This may just be the inevitable fallout of a franchise relocation that came pretty much out of nowhere two weeks ago, but there was a lot going on this weekend with the Arizona Coyotes‘ transformation into the Utah Something-Somethings. Let’s take the news items one at a time:
New team owner Ryan Smith doesn’t want a new arena, he wants to renovate his current one. This makes sense, if only because Smith is already plunking down $1.2-1.3 billion on the franchise, so he’ll want to keep construction costs down so that he doesn’t have to cover too much of them. It could be a tricky rebuild, though, as, like the arenas in Phoenix and Brooklyn, the Delta Center was built with the NBA in mind, so it’s going to require significant reworking to accompany a hockey rink, which is a good bit longer than the Jazz basketball court.
Also, Smith claims that if he had his druthers, he’d be building a new arena south of downtown, but elected officials instructed him otherwise:
“Our elected officials,” Smith said, turning to address those in attendance Friday. “I know you guys get dragged every way possible, you guys literally stopped us in the middle of the process and said ‘These both have to be downtown, so go figure out what you have to do.’” The Delta Center remodel plans were the result.
There’s still no reported price tag for a renovated Jazz arena to accommodate hockey, but the Salt Lake Tribune does have a new estimated total for the 0.5% Salt Lake City sales tax hike that would help fund it, reporting that it “would, in the estimation of the Legislature, raise $54 million per year that would go towards repaying bond on the project; over 20 years, it’s a total that sums to over $1 billion.” The better total would be to use the present value of those dollars over time — in other words, figure out how much in 2024 spending it could pay off, like calculating how much house you could buy with a certain amount of future mortgage payments — and that comes to $673 million, which is a lot more than the $500 million that was reported last month when the legislation was passed by the state legislature. Plus, that doesn’t include the kickback of all sales taxes from a possible sales tax increment financing district around the arena, so the public price tag could still go higher.
The sales tax hike still needs to get passed by the city council, but Bettman says if it fails, there’s a Plan B for raising the funds:
If that tax hike doesn’t pass, Bettman told ESPN700 on Friday that he’s seen a second set of arena plans. “There are a couple of sets of plans which I’ve seen. One is obviously a renovation and a resizing and configuring of this building. And the other is … a new building,” he said.
Uh, that’s not actually a Plan B for raising money, it’s a Plan B for spending it. Either Bettman, or ESPN700, or the Tribune (which reported the above) got confused somewhere along the way, your guess is as good as mine as to which.
Salt Lake City downtown businesses are in for an unpleasant surprise. “Utah NHL rising tide expected to lift all downtown businesses” read the headline on last night’s KUTV story, which quickly makes it clear that the ones doing the expecting are those self-same downtown business owners:
[STK Steakhouse manager Markus] Ericksen knows the introduction of a hockey league could be great for a growing downtown.
“We are excited; we saw a lot of great walk-in business because of the games with the Jazz,” said Ericksen.
Unfortunately, the economic literature doesn’t support the idea that more arena business drives a significant amount of new spending at local dining establishments — here’s one paper from last year that concludes that “basketball & hockey arenas do not appear to generate significant spillovers for the surrounding businesses” — and neither do anecdotal reports from local restaurateurs, who say it’s hard to seat enough fans in the brief time before and after games to get much benefit.
Ericksen has the opportunity to get his steakhouse’s name in the news, so it makes sense for him to use it to promote his business to future hockey fans. Why KUTV chose to investigate the economic impact on local businesses solely by talking to one local business owner and the head of the downtown chamber of commerce — I mean, it’s an easier lift than spending the 60 seconds it took me to find that economic paper, I guess, and then going through having to contact the authors and wait for them to get back to you and set up a Zoom, but it’d be nice to see TV journalists doing at least minimal journalism.
Outgoing Coyotes owner Alex Meruelo can’t make up his mind about pretty much anything. Meruelo had quite the week, saying all kinds of things that he then had to immediately walk back:
- On Thursday, Meruelo said he’d retained ownership of the minor-league Tuscon Roadrunners, and announced that “we’re gonna move them up to Mullett Arena” in Tempe, where the Coyotes have played the past two seasons. Later that same day, Meruelo said “we haven’t made a decision yet,” and the next day he said, “We’ve talked about maybe playing half the season in Tucson and half the season at Mullett.” He also, according to Tucson TV station KVOA, revealed that “the hasn’t discussed the matter with the Roadrunners, the City of Tucson, or Arizona State University, which owns Mullett Arena in Tempe,” all of which would be slightly important before moving the team.
