CXLIX - FINAL thoughts on the Arizona Coyotes

[MNNumbers]

Concerning Entertainment Districts:

The Islanders have one, and it is the reason that UBS Center could be built. This is in New York, mind you.

It is not a disgrace for ownership to link a sports team to an entertainment district today. Considering the very high prices one has to pay for on ice talent, and the way the CBA is set up, and the upward pull on HRR from Toronto, Montreal, and the Rangers, it's almost necessary.

The league continues to suffer one elephant in the room:
The income disparity on money from local fans between the top 5 or so teams, and the bottom 10-15 teams, is absolutely huge. And, the ownership of the top revenue teams doesn't want to share more, even though they should.
Continent wide TV contracts having grown enough to make up for it, and the last I knew, the Canadian broadcast contract is likely to be less on the next round.

All of that contributes, and all of it contributes to the Yotes problems. ESPECIALLY, after IA lost their 15m/yr subsidy.

 

[MNNumbers]

It's obviously a post-mortem that has been written many times, but.....
At the end, the Yotes were the only team in the league without arena control. So, they were surviving (or not) on game night revenue and local advertising. That's impossible in any league.

A list of 'what should have happened' might well include these changes:
1- Never leaving Winnipeg
2- Not giving up on Minnesota when Burke and Gluckstern balked at the lease the City of Mpls offered them. They could have taken it, and ended up as owners of the Wild.
3- Realizing that AWA would never work, and therefore not going there in the first place. Nashville, I believe was another possibility, and would have been better.
4- In no wise dropping into a warm market with no early marekting strategy. The team literally had no chance to gain any traction locally.
5- Ellman and Moyes should never have been approved as owners. A relo at that point would have been better
6- I totally understand opposing Balsillie, and this is the one thing that the league may have done right.
6a - Having purchased the team themselves, the league needed to be more active in pursuing marketing and ownership options. They did nothing for 2 years except take 25M/yr from Glendale.
7- The IA ownership was clearly unfit for the big leagues, and the 15M/yr lease was a sham. It was a bad idea, although Bettman thought it might be a door to the idea of host cities giving MORE money to teams.
8- The list of owners afterwards.

Truly, rather than propping the IA ownership, it's possible that it would have been better to sell the Yotes back to Winnipeg, and the Thrashers to Quebec City. I know that QC might have a tough road, but the province built an arena for free....

And, for the future in Arizona, it would have saved 10 years or so of ridicule and bad feelings continuing to fester and grow, and left the market far more amenable to expansion later.

 

[aqib]

It's obviously a post-mortem that has been written many times, but.....
At the end, the Yotes were the only team in the league without arena control. So, they were surviving (or not) on game night revenue and local advertising. That's impossible in any league.

A list of 'what should have happened' might well include these changes:
1- Never leaving Winnipeg
2- Not giving up on Minnesota when Burke and Gluckstern balked at the lease the City of Mpls offered them. They could have taken it, and ended up as owners of the Wild.
3- Realizing that AWA would never work, and therefore not going there in the first place. Nashville, I believe was another possibility, and would have been better.
4- In no wise dropping into a warm market with no early marekting strategy. The team literally had no chance to gain any traction locally.
5- Ellman and Moyes should never have been approved as owners. A relo at that point would have been better
6- I totally understand opposing Balsillie, and this is the one thing that the league may have done right.
6a - Having purchased the team themselves, the league needed to be more active in pursuing marketing and ownership options. They did nothing for 2 years except take 25M/yr from Glendale.
7- The IA ownership was clearly unfit for the big leagues, and the 15M/yr lease was a sham. It was a bad idea, although Bettman thought it might be a door to the idea of host cities giving MORE money to teams.
8- The list of owners afterwards.

Truly, rather than propping the IA ownership, it's possible that it would have been better to sell the Yotes back to Winnipeg, and the Thrashers to Quebec City. I know that QC might have a tough road, but the province built an arena for free....

And, for the future in Arizona, it would have saved 10 years or so of ridicule and bad feelings continuing to fester and grow, and left the market far more amenable to expansion later.

