Coyotes’ $170m tax kickback bill is mostly dead, owners go back to drawing board

So if Arizona Coyotes owner Andrew Barroway and NHL commissioner Gary Bettman though that threatening vaguely that the franchise “cannot survive” in its existing arena in Glendale was going to shake loose money from the state legislature, yeah, no, that’s not happening. State senate president Steve Yarbrough told the Arizona Republic yesterday that “I have no expectation that that bill is going to move,” and even the bill’s sponsor was reduced to mumbling something about how where there’s life, there’s hope:

[Sen. Bob] Worsley, who pushed the bill through a committee he chairs in February, said it “may be the case” the legislation is in trouble. Yet he noted that no bills truly are dead until the Legislature adjourns.

So assuming that the bill to write as much as $1 billion in blank checks to local sports teams for new buildings isn’t going anywhere, now what? Barroway and his co-owners may not be getting paid $8 million a year to run the Glendale arena anymore, but they still have a fairly cushy lease that has already been extended through 2018, so they can easily keep going year-to-year while trying to find some other Phoenix-area elected body eager to throw public money at them. They could try to move the team, but the options there aren’t much better: Quebec would require selling the team to Quebecor, Seattle still doesn’t have an NHL-ready arena, and other cities are even more of a shot in the dark. The real answer here appears to be “if you’re going to buy a hockey franchise, maybe don’t buy one that plays in a non-hockey hotbed and has never been able to draw flies,” but Barroway and company have made their bed, so honestly unless you’re a Coyotes fan, there’s no reason to worry about how they choose to lie in it.

Maple Leafs ticket prices aren’t part of a grand conspiracy, except for the usual ones

A headline like “Why are NHL tickets expensive in Toronto? Because they’re cheap in Phoenix” has got to be pretty much irresistable if you’re an editor at the Globe and Mail. But does columnist Tony Keller actually make that case? Let’s follow the bouncing argument:

  • The Toronto Maple Leafs can charge through the nose for tickets because demand for hockey in Ontario exceeds the supply.
  • The Arizona Coyotes can’t charge squat for tickets because demand for hockey in Arizona is a sad joke.
  • If the Coyotes moved to Toronto or even Hamilton, it would cut into the Leafs’ market, and they’d be forced to lower ticket prices.
  • Since the Coyotes don’t make money, they have to be subsidized by revenue sharing from teams like the Leafs.
  • “The MLSE golden goose helps subsidize a squad of American lame duck franchises; those lame ducks, stuck in dry ponds, make necessary a golden goose in Toronto.”

All of this is technically true, but there are some leaps of logic here: There’s no reason to think that the NHL would allow the Coyotes to move to within spitting distance of Toronto if they left Arizona, and that Toronto “golden goose” is something the league presumably would want to keep around (and the Leafs owners would absolutely want to keep around) with or without the Coyotes’ revenue issues. There’s a difference between “the Maple Leafs owners are willing to send some money to the Coyotes’ owners to maintain their monopoly” and “this is all part of a grand conspiracy to screw hockey fans both coming and going.” (Except inasmuch as trying to use your monopoly power as the only major pro league to jack up ticket prices is the plan for pretty much every sports league that doesn’t have open promotion and relegation.)

That said, it is undeniably true that if territorial rights were eliminated and teams could move wherever they wanted, it would be arguably good for hockey fans (except those in lousy hockey markets like Phoenix) and maybe even good for the league as a whole — just the same as it would be for MLB if the Steinbrenners and Wilpons didn’t have monopoly rights to New York City. But then, sports leagues aren’t really monolithic corporations, but rather cartels of individual business owners, each in it for themselves. The only conspiracy at work here is the profit motive combined with the failure to enforce antitrust laws, which is a bigger problem than just for hockey.

Arizona officials, columnists on Coyotes move threat: Talk to us when your team doesn’t suck

So how’s that whole threaten that the Arizona Coyotes will move (somewhere) if they don’t get a new arena to replace their new arena in Glendale that replaced their new arena in Phoenix thing going over with Arizona elected officials and the media? Not well at all:

[Glendale city manager Kevin Phelps and former mayor Elaine Scruggs] said lawmakers should kill an arena funding bill…

They added that the NHL and team are trying to pull a fast one on taxpayers and, by putting a losing team on the ice, the Coyotes have no one but themselves to blame for their financial problems.

