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April 09, 2010
Coyotes lease proposals out today; vote Tuesday
The Glendale city council plans to release proposed lease deals with prospective Phoenix Coyotes owners Jerry Reinsdorf and Ice Edge Holdings later today. The council will then vote on the leases (technically "memorandums of understanding") on Tuesday, giving the public four whole days in which to read the language and respond. (The council itself got a peek at the language last Tuesday, giving them seven whole days to read and digest it.)
The lease language, you'll recall, is now key to the team's future, ever since the two bidders revealed that they'd only keep the team in town if supplied with major subsidies by the cash-strapped city. As for what form those subsidies would take, we've had a few hints in advance of today's official release:
- The Arizona Republic reports that while Ice Edge won't immediately seek to schedule five home games a year in Saskatoon, as it had previously requested, it would seek to revisit that plan if "revenue stayed low."
- Reinsdorf is seeking an option to create a "community-facilities district" that can levy special property assessments to fund infrastructure improvements, which here would presumably be construed to mean shoring up the Coyotes' penalty-killing infrastructure. Even the council apparently doesn't have details on this one; Reinsdorf would only negotiate such a district if he decided he needed one later on. Which he would presumably have leverage to demand, if he's going ahead with an insistence on an out clause in the lease if revenues aren't up to par.
Meanwhile, Ice Edge is already griping about the lease concessions not being enough, and threatening to pull out of the bidding entirely. "We believe that Glendale is playing a dangerous game of poker," ice Edge CEO Daryl Jones told CanWest News Service. "At the end of the day, Ice Edge doesn't have to own this team, or any team. We make investments with the objective in generating an appropriate return. While we have become very passionate about supporting the fine hockey fans of Phoenix, a bad deal is a bad deal, and no amount of brinkmanship will lead us into signing a bad deal."
We'll see if the same holds true for the Glendale city council.
So... the good folk of Glendale have four days to review the docs. And the docs do not go into detail about what the prospective "buyers" want in the way of subsidies (whether by another name or...).
The Coyotes have drawn around 550,000 fans annually over the last few years. If the annual subsidy (and a special tax refunded to a private business is a subsidy, whether you call it one or not) figure of $23-28M is to be believed, the subsidy per spectator is about $44. What, you may ask, is the Coyotes avg ticket price? $37.
So, in short, the taxpayers are supposed to pay more for the Coyotes to stay than their actual fans do?
Hmmmmn.
Posted by John Bladen on April 9, 2010 03:06 PM
The backbone to any successful team is a strong business sense. John Kaites has got it. When this happens, good things will happen for arizona in this case
Posted by LHalls on April 10, 2010 12:00 AM
Hey Neil,
What's your take on this? Glendale is sticking to their guns. Are you thrilled a municipality is not caving-in to make concessions? Do you think it might set a precedent?
-Dave
I'll have more to say on Monday, hopefully after I've read the actual documents. What I've found so far is extremely unclear on exactly what dollars would be changing hands, and between whom. (I especially like the articles saying that the community facilities district would be able to supply money by "selling bonds," but doesn't say who'd pay off the bonds.)
Posted by Neil on April 10, 2010 10:00 PM