They should have made sure whoever was buying the team to move it had an arena situation lined up before letting them buy the team. Burke and Gluckstern wanted to move the team to Minnesota but they didn't have an arena deal in place. Seattle, Portland, Nashville, Houston, and basically everyone who applied for the 98-2000 expansion could have been a candidate. Nashville almost got the Devils a few months earlier and their arena was opening a few months later.

 

[TheLegend]

They should have made sure whoever was buying the team to move it had an arena situation lined up before letting them buy the team. Burke and Gluckstern wanted to move the team to Minnesota but they didn't have an arena deal in place. Seattle, Portland, Nashville, Houston, and basically everyone who applied for the 98-2000 expansion could have been a candidate. Nashville almost got the Devils a few months earlier and their arena was opening a few months later.

And none of that was Arizona's (nor its fanbase..... nor even Craig Morgan's) fault.

 

[Shwan]

And none of that was Arizona's (nor its fanbase..... nor even Craig Morgan's) fault.

You people still think Glendale getting out of the 15 year deal was because of some "conflict of interest" from a lawyer and not the city catching IA and the League Colluding to take payments meant for the arena to pay off the debt from buying the team.....because Craig Morgan lied to you.

Maybe if the truth came out about the team in 2014 there'd be a new team by now?

 

[TheLegend]

You people still think Glendale getting out of the 15 year deal was because of some "conflict of interest" from a lawyer and not the city catching IA and the League Colluding to take payments meant for the arena to pay off the debt from buying the team.....because Craig Morgan lied to you.

Maybe if the truth came out about the team in 2014 there'd be a new team by now?

Nope. Glendale got out because they were given the opportunity by giving their outgoing city attorney a "conflict of interest waiver", fully knowing where Craig Tindall was headed. And knowing full well it couldn't supercede the state law that's included in every agreement between a public entity and private one..

And then IA fell right into it.

I freely admit at first I was convinced IA was in the right (and not because of anything Craig Morgan reported), but another former poster here did a great outline of it all and that changed my mind and hasn't since.

Then again my post above was replying to a comment on events that took place almost 10 years before that.

 

[Shwan]

Nope. Glendale got out because they were given the opportunity by giving their outgoing city attorney a "conflict of interest waiver", fully knowing where Craig Tindall was headed. And knowing full well it couldn't supercede the state law that's included in every agreement between a public entity and private one..

And then IA fell right into it.

I freely admit at first I was convinced IA was in the right (and not because of anything Craig Morgan reported), but another former poster here did a great outline of it all and that changed my mind and hasn't since.

Then again my post above was replying to a comment on events that took place almost 10 years before that.

I'm sure that's what Craig tells you on the secret fanboy discord but the fact is The City caught the team Cooking the books to pay fortress and that's what they were going to use to break the lease.

Tony Tavares, the onetime president of both the Dallas Stars and Mighty Ducks of Anaheim, has delivered to Glendale city auditors a report that alleges IceArizona under-reported its losses last season during the first year of the 15-year arena management contract, sources tell TSN.

TSN spoke to a source with first-hand knowledge of Tavares' report who said any such misreporting could arguably be used by lawyers to claim that the team has breached the terms of its arena management contract.

When Glendale was getting ready to action on that to void the contract, the League bought the fortress debt to stop them.

Earlier in the season the NHL refinanced about $85 million of Arizona Coyotes debt through the league’s lending facility.

Documents acquired by Forbes via a Freedom of Information Act request with the City of Glendale, Arizona, show that the Coyotes Gila River Arena Management Company had $177 million of debt as of June, 2014. Of that $177 million, $79 million was a loan from Fortress and $85 million was a loan from the NHL that were used to finance the purchase of the team.

So in June the Council decided to vote on it anyways and use Tindall. Why? because they knew at the end they could use his access as both the City and Team's lawyer to bring up the payments to the court as Tindall would have been aware of the audit and then the team's books.

