CXLVI - Future of Coyotes up in air after Tempe rejects arena deal - will remain at Mullet Arena for 2023-24, looking at Fiesta Mall site in Mesa

[Llama19]

@Llama19

Can Glendale and the NHL/Coyotes kiss and make up?

Nope...and why should they...

To quote from the paywalled article, Tempe-Coyotes election recap: What happened, what's next for city after massive loss?:

"What's almost certainly not in the cards for the Coyotes is a return to Glendale, however. The city sold its arena to ASM Global, a massive sports management company that oversaw the arena when the Coyotes still called it home. That means it would be ASM's decision whether to welcome the team back.

But Phelps, Glendale's city manager, implied that the strained relationship between the two organizations makes such a reunion unlikely.

"ASM was the manager of the arena that struggled to get the bills paid on time, that had to negotiate the value of every invoice and that had to put up with a fair amount of nonsense the last couple of years of that relationship," Phelps said.

"I don't ever want to be of the mindset to take joy in somebody else's failure. That's just not the way I try to operate ... But I will say that at the end of the day, I'm also a believer that you reap what you sow.""

 

[GKJ]

To me, at least some of the shift on the part of the league from "will be evaluating over the coming weeks" to "will be playing in Mullett next season" stems from the league checking in with Meruelo and him saying "I've got another arena plan that's this far along"

I think it's probably that some of the shift comes from that and some of it comes from considering a relocation process that isn't rushed.

All sides should've been better prepared for this result IMO.

That sounds like something they should've known before the vote.

It doesn't seem Merulo has that kind of savvy, at least not in the area. I think that's what the Coyotes are really missing here. Someone who is known to the area and can be a dealmaker.

 

[Llama19]

Tempe-Coyotes election recap: What happened, what's next for city after massive loss?

Source (Paywall): www.azcentral.com/story/news/local/tempe/2023/05/18/tempe-coyotes-recap-what-happened-and-what-is-next-for-the-city/70228017007/

 

[MNNumbers]

Please quit with the Glendale talk. The real problem there was simple: There wasn't enough money available in the arena and the hockey market for both the team and the city to be happy. That's it. Easy to describe. There is no going back, because the same situation holds true. Glendale wanted 15 years or whatever, but on their terms. Meruelo knew those terms wouldn't work.

Consider, if you will, the Tempe deal. Where was the money for Meruelo? Probably in the development, not in the arena. Consider, if you will, UBS where the Islanders play. Why could it work? Not the arena. Everything else is the money driver.

There is no way back to Glendale. There isn't enough money there. The city should have known that back in '13, when SMG, who was at that time a large arena manager, gave them 2 estimates to run the arena. One, with hockey, the other, without. Since the team siphons off a lot, SMG offered the city a better deal with NO hockey team.

 

[aqib]

Can you cite any source that Glendale made no money from Coyotes games? Or how much money they're making now with the newly open dates?

Glendale was highly pushing the Coyotes to sign a 10+ year lease less than a year ago. Would be weird that the financials changed so much that Glendale wouldn't still want that anchor tenant back now.

The lease gave the Coyotes all the revenues generated on game day. The Coyotes paid $500K per season in rent. So they would have generated $250Kish from the having the Coyotes in 2022.

 

[PredsHead]

#1 and #2 are the most plausible, and probably #2 more than #1. #3 only makes sense if Ishbia wants to own a NHL team. I'm not sure how interested Phoenix would be in doing another new redevelopment of Footprint, given they just did one and signed the Suns to a long term lease. If the Suns get a lot of the revenue from other events at Footprint, then why fill up more available dates if you don't have to? I think the state owns AVMC, so #5 brings in a whole other bunch of wackiness. Entertainment for megathread, though.

The big problem with tribal land to me, besides the ownership of the arena itself, would be how would you generate enough revenue to sustain yourself on tribal land? Even if you have a very favorable lease, the arena itself almost certainly won't enough revenue to keep the franchise afloat. The tribe would likely keep a significant chunk of any gaming or sales made on any casino or development attached to an arena as well, so not sure that would leave Meruelo enough to survive.

 

[powerstuck]

The difference in what ESPN and TNT are paying versus what NBC was paying should give you some idea of what they thought adding those markets were worth. The ratings alone from NBC certainly didn't justify that jump in price.

As for Canada, if you add a team to Quebec City, you don't actually create that many new hockey viewers from a TV standpoint. You are mostly just reallocating the ones that are already watching. So if I am an advertiser I wouldn't pay more to reach the same number of people just because the logo at center ice is different.

I mean obvisouly, buck for buck Rogers pays quite a lot more to reach a POTENTIAL 36 millions viewership compared to what ESPN pays to reach a POTENTIAL 10 times more viewership.

