Coyotes pledge to play at least one more season in Glendale

The Arizona Coyotes have committed to playing at least one more season at Gila River Arena.

“We are absolutely planning to play next season at Gila River Arena and are focused on building a winning hockey team, positively contributing to our community, and achieving success in all aspects of our business,” said Ahron Cohen, the team’s chief operating officer.

The announcement comes nine months after the team and National Hockey League Commissioner Gary Bettman threatened to move the franchise unless it got a new arena. The team, however, has backed away from such demands and focused on community outreach despite a horrid start on the ice.

The one-year extension in Glendale also may quell concerns in the short

term about the team moving to Seattle or Houston — cities currently seeking an NHL team. Also, the league appears more interested in putting an expansion team in the Pacific Northwest.

The Coyotes had until Dec. 31 to notify AEG, the arena manager, whether the team planned to play elsewhere for the 2018-19 season. If the team does nothing, the lease automatically renews for one more year in Glendale.

Cohen noted the Coyotes have an “evergreen lease,” meaning it can continually renew annually with AEG.

Dale Adams, AEG’s general manager, said the Coyotes never gave him the impression that they would leave.

“I don’t know where they would go,” Adams said.

The Coyotes and Bettman in March threatened to move the franchise out of Arizona if the Legislature didn’t approve $225 million in public financing for a new arena in downtown Phoenix or the East Valley. But the Legislature never passed a funding bill for the Coyotes, and the team’s lobbyist, Jim Norton, was indicted in an alleged bribery scheme involving the state Corporation Commission.

Brent Stoddard, a Glendale spokesman, said the city had heard nothing regarding a new arena-funding bill for the 2018 Legislature.

There have been discussions on social media that the Salt River Pima-Maricopa Indian Community is interested in financially helping the Coyotes with a new arena on tribal land.

But Kim Secakuku, a spokeswoman for the tribe, called such discussions a “rumor” and said she had no information regarding an investment by the Salt River Pima-Maricopa Indian Community in the team or a new arena.

Glendale invested about $186 million in 2003 to build an arena specifically for the Coyotes. The city then provided the NHL a $50 million subsidy to keep the franchise in Glendale, after former owner Jerry Moyes filed for bankruptcy protection in 2009.

The NHL sold the team to a new ownership group, IceArizona, in 2013, and the city provided that group with a $15 million annual subsidy to manage the arena.

In 2015, the city terminated the subsidy with the team’s owners, who then began threatening to move, saying the team’s fan base was in Phoenix and the East Valley.

The city then hired AEG to manage the arena, paying that organization $5.6 million in fees, with AEG absorbing all arena losses.

Stoddard said AEG is bringing nonhockey events such as concerts and sporting events to the arena “like never before,” and AEG returned more than $1 million to the city this past fiscal year.

“The contract gives them (AEG) a lot of latitude to be world-class arena managers and to bring in as much revenue as they can,” Stoddard said.

Stoddard added that Glendale would like to see the Coyotes sign a long-term lease to stay in the West Valley. He added that city officials have heard Houston and Seattle want a NHL team, but he said the Coyotes relocating to either of those cities is “rumor mill stuff.”

The team, however, is facing serious financial challenges.

Majority owner Andrew Barroway bought out the minority owners this past summer in a highly leveraged deal in which he took on more than $200 million in debt.

Forbes, a business magazine that annually determines the worth of professional sports teams, recently valued the Coyotes at $300 million — the least valuable franchise in the 31-team NHL.

The magazine noted that the team lost at least $19 million last season, which is less than what prior owners have publicly said the team lost. And

Forbes said that the team’s debt ratio was 83 percent, meaning the franchise has very little liquidity or room to borrow money.

Before the buyout, Barroway and minority owners from Canada often had to make millions of dollars in cash calls to cover the team’s operating losses.

Among his first duties as sole owner, Barroway infuriated fans by cutting longtime captain Shane Doan and parting ways with Coach Dave Tippett.

Things got worse on the ice as the season began.

The Coyotes nearly set a league record for futility by starting the season 010-1, and they are currently the worst team in the NHL at 7-23-5. Home attendance also is near the bottom for the league.

Barroway, meanwhile, has been frugal as the Coyotes have the league’s lowest payroll of $54.8 million, according to the National Hockey League Players’ Association.