Why else would the Coyotes back down from such a "slam dunk" case against the city according to the team's ace attorney Nick Wood? (lol)

“It’s a baseless, ridiculous claim, said attorney Nicholas J. Wood, the team’s outside counsel.

Even worse was Ice Arizona taking the deal when they knew it was going to kill them after they lied to the city about the income the team was generating, leading everyone to believe the team was getting the better end of the deal from the renegotiated contract. The rest is history as they say.

Although the Coyotes will only receive $6.5 million/year from Glendale, it will be receiving revenue from almost everything that occurs at the arena including non-hockey events (that are related to hockey or the ownership). According to the revenue numbers Anthony LeBlanc gave at the June 10 City Council meeting, this is a substantial amount.

This was the point of no return for the team AND the moment the League went from having the plausible deniability of being victims of bad luck to actively engaging in sheisty behavior. and it could have been resolved if Craig Morgan reported the truth of the matter.

But he didn't and here we are. Though thank you for proving my point how Coyotes fans still truly believe it was over some stupid conflict of interest law

EDIT:

and you wanna know the the best part of it all? When Craig Morgan writes this about the ordeal in 2017 then goes on to defend Meruelo for 4 years lol

If you think breaking signed business deals is a trifle, you have no concept of the business world and the importance of holding to agreements. Business leaders and scholars across the Valley were clear in underlying the significance of Glendale’s decision.

Hall of Fame hack.

 

[TheLegend]

I'm sure that's what Craig tells you on the secret fanboy discord but the fact is The City caught the team Cooking the books to pay fortress and that's what they were going to use to break the lease.




When Glendale was getting ready to action on that to void the contract, the League bought the fortress debt to stop them.



So in June the Council decided to vote on it anyways and use Tindall. Why? because they knew at the end they could use his access as both the City and Team's lawyer to bring up the payments to the court as Tindall would have been aware of the audit and then the team's books.

Why else would the Coyotes back down from such a "slam dunk" case against the city according to the team's ace attorney Nick Wood? (lol)



Even worse was Ice Arizona taking the deal when they knew it was going to kill them after they lied to the city about the income the team was generating, leading everyone to believe the team was getting the better end of the deal from the renegotiated contract. The rest is history as they say.



This was the point of no return for the team AND the moment the League went from having the plausible deniability of being victims of bad luck to actively engaging in sheisty behavior. and it could have been resolved if Craig Morgan reported the truth of the matter.

But he didn't and here we are. Though thank you for proving my point how Coyotes fans still truly believe it was over some stupid conflict of interest law

You're only proving your continued obsession with Craig Morgan is intriguing.

All I said was it gave them an easy path to do cancel the 15-year lease. I was fully aware of the conflict over Glendale wanting to look deeper into the IA books and if it was such a slam dunk as you think it is why didn't they pursue it??

At this point I really don't care. There are countless ways this whole saga could have cratered itself.

 

[aqib]

And none of that was Arizona's (nor its fanbase..... nor even Craig Morgan's) fault.

Literally nothing in my post mentioned the fanbase. I was blaming the league for putting the team there under those circumstances in the first place.

 

[TheLegend]

Literally nothing in my post mentioned the fanbase. I was blaming the league for putting the team there under those circumstances in the first place.

I know. I understood you, and agree with it. That response was aimed at some others.

All said….. I’m not sure the NHL had much choice from what I understood at the time.

 

[Canis Latrans]

Literally nothing in my post mentioned the fanbase. I was blaming the league for putting the team there under those circumstances in the first place.

They really did put the team behind the 8-ball from the very start. Phoenix had a flood of new teams and arenas/stadiums come into being in the 90s.

The NHL really shot themselves in the foot and dug a hole in the market when they told Colangelo they weren't interested in expanding there. That must have been in the late 80s because, if I recall correctly, America West Arena broke ground in 1990 and opened in 1992. The NHL also came out with a 10-team expansion plan (the concept of we want to expand to 30, not solid plans of how they'd do it) around then, so to have recently told a prime market not to build an arena to house ice is really poor foresight.

The Diamondbacks were approved in 1995, so they had to have had their stadium plans and funding begun prior to the Coyotes moving for the 1996-97 season.