“We have continually invested heavily to keep NHL in the state of Arizona. We have held up our end of the bargain. They have not held up their end of the bargain. They cannot put a product on the ice for a community that has a lot of options,” Phelps said. “They don’t believe there is any correlation to the fact that they have not put a team that has been competitive for many, many years.”…

“And we are paying $13 million in arena debt payments, plus annual capital maintenance where we can spend $1 to $2 million a year,” Phelps said. “Our frustration is starting to build a little bit.”

Okay, sure, Glendale officials are going to be steamed, given that this whole thing started when they canceled the Coyotes’ sweetheart lease and the Coyotes owners said, “If you’re not going to pay us $8 million a year to play in our taxpayer-built arena, then screw you.” What about reaction elsewhere, say from Arizona Republic sports columnist Dan Bickley?

Bettman’s three-page letter to the Arizona legislature is backfiring badly on the NHL’s snappish commissioner. His bold-faced remarks that the Coyotes “cannot and will not remain in Glendale” come off as heavy-handed threats that absolve a hockey team from its non-competitive past while chiding a local government for withdrawing hefty subsidies it can no longer afford…

The Coyotes have failed on their end of the bargain, running their franchise on the cheap while depending on handouts to survive. If this team had consistently exposed Arizonans to the majesty of playoff hockey over the past decade, this conversation would sound much different.

And how about Republic non-sports columnist Laurie Roberts?

Glendale taxpayers still owe $145 million on the 13-year-old hockey arena. Glendale taxpayers, once they’ve paid off their debt, will have invested nearly a half a billion dollars in trying to keep the NHL in the state, according to city officials.

And this is the thanks they get, Mr. Bettman?

The Coyotes want $225 million in public money to help pay for a new arena complex either in downtown Phoenix or the East Valley. They also want control of a planned adjacent hotel and surrounding real estate development. Team owners moan that they just haven’t been able to turn a profit on the west side.

I wonder … Is the team’s inability to turn a profit because this Valley won’t support hockey? Or is it because this Valley won’t support bad hockey?

Sense a theme here? If there’s one lesson that we’ve learned over and over in stadium and arena battles, it’s that as much as there is public distaste for giving tax money to rich sports team owners, what people really hate is giving tax money to rich owners of sports teams that suck. (This undoubtedly plays into the dismal poll numbers for the Coyotes owners’ demands, too.) Dropping vague threats to move your team because you’re unhappy with your lease and claim you can’t make money is one thing; doing so when you’ve won all of two playoff series in your 21-year history is the kind of chutzpah that isn’t likely to win you many friends, or even many enemies who’ll give you money just out of fear that the team will leave.

The irony, of course, is that having Arizona taxpayers pay for a new arena to let the Coyotes move from one part of the state to another would still be a terrible idea even if the team were winning Stanley Cups. Maybe Andrew Barroway and Anthony LeBlanc should try putting together a winning team before trying their move-threat gambit, so it’ll go over better — though if they were to do that, they might risk people actually showing up to games in Glendale, which would make it tougher to argue that they need a new arena. This whole extortion thing is more difficult than it looks.

NHL commissioner threatens that without new arena, Coyotes will move or evaporate or something

Stop the presses! NHL commissioner Gary Bettman and Arizona Coyotes principal owner Andrew Barroway have threatened that if a new Arizona arena isn’t built, the team will move … sorta. Here’s Bettman, in his letter to the state senate:

The simple truth? The Arizona Coyotes must have a new arena location to succeed. The Coyotes cannot and will not remain in Glendale.

And Barroway:

As Commissioner Bettman made clear in his letter to legislators, the Arizona Coyotes Hockey Club cannot survive in Glendale. … The bottom line remains the same: the team’s owners continue to lose tens of millions of dollars annually. Consistent losses of such magnitude are not sustainable — not for an NHL franchise, or any other business.

