the team leaves.
- We don't know what Tempe is thinking, but it really seems the best way, and perhaps only, this team has a future is a new ownership group where the head is known and trusted locally. I can't see the current group getting very far, both short term and long term.

I agree. I was leaning toward "Glendale is serious" before. But I am totally sure they want nothing to do with the Coyotes anymore. That is going to make things really complicated.

If, and it has now become a really big if, the Tempe thing goes through, then where do you play in the interim?
- Chase? Maybe, but the playoff dates are a big problem. You can start and finish with a road trip, and you might be comfortable with assuming that 22-23 is not going to produce playoff hockey, but you can't assume that beyond.....so, let's say you can start 22-23 at Chase. It's not your 'permanent' temp solution though.
- AMVC. This is the only real option you have. There likely isn't time to get it ready for next year, so you have to start when you have approval at Tempe, and it maybe could be ready for the playoffs in spring '23 if necessary.

This is the only pathway that I can really imagine. Playing in Tucson or in Prescott Valley is very unlikely to be approved by the BOG.

However, even this idea has super flaws and pitfalls. For example:

If I am the city of Tempe, I don't have to speed up my process at all. I just let it go at a slow pace, use my consultants, watch the way Meruelo does his business, and I don't commit to anything. It's his project, not mine. Most likely, I put out the RFP because he begged us to do so, so it's on him to show the city something they can work with. Right now, he has to prove him self trustworthy.

I can see the string playing out very slowly and tightening the noose on Meruelo, until he has no options and no place to play in Arizona. Very easily I can see that happening.

And, that brings us to the subject everyone wants to talk about, but we won't.

 

[aqib]

Are there any Ken Jones/Arthur Thurston type activists in Tempe that are publicly opposing this?

 

[JimAnchower]

If I am the city of Tempe, I don't have to speed up my process at all. I just let it go at a slow pace, use my consultants, watch the way Meruelo does his business, and I don't commit to anything. It's his project, not mine. Most likely, I put out the RFP because he begged us to do so, so it's on him to show the city something they can work with. Right now, he has to prove him self trustworthy.

I can see the string playing out very slowly and tightening the noose on Meruelo, until he has no options and no place to play in Arizona. Very easily I can see that happening.

And, that brings us to the subject everyone wants to talk about, but we won't.

Specifically for Tempe, they can't start construction on the plot of land until 2024 anyway. Maybe they could accelerate that timeline if they wanted to, but there hasn't been anything to indicate that plan has changed. That's still more than enough time for a new RFP process to be started with shovels in the ground in 2024. And that feasibility study for an arena? That could also be turned into one that houses ASU basketball or concert/performing arts center. As you said, Tempe has time on it's side.

 

[snovalleyhockeyfan]

Some thoughts I'm having:

- I believe it now. Glendale is done with the Coyotes, at least with the current ownership. They don't have any reasonable price that they would accept to bring them back next year.
- Considering AVMC is run by the State Fair board, how likely are they to come to a short term lease agreement considering state taxes were one of the things the team were late paying? Include the fact that even if they do agree, they'll have an ice plant to either uninstall or maintain once the team leaves.
- We don't know what Tempe is thinking, but it really seems the best way, and perhaps only, this team has a future is a new ownership group where the head is known and trusted locally. I can't see the current group getting very far, both short term and long term.

Good thoughts and it's nice for me to be back on here posting after many many months away. Anyway, my thoughts are this:

-The NHL IMO should perhaps do an audit of Meruelo's financial health AND investigate his business practices. If either or both do not meet NHL standards, the league needs to revoke the franchise from him the sooner the better and run it themselves until the end of the season.

-Following the end of the season, it would probably be best for the league to do the following:
1. Sell the franchise to Fertitta in Houston OR investors who would move it to Kansas City
2. Identify strong local ownership in the Phoenix market that would be able to work with Tempe on the arena proposal there
3. If there are no snags with that or any other franchise relocation issues that come up in the interim, i.e. Carolina/Florida, you promise both Phoenix and Quebec City expansion franchises for either the '25/'26 or '26/27 seasons

That a viable solution to all this? This current situation down there is a downright embarrassment for the league and puts this back in the same position almost that we were the night of the council meeting some years back where they came within one vote of having to move the team to Seattle if you remember that vote at all. Bad situation all around down there and the league should have known this was happening a lot sooner I think.

 

[HeHateMeFrisbee]

“No problem. But we’ll deal with that tomorrow.”


Okaaaaaaayyyyyy….

This is what I say to my credit card company

 

[cbcwpg]

-The NHL IMO should perhaps do an audit of Meruelo's financial health AND investigate his business practices. If either or both do not meet NHL standards, the league needs to revoke the franchise from him the sooner the better and run it themselves until the end of the season.

If you look at every owner that has been involved in the Coyotes ownership, and look at every owner that the NHL has allowed to own other franchises over the last 30 years, it's more than obvious the NHL has no standard when it comes to the financial capabilities of it's owners.

 

[Llama19]

Are there any Ken Jones/Arthur Thurston type activists in Tempe that are publicly opposing this?

Yes...yes there is...

However...because there has been no formal commitment...by the City of Tempe council...

there has also been no public meetings either...but stay tuned...

