Arizona Coyotes COG Seeking Arena Management Options

Just when the Arizona Coyotes ownership group thought the drama with the city of Glendale had ceased, the city comes up with more

The city of Glendale is at it again…

Now they are seeking a new manager for Gila River Arena, and the Arizona Coyotes ownership group is mystified at their motive.

The Glendale City Council on September 8th voted to employ Beacon Sports Capital Partners LLC as a consultant to seek bidders to manage the arena, with the manager taking over as early as July 2016. IceArizona, the Coyotes’ ownership group, has overseen the arena the past two years.

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The newest move comes after the Arizona Coyotes and Glendale reached a settlement six weeks ago in a highly fought legal dispute that ended the city’s 15-year, $225 million deal with the team, and replaced it with a two-year agreement for the Coyotes to continue to play at Gila River arena in Glendale.

Since the deal for the team to play in the arena runs through 2017, the settlement allows the city to select a new manager for the building prior to that time-line. The City and team owners had publicly stated they would attempt to move forward with hopes of a longer-term agreement when they completed the deal. Now, this may change that concept completely.

City of Glendale Vice Mayor Ian Hugh said on September 9th that the city hopes to select an arena manager as early as January, and IceArizona will be considered if it responds to the city’s request for proposals.

Arizona Coyotes President Anthony LeBlanc said he had expected to begin negotiating with the city on an extension of the two-year agreement, but the city’s sudden move on the request for proposals makes that a moot point.

“The fact that (Glendale) jumped forward … changes the dynamics,” LeBlanc said.

He would not say whether IceArizona will bid on managing the arena, but did reiterate that “we’re committed to (staying) in Arizona.”

Friction between the Coyotes and the City Council over management of the arena follows months of turmoil earlier this year over a long-delayed audit of the Coyotes that also was released Tuesday.

The dispute was irritated when the council voted in June to end the 15-year agreement with the team. A settlement was reached in late July.

Hugh said the city does not want to wait until the last minute to evaluate bidders for the arena management.

"“I think the council wants to have the best arena operator we can have and we want the arena to be used to the fullest extent,” he said."

Hugh and other city officials have complained that IceArizona did not book enough non-hockey events in the arena. Glendale reported an $8.47 million loss on its $15 million arena-management investment for the 2014-15 fiscal year. The competition for concert dates has been rising since the arena begin operations in 1996.

IceArizona, which hired Spectra to manage the concert business, booked 14 shows for the fiscal year ending June 30 and seven the previous year.

Concert-industry insiders have said it will be difficult to impossible to book shows and keep the arena viable if Glendale were to lose the Arizona Coyotes and more than 40 nights of NHL hockey in the building.

Councilwoman Lauren Tolmachoff said she hopes the city can negotiate a long-term agreement to keep the Coyotes in Glendale but added that the arena-management deal is a separate issue.

“It’s about time the city got this right and hired a professional to figure out how (the arena) can be successful for everyone,” she said.

Glendale is bringing Beacon Sports back as a consultant to help with the arena-management hiring process. Beacon is an investment bank and financial-advisory firm based in Needham, Mass.

The city hired Beacon in 2013 to oversee the proposals for managing what was then called Jobing.com Arena, but the Coyotes’ ownership group struck its own deal with Glendale.

The council on Tuesday approved an initial $25,000 retainer for Beacon. The company’s staff will be paid $400 per hour.

Under Glendale’s new agreement, IceArizona is the arena manager through at least June 30, and the city must give 90 days’ notice if it plans to replace IceArizona. The city would have to notify IceArizona of the change by the end of March if it wanted a new manager to take over July 1. If that happens the tedious relationship with the city may push the team to seek a new home, after the two-year lease expires.

The city’s audit of the Coyotes 2013-14 season was released on September 8th, about an hour before the council voted 7-0 to hire Beacon. The audit found:

IceArizona shorted the city about $76,400 in naming-rights revenue and nearly $40,000 in ticket-surcharge revenue.
Glendale’s records were unclear about whether IceArizona paid the city enough for its’ share of ticket revenue from the state high-school basketball tournament in 2014.

IceArizona refused to provide financial statements to verify its operational loss. The team reported in March that it lost $34.5 million in the 2013-14 season.

Next: Arizona Coyotes: Options After Two-Year Arena Lease Ends

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