Yeah, that’s not exactly a threat, guys: For starters, it’s missing the “And if you don’t get it, then what?” piece. “Things cannot continue as they are” is a classic example of the non-threat threat, and having Bettman deliver it is a classic use of a league commissioner. But ultimately, despite the resulting headlines — “NHL and Coyotes tell Arizona: Give us a new arena or we will leave” in the Arizona Republic — there isn’t much more solid behind this than the last time the league did it, except that this time Bettman actually signed his name to it.

Those headlines, of course, are precisely the goal, or rather the idea of them throwing a threat into the arena-subsidy-reticent Arizona legislature is. This is the “Don’t make me come in there” of sports subsidy negotiations — better to let Arizona elected officials imagine what will happen if they don’t meet the Coyotes owners’ demands that to actually say it out loud and risk people getting mad at you for conducting extortion. Hey, it’s almost like these guys have a playbook!

Arizona officials just can’t quit looking for ways to throw tax money at Coyotes

So many vague rumors and whinging going on around the Arizona Coyotes‘ attempts to get somebody else to pay for building them a new arena against the will of state residents so that they don’t have to play in their perfectly good old one, I’ve gotta go to bullet points:

  • Coyotes execs have met with Mesa City Manager Chris Brady to discuss a new arena! Twice! Mesa Mayor John Giles chimed in, “If I were the Coyotes, I know I would want to be there. But whether it’s a good deal for Mesa or not is something that we’ll have to look into.” Which seems to be code for “If the state legislature agrees to foot most of the bill with sales-tax kickbacks, sure we’ll consider it,” but way too soon to tell about any of this.
  • The city of Phoenix has extended its contract with Barrett Sports Group to explore whether to renovate the Suns‘ arena, and possibly try to make it more workable for hockey. Again, this is not a plan, or even a plan for a plan, but they’re looking into it.
  • State Senator Bob Worsley, who is behind that sales-tax kickback bill that his colleagues in the state legislature aren’t so hot on, has written an op-ed in the Arizona Republic insisting that his bill “tears up the playbook on facility deals” because it involves “no state tax increases, no risk to the state, and no existing revenue from the state General Fund,” which is only true if you think that state sales tax receipts will soar just by virtue of the Coyotes moving from one part of the state to another. Apparently if you’re a state senator, you’re not subject to newspapers’ stringent fact-checking requirements.

Upshot: Nothing, really, other than that lots of people are still trying to solve Coyotes owner Anthony LeBlanc’s problem that he doesn’t want to keep playing in Glendale unless he’s paid $8 million a year by the city to do so. It’s a tough life, being an NHL owner.

The more Arizona residents learn about Coyotes tax kickback plan, the more they hate it

So we know that Arizona state legislators aren’t crazy about the idea of giving the Coyotes $170 million in state sales-tax money for a new arena so they can leave Glendale (and possibly as much as $375 million apiece for another other sports construction deals that come along), but what do Arizona voters think of the plan? Turns out they really, really hate it:

Seven out of 10 voters statewide and in Maricopa County say they oppose using sales tax dollars to help pay for a new hockey arena, according to a survey released Tuesday.

Eight out of 10 reject state legislation that would create a special taxing district to build an arena. That number grew to nine in 10 when poll respondents were told about the remaining public debt on the arena that Glendale built for the Coyotes in 2003.

In case you think this sounds like the more residents learn about the deal the more they hate it, yeah, exactly:

“The poll shows that the more voters know about the proposed plan the less they like it,” [poll conductor Bert] Coleman said in a release.

All this is leading some people (okay, sportswriters) to flip out about what will happen in the Coyotes are forced to leave, but, you know, there is a perfectly acceptable arena there in Glendale — it’s just that Coyotes owner Anthony LeBlanc is throwing a hissy fit over having to play there without getting paid $8 million a year to do so. Sure, this could potentially be the final straw that tips LeBlanc into moving the team elsewhere, but that 1) is far from certain, given that he’s already extended his Glendale lease once to buy time and 2) could be true of pretty much anything, and you can’t negotiate a sports lease while tiptoeing around in fear that if you make any demands, the team will bolt. I mean, you can, and elected officials do so all the time, but it’s stupid and counterproductive.

Anyway, now that the people of Arizona have spoken that LeBlanc should suck it up and stay in Glendale, it’ll be very interesting to see what the response is. My money’s on flying to Seattle for the weekend and seeing if that throws a scare into the populace.

