CXLIII - UPDATED 6/3 - Coyotes arena deal takes next step after Tempe council votes to open negotiations

[TheLegend]

Paywall


Sales tax revenues means....."On everything that people spend elsewhere, not just in the arena", correct?

Ticket surcharge....If you have tickets, what was the surcharge?

Thanks.

Don’t recall how much the surcharge was.

Correct about the “spend the money anywhere”. Could be in arena or out in Westgate. Westgate District has filled out quite a bit the past five years. But it’s still barely a quarter of what Steve Ellman envisioned for it.

Even so… I’m presuming with the new water and theme park resort coming online next year, and a couple more projects in the pipeline, there’s enough tax base there to where the city is betting they can compensate for not having the Yotes at GRA to pay off the arena bonds.

But they’re making that bet under the premise there won’t be a third arena. That’s what their analysis was based on. Westgate in itself will be fine. But the arena is not part of it. Bob Parsons could care less if it was there at all.

 

[KevFu]

IMO it's not just cause of the weather being nice is the reason they are bad. The amount of transplants in those cities is a big reason. LA is a bad market too. Bad sports markets can work when the teams win. The problem is when they don't.

Right, and I'm saying that your definition of "work" and "problem" need to be adjusted.

When you have teams like the Islanders go 30 years of being a financial disaster (while trying to first wait out a bad lease and then building their own new arena) and NOTHING HAPPENS to that franchise, then you can't say it "didn't work." Or it's a "problem." The problem was the fans didn't get to see the team spend enough money to win.

The Islanders/Devils/Rangers are the perfect example of why everyone making value judgments about "markets" is just pointless. At one point they were 2, 15 and 29 in revenue. Same market, three outcomes. What's the difference? Rangers own/operate MSG, so they're 2nd. Devils operate the Rock, but don't own it. 15th. Islanders didn't own/operate NVMC and had a terrible lease so they were 29th. So the "problem" can't be the MARKET, it's just the arena situation.

Of course teams sell fewer tickets when they're bad, and more tickets when they're good. But there is really no such thing as a franchise being "unhealthy." COVID proved it.

MLB sold zero regular season tickets in 2020. No one went out of business. Franchise values are up 27% over 2019. So if an entire league can sell zero tickets without anyone going out of business, why is not selling the same amount of tickets as Winnipeg a problem for the Coyotes or Panthers or Oakland A's?

 

[TheLegend]

@MNNumbers DM’d you the article.

 

[aqib]

Bad sports markets and "don't work" are too different things. In a small closed group like a sports league, someone is going to be last at everything; and being last doesn't mean it isn't viable.

You mention Miami, Atlanta and Phoenix are bad sports markets. Because those teams don't draw. But by the same metrics, the entire West Coast are bad sports markets. Everywhere with nice weather is a bad sports market.

List the best sports markets. They're all cold in the winter where people stay inside and watch basektball and hockey on TV, and follow along with baseball transactions.

You want to tell me that Los Angeles is a GOOD sports market compared to BOS, NY, PHI when they lost two NFL teams and went decades without replacements? If the Giants and Jets left New York at the same time, there'd overthrow NFL headquarters.

Hell, the Dodgers and Giants DID leave New York, and New York rallied. William Shea got rejected for NL expansion in the winter of 1958, put together a competing league (CBL) that forced the NL and AL to come up with an agreement; and they announced expansion teams by August of 1960. It took them 33 months to get a replacement team (and they HAD the Yankees the entire time).

Bad sports markets can be perfectly healthy.

Not the entire West Coast, the Bay Area is a pretty good sports market just not for 2 teams in every sport. Sacramento has supported the Kings very well. San Diego's only issue was the venue and unwillingness to replace it. As far as LA its more layered. Like I think the Clippers would have gotten on solid footing a lot earlier if they had gone to Anaheim and built a following in Orange County. However, I do think the NFL will eventually regret putting both the Chargers and Rams there. Once the novelty of the SOFI fades attendance will start coming down. Its easy to sell out when you're a Super Bowl contender however you can't have all 32 teams being Super Bowl contenders every year.

