The Glendale city council gave its blessing to the AEG management deal for the Arizona Coyotes‘ arena last night:
The Glendale City Council voted unanimously Tuesday night to approve a $28 million deal with the Los Angeles-bases AEG Facilities to operate the Gila River Arena.
The new deal is an effort to keep the Coyotes in Glendale beyond the 2016-2017 season.
Okay, none of that is exactly right, 12News: Whereas normally a “$28 million deal” means you get paid $28 million, here Glendale will be paying AEG $28 million over five years. Plus it’s not really an effort to keep the Coyotes in Glendale so much as an effort to reduce the fiscal bleeding that was put in place by the Coyotes’ 2013 sweetheart lease for the arena, now canceled. Plus you misspelled “based.”
As discussed here yesterday, the new lease is about $2-3 million a year cheaper for Glendale than the old Coyotes one, though it’s about on par with the temporary management contract the Coyotes signed last summer to tide everyone over until the open bidding was complete. (The Coyotes owners decided not to submit a bid, because screw that competitive-bidding crap.) AEG can renegotiate the lease if the Coyotes move, or opt out of it entirely if the two sides then can’t agree on new terms.
In all, it’s best to look at this as a compromise between putting up with the original Coyotes deal and shutting down the arena entirely: The hockey team is still there for the immediate future, after all, and AEG is really good at booking concerts, so maybe they can make a go of it. If it works out, Glendale saves itself maybe $10 million or so, and ends up with a slightly more viable arena, with or without hockey; if it doesn’t work out, the arena probably still shuts down, but Glendale still saves the $10 million. Unless some future council gets suckered into renegotiating a worse deal just because “we spent all this money on an arena, we don’t want to waste it,” but hopefully by now everyone in Glendale has learned the hard lessons about sunk costs.