Like I said, it’s a lot. It’s entirely possible, though, that the move of the Coyotes from Arizona to Utah could end up triggering a billion dollars or more in public costs across two states, so that two NHL team owners can get new arenas without dipping too far into their own pockets. Or Salt Lake and Phoenix elected officials could vote down all the tax kickbacks, sure, that’s a thing that could happen. But accepting defeat and paying for things yourself doesn’t seem to be in Bettman’s, or Meruelo’s, vocabulary.
If Salt Lake City falls for this insane nonsense, downtown or Point of the Mountain or wherever, they are staring into the same black hole Glendale was stuck in for 20 years. Salt Lake City officials, if you don’t believe me, Glendale Mayor Jerry Weiers or Councilmember Joyce Clark can fill you in at 623-930-2249.
Are you suggesting SLC politicos could be candidates for the coveted “Scruggs-Beasley Award for Public Disservice”?
You forgot the Craig Tindall double dealing City attorney award. Winner!
It is not at all like Glendale. Glendale didn’t need to get into the arena business at all. That was a choice.
The Utah Whatevers are going to move into a downtown(ish) arena that already exists. The massive changes planned may make it the Arena of Theseus, but it’s still in the same place. And, judging by how well the Jazz draw despite not being very good, it appears the arena is reasonably well served by the transportation options.
Glendale wasn’t that at all. It was *competing* with a downtown arena that people were already familiar with and, by all accounts, was not well served by the available transportation infrastructure.
It might still be a bad investment for Utah, given the opportunity costs, but adding 41 sporting events to the Delta Center’s schedule is not going to suddenly turn it into a white elephant project like Glendale’s arena.
(Unless, of course, they botch the redo so badly that it’s no longer very good for either the NBA or the NHL and alienates everyone. Given how much money they’re getting, it would be hard to screw it up that badly, but we’ll see.)
If the Footprint Center had been rebuilt to properly accommodate hockey, the Coyotes would probably still be there.
That would have required owners of both teams working together and having enough money to do that. I don’t think Ryan Smith NBA owner will struggle to get along with Ryan Smith NHL owner, but it remains to be seen if the arena can be rebuilt the way he says it can.
My guess is that it will get there eventually, largely on the public dime.
“…Glendale wasn’t that at all. It was *competing* with a downtown arena that people were already familiar with and, by all accounts, was not well served by the available transportation infrastructure…”
Can’t have it both ways… if the reason Glendale failed is because it was in direct competition with a downtown arena it can’t also have failed because of poor transit and road access.
If “you just can’t get there from here” is really a thing, then it cannot be in direct competition with the downtown arena. Either they are in the same market and serving the same potential customers or they aren’t.
I would say they weren’t in the same market. Glendale’s plan failed because the anticipated spinoffs of the sports “investments” (IE: local housing and other businesses) didn’t happen. That doesn’t make it not their fault as they clearly were dreaming of sugarplums while making no effort to ensure that the promised sugarplums were ever built by the shady and undercapitalized owners (who didn’t help build a following with their predilection for leaving bills to local suppliers – many of whom could have become corporate ticket holders and boosters – unpaid).
It was a dumb idea to build the arena, especially at the same time they were building the Cardinals a stadium (more or less). Putting those two venues in Glendale is like dropping them down in Toledo, Reno or Baton Rouge.
As for the Coyotes still being ‘there’ if they had a true hockey arena downtown, well, that will remain eternally unknown. They had better attendance there (despite the sight lines). They did not develop any significant tv following over the 6-7 years they played there.
Many have said “oh if they’d only had better owners or more competitive teams or ….”. The fact of the matter is that they had one of the better arenas to watch a game in and were charging less for NHL hockey than most junior teams do in actual hockey markets. They still couldn’t attract a decent crowd.
I’m sure there are 3-4,000 hardcore hockey fans in the Phx metro who are really hurting at losing their team. My sympathies are with them.
But you can’t run a professional sports franchise with that level of support – in Phoenix or elsewhere.
Glendale is a beautiful arena, and if a good team played there it would be full. I drove further to watch hockey in a crappy and sometimes dangerous part of Chicago, in an arena (United Center) that is not as nice for hockey as the Glendale arena. Thats true in other cities as well. A good team overcomes a lot of problems.
And the lovely Kennedy and Edens, with endless construction, rain, snow and not an inch of carpool lane. Coyotes fans don’t know what they’re complaining about.
I don’t doubt the claim that there are ‘some’ places in the Phx metro that are difficult to get to Glendale from in a timely fashion. But that’s true of many other sports towns as you have both said.
The Coyotes had some “good” teams and a string of playoff appearances (they were over .500 for six straight seasons after moving)
Post Ellman/Gretzky (when Gretzky named himself coach despite never having coached the game at any level), they won the Pacific division and made the conference finals (2012?).