AZ legislators not actually all that stoked about approving $1b-plus in sports subsidies

So it turns out that giving Arizona Coyotes owner Anthony LeBlanc $170 million in state tax breaks to move from one part of the Phoenix area to another and also approving as much as $375 million in tax breaks for any other pro sports team that wanted a new stadium isn’t so popular in the Arizona state legislature after all. Or at least, isn’t quite popular enough to get a majority, probably:

A plan that would provide $225 million in public financing for a new $395 million Arizona Coyotes arena likely does not have the votes to pass the state Senate, key lawmakers told The Arizona Republic/azcentral Thursday.

Sens. Debbie Lesko, R-Peoria, and John Kavanagh, R-Fountain Hills, said they definitely were going to vote against the plan, while Minority Leader Katie Hobbs, D-Phoenix, said there is little support among the chamber’s 13 Democrats. Meanwhile, Senate President Steve Yarbrough, R-Chandler, said he had “serious reservations” about the plan that would allow the National Hockey League team to build an arena in downtown Phoenix or the East Valley.

The utter stupidity of such a plan aside, this points up the political difficulty of getting state support for the subsidy deal: In addition to it becoming a partisan political issue (the sponsor of the bill is a member of the state’s Republican majority), there are regional splits as well, with West Valley legislators of both parties opposing a bill that would likely be used to subsidize a move of the Coyotes out of Glendale, which is in the West Valley. (Peoria is adjacent to Glendale, though Fountain Hills is in the East Valley.) Add in any legislators who are just opposed on the principle that throwing over a billion dollars at your state’s sports teams for no damn reason is a terrible idea — hey, it’s always possible — and the bill is “on life support,” according to the Arizona Republic.

Not that it won’t eventually happen, in some form. (You know how politicians love to haggle.) But it looks like it’s going to take a few more strands of spaghetti thrown at the wall before one of them sticks.

Arizona senators push to give Coyotes, Suns, D-Backs up to $1.1b for new arenas and stadium

Arizona Coyotes owner Anthony LeBlanc may not have any idea where he wants to build a new hockey arena now that Arizona State University pulled out of a planned venue in Tempe, but that’s not going to stop members of the Arizona state senate from pushing legislation to give him $170 million in sales- and hotel-tax kickbacks to help build one. And hey, while we’re at it, let’s make it easier for the Diamondbacks and Phoenix Suns to get state subsidies, too:

The bill would allow creation of “community engagement” districts of up to 30 acres. Within them, up to half of the state’s share of sales taxes generated from retail sales and hotel stays would be dedicated to paying the bond debt for new sports or entertainment facilities. It also would allow an additional 2 percent district sales tax to be applied to all purchases within the district, with those revenues also dedicated to defraying the cost of facility construction.

In the case of the Coyotes, the plan envisions public funding covering 57 percent of a new arena’s cost, with new sales taxes covering $170 million and the host city contributing $55 million. The Coyotes said the team’s portion would be $170 million, amounting to a 43 percent contribution toward the $395 million total cost.

This is a bit of a hybrid bill, combining super-TIFs (where half of existing sales and hotel taxes would be kicked back to pay teams’ construction costs) with a new sales tax surcharge in the area around the new sports venue. The math on how much of a subsidy this amounts to gets dicey — virtually all of a TIF would be cannibalized from sales and hotel tax receipts elsewhere in the state, but a slice of a sales tax surcharge could come out of a team owner’s pockets, depending on how big the surcharge area is — but the vast majority of it would be a straight-up gift to team owners, all to allow cities in one part of Arizona to steal teams from cities in another.

You’ll note that I said “teams,” not just the Coyotes. That’s because the new super-TIF districts could be applied to help build any new sports and entertainment facilities. The only limit is that state money would only be allowed to pay for half of construction costs up to $750 million — meaning that if the Coyotes, Suns, and Diamondbacks all availed themselves of the legislation, as you know they would love to do, Arizona taxpayers could potentially be on the hook for $1.125 billion. (If the Coyotes stick to their $170 million demand, the max would be only $920 million, but as we’ve seen before, sports construction costs only tend to go up, and there’s nothing stopping LeBlanc from revising his ask as time goes on.)

