The Glendale City Council seems like it “decides the fate of the Phoenix Coyotes” every few months, but Tuesday night’s special meeting could be the endgame of this saga:
The council is expected to decide whether to award a 15-year, $225 million lease for Jobing.com Arena to Renaissance Sports & Entertainment, which is the latest NHL-backed suitor for the woebegone franchise.
What the NHL and “IceArizona” want from the city, via AZCentral.com:
They want taxpayers to continue to cover the cost of debt service on the arena, which will be $8.4 million in fiscal 2014, and fund capital repairs for $500,000, plus pay hockey executives $15 million annually to manage the building. Before the bankruptcy, the team managed the arena at no cost.
The council has two options. The hockey option is to pay the team $15 million a year for 15 years with a promise of partial reimbursements to keep the Coyotes and something close to the original vision. The proposal would keep the team in Glendale for at least five years, allowing the new ownership group to establish hockey as a viable sport in the desert. The team also would create a steady flow of foot traffic for Westgate.
In the IceArizona scenario, the city’s $8.4 million repayment on construction debt, $500,000 in repairs and the management fee would come to $23.9 million next year. It would be offset by projected tax collections from hockey and other business at the arena and Westgate totaling $4.3 million, plus projected reimbursements by the team of $6.7 million. The bottom line for the city would be a deficit of $12.9 million in the coming fiscal year.
The other option … well, let’s just say that it would make either Seattle or Quebec City happy.
In the hours leading up to this critical vote, Renaissance Sports & Entertainment revealed a potential game-changer in negotiations: a partnership with Global Spectrum “to ensure the financial and promotional success” of the team’s management proposal with the city.
This is as significant an addition as the potential Coyotes owners could make at this late hour.
Global Spectrum, which operates University of Phoenix Stadium where the Cardinals play, is one of the premiere facility management groups in the world, right there in the conversation with AEG. It’s a subsidiary of Comcast-Spectacor, which the NHL has a slight relationship with as you well know.
“Combining Global Spectrum's management of the stadium next door with the efforts at the arena creates unique operating efficiencies that will be financially beneficial to both venues. With opportunities to combine our efforts, we can maximize opportunities for our teams, our customers and guests while significantly reducing expenses.
“At the University of Phoenix Stadium, the Arizona Cardinals and the Fiesta Bowl are the anchor tenants. We have been extremely successful attracting events such as international sporting events, trade shows, concerts, and large-size events to the stadium's schedule, making that venue one of the most heavily booked and successful stadiums in the world. By booking around the Coyotes schedule at Jobing.com Arena, we are certain we will see similar success."
From RSE’s Anthony LeBlanc on the deal with Global Spectrum:
“As owners of an NHL franchise and operators of the arena in which they play, we are confident that they will do amazing things for us in Glendale. It’s difficult to imagine a better partner than Global Spectrum."
There was some puzzlement when Global didn’t make a “non-hockey” bid for the arena management rights in June, which had been anticipated.
Why does this matter for the Coyotes’ future? Craig Morgan of Fox Sports Arizona believes Global Spectrum can push events from University of Phoenix Stadium to Jobing.com Arena, and attract more events overall while also maximizing revenues from Coyotes games.
So this is good news as far as bolstering confidence in the buyer’s bid.
Now, if only the two sides can suss out the fact that both the buyers and the city want a five-year out clause …
This saga stretches back to May 2009, when owner Jerry Moyes placed the Coyotes into bankruptcy, allowing Research In Motion co-founder Jim Balsillie to purchase the team for $212.5 million and get around the approval of the NHL to make the sale.
A court battle raged through the summer and finally saw Balsillie drop out of the bidding for the team in September after the court rejected both his bid and that of the NHL to own the team. Two months later, the NHL purchased the Coyotes for $140 million at auction.
Then came a parade of potential buyers. Ice Edge Holdings, an investor group that sought to play some Coyotes games in Canada, couldn't close a deal. (Members of Ice Edge are a part of the current bidding group.) Matthew Hulsizer, a Chicago-based businessman, nearly had a deal but local politics in Glendale forced him to pull his bid. The NHL had Jerry Reinsdorf in the mix at several junctures, before former San Jose Sharks COO Greg Jamison stepped to the plate but couldn't get the proper financial backing for his bid.
Read details of the current proposal on AZCentral.com. Gary Bettman, Bill Daly and other principles will be in attendance in Glendale this evening.
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