CXLIX - FINAL thoughts on the Arizona Coyotes

[TheLegend]

We doing the chicken or the egg thing again?

Making dog food.

 

[Voight]

I mean, yes and no. It's over, the Coyotes are finally dead after being strung around for over a decade. The franchise didn't just relocate it has been technically disbanded, and is the first franchise to go properly defunct in some 50-odd years. This saga will be talked about until the end of time because the way it unfolded was genuinely a fascinating disasterpiece of incompetence. To that end, this is a bait and switch because I don't think the conversation should end about this non-existent team, and the prospect of a new expansion franchise. On the other, Coyotes relocation talk is finally over.

I wouldn't call them properly defunct, it's more of a Cleveland Browns type of thing for now.

 

[Headshot77]

I wouldn't call them properly defunct, it's more of a Cleveland Browns type of thing for now.

Didn't Meurelo already give up though? He set his sights on the AHL relocating to Reno.

 

[Boris Zubov]

Matthews, McDavid, or Eichel would've put the team on the map in AZ. With ownership that couldn't afford to pay for them and support pieces, it likely would've still flailed true.

What I am confident of though and folks don't have to agree with me and I don't care but if Bill Foley (or a similar type) had owned the Coyotes, and setup an arena in Phoenix the way he (and others) did in Vegas and if he ran the team in Phoenix the way he did in Vegas. I am confident the Coyotes would've been successful. It was a good enough market that competent ownership would've had success.

So here's a what-if conundrum....What if Foley owned the team & they started in Glendale? Is the team viable & profitable?

 

[TheLegend]

So here's a what-if conundrum....What if Foley owned the team & they started in Glendale? Is the team viable & profitable?

Rumor was Foley might have looked into Arizona and moved them to Vegas but preferred to build from the ground up.

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Glendale doesn’t work unless you own Westgate and the Coyotes. And neither were in great shape at the time. Bob Parsons ended up getting Westgate dirt cheap but wasn’t interested in being a pro franchise owner.

 

[Boris Zubov]

Rumor was Foley might have looked into Arizona and moved them to Vegas but preferred to build from the ground up.

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Glendale doesn’t work unless you own Westgate and the Coyotes. And neither were in great shape at the time. Bob Parsons ended up getting Westgate dirt cheap but wasn’t interested in being a pro franchise owner.

I was around for the Foley rumor that had him taking the Yotes to Vegas. Always felt bogus & from what I recall it was never attributed to any legit sources.

You're moving the goalposts a little, but If you believe Glendale doesn't work unless Westgate is also owned by the same individual, then hockey returning to the area is not happening anytime soon, if ever, unless Ishbia bids for an expansion franchise & either renovates Footprint yet again or builds a new arena. My point is, if a team cannot stand on their own without an entertainment district, they really have no business being in the market.

Add in the fact that the combined costs for a franchise & a new entertainment district are going to approach $5B by the time this rolls around, the prospects for a new team are pretty bleak, IMO.

 

[Voight]

Didn't Meurelo already give up though? He set his sights on the AHL relocating to Reno.

He did, but the league still considers them inactive, as they hold onto their pipe dream of an NHL team there again.

Even though this was a relocation in all but name.

 

[TheLegend]

I was around for the Foley rumor that had him taking the Yotes to Vegas. Always felt bogus & from what I recall it was never attributed to any legit sources.

You're moving the goalposts a little, but If you believe Glendale doesn't work unless Westgate is also owned by the same individual, then hockey returning to the area is not happening anytime soon, if ever, unless Ishbia bids for an expansion franchise & either renovates Footprint yet again or builds a new arena. My point is, if a team cannot stand on their own without an entertainment district, they really have no business being in the market.

Add in the fact that the combined costs for a franchise & a new entertainment district are going to approach $5B by the time this rolls around, the prospects for a new team are pretty bleak, IMO.

Agreed...

But it's not just Glendale.... it's anywhere. It's getting harder and harder for pro sports teams to make it on just an arena alone. Especially in the smaller markets.

Ishiba isn't a guarantee either. He's got full control of Footprint, but spending another $1.2 billion for an NHL franchise isn't going to bring enough return to quantify it. There has been talk about Phoenix creating a large sports entertainment district downtown and Ishiba could be part of it but it's only talk.

 

[Sgt Schultz]

We doing the chicken or the egg thing again?

Not again, still.

 

[AZDesertKnight]

These owners didn't have money.. pure and simple

Move on. Even if Meruelo won the TED vote he was never getting that thing built.

 

[Shwan]

These owners didn't have money.. pure and simple

Move on. Even if Meruelo won the TED vote he was never getting that thing built.

Fact Check: True

Good thing Craig Morgan lied up a storm and whipped the Coyotes fan base up for those Tempe hearings to make fools out themselves

 

[Voight]

Fact Check: True

Good thing Craig Morgan lied up a storm and whipped the Coyotes fan base up for those Tempe hearings to make fools out themselves

He was never more than glorified PR guy for Mereulo.

