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Is winning enough to keep Coyotes in Phoenix?

Michael Traikos, National Post, May 7, 2012

The Phoenix Coyotes have finally managed to fill their arena in Glendale, thanks to their post-season success.

They say winning cures all. We’ll see about that.

As early as Tuesday, council members in the city of Glendale, Ariz., could vote on a proposal that would grant upwards of US$17-million to the potential new owners of the Phoenix Coyotes in hopes of keeping the team in the desert. But if Greg Jamison and his ownership group have any say in the matter, they will wait until after NHL commissioner Gary Bettman hands the Stanley Cup to captain Shane Doan before votes are cast.

OK, so we might be getting ahead of ourselves.

The Coyotes, who have a 3-1 series lead against the Nashville Predators, are only in the second round of the playoffs. But in a strange situation, where on-ice success could possibly affect off-ice developments, the players might end up controlling where they play next year.

With every win the Coyotes pick up, the argument for staying in Phoenix becomes stronger. It is easy to say no to a team that does not qualify for the playoffs or have any type of success. But can council members really turn the lights out on an arena that is selling out every playoff game?

For NHL commissioner Gary Bettman, this is the big test. He has said in that the only thing standing in the way of success for a non-traditional hockey market was a failure to deliver a winning product. That was the problem in Atlanta. But that no longer seems to be the problem in Phoenix.

The Coyotes, who have qualified for the playoffs in each of the last three seasons, won their first playoff round in franchise history this year. They are one win away from reaching the Western Conference final, five wins from playing in the Stanley Cup final and nine wins away from being crowned champions.

Slowly, roots are being established. The arena, which had fittingly felt like a desert during the regular season, has been packed with fans dressed in white T-shirts and waving white towels in the post-season. It feels like hockey is finally making a footprint in the desert, just as it did in Nashville, Carolina, San Jose and other non-traditional markets.

And yet, maybe because the bleeding has gone on for so long, there is still the feeling that regardless of how this all ends, the Coyotes will inevitably be uprooted and moved to Quebec City.

Four weeks of sellouts do not erase six months of empty seats, nor do they erase years and years of losing money. According to various reports, the Coyotes have never turned a profit since relocating to Phoenix in 1996, having lost somewhere between US$25-million and US$40-million annually. The NHL, which has owned the team since 2009, is looking for US$25-million at the end of this season and next season for running the arena and franchise.

Jamison, who is the former CEO of the San Jose Sharks, seems committed to making it work in Phoenix, as long as the city of Glendale is willing to chip in. For that, he needs help from the Goldwater Institute, the Phoenix-based conservative watchdog that spoiled Matthew Hulsizer’s attempt to purchase the team a year ago and has vowed to scrutinize any city deal with the Coyotes buyer.

Perhaps more importantly, Jamison also might be looking for help from the players. So far, he has been getting it.

This is a team that has consistently been one of the lowest-spending in the league. But like the misfit roster in the baseball comedy Major League, the players have blocked out the relocation rumours and have found a way to get the job done.

Goaltender Mike Smith, who signed a US$2-million contract after being cast away from Tampa Bay, is ranked third among goaltenders in the playoffs with a .946 save percentage. Antoine Vermette, a salary dump at the trade deadline, is in the top 10 in playoff scoring.

Winning cures all. At the very least, it sways popular opinion. And if the Coyotes can continue to generate excitement in this city, perhaps finding money will not be so difficult.

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Hurdles remain in Phoenix Coyotes deal

DAVID SHOALTS, Globe and Mail, May. 07, 2012

The NHL's sale of the Phoenix Coyotes to a group led by Greg Jamison may have taken a step forward, according to two reports, but the long-awaited sale still has some hurdles to clear.

The Phoenix Business Journal reported Monday morning there is a tentative agreement between Jamison, the former president of the San Jose Sharks, and the NHL, which could be announced by league commissioner Gary Bettman before Monday night's playoff game between the Coyotes and the Nashville Predators. However, an earlier report on Fox 10 News, a Phoenix television station, was less definite. It said Bettman and Jamison were expected only to publicly discuss "a plan for a new ownership group."

Both Bettman and NHL deputy commissioner Bill Daly declined to comment.

While the no comments indicate an agreement may be announced, that is not the biggest problem in the deal. It is thought they agreed on the basic terms of the deal some time ago – the NHL wants $170-million (all currency U.S.) for the team it bought out of bankruptcy in October, 2009 – but a lease agreement with the suburban city of Glendale is needed to complete the sale. The final step will be the approval of the NHL's board of governors but that is not expected to be a problem.

The biggest threat is the looming opposition from the Goldwater Institute, a conservative watchdog group which scuttled a previous bid on the grounds that Glendale would violate Arizona's laws against excessive public subsidies to private companies. The institute is still battling the city in court over access to records related to the Coyotes sale.

Jamison was looking for about $16-million per year from the city as a management fee to operate Jobing.com Arena. Informal declarations from council members showed recently that a slim majority of four of council's seven members would vote in favour of the payment plus another $1-million annually to pay the debt required to pay the fee over a 30-year lease. That vote is not likely to come for at least a week, since the Coyotes sale is not on the agenda for Tuesday's council meeting.

That does not include outgoing Glendale Mayor Elaine Scruggs, who will not run for re-election this summer although she still has a vote in the city's 2013 budget. The mayor, whose vision of Glendale as a home for various professional sports teams led to a massive debt from building the necessary facilities, said she thinks Jamison should not receive more than $11-million as a management fee.

Over the last two NHL seasons, the city of 250,000 people committed $50-million to the NHL to subsidize the Coyotes' losses, which run to more than $30-million per year. But budget problems resulted in Glendale coming up $5-million short of its obligation this year, which is now due. Scruggs told city council they should ask the NHL for some of the $20-million back that is an escrow account controlled by the league and negotiate a payment plan.

While a majority of councillors may vote to pay Jamison what he is demanding, coming up with the money is another matter. Glendale is facing a deficit of $35-million in its 2013 budget, which has to be in place by late June.

In its ongoing budget deliberations, council is considering raising taxes, laying off as many as 51 city employees and cutting programs.

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