The Cardinals had wallowed in Sun Devil Stadium for their first dozen years or so, then got stadium plans and funding lined up in Glendale.

You can see the pattern here, every other league got in before the NHL who had ample warning. Markets don't like to continually fund stadiums through taxes and the NHL was coming to the table last.

Furthermore, the NHL used to tell teams to basically sink or swim. Great for existing strong clubs who get to increase their value as the league adds more teams and looks more legitimate. Poorer for new teams who usually had to slog through poor rosters and hope fans hadn't tuned out the team when they could turn the corner. At least the league learned, and recent teams have gotten much better starting points to come in and establish themselves. They are better about growing the game via youth programs and other investments now, but it really used to be entirely on the new market to do everything.

The league strategy for the team basically turned into finding the next rich owner who could afford building a new arena for the team to turn the corner since they'd botched that. If it didn't work out, you could sell the owner on increased value and equity when they sold and hope the next guy could make an arena deal work. I don't doubt some of the league debt accrued was based on promised increased value or making an owner whole come sale time. I can see how this strategy can almost go on indefinitely, but that hole just keeps getting bigger until you find a miracle owner who will front the funds, which they never did, and in fact scared away any of the bigger fish who would be interested. I think that's why we hear rumblings of investors still being interested in the market. They can do it on their own terms and not covering a pile of debt plus building an arena while floating the team.

 

[Shwan]

The league strategy for the team basically turned into finding the next rich owner who could afford building a new arena for the team to turn the corner since they'd botched that. If it didn't work out, you could sell the owner on increased value and equity when they sold and hope the next guy could make an arena deal work. I don't doubt some of the league debt accrued was based on promised increased value or making an owner whole come sale time. I can see how this strategy can almost go on indefinitely, but that hole just keeps getting bigger until you find a miracle owner who will front the funds, which they never did, and in fact scared away any of the bigger fish who would be interested. I think that's why we hear rumblings of investors still being interested in the market. They can do it on their own terms and not covering a pile of debt plus building an arena while floating the team.

This is spot on. The Coyotes would still be in Arizona if interest rates were still at 2% because the league (or just Bettman) really did think that at some point it could even out. There's a very good reason the final reports of the team moving came just hours after the March CPI report was released on 10 April.

 

[aqib]

I know. I understood you, and agree with it. That response was aimed at some others.

All said….. I’m not sure the NHL had much choice from what I understood at the time.

Once the team was sold the Burke/Gluckstern the options became limited. Places like Portland were closed once the team was sold to somone other than Paul Allen. My thing is the NHL should have been managing the sale process and made sure the team was sold to people who had a firm plan in place.

As far as NHL haing other options they began an expansion process a few months later and according to this article "The league received 11 applications from nine cities - Atlanta; Columbus; St. Paul; Nashville; Houston (three); Oklahoma City; Hampton Roads, Va.; Raleigh, N.C.; and Hamilton, Ontario." There is no reason why one of them couldn't have been a candidate.

NHL Ices City's Bid For Team TV Market Size Dooms Effort To Gain Expansion Franchise

BIOG:NAME:UPD: 19970618 -TEXT- Saddled with a television market considered too small for the big time, Oklahoma City has failed in its quest to gain a National Hockey League expansion franchise. The …

www.oklahoman.com

 

[TheLegend]

Once the team was sold the Burke/Gluckstern the options became limited. Places like Portland were closed once the team was sold to somone other than Paul Allen. My thing is the NHL should have been managing the sale process and made sure the team was sold to people who had a firm plan in place.

As far as NHL haing other options they began an expansion process a few months later and according to this article "The league received 11 applications from nine cities - Atlanta; Columbus; St. Paul; Nashville; Houston (three); Oklahoma City; Hampton Roads, Va.; Raleigh, N.C.; and Hamilton, Ontario." There is no reason why one of them couldn't have been a candidate.