 

[AZDesertKnight]

Fact Check: True

Good thing Craig Morgan lied up a storm and whipped the Coyotes fan base up for those Tempe hearings to make fools out themselves

I was at the June 2nd 2022 Council meeting and fist bumped Alex Meruelo and Junior.. I wish I didn't!

 

[voyageur]

Agreed...

But it's not just Glendale.... it's anywhere. It's getting harder and harder for pro sports teams to make it on just an arena alone. Especially in the smaller markets.

Ishiba isn't a guarantee either. He's got full control of Footprint, but spending another $1.2 billion for an NHL franchise isn't going to bring enough return to quantify it. There has been talk about Phoenix creating a large sports entertainment district downtown and Ishiba could be part of it but it's only talk.

I don't know why people think an expansion franchise is worth $1.2 billion. Just because the league sold an existing franchise for $1.2 billion doesn't mean an expansion team is worth that. Maybe the number is only $800 million, an increase from the last expansion team at $650 million, which was $500 million when Vegas was admitted. That's a number more in line with the bottom of the league valuations. Which is where you start, and the market and success dictates the growth. I can see a realistic possibility of both Atlanta and Arizona awarded franchises in the next couple of years, and Gary Bettman retiring, having only screwed over the markets of Quebec and Hartford, in his tenure, which were unwanted markets when they were accepted to the NHL. Quebec may not have the votes to get in, and Hartford isn't even on the radar anymore.

 

[TheLegend]

I don't know why people think an expansion franchise is worth $1.2 billion. Just because the league sold an existing franchise for $1.2 billion doesn't mean an expansion team is worth that. Maybe the number is only $800 million, an increase from the last expansion team at $650 million, which was $500 million when Vegas was admitted. That's a number more in line with the bottom of the league valuations. Which is where you start, and the market and success dictates the growth. I can see a realistic possibility of both Atlanta and Arizona awarded franchises in the next couple of years, and Gary Bettman retiring, having only screwed over the markets of Quebec and Hartford, in his tenure, which were unwanted markets when they were accepted to the NHL. Quebec may not have the votes to get in, and Hartford isn't even on the radar anymore.

My reasoning here....

It's $1.2 billion because that's what the NHL wanted for the next expansion.

Utah was originally to be an expansion location. Ryan Smith had first contacted the league nearly two years prior about it and was progressing on a track with Salt Lake City's bid for the Winter Olympics. But when Alex Meruelo ran into all the problems he created they facilitated the sale of teh Coyotes using the expansion price as a base point.

And for all intensive purposes.... Utah was a NEW team. Remember that Meruelo at that point still had control of any Arizona franchise for the next five years, and it was going to cost him at minimum $1 billion to reactivate it.

That....... and you also had Atlanta who was actually ahead of SLC in the process at that point and they needed to keep that expansion price up.

Now that Meruelo is out of the picture anyone could bring a franchise back to Arizona. But it'll start at the $1.2 billion.... possibly more by the time it comes around.

 

[Headshot77]

I don't know why people think an expansion franchise is worth $1.2 billion. Just because the league sold an existing franchise for $1.2 billion doesn't mean an expansion team is worth that. Maybe the number is only $800 million, an increase from the last expansion team at $650 million, which was $500 million when Vegas was admitted. That's a number more in line with the bottom of the league valuations. Which is where you start, and the market and success dictates the growth. I can see a realistic possibility of both Atlanta and Arizona awarded franchises in the next couple of years, and Gary Bettman retiring, having only screwed over the markets of Quebec and Hartford, in his tenure, which were unwanted markets when they were accepted to the NHL. Quebec may not have the votes to get in, and Hartford isn't even on the radar anymore.

Wait until you see that the next expansion will be $2b per franchise

 

[voyageur]

My reasoning here....

It's $1.2 billion because that's what the NHL wanted for the next expansion.

Utah was originally to be an expansion location. Ryan Smith had first contacted the league nearly two years prior about it and was progressing on a track with Salt Lake City's bid for the Winter Olympics. But when Alex Meruelo ran into all the problems he created they facilitated the sale of teh Coyotes using the expansion price as a base point.

And for all intensive purposes.... Utah was a NEW team. Remember that Meruelo at that point still had control of any Arizona franchise for the next five years, and it was going to cost him at minimum $1 billion to reactivate it.

That....... and you also had Atlanta who was actually ahead of SLC in the process at that point and they needed to keep that expansion price up.

Now that Meruelo is out of the picture anyone could bring a franchise back to Arizona. But it'll start at the $1.2 billion.... possibly more by the time it comes around.