 

[Stumbledore]

When I saw the meager effort from the Coyotes owners to get this passed (spending under $250k on the yes campaign), I think there are only two possible reasons:

1) Coyotes owners don't have the money to put forward a serious campaign, which means this whole project was going to go up in flames even if this passed if they're that strapped for cash; or

I'm surprised the NHL didn't fund a more aggressive campaign, either up front or under the table.

They blackmailed $50 million out of Glendale - couldn't they have coughed up at least a couple of million to the drive to keep Tempe alive?

 

[Tawnos]

I'm surprised the NHL didn't fund a more aggressive campaign, either up front or under the table.

They blackmailed $50 million out of Glendale - couldn't they have coughed up at least a couple of million to the drive to keep Tempe alive?

@TheLegend have you heard anything from your local people on whether that $250k in campaign money spent is accurate or not? I've seen that number and I've seen $1.2m.

 

[Stumbledore]

I mean obvisouly, buck for buck Rogers pays quite a lot more to reach a POTENTIAL 36 millions viewership compared to what ESPN pays to reach a POTENTIAL 10 times more viewership.

Now there was a real hero...

 

[patnyrnyg]

Thinking about the summer the Thrashers moved to Winnipeg, the big story that the deal was effectively done came out in the Globe and Mail on May 19th, and by May 31 The deal was officially announced. At the time of the G&M article, both the NHL and the team refuted the story, but did not make any strong statements like "The Thrashers will be playing here next year."

In this case, I think the NHL could have given a more uncertain answer like "we are still evaluating but have no further comment at this time" and they would just deal with the noise and speculation for 2 weeks. By making a strong statement, it means the NHL will be in Mullet next season.

I guess we will see what happens over the next few weeks, but it sure seems like there isn't a relocation option ready to go this spring.

Maybe they are seeing the issues in Winnipeg (supposedly) and want to avoid a quick sale/relocation? Parties might be in agreement that the team needs to move, but wants to take a little more time to figure out the best option? Maybe KC can done quickly, but they do not want to rush into a deal that could also wind up as a disaster?

 

[Lt Frank Drebin]

The Coyotes need to figure something out by December or they’ll have to relocate. The owners won’t like the idea of the team playing in a 5,000 seat arena with no plan for a new building. I think they’ve burned too many bridges in Glendale to go back there. And there’s a reason they left in the first place. The arena is too far away from where most of the fanbase lives. If ishbia is willing to let them play in the suns arena that would help but it wouldn’t be a permanent solution. And why would ishbia allow them to play at his arena if he knows they will build a competing venue in a few years? The Phoenix metro really doesn’t need three arenas competing for events. I feel bad for Coyotes fans, the team would be successful there in a downtown arena that was built for hockey. But I don’t think they’re going to get that arena.

 

[Shwan]

The big problem with tribal land to me, besides the ownership of the arena itself, would be how would you generate enough revenue to sustain yourself on tribal land? Even if you have a very favorable lease, the arena itself almost certainly won't enough revenue to keep the franchise afloat. The tribe would likely keep a significant chunk of any gaming or sales made on any casino or development attached to an arena as well, so not sure that would leave Meruelo enough to survive.

An interesting quirk here is that last year the AZ Supreme Court ruled that non tribal owned buildings on tribal land are still subject to state taxes.

I really don't see the economics of it panning out for Meruelo and it'll probably take years to hash it all out.

 

[patnyrnyg]

The Coyotes need to figure something out by December or they’ll have to relocate. The owners won’t allow them to play in a 5,000 seat arena with no plan for a new building. I think they’ve burned too many bridges in Glendale to go back there. And there’s a reason they left in the first place. The arena is too far away from where most of the fanbase lives. If ishbia is willing to let them play in the suns arena that would help but it wouldn’t be a permanent solution. And why would ishbia allow them to play at his arena if he knows they will build a competing venue in a few years? The Phoenix metro really doesn’t need three arenas competing for events. I feel bad for Coyotes fans, the team would be successful there in a downtown arena that was built for hockey. But I don’t think they’re going to get that arena.

I know the old saying is that Bettman works for the owners, but they listen to him and do what he suggests. They believe he knows what is best. While I agree with you about not staying in Mullett for much longer, how can the other 31 owners FORCE a move?

 

[JimAnchower]

Maybe they are seeing the issues in Winnipeg (supposedly) and want to avoid a quick sale/relocation? Parties might be in agreement that the team needs to move, but wants to take a little more time to figure out the best option? Maybe KC can done quickly, but they do not want to rush into a deal that could also wind up as a disaster?