NHL Ices City's Bid For Team TV Market Size Dooms Effort To Gain Expansion Franchise

BIOG:NAME:UPD: 19970618 -TEXT- Saddled with a television market considered too small for the big time, Oklahoma City has failed in its quest to gain a National Hockey League expansion franchise. The …

www.oklahoman.com

Only thing I could think of that is those cities had ownership groups already in the process.

Also…. Burke and Gluckstern needed an arena immediately. Bettman knew Jerry Colangelo from his time with the NBA and may have known he’d inquired years earlier.

This is 100% speculation on my part though.

 

[aqib]

I unearthed this while looking through

Only thing I could think of that is those cities had ownership groups already in the process.

Also…. Burke and Gluckstern needed an arena immediately. Bettman knew Jerry Colangelo from his time with the NBA and may have known he’d inquired years earlier.

This is 100% speculation on my part though.

So I unearthed this as I was digging for info on what other cities were in the running for the Jets in 95/96. One of the telling quotes was this:


And from Feb. 11, 1995, a Toronto Star story titled "Phoenix awaits Canadian NHL flop." Seriously. If one of Canada's small market teams such as Ottawa, Edmonton, Winnipeg or Quebec continues to falter financially, it could end up in Phoenix, the Arizona Republic reports.

"We've had discussions with some NHL teams and that has been on public record," Bryan Colangelo, president of Phoenix Arena Sports, a subsidiary of the Suns basketball team, told the newspaper.

"We've also had discussions with others who remain nameless and have been on hold due to situations working out locally and in those respective cities. But we are keeping a watchful eye on those scenarios and are waiting for something to come out of it."

Jerry Colangelo, president of the Suns, is confident he'll eventually have an NHL team to share his building.

"The simple fact is that the National Hockey League would like a team in Phoenix someday and we have the building ready for it," he said.

The newspaper said Colangelo has been assured by "good friend" Gary Bettman, the NHL commissioner, that the league wants a franchise in Phoenix. The Republic suggests that the "financially strapped Quebec Nordiques and Winnipeg Jets could be up for sale or might have to relocate in a bigger market to stay afloat.

"The question is only when and how - whether it's two or three years, and whether it's through expansion or relocation," Jerry Colangelo told The Star's Chris Young, adding that he has been approached quietly by Phoenix-area investors interested in bringing NHL hockey here.

Bettman and the Jets: Tales from the NHL’s flight from Winnipeg

By all accounts, the sale of the Atlanta Thrashers to True North will be completed this week, with a formal announcement of the NHL's return to Winnipeg coming as early as Tuesday. It'll be a joyous time for hockey fans … <a...

sports.yahoo.com

Now that makes me wonder a few things:

1) Why didn't Colangelo bid for the Jets himself rather than make them a tenant
2) Why wasn't there a renovation plan (yes I know that the arena was relatively new) to make it hockey ready.

 

[TheLegend]

I unearthed this while looking through

So I unearthed this as I was digging for info on what other cities were in the running for the Jets in 95/96. One of the telling quotes was this:


And from Feb. 11, 1995, a Toronto Star story titled "Phoenix awaits Canadian NHL flop." Seriously. If one of Canada's small market teams such as Ottawa, Edmonton, Winnipeg or Quebec continues to falter financially, it could end up in Phoenix, the Arizona Republic reports.

"We've had discussions with some NHL teams and that has been on public record," Bryan Colangelo, president of Phoenix Arena Sports, a subsidiary of the Suns basketball team, told the newspaper.

"We've also had discussions with others who remain nameless and have been on hold due to situations working out locally and in those respective cities. But we are keeping a watchful eye on those scenarios and are waiting for something to come out of it."

Jerry Colangelo, president of the Suns, is confident he'll eventually have an NHL team to share his building.

"The simple fact is that the National Hockey League would like a team in Phoenix someday and we have the building ready for it," he said.

The newspaper said Colangelo has been assured by "good friend" Gary Bettman, the NHL commissioner, that the league wants a franchise in Phoenix. The Republic suggests that the "financially strapped Quebec Nordiques and Winnipeg Jets could be up for sale or might have to relocate in a bigger market to stay afloat.