I disagree with the idea that they “never” put a good product on ice. There were some very bad years and they didn’t consistently win, but even with reduced capacity at America West, an over .500 team (for six straight years) should have been able to build a following if the area had an interest in hockey. Yet they couldn’t.
” if the reason Glendale failed is because it was in direct competition with a downtown arena it can’t also have failed because of poor transit and road access.”
Yes it can. Projects can fail to meet expectations for multiple reasons.
The fans, such as they were, generally hated Glendale. So did the players. It took too long to get there from where they lived. That’s been pointed out repeatedly.
Hockey can succeed in new markets, but the team has to make it
relatively easy to see their product. Hardcore fans and Canadians who say “I walked uphill both ways in the snow to see hockey” do not get it.
People said the same thing about Dallas, Tampa, Las Vegas, Carolina, Nashville, LA, etc. They also said the same thing about MLS and any number of other sports ventures that have done ok. “It will never work. We tried that before, etc.”
It’s definitely harder to do and the margins of error are small, but it’s not impossible. There’s no way to really know how it will turn out.
I don’t think the Coyotes failed to draw in Glendale because the arena competed with the one downtown. I never said that. That’s a separate issue.
The original point I was responding to was the claim that somehow renovating the the Delta Center, which is already there, is a similarly dumb idea as building the Glendale arena.
But the situations are not comparable. The Delta Center is centrally located, more or less, for that market and it’s the biggest arena in the area. The owner of the building also owns its major tenants. It’s in a much better position to succeed than the arena in Glendale.
Indeed, I’m not sure Glendale has completely failed overall. It’s still there so I guess it is still getting events. But it does have a lot of competition in the area for big events, which is just one more reason – but not the only reason – why it was very risky for Glendale to ever build it.
If the Coyotes played in the Footprint Center now – or in Glendale – they’d definitely still be there. That isn’t really disputable based on everything we’ve learned in the last few weeks.
Mereulo has made it clear that he’s not giving up his dream of an arena of his own on the east side of the city and is willing to lose money hand over fist to get there. And the NHL is willing to indulge that dream even now after the team has left.
They only moved now because it became intolerable to play in a college arena.
But if they were playing in an NHL-sized arena, downtown or in Glendale, they would still be there while Meruelo continued to pursue other options. They might still be losing money, but they’d still be there.
The only way this shared dream of the NHL in Arizona dies if if there is no billionaires willing and able to keep it going. That day may come of Meruelo can’t get an arena built. Another rich guy might come along and want to try, but there is actually a limited supply of billionaires willing to spend so much on something that, even under the best circumstances, is not all that profitable.
It seems unlikely that the league would want to own the team again. They didn’t take that option with the Thrashers, which suggests the owners just don’t want to do that again.
They didn’t take that option with the Thrashers because they couldn’t. Atlanta Spirit already kneecapped the Thrashers when they themselves owned the team. What incentive would they have to mark off dates for the Thrashers when they weren’t the ones getting revenue? The NHL would have been third-class citizens in the arena in Atlanta at best.
Nobody in Phoenix rides the Valley Metro despite free light rail rides included with Footprint Center tickets. UTA TRAX ridership to Delta Center events is probably minimal despite a fairly extensive network. Parking was free for most of the time the Coyotes were in Glendale, and access off the 101 was as easy as it gets. Most fans came around on Loop 101 from North Scottsdale, and by 6:30 the carpool lane was cruising at 80mph. The Deck Park Tunnel bottleneck excuse was nonsense, the Coyotes didn’t mention when the South Mountain Freeway opened, creating an easy bypass from the Easy Valley to Glendale. That would have ruined their excuse for poor attendance. Canadians, Bruins, Rangers Red Wings and Blackhawk fans had no trouble finding their way to Glendale. I can’t see a way to reconfigure a way to accommodate both hockey and basketball, good hockey sightlines push seats too far away for basketball.
On top of all that, the NHL announced last week that Utah games would be syndicated into Arizona next winter.
History shows that is not a wise nor worthy business practice. After the Baltimore Colts left for Indianapolis in 1984, NBC forced the Colts’ games into Baltimore most every Sunday. 1984 was the year the NFL’s TV ratings famously went through the floor.
That’s a non-sequitur. The NFL in 1984 does not resemble the NHL in any year and the way TV worked in 1984 does not remotely resemble how it works now.
The channel that is going to show the Utah whatevers in Arizona is Scripps sports. I believe that is the same outfit that is trying a post-RSN experiment with putting Suns games over the air.
I can’t imagine many Coyotes fans will want to watch that. And if it means the Utah games are blacked out from the ESPN+/MAX package, they’ll be pissed about that too.