The Giants and Dodgers situation is an aberration. Robert Moses and Walter O'Malley got into an ego war. Bowie Kuhn said if he was commissioner at the time he would have blocked the move. At the very least if there was the requirement to find local ownership first (like when the Giants tried to leave San Francisco twice) the Dodgers would have been sold to Rockefeller.

Giants in San Fran is probably a better example of what you're saying because in 1992 hardly anyone was trying to stop the move to Tampa but Magawan buying them, Barry Bonds signing there, and the new park turned it around.

That all being said do you really think people who live in colder cities stay inside all winter? Or even if they are inside that they have nothing else to do besides watching sports?

 

[MNNumbers]

@MNNumbers DM’d you the article.

Thanks. It doesn't say anything that we didn't already know.

 

[TheLegend]

Thanks. It doesn't say anything that we didn't already know.

True. But for the average person it lays out what has to be done.

There were so many who thought the 6/2 meeting was the actual approval of the proposal.

 

[OG6ix]

Tempe's Mayor excited to start negotiations with the Coyotes

Worth a listen just to hear the enthusiastism of Tempe's mayor. It's almost like he's confident that a deal will get done; he mentions that he would like the Coyotes and their detractors to work together to get a deal done.

 

[Devils 3silverones]

True. But for the average person it lays out what has to be done.

There were so many who thought the 6/2 meeting was the actual approval of the proposal.

Hmm. Seems a bit "vague" no?
What are thoughts of Tempe going half in?

Are there contingent plans? Half money plus other money(other persons) .

Im not just asking you, the peeps in the know always help.. (Casual, Mmm, and the likes)...

 

[Headshot77]

Tempe's Mayor excited to start negotiations with the Coyotes

Worth a listen just to hear the enthusiastism of Tempe's mayor. It's almost like he's confident that a deal will get done; he mentions that he would like the Coyotes and their detractors to work together to get a deal done.

 

[BKIslandersFan]

IF Tempe arena is built, I hope ASU sooner or later joins them. Figure competing with Talking Stick and Gilas River, they'd need to occupy many dates as possible.

 

[mouser]

There's obviously more to "events" than just concert tours. My overall point is that each arena needs to have events in them to make money; and there's ample amount of events that can be in an arena at any given moment and "Competing" with each other for marquee events is a make-believe problem.

If an artist is large enough that the four 18,000-seat venues are COMPETING over who gets to host them, then chances are that artist can play and would rather play Chase Field downtown, selling more tickets at a better location than playing at GRA, Tempe, or Scottsdale.

"Competing for events" is something people said about New York when Barclays and UBS were opening.. "Does New York Metro really need FIVE venues that big?" And that was a dumb take to have because in addition to the 5 sports venues, there were also about 30 other non-sports venues you can put 15000+ people into for a concert/show, and there's plenty of events for all of them because the market is big.

Phoenix has 5.8 million people in the metro area. Most events are for a niche audience of 15,000. 15,000 people is 0.24% of the market. Adding another place trying to sell tickets to 0.24% of the market isn't a problem.

And one very important detail that is often misunderstood.

Any “competition” for events means the arena is lowering their fees they get from the concert promoter, not increasing their fees.

 

[TheLegend]

Hmm. Seems a bit "vague" no?
What are thoughts of Tempe going half in?

Are there contingent plans? Half money plus other money(other persons) .

Im not just asking you, the peeps in the know always help.. (Casual, Mmm, and the likes)...

"Half in"??

Not sure what yo mean there.

They're looking to come up with a deal that puts the city at minimal financial risk. Because it's the only way it'll get approved.

Originally the proposal was $200 million in bonds to remediate the land, put in the infrastructure and construct a parking garage for the city to own and operate.

But at the meeting it changed to Meruelo putting up $40 million (non-refundable) for clearing the land, and building the parking garage himself. Plus investing into the city's new rail car system to extend it out to the arena site, and contributing to the city's affordable housing fund.