"The question is only when and how - whether it's two or three years, and whether it's through expansion or relocation," Jerry Colangelo told The Star's Chris Young, adding that he has been approached quietly by Phoenix-area investors interested in bringing NHL hockey here.

Bettman and the Jets: Tales from the NHL’s flight from Winnipeg

By all accounts, the sale of the Atlanta Thrashers to True North will be completed this week, with a formal announcement of the NHL's return to Winnipeg coming as early as Tuesday. It'll be a joyous time for hockey fans … <a...

sports.yahoo.com

Now that makes me wonder a few things:

1) Why didn't Colangelo bid for the Jets himself rather than make them a tenant
2) Why wasn't there a renovation plan (yes I know that the arena was relatively new) to make it hockey ready.

Nice find and good questions.

This all happened before I moved to Arizona, but as an addendum to question 1..... If Colangelo actually wanted an NHL team down the road why go through with designing Footprint to be practical only for basketball? Yes.... he was told the NHL wasn't coming "in his lifetime" before he built it, but if he was still willing to try and get one, you'd think he'd have had the foresight for it.

There's an article in The Athletic from 2019 that has the sequence of events.

https://www.nytimes.com/athletic/751652/2019/01/07/colangelo-talks-original-deal-arena-transformed-downtown-phoenix-and-fulfilled-his-vision/

According to this article John Ziegler wasn't keen on Arizona as a market, but Gary Bettman was after he took over as commissioner.Before the Suns and city went forward with their design plans, Colangelo called Ziegler and asked him if there was a chance the NHL would want to put a team in Phoenix at some point.

Before the Suns and city went forward with their design plans, Colangelo called Ziegler and asked him if there was a chance the NHL would want to put a team in Phoenix at some point.

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Ziegler’s answer: “Not in your lifetime.”

Either he vastly underestimated Colangelo’s life span, or he failed to realize the potential for hockey in the desert.

Either way, a few years later, Gary Bettman became the NHL’s first commissioner and immediately began eyeing the Phoenix market. By then, it was too late to make it work in the new arena over the long haul.

Colangelo and the city had built an arena designed to be an intimate basketball space. There is an ice-making system for skating shows, and enough room for minor league hockey. But when the Coyotes arrived from Winnipeg, it was evident that it wasn’t suitable for NHL hockey because of obstructed-view seats.

Including hockey in the plan that is under consideration now would mean expanding beyond the existing footprint of the arena – an entirely new building rather than a renovation.

Colangelo has never regretted how the arena project turned out. He said the city and Suns “got a lot of bang for our buck” because there was a recession at the time and that resulted in a lot of competition in bidding by contractors.

 

[aqib]

According to this article John Ziegler wasn't keen on Arizona as a market, but Gary Bettman was after he took over as commissioner.Before the Suns and city went forward with their design plans, Colangelo called Ziegler and asked him if there was a chance the NHL would want to put a team in Phoenix at some point.

So there are two things I wonder. If the NHL had managed the sale of the team from the outset if the had called Collangelo and said "you can have the Jets for $65 million do you want them" would he have bought them himself? Would it have worked even with the arena less than ideal for hockey if they were under one owner. Secondly, they did a renovation after the Glendale Arena opened. If Collangelo owned both teams would they have been able to do an renovation that accomodated both teams?

 

[TheLegend]

So there are two things I wonder. If the NHL had managed the sale of the team from the outset if the had called Collangelo and said "you can have the Jets for $65 million do you want them" would he have bought them himself? Would it have worked even with the arena less than ideal for hockey if they were under one owner. Secondly, they did a renovation after the Glendale Arena opened. If Collangelo owned both teams would they have been able to do an renovation that accomodated both teams?

Problem is Colangelo had planned to build (what is now) Footprint some 5-6 years before the original Jets went on the block. And Colangelo was long gone when the most recent renovation of Footprint took place.

If Ziegler had told him up front that the NHL could go there in the near future he might have built the arena to accommodate hockey better and been in on it.

The Coyotes make for a good Lemony Snicket story.