Door opens for Coyotes to leave Arizona
Since Anthony LeBlanc and his Ice Arizona group rescued the Arizona Coyotes from the stewardship of the National Hockey League in 2013, there have been strong suspicions that the Canadian businessman’s true intent was to eventually whisk the team away from the desert.
At the root of the relocation theory was language in the 15-year lease that the team signed with the city of Glendale, which allowed the Coyotes to bail after five years if operating losses exceeded $50 million US. That target seems easily attainable, so to speak, given weak attendance at Gila River Arena, so much so that Glendale doesn’t trust Ice Arizona to present its books transparently. The city triggered a clause that allowed it to audit the team’s finances. That has not yet been released.
The sign of a healthy partnership: Glendale didn’t want the Coyotes to artificially inflate their losses in a bid to break the lease. And then Glendale went a head and broke the lease.
LeBlanc, in a conference call with reporters on Thursday, a day after the city voided the lease it signed less than two years ago on what amounts to a technicality, noted the irony. Some people at Glendale council didn’t trust that he wasn’t gunning for the out clause, he said. “We have an out right now.”
It is a fascinating, if bizarre, turn of events. Glendale, with a majority of councillors who were elected after the 2013 deal was signed, has decided that it either wants a better lease arrangement, or no team at all. LeBlanc insists the city must abide by the deal that was signed, and he is giving it the full legal press, pursuing three remedies in the courts, including an order to overturn council’s decision and a lawsuit.
That his first and only reaction thus far has been to protect the deal that would keep the team in Arizona, and not immediately start calling Quebec City and Seattle, suggests that LeBlanc is aware of how the NHL wants to see this resolved.
Indeed, the first response from the league was a terse statement, issued as Game 4 of the Stanley Cup final was about to get underway on Wednesday night, that it “fully expects the Coyotes to continue to play at the Gila River Arena and for the city to continue to honour its obligations to the Coyotes.”
NHL commissioner Gary Bettman has since issued various condemnations of the Glendale council.
But even as LeBlanc insisted that there are positive signs of growth in what has been a moribund hockey market, he acknowledged that the team is “at the mercy of the court.” If council’s decision to break the lease is upheld — it decided that a conflict-of-interest statute had been violated because Ice Arizona’s general counsel used to work for the city — LeBlanc said the Coyotes would “have to figure out their Plan B.”
There would only be two choices in that scenario: cut a new deal with Glendale, or giddy up. We would put our money on the latter.
This has always been where NHL hockey in Arizona seemed likely to end up: catastrophe. It has just taken longer than many expected, about 19 years since the Coyotes moved to Phoenix, and then tothesuburbofGlendale.The team wasn’t a hit in Phoenix, but it has been a Dumpster fire in Glendale.
The Coyotes get $15 million US a year from the taxpayers, and while the city gets some of that money back in shared revenues, it still expects to lose something like $8 million US annually just to keep the team around. If that sounds like an utterly baffling idea to you, even by the standards of dumb-as-rocks municipal politics, you are not wrong. The counterargument is that Glendale would be even worse off without the Coyotes, as the owners of a large, empty arena. That might even be true. According to data compiled by the Arizona Republic, Gila River Arena had total attendance for non-hockey events of about 61,000 in the last full fiscal year, and about 90,000 in the year ending June 30. That’s staggeringly low: six dates of about 10,000 tickets sold in an entire year. Apparently Glendale is not a hot ticket.
LeBlanc says that if you include ancillary revenue from sales around the arena, the city loses less with the Coyotes as a tenant than it would ifthebuildingwasempty.And he remains hopeful that, in the long-term, actual profits would be realized. He pointed to Tampa, which will host Game 5 in the Stanley Cup final on Saturday, as proof that NHL hockey can work in the southern United States. This argument would come off a little stronger were it not for the vast swaths of Amalie Arena that were populated by Blackhawks fans in games 1 and 2.
When Bettman was asked about Coyotes-related rumours on the eve of the Stanley Cup, he sighed and wondered why such concerns were even being raised. “That club is not going anywhere,” he said, just eight days ago.
Now, I wouldn’t be so sure.