Yet another guy fails to buy the Coyotes, killing Glendale subsidy deal (and maybe team)

We’ll get to last night’s Superdome Super Bowl blackout fiasco in a bit, but first, the two major stadium-related bombshells that dropped this weekend. Numero uno:

It’s been fun to joke about the long, tortured Phoenix Coyotes sale saga, and how prospective owner Greg Jamison was clearly never going to be able to buy the team because it’s cursed — so cursed that he couldn’t even find $170 million for a team that comes with $200 million in subsidies. But, seriously, eventually the Coyotes would have to be sold, right?

No, not never ever ever:

Greg Jamison confirmed last night that he was going to miss the city of Glendale’s midnight deadline to buy the Phoenix Coyotes and receive a $308 million arena deal from the municipality.

Fox Sports Arizona first reported official confirmation from Jamison that he could not close the sale. That came after confidence in the bid coming to fruition faded Wednesday and Thursday.

Jamison’s official statement included a promise that “our journey to purchase the Coyotes will continue,” but it’s hard to see where the hell else it will take him, given that he was given nine months to find the cash to buy the team — which, and this can’t be repeated enough, was going to be getting a city subsidy worth more than the entire purchase price — and all he could come up with was to ask for more time.

He’s almost certainly not going to get additional help from the city of Glendale: Four of the seven city councilmembers who voted for last year’s deal to prop up the team with massive operating subsidies have since left office, and new mayor Jerry Weiers made a point of telling the Coyotes in his acceptance speech that “Glendale is not your cash register.” It’s always possible another bidder will emerge — another one always does, though half the time it seems to be just Jerry Reinsdorf kicking the tires yet again — but at the moment it looks like the current deal has blowed up real good.

That’s probably a good thing for Glendale, which will save itself $13 million a year in operating losses on the Coyotes, and might even be able to stop laying off so many city workers. For the dwindling number of Coyotes fans, though, it’s less good news, since this pretty much confirms that there’s no subsidy deal lucrative enough to make it affordable to keep the Coyotes in Arizona, short of turning over the keys to the Phoenix mint. (Wait, the Phoenix Mint doesn’t actually mint money? Scratch that one, too, then.) There’s already speculation that the Coyotes could become the new Quebec Nordiques; Seattle is another possibility, though that likely wouldn’t happen until Chris Hansen secured an NBA franchise first, which isn’t exactly moving swiftly right now. Markham — described excellently in the Seattle Times article linked above as “Toronto’s version of Bellevue” — would have to be considered a major longshot, given that the city’s arena deal still isn’t finalized, and that the NHL would have to either sell the Coyotes for next to nothing or agree to pay off the Maple Leafs for impinging on their territory, neither of which is likely to happen anytime soon.

If this is the ending for the Coyotes, it’s not a happy one for anyone: not for Winnipeg Jets fans who saw their team trucked south and had to wait 15 years for a new one; or for Phoenix area hockey fans who’ve been put through years of uncertainty and now face the likely loss of their team; or for Glendale taxpayers, who’ve been throwing good money after bad to support the team after building it an arena that will never pay off its costs; and above all not for NHL commissioner Gary Bettman, who has vowed never to give up on his plan to make hockey bloom in the Arizona desert, but may finally be forced to acknowledge that it was a failure from the start. I’d call it the biggest ownership disaster in NHL history, but that’s a pretty high bar to clear.


13 comments on “Yet another guy fails to buy the Coyotes, killing Glendale subsidy deal (and maybe team)

  1. If this team indeed moves to a profitable market, where ever that may be, it will undoubtedly push revenues up. To go from a market making, let’s say, $20M in revenues before national TV monies and revenue sharing, to a market that can generate more like $70M in local revenues obviously pushes up total revenues for the league which determines where to set the salary cap.

    Which adds money to a salary cap that, thanks to ravenous hockey fans, doesn’t look like it will suffer anytime soon post-lockout.

    So where does this leave Dallas, Anaheim, Tampa Bay, Florida, Carolina, Columbus and any other money pits?

    This cycle is ripe to continue which puts all these teams on fragile ground.

  2. Hockey in the desert was a stupid idea then, it is a stupid idea now. I am hoping for a return of the Quebec Nordiques as soon as possible. The success of hockey in Russia and northern Europe, and across the snowbelt of the US, show that it is truly an international sport with a rabid following among its fan base. Gary Bettman’s narrow pursuit of a big US television contract has led the NHL to expand in the wrong direction. That’s what you get when you hire an NFL executive who only knows how to look at the NFL and attempt to press the repeat button.

  3. @ Andrew T – Dallas isn’t a money pit. The market was just fine until it was driven into the ground by Tom Hicks money issues. Bankruptcy fixed the Rangers problems quickly, but the Stars sale drug on for years before finding a new owner last year. DFW will support not just a winner, but even a mediocre team as long as it’s properly marketed and shows even a glimmer of hope.

    @ MikeM – Seattle doesn’t have an arena, and has made clear that they need a NBA team first before they’ll build the new one. So, while I agree in general that it’d be a good market, there’s the question of how relevant an NHL team would be, given that they’d already be behind the Mariners and Seahawks, and then a new Sonics team that figures to get rabid support. Not to mention that Seattle is a market that’s taken wholeheartedly to MLS, and treats it like a major sport, and the big state university is also in town.

