The Coyotes Will Stay In Arizona—For Now
The debate was long, contentious, mind-numbingly boring, and featured the bizarre sight of hockey fans cheering Gary Bettman, but the outcome is simple enough to understand. By a 4-3 vote, the Glendale City Council approved a lease deal that will keep the Coyotes in Arizona for at least five more years.
By the slimmest of margins, the council signed off on an agreement that will see the city will pay Renaissance Sports & Entertainment $15 million a year to operate the Jobing.com arena, a deal without which RSE would refuse to purchase the team. The NHL's Board of Governors still has to approve the sale, but that's considered a formality. This was to be the last shot—if Glendale and RSE couldn't work out a deal, the Coyotes would have been in Seattle or Quebec to start the 2013 season.
"Everybody who's followed this saga has said 'decide something or just shoot us,'" Coyotes general manager Don Maloney said. "Fortunately, we got the result we needed to stay in a great place and a great hockey town."
Coyotes fans turned out in force at the meeting, wearing jerseys and flashing thumbs-ups in lieu of applause. As part of the new deal, the team will be renamed the Arizona Coyotes, which is only fair because Phoenix hasn't done a damn thing. Glendale has already sunk tens of millions of dollars into keeping this team, and with this agreement, continues to assume all the risk.
The arena lease is for $225 million over 15 years, but RSE has an out clause: if the team loses $50 million over five years, they can back out of the deal. The city had pushed for its own out clause, but the league made it known that it would approve no sale that gave Glendale the opportunity to back out.
"The city should have a similar out if they lose $50 million, which would be $10 million per year on average or four million above the city's budgeted loss [of $6 million]. What if the revenue projections don't match the budget, and what if the team doesn't leave? Doesn't use it's out? Then those losses continue for the 15 year term of the agreement."
The price is steep, but hockey will be played in Arizona through 2018, and for the team's fans, that's all that matters. This ends a four-year saga in which the league desperately and repeatedly tried to unload the team after rescuing it from bankrupt former owner Jerry Moyes, but it doesn't address the issue that's plagued the franchise since the beginning: how can the Coyotes make money? Can the Coyotes make money?
See you back here in five years?
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