The Glendale city council last night approved a new lease agreement with the Phoenix Coyotes that opens the way for a sale of the bankrupt franchise, promises to keep it in town long-term, and in its insane complexity reminds me why I hate writing about the Phoenix Coyotes lease. Once more, into the breach:
- Under the deal, Glendale will issue $100 million in bonds, then immediately hand over the cash to Matthew Hulsizer, a Chicago hedge fund manager. The city would also pay $97 million to the team over the next five years for the grueling task of operating the arena during concerts and other non-hockey events.
- Hulsizer will turn around and hand most of his newfound lucre to the NHL, paying $170 million for the Coyotes franchise, which has been in league hands since last year.
- Glendale will gain control of 5,500 parking spaces in lots surrounding the Coyotes arena, and will attempt to earn some of its money back by charging between $5 and $20 for parking, as well as by, insists the Arizona Republic with a straight face, “selling advertising and naming rights on the lots.”
While the lease requires Hulsizer to keep the Coyotes in Glendale for the next 23 years (and “work to rename” them the Arizona Coyotes; what, he has to lobby the Swedish Naming Bureau for approval?), he also gets an out clause that would let him terminate the lease if the city (in the Republic’s words) “failed to meet its financial obligations to the team or faced a lawsuit that invalidated part or all of the deal.” Then Hulsizer gets to keep the team and the $197 million in cash, and go wherever he likes with them.
Given that the Arizona-based Goldwater Institute is already threatening to sue to block the deal, this is a not inconsiderable risk. And, of course, Glendale is out $197 million either way. Jerry Reinsdorf is starting to look not so bad in retrospect…