  4. The SacKings moving to Seattle is likeky to happen but we won’t know until late March/Early April. The NHL will not publically say anything about relo of the Coyotes until May. I am sure they have all their scenarios mapped out and as any FoS reader would know, it’s always great for the League/Owners to have competition. Even Portland has started to enter the conversation with Calgary oil magnate and Portland Winterhawks owner,Bill Gallacher being a potential suitor.

    KeyArena could work but it won’t be great.

    As much as people like to say that hockey in the south doesn’t work, I feel it is working most other spots (Nashville, Floida, TB, Carolina and Dallas). The League continues to say they are committed to Glendale (after this latest debacle) but I think that is more to keep people going to the games the rest of the Season. Interesting to note is that 10 years ago, the Coyotes had higher attendance than Bruins, Sabres, Blackhawks, Penguins and Devils.

  5. Stage one of the recovery for southern teams is that they’ve finally found some decent owners (TB, NSH, and DAL are recovering nicely), and that the league is finally smartening up by not “ghettoizing” all the Southern teams in one division and allowing all the teams to play everyone fairly equally in the new realignment.

    Phoenix is dead, though. Time to just move on.

  6. The Coyotes drew well at America West in downtown Phoenix.There were no questions about attendence back then.They spent a half of year in Glendale and were fine.Then the NHL lost a year with the Lockout. Either that next season or maybe the next 06-07 (can’t recall exactly)there was a huge plunge in attendence,that has never fully recovered.. .The US economy also started to tank around that time. Doesn’t make a lot of sense with so many people in the area, and is a shame with such a beautiful facility.But for people to say that the team never worked in Phoenix is not accurate.

  7. The newly elected mayor of Glendale says that the NFL shouldn’t treat the city as their pocketbook. He sounds like someone who might be willing to tell the sports moochers to take a hike. We’ll see. Plenty of tough-talking pols have been rolled by sports teams/leagues/owners before, so we shouldn’t be at all surprised if this ends up with yet another gazillion-dollar subsidy to keep the bankrupt hockey team happy.

  8. Looking at the Coyotes attendance ( http://espn.go.com/nhl/attendance/_/year/2006 ), they averaged 15,467 in ’03-’04 (last year before the lockout). From ’05-’06 through ’08-’09, they gradually declined from 15,582 to 14,875 (not a real big decline, although they slipped from 19th in ’04 to 28th in ’09 due to the rising tide of attendance of the other teams). Then in ’09-’10 they drew 11,989 and have remained around 12k since.

    Of course, the NHL is notoriously screwy when it comes to calculating attendance by tabulating “tickets out”, but it looks like ’09-’10 was the cliff.

  9. Going back further, they were down to 13,229 in ’02-’03 (their last year in America West or whatever it’s called now), good for second worst in the league that year, ahead of only Nashville by one fan per game.

  10. Completely O/T to the point of being a thread hijack, but speaking of Seattle, the latest development regarding Sacramento’s pod (of whales) is that Ron Burkle may be bidding on AEG. Wouldn’t this take him out of the running for the Kings? AEG owns a percentage (I’ve heard 30%, but can’t verify that) of the Lakers. I’d think Burkle can only regard this as “one or the other, but not both.”

    It seems like the longer it takes for a whale to get here, the less chance that whale will actually get here. Was Burkle’s meeting with Stern actually to discuss the offer to buy AEG?

    http://www.sacbee.com/2013/02/03/5161046/both-downtown-plaza-and-sacramento.html

  11. Brian:

    The NHL’s announced attendance is one of the most creative works of fiction on the planet (in many markets). Teams are, among other things, allowed to buy their own tickets (at whatever price they want) in order to boost “paid” attendance. Other than image, why would they do such a thing? Well, tickets that the owners buy themselves can be counted toward revenue sharing qualification.

    Nice.

    For those discussing this franchise’s “success” at America West, it is true that they drew reasonably well in the Suns’ facility. Among other things, it was a much shorter commute for the well heeled fans of Scottsdale, Mesa etc.

    However, there were lots of obstructed view seats that were sold for nominal cost. Richard Burke, the man who bought the team from Shenkarow in Winnipeg and moved it to Phx, admitted when he sold the team to Ellman (in 1999?) that he would have lost less money if he’d kept the team in it’s old arena in Winnipeg.

    Attendance was better at America West, but I’m not sure the team’s financial fortunes were significantly different.

  12. Interesting thing about the Jamison “Group” revealed last week:

    As discussed a few weeks ago, Jamison was very much seeking a “steinbrenner” like partnership… for those who don’t recall, Big Stein put about $170k into the partnership that bought the Yankees from CBS for $10m in 1973. Yet, amazingly, he retained almost total control of the club – much like Al Davis’ general partnership in Oakland…

    IF what I’ve heard is correct, Jamison’s commitment to the deal in Glendale was such that he was not willing to put any of his own money in. Gee… I wonder if that made it harder for him to find potential investors in the partnership he would control…

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