Coyotes to Stay in the Desert?

Oct18

Coyotes to Stay in the Desert?

by Matt Hamilton on October 18, 2010 at 8:08 AM

Posted In: Bankruptcy, Law, NHL, Non-Labor Contracts, Sports

(AP Photo/The Arizona Republic, David Kadlubowski)

Phoenix Coyotes fans, the end of uncertainty may be near! After a recent development, the Coyotes ownership saga finally seems poised to come to an end. An end which would keep the hockey franchise in the Valley permanently.

The city of Glendale announced on Friday that it has reached an agreement in principle with Chicago investor Matthew Hulsizer on a new lease for the Coyotes to continue playing at Jobing.com Arena. With that agreement in place, Hulsizer will now shift his attention toward formally purchasing the team from its current owner, the National Hockey League.

Much unlike the prior story line of the Coyotes ownership struggle, Hulsizer’s purchase of the team from the NHL seems certain. Well, almost certain.

For example, all of the involved parties are eager to reach an agreement. Bill Daly, the NHL’s Deputy Commissioner, recently released a statement illustrating the NHL’s intention to “[work] closely with the Hulsizer group and [to move] quickly toward[s] the conclusion of [the] process.” Additionally, both Glendale and Hulsizer have deposited $25 million as a demonstration of their commitment to the transaction.

But, as to be expected, the completion of the sale hinges upon the price. ESPN recently reported that Hulsizer hopes to close the deal at the NHL’s asking price. An asking price that is speculated to be between $165 million and $170 million, which would cover all of the NHL’s incurred losses since obtaining the team last year.

However, a separate report claims that Hulsizer is only willing to pay $140 million, and thus he will rely on Glendale to cough up the difference. Would Glendale be willing to do so? Their recent statement seems to suggest that they would, as they have already foreshadowed the need for any completed transaction to obtain “formal approval by the NHL Board of Governors.”

The NHL has set a deadline of December 31st to find a local buyer before exploring relocation. Let’s hope Hulsizer is that buyer.

Otherwise, the team may slip back to a certain Canadian city desperately looking for a “fish to fry.”

└ Tags: Arizona, Bill Daly, Board of Governors, December 31st, ESPN, Glendale, Hockey, Jobing.com Arena, Lease Agreement, Matthew Hulsizer, National Hockey League, Sale, The Phoenix Coyotes, Winnipeg

mwadswor

As a Phoenix area resident and sports fan, I am thrilled that the Coyotes might stay here. However, I have to wonder how much more the taxpayers in Glendale are going to be willing to tolerate. Glendale has already thrown obscene amounts of money after the Coyotes and now they may be expected to subsidize the sale of the team to a new owner so the NHL won’t lose money on the deal? I understand that the city is expecting a return on its investment in the form of increased development, but after the amounts of money that have been spent subsidizing the Coyotes just trying to keep them afloat because people aren’t coming out to the arena (and therefore also not encouraging development by increasing traffic in the area as much as expected), I have to wonder how the math can possibly work out for Glendale to get any sort of reasonable return on its investment in the Coyotes.

If the city of Glendale does end up subsidizing this deal, at the very least they need to condition that subsidization on a very, very long lease with prohibitive penalties for breaking the lease, so the new owner doesn’t just take the subsidization and then either run in a few years or hold the city hostage for even more financial incentives for keeping the team here.
mjhamilt

I agree. The longer the lease duration, the more likely it will be that Glendale will eventually turn a profit. However, being that the franchise hasn’t had a profitable season since relocating to the Valley in 1996, the overall outlook remains grim for Glendale.

Hopefully a big-time-investor like Hulsizer can change that outlook.
http://www.tsn.ca Canadian_dude

This is the problem that is created when you put a sports team in a location that makes abosultely no sense what-so-ever. The problem is amplified due to the NHL’s choice in owners for the above mentioned club. Deep pockets is not the only requirement for running a pro hockey team. Look up True North Sports and Entertainment. Now there’s a company with a solid financial backer BUT ALSO years of experience running a pro-team. It helps that they also OWN a 6 year old arena. The NHL will leave PHO eventually, whether its this December, or next or whenever. They will leave Glendale in the dust, mark my words. I truly feel sorry for the Yotes fans that are out there, regardless of how few you number, I felt the pain of losing a team you care about. The NHL would be wise to right the wrongs of 1995/96 and bring back teams in WPG and QUE, not just for the sake of the die-hard fans and there cities, but for the good of the entire NHL.
mjhamilt

The location does makes sense. The Coyotes play fifteen minutes away from the fifth most populous city in the United States. They are surrounded by a market of nearly two million people. The problem isn’t in the geographical location, it’s securing enough interest in the franchise to make it profitable.

As for bringing a team back to Canada, I have no doubt that eventually a NHL franchise will call the MTS Center home, but I wouldn’t bet on it being the Coyotes. Gary Bettman isn’t going to embarrass himself like that. I would bet on Carolina or Tampa Bay instead.

If that does happen, will Winnipeg be able to sustain an NHL franchise? It’s not as if things were going well when the Jets left for Phoenix in 1996. The Jets’ ownership was experiencing great financial trouble as a result of increasing costs and salaries. In the same small, oversaturated market, why wouldn’t that happen again?
Laura Clymer

I agree with two of the earlier posts — how much more are taxpayers willing to shell out for professional sports franchises just to keep them in town? Ownership holds everyone hostage and yet they are more than willing to foot payrolls that are out of this world. Isn’t this just the cost of doing business? Sure, we give companies tax breaks for relocating here, but, for example, I suspect Chandler’s return on investment to lure Intel is much greater that what Glendale shelled out for the Yotes.
Seems like we can’t find the money for schools, but there’s no end to tax breaks or the building of new stadiums or other handouts for professional sports. Doesn’t add up to me.
And now for a strictly irrational rant: If there’s one thing that should stay north of the northern border … it’s hockey! As a native Arizonan, I just don’t get it — hockey in the desert. Folks, we hit 105 the first weekend in October. This ain’t a hockey environment
http://asusportslaw.wordpress.com Sam Renaut

I think you hit it right on the head – “Seems like we can’t find the money for schools, but there’s no end to tax breaks or the building of new stadiums or other handouts for professional sports. Doesn’t add up to me.”

The problem is, it DOES add up. Schools don’t make money, so there is really no justification for giving them tax breaks. They are a total drain on the state finances. Stadiums make a ton of money for everyone involved in the planning, building, operating, maintaining, etc., from the janitorial staff all the way up the ladder to the owners.
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