 

[aqib]

Yes...yes there is...

However...because there has been no formal commitment...by the City of Tempe council...

there has also been no public meetings either...but stay tuned...

 

[CaptainKirk]

Yes...yes there is...

However...because there has been no formal commitment...by the City of Tempe council...

there has also been no public meetings either...but stay tuned...

There must be a Logan Jr by now.

 

[Yukon Joe]

ASM sends Coyotes letter detailing when they expect rent and other expenses to be paid.

Look on page 2.

Slightly embarrassing for Glendale that they have typos on the dates they expect payment: January 31, 2021 and March 1, 2021 (should be 2022).

Of course vastly more embarrassing for the Coyotes for these kinds of disputes and defaults to be made public.

 

[Mightygoose]

No surprise comments from the commissiner



What else is he going to say?

 

[Slashers98]

No surprise comments from the commissiner



What else is he going to say?

It's called damage control because the Coyotes' dumpster is currently on fire!

 

[TheGreenTBer]

No surprise comments from the commissiner



What else is he going to say?

Yeah the Coyotes may indeed find a way to stay but if the team does relocate Bettman will deny it until it's no longer possible to deny and not a second sooner.

 

[StreetHawk]

Look on page 2.

Slightly embarrassing for Glendale that they have typos on the dates they expect payment: January 31, 2021 and March 1, 2021 (should be 2022).

Of course vastly more embarrassing for the Coyotes for these kinds of disputes and defaults to be made public.

Not good. That is something that needs to be done correctly, speaking as an accountant.

Once you get a payment for a past due amount, you typically do remind the customer of future amounts due because you don’t want a repeat of the late payment.

 

[Yukon Joe]

No surprise comments from the commissiner



What else is he going to say?

Well nothing of course, as you say.

Look even if there was an agreement in principle to sell the team and move it to Houston the league would say absolutely nothing and continue to re-assure people that the team will stay in Phoenix long-term (though to be clear, I'm not saying there is such an agreement).

As a Winnipeg fan I have some experience in relocations. Back in 2010-2011 there were definite rumblings that Atlanta was a potential to move. Bettman and the League denied them right up until the end, though we know now there had been negotiations and discussions for months.

And another example saying why the league won't announce: back in 1995 there were last-minute attempts to save the Jets over the summer which fell apart in the end. But they fell apart so late there was no time to relocate the team - it was announced the team would move after the 1995-1996 season. Attendance in Winnipeg was TERRIBLE that season because it was a lame-duck team (until the last handful of games which were sellouts IIRC). The league wants to avoid making the Coyotes situation even worse.

 

[JimAnchower]

Glendale's response to Bettman.

 

[TheGreenTBer]

I don't have a horse in this race one way or another, but Tempe really needs to think this over and wonder whether or not Meruelo is the type of guy with which they really want to make an absolutely massive deal.

If it were my call the RFP would be dead in the water, not because I have anything against the State of Arizona, the Arizona Coyotes franchise, or any other thing people on this site get accused of being for or against (so please spare me any potential comments in that regard), but because I don't like the way AM does business. Why would I want to deal with a guy that consistently refuses to pay until/unless threatened with litigation, eviction, or any other thing associated with a breach of contract? Why, if I'm working on behalf of the city of Tempe, would I want to put my employees, taxpayers and city through endless legal and PR nonsense (and the corresponding expenses that come with administrative and legal action) just to get what I am rightfully, legally and contractually owed? If he's going to try to screw one city out of a comparatively measly amount of money, how on Earth can I have any confidence he's going to abide by an infinitely larger and more expansive agreement?

If Tempe does work out I certainly won't be offended or mad because it doesn't affect me in particular, but I'd really kind of question who is running things in Tempe and what they were thinking because it's highly likely based on history and evidence that AM will screw them too.

 

[KevFu]

I've never operated a hockey team that had a lease with a city before, but... "monthly tax returns" ???

Aren't those normally like, an annual thing on a yearly basis?

 

[Mightygoose]

Bettman on the Coyotes owing money: 'It's been taken care of'

More along the same as above but another quote from the commissiner

To quote

He added that when a franchise "that needs work" is taken over by new ownership, sometimes during the due diligence of the transition of running that team, "you uncover things." He said owner Alex Meruelo, whose ownership group bought the Coyotes in 2019, is "working through all of those."

I'm certain there's lots 'things' that were uncovered.

Get back to us in the spring Gary

 

[JimAnchower]

Bettman on the Coyotes owing money: 'It's been taken care of'

More along the same as above but another quote from the commissiner

To quote

He added that when a franchise "that needs work" is taken over by new ownership, sometimes during the due diligence of the transition of running that team, "you uncover things." He said owner Alex Meruelo, whose ownership group bought the Coyotes in 2019, is "working through all of those."

I'm certain there's lots 'things' that were uncovered.

Get back to us in the spring Gary

Bettman, speaking after the second day of the annual NHL Board of Governors meeting, speculated that the city of Glendale had "an agenda" while dealing with the Coyotes, perhaps because the team announcing it is looking to move in the near future has "agitated" the city.

I mean if someone who owed me rent was habitually late, and was late paying taxes, vendors, employees, etc., I would be agitated as well.