There's also was mention of the TPT and GPLET formulas changing some.

And Meruelo is willing to put the entre project up as collateral.

So the wheeling and dealing has just begun.

 

[aqib]

I think you're kind of backing up my point with that. Mariah ain't playing Gila River Arena multiple nights to sell 35-40 tickets total; she could just play at Chase Field and sell 45,000 tickets per show (like Elton John is doing) or the Cardinals stadium in Glendale, selling 60,000 tickets (like Taylor Swift did last time).

You'd drive to Glendale to see the ONE stop show at the Cardinals stadium. But if a concert tour is picking ONE 18,000 seat venue to play in the Phoenix Metro area, they are picking the Suns arena or new Tempe Arena, or that amphitheater in Scottsdale over Gila River every single time, provided they are available; because the other three are in the population center and Glendale isn't.

There's obviously more to "events" than just concert tours. My overall point is that each arena needs to have events in them to make money; and there's ample amount of events that can be in an arena at any given moment and "Competing" with each other for marquee events is a make-believe problem.

If an artist is large enough that the four 18,000-seat venues are COMPETING over who gets to host them, then chances are that artist can play and would rather play Chase Field downtown, selling more tickets at a better location than playing at GRA, Tempe, or Scottsdale.

"Competing for events" is something people said about New York when Barclays and UBS were opening.. "Does New York Metro really need FIVE venues that big?" And that was a dumb take to have because in addition to the 5 sports venues, there were also about 30 other non-sports venues you can put 15000+ people into for a concert/show, and there's plenty of events for all of them because the market is big.

Phoenix has 5.8 million people in the metro area. Most events are for a niche audience of 15,000. 15,000 people is 0.24% of the market. Adding another place trying to sell tickets to 0.24% of the market isn't a problem.

There are a few things wrong with what you're saying. 1) Stadium shows are rare these days. There are very few acts that could sell out stadiums 2) Doing a show in a stadium isn't as simple as just take the same show you do in an arena and doing it in the stadium. When the stage/props/performance is planned and choreographed for an 18-20K seat venue you can't just plot it down in a 40K seat stadium and do the same show 3) again if they are doing 1-2 shows they aren't going to care if its downtown or east side or west side. Fans will drive for a 1 off show just like they drive to a once a week football game. You think Lady Gaga's fans or B-hive folks aren't driving an hour if that's where the show is? 4) the concern in NY is still valid. The Meadowlands arena had to close when Prudential opened, Nassau Coliseum has had its issues since UBS came up. We'll see how Barclays does now with UBS there.

 

[nhlfan79]

I'm happy the league works hard to keep the teams in place as best they can. At the same time there is some markets that just don't work and it's not just hockey. Miami, Atlanta and Phoenix are bad sports markets

I don't get why this myth is still a thing when it comes to Atlanta. The Braves finished second in MLB attendance last year only to the Dodgers and their gigantic stadium. For this year so far, they're 3rd in attendance. The Battery has been an absolute game-changer. Meanwhile, Atlanta United literally redefined the meaning of success in MLS. The Falcons draw no better or worse than any other NFL team since moving into Mercedes-Benz Stadium. The Hawks generally do fine as well.

What *recent* evidence is there that Atlanta is a bad sports market in general?

 

[TheGreenTBer]

IF Tempe arena is built, I hope ASU sooner or later joins them. Figure competing with Talking Stick and Gilas River, they'd need to occupy many dates as possible.

I disagree, I personally like college hockey in small, loud, intimate arenas. I don't really dig the sterile, corporate atmosphere of a lot of these NHL barns.

EDIT: Wasn't referring to hockey, post is irrelevant.

 

[stealth1]

I don't get why this myth is still a thing when it comes to Atlanta. The Braves finished second in MLB attendance last year only to the Dodgers and their gigantic stadium. For this year so far, they're 3rd in attendance. The Battery has been an absolute game-changer. Meanwhile, Atlanta United literally redefined the meaning of success in MLS. The Falcons draw no better or worse than any other NFL team since moving into Mercedes-Benz Stadium. The Hawks generally do fine as well.