I don't believe you can consider Utah a new team, in that Smith bought an organization that already had a front office in place, and a prospect pool. Realistically that is something that an expansion franchise has to build, when you look at Seattle, it's taken awhile. Prospects are a means to immediate improvement, which will be a task for any future expansion team. For both Vegas and Seattle they were more attractive markets than a lot of NHL markets so they have had no trouble with getting players to sign there, Vegas using the trade route and free agency, Seattle mostly free agency. Not sure Ariona or Atlanta will have the allure those two markets do, in getting off the ground, so I would remain conservative.

But maybe you are right, using Sportico's numbers every franchise is worth $1 billion, I suspect the Forbes numbers come in lower,

 

[TheLegend]

I don't believe you can consider Utah a new team, in that Smith bought an organization that already had a front office in place, and a prospect pool. Realistically that is something that an expansion franchise has to build, when you look at Seattle, it's taken awhile. Prospects are a means to immediate improvement, which will be a task for any future expansion team. For both Vegas and Seattle they were more attractive markets than a lot of NHL markets so they have had no trouble with getting players to sign there, Vegas using the trade route and free agency, Seattle mostly free agency. Not sure Ariona or Atlanta will have the allure those two markets do, in getting off the ground, so I would remain conservative.

But maybe you are right, using Sportico's numbers every franchise is worth $1 billion, I suspect the Forbes numbers come in lower,

Smith only got the hockey ops department, coaching staff and player contracts in the deal.

He actually used his people from the Utah Jazz to initiate the move and spent the next 4-5 months hiring a front office for the hockey club. A few came from Arizona but they were all new hires from his perspective.

 

[DustyDangler]

So here's a what-if conundrum....What if Foley owned the team & they started in Glendale? Is the team viable & profitable?

No. Whether it is Ottawa, or the Rays or the Coyotes, I think it is clear the struggle teams face when they do not have an arena centrally located to their fan base. I do not think a smart owner such as Foley would've ever rolled with Glendale. It was a lack of good options kind of move (and an enrichment of a certain someone's real estate agenda) and a better to be in Glendale than Portland kind of thing.

AWA, should've been multi-purpose (20/20 hindsight) and the NHL should not have allowed Winnipeg 1.0 to leave a market with an arena problem to go to another market with an arena problem. The NHL has more recently shown a lot more care regarding expansion and relocation and I doubt we will see the Jets to Phoenix scenario again.

Ultimately, imho, the NHL can work in the desert with the essential ingredients of strong ownership, a centrally located arena, and a competitive on ice product, things the Coyotes never had.

 

[Shwan]

I don't believe you can consider Utah a new team, in that Smith bought an organization that already had a front office in place, and a prospect pool. Realistically that is something that an expansion franchise has to build, when you look at Seattle, it's taken awhile. Prospects are a means to immediate improvement, which will be a task for any future expansion team. For both Vegas and Seattle they were more attractive markets than a lot of NHL markets so they have had no trouble with getting players to sign there, Vegas using the trade route and free agency, Seattle mostly free agency. Not sure Ariona or Atlanta will have the allure those two markets do, in getting off the ground, so I would remain conservative.

But maybe you are right, using Sportico's numbers every franchise is worth $1 billion, I suspect the Forbes numbers come in lower,

If Smith walked away from the deal you'd be looking at best the league owning the team right now racking up another 8 digits of debt on the Coyotes behalf, and at worst having that roster and prospect pool broken up and divvied to the rest of the league.

The price had to satisfy the League (to pay off the mountain of Coyotes debt they had and needed a number large enough that wouldn't devalue the rest of the owners), Meruelo (who wanted a certain level of return on his "investment" to not sue the league) and Smith (who, while he was a very motivated buyer, didn't want to get outright fleeced).

This is why the most guarded secret in the League regarding the Coyotes is Andrew Barroway. After his run in with Aspen police for beating his wife he was indefinitely suspended from the league. Then in September 2023 we get this news that Meruelo wants to buy his 8%.

At the time I said that would be tricky because the valuation of the team would be a hard number and would likely affect financing for any new arena project. A few months later in November 2023 Michael Andlauer sells his 10% of the Canadiens to get a monster $2.5B valuation for Montreal and now things are super hairy.

So we hear nothing about Barroway until Josh Doan's first game where he's spotted in the owners Box with Shane.

Fascinating for a man who's supposed to be still suspended from all league activities to be there.....as an owner at least.

This is further evidence of the idea that the League really defacto owned the team through the Meruelo years via control of the vast majority of the debt the team has accrued. We heard nothing of Barroway getting a payoff from Smith's sale which also lends to this theory.

All of this to say is the assumption here is correct that there were WAY too many variables in play to think the sale price of the Coyotes was commensurate with its actual value, but a nice round $1B price tag for the team itself (the $200M was the relocation fee) was a number that was satisfactory for all parties.

As the saying goes "it's worth what people with pay for it" even if there was only one person willing to.