Thursday, April 1, 2010

Glendale's Got (Skin In The) Game

The ball, or shall we say the puck, is in Glendale’s end of the ice. And time is running out.

From day one, we have contended both here and on our frequent calls to sports talk radio that sooner or later, Glendale will have to come forward with lease accommodations or the Coyotes will leave town. Now it’s not only playoff talk that’s heating up. The negotiations to sell the Coyotes have reached a critical stage. Expect news, perhaps big news, in the next few days.

There is a lot of pressure on the Glendale City Council. The Coyotes have become the hot team in town in recent weeks, with their tremendous regular season culminating in a playoff spot. What’s more, as long predicted, the city is responding to the team. Crowds are building. It seems like Coyotes players are everywhere on radio and television. Even chronically disinterested sportscasters like Dave Byrnes and Bob Kemp are starting to pay attention.

The Glendale City Council heard proposals from both groups on Tuesday. No action was taken. There’s been talk that the City is stalling to let Jerry Reinsdorf’s group further their negotiations but little solid proof that is the case. Reinsdorf’s insistence on some kind of an out clause could be a deal breaker for the city.

And while the Coyotes future is the most time sensitive issue, there are a lot of moving parts in Glendale right now. And most of them are moving in the wrong direction. The city continues to fight the Tohono O'odham Indian Nation over their plans to build a casino a mile north of Westgate. Construction has not yet started on the USA basketball development center. And the city’s Main Street development, which is intended to pay for much of the City’s Camelback Ranch debt, has been delayed by financing issues.

Now it doesn’t take a genius to figure out that a) the fate of the Coyotes, b) the construction of the basketball center and c) the lack of the Main Street development to pay for Camelback Ranch all have the potential to be revenue drains on the city. Big revenue drains. At a time where cities are scrambling to keep police and firemen on the street, it’s a litany of issues that Glendale doesn’t need.

The financial issues of car wash entrepreneur Danny Hendon haven’t helped either. Hendon had signed on to the Ice Edge group as an investor and was one of the lead players in financing the Main Street development. He and his money are occupied right now reorganizing his core businesses in bankruptcy court.

Of all of Glendale’s issues, only one, the proposed Tohono O'odham casino, is a potential revenue generator.

I believe the ultimate solution to all of these problems may in some way include revenue from the proposed Indian casino in Glendale. That's how Pittsburgh solved their arena problem. I could never understand why Glendale would not embrace a project that would create jobs and add excitement to the 101 corridor but I do know that money is the mother’s milk of politics. A revenue stream from a proposed casino could be the key to getting all of these disparate projects off the ground. I don’t know what form that may take but I do know the Tribe would certainly like to get building and be good local citizens. This may be their ticket to play in Glendale.

The relative quiet about the casino issue plus the clandestine nature of the Coyote negotiations suggest to me something big is going on. I wouldn’t be surprised if the NHL was briefed about negotiations when Gary Bettman and Bill Daly met with Glendale City officials two weeks ago. Glendale knows they must act to keep the team. They may in fact have already settled on a backup plan (i.e. the favored Coyotes offer) if a bigger deal cannot be struck. Remember, we are talking about politicians. They know that voters are in a firing mood right now. They want to settle this issue quickly and with the greatest possible benefit to Glendale.

The NHL has a lot of clout to wield. The “news” that the NHL can void the Glendale lease at the end of June is not a surprise to anyone who read the court filings last year. The league can’t (and won’t) carry the team forever. But here’s another one you may not have heard – the concert business at Arena is controlled by AEG, a major player in the NHL. AEG owns the Los Angeles Kings and Staples Center. Healthy concert revenue is the one bright spot in the arena’s business plan. Pull the plug on that relationship and Glendale has a building on their hands destined to become a very large warehouse. AEG has a nice fallback in the US Air Center if they ever decided to move their concert business.

Perhaps the most interesting morsel over the last few days came with Ice Edge hiring former Arizona Attorney General Grant Woods to finalize a new lease agreement with the city of Glendale. Woods is a skilled and experienced politician. He’s also highly respected around town. His presence on the Ice Edge team may neutralize any advantage that lobbyist John Kaites provided to the Reinsdorf group. Remember one thing about Ice Edge -- they are very serious.

And remember what we have previously told you. An NHL team executive told me that Ice Edge has the money to do the deal. “Plenty of money” was the exact quote. And from what we’ve read, they apparently have financing lined up from international powerhouse Deutsch Bank to finance the ongoing operation.

Winnipeg? I love the enthusiasm of hockey fans and I truly regret their loss but Winnipeg isn’t the NHL’s first choice to gain a new team. People seem to forget that the Jets were not particularly profitable either. Exactly three years out of 17 in the NHL. They left Winnipeg for a reason. The NHL has serious concerns about the ability of Winnipeg and Quebec City to return to the NHL because both cities do not have enough industry to produce the corporate support and sponsorships necessary for profitability. A second Toronto area team is far more likely to be added.

So as the off-ice issues continue to play out, we finally get to experience a playoff hockey game at the Job. That will be an extraordinary sight. We do know that the upper levels of the arena are essentially sold out for the first round of the playoffs and total ticket sales are around 12,000 per game. Once the dates are finalized and an opponent is known, I expect the demand for tickets will explode. We’ll be back with more insight on the playoffs once we know who the Coyotes will be playing.

And we’ll be watching the off-ice battles with the same tense anticipation.


  1. Arguing whether or not Winnipeg is a viable market is trivial. If Bettman and Daly are in talks with True North Sports and Entertainment to relocate a team there (which they have admitted they are, most likely the Coyotes), then that's all that really matters.

  2. "Having talked" with True North (Bill Daly's words, not mine) is much different than being "in talks" with True North. True North wants the second Toronto area team. You need to read Daly's quotes more closely.