What *recent* evidence is there that Atlanta is a bad sports market in general?

They are getting better I will admit. My issue with a lot these cities is more to do with the transplants then the city itself.

 

[Dirty Old Man]

I disagree, I personally like college hockey in small, loud, intimate arenas. I don't really dig the sterile, corporate atmosphere of a lot of these NHL barns.

I assumed he was referring to the basketball program, who does need a new/renovated arena too, but I might be wrong there.

 

[TheGreenTBer]

I assumed he was referring to the basketball program, who does need a new/renovated arena too, but I might be wrong there.

Oh, my bad, didn't know anything about the basketball program as I'm not a fan of the sport. Fair enough.

 

[JMROWE]

I'd add that the league has always been in favor of keeping teams where they are, and relocation is a last resort. No one made an offer at a dollar amount that would keep Winnipeg, Quebec and Atlanta from moving; and the owners of Minnesota and Hartford weren't selling and wanted to move.

But when would-be owners tried to move Edmonton, New Jersey, Nashville, and Arizona; the league did everything in their power to keep them where they were.

That's what you WANT out of the NHL. It should be last-resort to move. Of course if you don't have a team, you want it to be easy to get one; but if you have one, you don't want them leaving. Atlanta, Hartford, Minnesota, Quebec and Winnipeg fans of course should be upset and frustrated that they lost teams; but that doesn't mean it's okay for it to happen again to another fan base.

BULL The owners of the Jets & Nordiques at the time where in such hurry to offload both teams & did not give enough time for offers to keep them in there cities or at the very least relocate them within Canada so they really did not care if they stayed or go as long as they got out of dodge.

 

[JMROWE]

In my opinion I think Tempe is just humoring the Coyotes this deal is DOA. because there is no money to be made with the Coyotes anywhere in Arizona accept if they built an arena in Downtown Phoenix they might have had a shot at surviving but that ship has sailed & with the Vegas Golden Knights in the same southwestern market . There is really only room for one team in that market & the Vegas Golden Knights are that team because they are actually making money & have a solid fan base which the coyotes do not so I think its best for ownership & the BOG to cut there losses & move them to Houston or Austin .

 

[aqib]

BULL The owners of the Jets & Nordiques at the time where in such hurry to offload both teams & did not give enough time for offers to keep them in there cities or at the very least relocate them within Canada so they really did not care if they stayed or go as long as they got out of dodge.

The Jets were on the market for a while. The Nordiques it seemed like it came out of nowhere.

 

[KevFu]

There are a few things wrong with what you're saying. 1) Stadium shows are rare these days. There are very few acts that could sell out stadiums 2) Doing a show in a stadium isn't as simple as just take the same show you do in an arena and doing it in the stadium. When the stage/props/performance is planned and choreographed for an 18-20K seat venue you can't just plot it down in a 40K seat stadium and do the same show 3) again if they are doing 1-2 shows they aren't going to care if its downtown or east side or west side. Fans will drive for a 1 off show just like they drive to a once a week football game. You think Lady Gaga's fans or B-hive folks aren't driving an hour if that's where the show is? 4) the concern in NY is still valid. The Meadowlands arena had to close when Prudential opened, Nassau Coliseum has had its issues since UBS came up. We'll see how Barclays does now with UBS there.

1) Stadium shows are rare these days, but partly because we're not back to "normal" after COVID. Anyone capable of being a stadium act is going to be a stadium act, and not play the Suns Arena. Taylor Swift will have a theater BUILT for her in residency before she ever plays the Suns Arena again.

2) Exactly correct. The tours are designed for the venue sizes they are taking place in. Which is why the "competing venues" thing is ridiculous. There's no shortage of acts who are playing a venue that size, because everyone but Mariah/Elton/Taylor Swift's of the world are that size or smaller.