Meruelo still controls it. If he thinks he can make it work and is willing to lose money while trying to figure that out, he will. Some of the other owners may complain about it, but they will have difficulty kicking him out. If they try to, he may sue them and tie them up in court for several years. Just look at how the NFL is getting rid of Snyder. Unless and until he says he wants to sell and there is no one interested locally, then the league can call SLC, KC, Houston, QC, etc.

 

[TheLegend]

@TheLegend have you heard anything from your local people on whether that $250k in campaign money spent is accurate or not? I've seen that number and I've seen $1.2m.

No. PAC’s are only required to make periodic financial reports and the reporting system can be sketchy.

But for sure Tempe1st had more money to spend than they’ve shown to date.

 

[TheLegend]

The lease gave the Coyotes all the revenues generated on game day. The Coyotes paid $500K per season in rent. So they would have generated $250Kish from the having the Coyotes in 2022.

Coyotes paid more than just rent.

There was a post a while back that was a itemized statement from the arena manager showing various charges for practices and such that the team owed on.

Much of it staffing and ice time charges for practices and such. The rent was only a base charge.

 

[aqib]

Coyotes paid more than just rent.

There was a post a while back that was a itemized statement from the arena manager showing various charges for practices and such that the team owed on.

Much of it staffing and ice time charges for practices and such. The rent was only a base charge.

So that is more along the lines of covering expenses rather than revenue though. In any case its ASM's call now not Glendale's.

 

[TheLegend]

So that is more along the lines of covering expenses rather than revenue though. In any case its ASM's call now not Glendale's.

Yet.... covering the expenses means it doesn't eat into the profits.

And Glendale still has ~$130 million in bonds owed on that arena (my estimate, it could be lower). That you can't ignore.

 

[Skidooboy]

member when I was repeatedly told this was a done deal?

I remember when I was told that.


there is no market in AZ. even now the owner wants a Casino and a sportsbook. the Hockey team was a means to an end.....wanna bet he's gonna sell by the end of next year?



there is no market, no desire, no need for an NHL team in Phoenix. the fans can't be f***ed to drive half an hour of AZ freeway to get to a game? they ain't fans.


move the team.

 

[Tawnos]

member when I was repeatedly told this was a done deal?

I remember when I was told that.

No you don't. At least not in here or by any of the knowledgeable active posters in here. There was a range of "I think it'll pass" and "I think it'll fail," but no one was confident enough to guarantee either of those... and most of us around here were saying we had no idea what's going to happen with the referendum.

 

[Ernie]

Please quit with the Glendale talk. The real problem there was simple: There wasn't enough money available in the arena and the hockey market for both the team and the city to be happy. That's it. Easy to describe. There is no going back, because the same situation holds true. Glendale wanted 15 years or whatever, but on their terms. Meruelo knew those terms wouldn't work.

It could have worked. It has worked for the Florida Panthers in Sunrise in a very similar situation. But Bettman was pissed that Glendale Council refused to spend $15m every year subsidizing the team. This team will leave Arizona because of Bettman's arrogance and the fans' naivety.

 

[1CasualFan]

Ok dude. If you've been following along you'll know what I'm saying is correct. But you've had a tough few days so I'm guessing you're pretending you don't know to try to argue some obscure point. Not taking the bait.

What you're saying is kind of incoherent. You pointed to a worthless AM News Radio blog post that vaguely referenced one side of the ledger. The concept of revenue and expense is not obscure.

It's essentially impossible to make a message board post about the how the arena impacts the city of Glendale budget because there were like a dozen versions of the lease since Moyes through this thing into bankruptcy back in the day bringing us all together on this forum to begin with.

Throughout that wild ride, there have been prosperous and less prosperous times for both the franchise and the city. However, to pull all of that into a tidy little summary, Glendale decided they wanted to get off the Coyote rollercoaster so they RFP'd a management agreement that enabled them to get closer to a fixed number in the budget for the arena. It's still a bright red number, my friend.

 

[TheLegend]

No you don't. At least not in here or by any of the knowledgeable active posters in here. There was a range of "I think it'll pass" and "I think it'll fail," but no one was confident enough to guarantee either of those... and most of us around here were saying we had no idea what's going to happen with the referendum.

You have to excuse some people who have been waiting since 2009 to say "SEE!?!?!? I TOLD YOU DESERT HOCKEY DOESN'T WORK!!".

Even though Vegas has torched that concept, and they still may not be right.

 

[Isles72]

Desert Diamond Arena, former Coyotes home, had record revenue year

Desert Diamond Arena, the former Glendale home of the Arizona Coyotes, said it had a record-breaking revenue year in 2022.

ktar.com

Desert Diamond Arena, renamed from Gila River Arena in August, hosted over 50 live events in the venue’s 19th year.

So they made record revenue hosting just 50 events in 2022 ?