Now, the bill has so far only passed one committee in one branch of the Arizona legislature — Sen. Bob Worsley of Mesa used one of those “gut an unrelated bill and insert your own language” tricks to get it on the agenda of his own transportation and technology committee — and none of the teams involved have identified places where they’d like to build new facilities, or how to pay for their halves. Still, it’s a pretty remarkable response to a “crisis” started by the Coyotes’ need to leave their nearly-new arena in Glendale because … hey, Coyotes ownership, why do you need to leave again?

“It does not work in Glendale,” Ahron Cohen,the team’s general counsel, told the Senate panel. “In 2013, our ownership group bought the team. The previous ownership chose to go out there.”

Oh. Well, if it “doesn’t work,” then it doesn’t work. I thought you were going to say something about how you couldn’t bear to be forced to compete for the rights to operate the arena instead of just being handed $8 million a year by Glendale in a no-bid contract. Good thing it’s not that, because asking the state of Arizona to pay you a couple hundred mil to get you out of that pickle would be chutzpah in the Nth degree, and only complete morons in state government would actually consider it.

Coyotes owner now OK with staying in Glendale while he waits to be gifted with a new arena

Arizona Coyotes owner Anthony LeBlance said yesterday that he’s still “pretty confident” he’ll get a new arena somewhere, and blah blah blah whatever, of course he’ll say that, but — hey, what’s that?

The Coyotes still have no intention of calling Gila River Arena home for any longer than they have to.

“We’re okay staying in Glendale if we know that there’s certainty of a new facility coming online and shovels in the ground,” said LeBlanc.

Well, that’s new. Admittedly, LeBlanc doesn’t have much of a choice but to stay in Glendale for a while if he wants to stay in the Phoenix area and has to wait on a new arena, but previously he’d made noise about getting out of Glendale “as soon as practicable,” and … okay, I guess this isn’t technically any different, but it does put more of an emphasis on being willing to stay put for a while if necessary. Though only if he can smell those shovels in the ground. Otherwise … he’s not saying, but you don’t wanna cross him, man, there’s no telling what he’ll do. Just not move to Portland or Seattle, because he wouldn’t do that. Is this threat working yet?

Glendale legislator: Wait, why exactly should we pay for another city to steal the Coyotes?

Hey, here’s a question you don’t see asked nearly often enough: Why the heck should a state government pay to help a pro sports team leave one part of the state for another? The state is Arizona, where even after Coyotes owner Anthony LeBlanc’s Tempe arena plans crashed and burned last week, state senator Bob Worsley (who represents Mesa, in the East Valley) is still pushing for $200 million in state sales tax kickbacks that LeBlanc could use for a new arena elsewhere in the state. State representative Anthony Kern (who represents Glendale, in the West Valley), meanwhile, is having none of that:

“This legislation comes down to a simple public-policy question: Should taxpayers be asked to pay for a new arena that will directly compete with already existing facilities that taxpayers are still paying off?” Kern said…

“We want the Coyotes to be successful on and off the ice and to do so in the publicly-funded Gila River Arena that the public built — Glendale taxpayers built — for them to play in.”

While I’m not sure “taxpayers are still paying off” is the most sensible argument — would it be okay for the state to subsidize one Arizona city stealing a team from another if Glendale’s arena were already paid for? — Kern has a point with the rest of it. The only thing stopping the Coyotes from playing in Glendale, after all, is that LeBlanc is refusing to do so unless he gets to manage the arena and get paid by the city for it, which isn’t exactly the kind of crisis that the state needs to run in and solve. Unless you think that he’s going to move the team out of state if his demands aren’t met, which he hasn’t threatened to do yet—

According to officials in Seattle and Portland, members of the Arizona Coyotes have toured arenas in both locations in the past three months. The destinations appear to have been the KeyArena in Seattle and the Moda Center in Portland, Ore...

Arizona Coyotes Executive Vice President of Communications Rich Nairn denied the rumors, when asked about the reports of members touring the two arenas.

“That is false,” Nairn said via email.

So, either this is a rumor that Seattle and Portland are spreading for unknown reasons, or it’s a non-threat threat by LeBlanc. Either way, a whole lot of sabers are being rattled, which is to be expected, but that’s no reason to panic just yet and start throwing sales tax money around.