And "venue needs to fit the show, not the other way around" is why the AK-Chin Amphitheater (designed for music) has a busier concert schedule than the Suns arena (Designed for sports) and also HAS THE WNBA TEAM PLAYING HOME GAMES during the summer.

Through Oct 10, CONCERTS ONLY:
Ak-Chin - 22
Suns Arena - 14
Gila River - 7

I don't see how the "Suns Arena doesn't want a competing venue" argument holds a single ounce of water, when they're losing concerts to Ak-Chin all summer because of the WNBA team, which they own, so they make 100% of the revenue on vs paying the musicians.


3) Of course fans will drive to see a show, but the idea that music acts are booking tours and "picking" a venue because all four have open dates when they're passing through is just ridiculous. You will pick a venue based on "Which building is open June 29-30-July 1-2 when we're passing through" And that's why Beiber is doing GRA on June 30, because Ak-Chin has Halsey, Suns Arena has WWE (load-in).


4) It's not a concern at all in NYC. 2019 Pollstar rankings had MSG #2, The Rock #29, Barlcays #31 and NVMC #40..... in the world. US ranks of #1, #13, #14, #21.

I mentioned that a 18,000 seat area is 0.24% of the Phoenix market? It's about 0.07% of the NYC market.

And the Devils old venue is actually used as practice/rehearsal for all the NYC arena concerts.

 

[KevFu]

I don't get why this myth is still a thing when it comes to Atlanta. The Braves finished second in MLB attendance last year only to the Dodgers and their gigantic stadium. For this year so far, they're 3rd in attendance. The Battery has been an absolute game-changer. Meanwhile, Atlanta United literally redefined the meaning of success in MLS. The Falcons draw no better or worse than any other NFL team since moving into Mercedes-Benz Stadium. The Hawks generally do fine as well.

What *recent* evidence is there that Atlanta is a bad sports market in general?

For starters, I don't think a "bad sports market" conversation has any point whatsoever, because it certainly doesn't matter to the BUSINESS of sports. No major market is going to be so bad of a sports market that a team is going out of business; no one's gone out of business since the Cleveland Barons played 20 minutes outside of Cleveland in the 70s before cable TV contracts.

Atlanta gets a bad rap for having non-sold out MLB playoff games -- when they got put on afternoon timeslots because TV networks wanted the Yankees late, and the Braves had made the playoffs like 14-years in a row so maybe the first round games shouldn't be expected to sell out at 2 pm on a Tuesdays.

But using last year's attendance in MLB is massively flawed because of the COVID restrictions. The Braves were in the sweet spot of having a government that wanted things open all season long AND being good at the same time. The Dodgers weren't allowed to put 55,000 in their stadium all season long.

 

[KevFu]

They are getting better I will admit. My issue with a lot these cities is more to do with the transplants then the city itself.

The problem with this argument to me is that we have zero frame of reference for any city. Phoenix has a ton of transplants. But so do most big cities.

And the Diamondbacks and Coyotes get my money whether I'm wearing Mets/Islanders gear or Snakes/Peyote Coyote gear.

The best list I can find for a transplant index is "Not born in the state" top 15, but most of the list is non-major league cities. Vegas, Tampa Bay, Phoenix, Denver and DC are on the list.

If transplants are a problem for a sports market, how come no one has ever suggested that Denver or DC lose teams?

There's WAAAAAAAY too much "crafting the facts around the desired outcome" going on

 

[Headshot77]

In my opinion I think Tempe is just humoring the Coyotes this deal is DOA. because there is no money to be made with the Coyotes anywhere in Arizona accept if they built an arena in Downtown Phoenix they might have had a shot at surviving but that ship has sailed & with the Vegas Golden Knights in the same southwestern market . There is really only room for one team in that market & the Vegas Golden Knights are that team because they are actually making money & have a solid fan base which the coyotes do not so I think its best for ownership & the BOG to cut there losses & move them to Houston or Austin .

Cities don't just humor teams and proposals they find cute. Why would they waste their own time like that?