Coyotes’ lease claims, if true, would require $20 in surcharges per fan

The Glendale city council met again on Friday to discuss the Phoenix Coyotes‘ lease subsidy request — again, behind closed doors — but this time, there are some faint clues about what they discussed:

An executive familiar with the Renaissance bid said the ownership group wants the city to pay $15 million over 15 years to manage Arena. The money would help Renaissance close on the purchase of the team from the NHL, and past Coyotes bidders have relied on favorable city arena deals to help their purchase efforts.

To offset the $15 million price tag Renaissance is offering to share future revenue from things such as parking and ticket surcharges to Glendale. The group said that could total as much as $8 million to $10 million a year for the city.

Okay, that’s actually marginally hopeful: This is the first time anyone’s mentioned any actual cash money going from the Coyotes owners to Glendale in exchange for the $15 million in annual revenues. When last this was discussed, the Coyotes were to pay $2.2 million a year in rent payments, ticket surcharges, sales taxes, and other fees combined, so to come up with $8-10 million a year, presumably we’d be talking some hefty surcharges. In fact, since the Coyotes only sold 500,000 tickets the last time there was a full NHL season — plenty of whom probably didn’t show up, and so wouldn’t have paid parking surcharges — we’d be talking nearly $20 in surcharges per person, which is, um, kind of a lot.

So, maybe not so marginally hopeful. We should know more tomorrow night, when the council is finally supposed to hold its first public comment session. Unless they let people comment without actually telling them what they’re commenting on, which would be so Glendale.

10 comments on “Coyotes’ lease claims, if true, would require $20 in surcharges per fan

  1. Ladies and gentleman: tonights attendance……18. The Phoenix Coyotes thank you for your support.

  2. Nothing new here, Neil. When the city was trying to find a way to hand Reinsdorf $15-17m annually, they talked about imposing surcharges on tickets and parking to fund it…

    Does no-one in this financial basketcase of a city know how to do simple math (obviously a rhetorical question)? If fans won’t pay $12 for a ticket to attend an NHL game – even if they get a free fifth of Vodka with it – why would anyone believe they’ll pay $20 to park or a $5 ticket surcharge?

    It’s a bit like a man pining for the beautiful ex-wife who’s now living with someone else. You can keep hope alive a lot longer than you should, but it doesn’t actually change anything. She’s already gone. Saying it isn’t so doesn’t mean it isn’t so, no matter how much you believe…

  3. “Unless they let people comment without actually telling them what they’re commenting on, which would be so Glendale.”

    Or in other words The Kevin Johnson Sacramento Plan

  4. What’s new is this is apparently part of an actual lease package being negotiated. Unless it’s “Give us $15m a year and we’ll give you the right to collect ticket surcharges if we decide the market will bear it.” Which would be pretty stupid, but then again, this is Glendale.

  5. Previous Coyotes owners would have liked to charge $20 more per ticket too – and presumably the new owners will want to charge more, to avoid those $20-30 million annual losses that seem to go along with owning the team. Even if the ‘Yotes can get attendance up to 15,000 per game (quite a stretch in itself), those folks have to be the source of the Glendale subsidy (let’s say $10 million) and the losses the owners would like to avoid (say another $10 million). That’s 20 million bucks extra to be paid by the (roughly) 625,000 paying fans. So, due to the miracle of new ownership, the fans will shell out $30-35 more per game, and show up in greater numbers.

    No, it doesn’t add up. Yes, it’s a done deal. Because you pessimists aren’t taking into account the Multiplicator Effect and the planned renooberation that will posify once the dynamics of refractulating revenue streams kick in.

  6. This is just so unbelievably foolish to me. If Glendale had any sense, they’d just deny any more money. If that means bankruptcy for the team, I think everyone would be better off.

    Bankruptcy would not be fun, but how fun will Even More Enormous Bankruptcy be? Because they’re headed that way.

    I hadn’t really thought about Sacramento in this way, but selling bonds against Sacramento’s parking in the hopes of keeping the $9M revenue stream alive, plus paying off what should be about $20M in bonds, will require “how much?” in terms of a per-person surcharge? Well, if it’s 200 events at 20,000 per event, it better be about $7.25 each. Too bad it’s not going to be 200 events with 20,000 each.

  7. “If Glendale had any sense…”

    Nothing personal, but seemed kind of pointless to read the rest of your comment after that.

  8. Yes! Surely Glendale would be better off once the Coyotes subsidy ends! (And the Westgate businesses shutter, the Renaissance hotel goes under and the arena is boarded up.) The less economic activity in a city, the better! You gentlemen obviously think through issues carefully.

  9. Ben, I assume you’ve done the math to determine that it would cost more than $15 million a year in public expense to make Westgate viable without 40 hockey games a year?

  10. Supporter of subsidized sports always point to the awful things that will happen if we don’t subsidize teams like the Coyotes. Like there are no shopping centers that survive without hockey teams, and other such nonsense. (Westgate went into foreclosure all by itself, even with the magical hockey team attached to it.)

    If you have to put a quarter-billion dollars into keeping a hotel and shopping center open, then yes, you are better off without the hotel and the shopping center. There is no conceivable level of taxable economic activity that will justify the subsidies Glendale is talking about. (Glendale’s take of sales tax is 2.2%. To repay that quarter billion it will take 11 billion dollars of taxable sales. The most magical hockey team in the world isn’t gonna do that.)