The Arizona Coyotes are no stranger to financial turmoil. Back when the team was located in Winnipeg, the franchise ran into trouble when the NHL required teams to pay players in American dollars. Between the depreciation of the Canadian dollar, the rising operating costs throughout the league, and the rapidly increasing player salaries throughout the early nineties, the team was eventually forced to relocate.
Phoenix ended up being no better financially for the team, though. Low attendance and an inadequate arena made it hard for the team to remain afloat financially, and was eventually bought out by the NHL in 2009 when the team’s owner, Jerry Moyes, filed for bankruptcy.
The number of financial woes the team possessed resulted in problems for team’s new arena from day one. Built in 2003 in order to better accommodate fans, the arena- originally named Glendale Arena, located twelve miles north of downtown Phoenix- cost the city far more than anticipated. Home to the now-defunct Arizona Sting of the National Lacrosse League and the Phoenix Coyotes, who didn’t see a playoff run in the new arena until 2009, the city suffered immense losses on the structure.
Although it seems quite clear that Gary Bettman wants to keep the Coyotes in Arizona, though, another financial tiff has come to light- this one harder to remedy than the others.
Back in 2012, the Glendale City Council and the Arizona- then Phoenix- Coyotes brokered a deal that would pay the Coyotes $320 million dollars to lease the arena, rather than the other way around. In exchange for the funds to operate the arena during games and other NHL events, the Coyotes were expected to provide the city with a certain return from parking and ticket revenue. According to the AZ Central, though, things didn’t work out quite as planned. “As part of the deal, the city paid IceArizona $15 million in the previous fiscal year to manage Jobing.com Arena and had expected to get back $6.8 million in parking and ticket revenue. The city received about $4.4 million,” wrote Peter Corbett of The Republic.
This, understandably, hasn’t gone over well with the city’s mayor, Jerry Weiers. Weiers, who had voted against the lease agreement back in 2012, isn’t fond of the lack of power the lease gives the city- due to NHL regulations, the agreement doesn’t include an eviction clause. The clause, which Weiers had been in strong support of, would have given the city power to evict the Coyotes at any time the city believed was fit; this went against NHL regulation because it would give Glendale the potential to render the team homeless mid-season.
This past week, though, Weeirs has insisted that deal might not have been drawn up in quite the over-the-table manner one would want. By that, I mean that the deal might not be… well… legal.
Arizona law includes an open-doors meeting policy that requires any meetings between council members and other parties to be announced twenty-four hours ahead of time, in the interest of including all parties and members involved. A meeting, the law dictates, is defined as any “gathering, in person or through technological devices, of a quorum of members of a public body at which they discuss, propose or take legal action, including any deliberations by a quorum with respect to such action”.
The team- and certain Glendale City Council members who are in strong support of keeping the team in Arizona- has already been under scrutiny in the past year for holding meetings that never included more than three people from the council. These meetings, which seemed to directly circumvent the law, were highly criticized by Weiers and his supporters.
Now, he’s claiming that just days before the lease was voted upon by the team and the council, a “closed-doors meeting” was held by three council members with the team’s attorney. He then claimed that after the meeting, the council members who had been there sent an email to a fourth member, who had potentially been on the fence about the deal. He was informed of what had gone on in the meeting, which- based on the law, which includes online correspondence- would include him in the gathering, making him the fourth member of a meeting that had not been announced to Mayor Weiers or the other two council members. In other words, the meeting had been withheld from the three members of Glendale’s City Council who were against the lease agreement.
Should Weier’s allegations be held in court, the lease would be rendered void. The city council would then have thirty days to restructure the agreement as needed and re-vote; should the vote fall out of favor for the Coyotes, the team would be left without an arena.
Arizona has seen an increase in hockey participation as of late- in the past year, the state was ranked third in the nation for increase in registered ice hockey players, and ranked first in the nation out of states that already possess an NHL franchise. This increase was almost twenty percent, which only seems high until you place it alongside the eighty-five percent growth in game attendance the Coyotes themselves saw in the same time period.
Despite these growing numbers, though, the team still lags behind almost every other NHL franchise for game attendance percentage. The team comes out ahead of only one other NHL franchise in this area, the Florida Panthers- and seemingly only because of a smaller arena than the Atlantic Division franchise. In terms of actual attendance numbers, the team comes in dead last.
What does this mean for the Desert Dogs? While the immense growth the team has seen in fan numbers looks good, the actual numbers look quite bad. Three of the seven city council members voted against the current lease- should the agreement be put back on the table, it seems much less likely that the team will receive the kind of support they currently have. The city doesn’t seem fond of the franchise, and this could hurt the team immensely. There doesn’t seem to be anywhere else for the ‘Yotes to head.
Should the deal fall through, the team would have a number of options. They could attempt to restructure the agreement with the City, but this would most likely come at a pretty huge expense for the team. For a team that is already financially struggling, this could mean the end.
In this instance, it seems almost inevitable that the team be relocated. Cities like Houston, Hartford, and Seattle have all been showing growing interest in hosting a franchise, and that might be the team’s only option. It’s unlikely that the league permits the team to move to Quebec, as a number of interested buyers had proposed, due to the turmoil in the province and the difficulty this would cause in terms of conference alignments.
Although it appears that a number of attorneys have suggested that nothing untoward happened, there are a number of attorneys who state otherwise. I’ve included a copy of the email Mayor Weiers is using as his leverage in the situation, so as to give readers a chance to come to a conclusion themselves. What do you think? Is the team safe in the desert, or will the league see the second relocation in under five years of a southern team?