But obviously Scripps thinks it will be more people than will watch whatever else it could put on. Or, perhaps, they signed a very dumb contract and didn’t bother to make a clause stating it was null if the team left the market. No offense, but I suspect they know how to run their business better than you do. They have people who research the numbers and what not.
Either way, that won’t have much effect on the NHL’s TV strategy, such as it is, overall.
The analogy between NHL Coyotes 2024 and NFL Colts 1984 is appropriate. In both instances, it’s a case of TV broadcasters forcing certain teams into markets where they’re no longer welcome. The Colts weren’t embraced during their final years in Baltimore and their home attendance was proof.
On that note, the Scripps contract for Utah/ex-Phoenix covers games that are not exclusive to ESPN+ or Hulu. [Gray Television has the contract for the Phoenix Suns and Phoenix Mercury.]
You are overstating the issue. When NFL games are regionally televised on Sunday afternoons, CBS and Fox usually televise the Chargers game in San Diego. No one has threatened to burn down the TV stations because of that.
If the number of people in Arizona watching the Utah _____ on TV turns out to be even fewer than the number that watched the Arizona Coyotes, then the TV guys will figure that out quickly and stop showing the games in Arizona.
“…that comes to $673 million, which is a lot more than the $500 million that was reported last month…”
Hmmmn. Seems like this is an opportunity for Kaval & Fisher to claim another $173m in economic damage to their Las Vegas “plan”.
(and yes, I know what story this is… and no, this isn’t accidentally posted in the wrong forum)
I’m curious about this paper that you linked. (https://ideas.repec.org/a/eee/regeco/v98y2023ics0166046222000916.html)
The paper isn’t available there – not for free, at least -but the abstract says: “We show that the spillover benefits are heterogeneous across sports and business sectors. We find that 100 baseball stadium visits generate roughly 29 visits to nearby food & accommodation businesses and about 6 visits to local retail establishments. While the estimates for football stadiums are comparable, basketball & hockey arenas do not appear to generate significant spillovers for the surrounding businesses.”
29 out of 100 seems like an awful lot to me. Not insignificant, perhaps.
It says basketball and hockey generate less traffic. Is that right? So, to be conservative, if we imagine a crowd of 15,000 people coming to a game and 20 out of every 100 go to a bar or restaurant in the area afterwards, that means that 3,000 people are going out in the area.
Let’s say it’s 2,000. That could still be a lot depending on how many bars and restaurants are in that area.
I imagine its hard to generalize – thus, “heterogenous” – the impact of these places, because it largely depends on what else is going on in that area on non-game nights.
In the not-to-distant past, downtown bars and restaurants in big cities would depend heavily on people coming in after work so, to a large extent, game traffic just displaced a lot of those people. Anybody who has ever worked in an area near a major sports venue can attest to that. And, like you said, a bar can only serve so many people at a time, so it can’t really take full advantage of spikes in demand at 6 pm and 10 pm.
But a lot of downtowns are mostly vacant after 7 pm during the week and on the weekends. I get the sense that downtown SLC is one of those places.
The post-COVID shift away from offices has exacerbated that in many cities. So it’s not surprising that mayors, real estate owners, and restauranteurs are desperate for anything that might bring more people from the suburbs, or keep them there longer, as the case may be.
But if that’s the goal, then there are better ways to spend $600m on it. Putting more housing in these dense areas would help in a lot of ways, but that’s going to be a slow process if it happens at all. Better transit and transit safety would help. Building dedicated public spaces that can host free or cheap events would help too.
The owners want us to think that people are motivated to come into the area to go to the game and then go out to eat or drink nearby just because it’s convenient and they like the vibe of being around other fans of that team. And to some extent, that is how it often works. Buffalo Wild Wings did not invent the “sports bar.” That sort of place emerged organically.
But the development of these “entertainment districts” suggests that the presence of bars and restaurants and “the vibe” is as much of a draw as the game itself, especially for the oft-cited “casual fans.”
The owners want to make it look like they’re doing a favor to the local hospitality industry by putting their facility in their neighborhood, but it’s really the other way around and they know it. There are no more stadiumless neighborhoods that resemble Wrigleyville or Kenmore Square, so they’ll ask for public help to create one.
I can sympathize with the desire to “save” downtowns. Walkable, transit-friendly public spaces create community. I’m a big fan of them. They’re good for the environment and good for humanity. And arenas and sports teams can contribute to that. But plans like this essentially privatize those public spaces at a high cost to the taxpayers.
Yeah, I don’t know more about that paper either, and don’t know the authors. But 30% of fans stopping to buy something either before or after a game doesn’t seem like all that much — and is even less so if “visits” can be multiple per person, so if someone rents a hotel room, buys a coffee, takes a Lyft to the game, and takes another Lyft to get back, that’s four “visits.”
I’ll see if I can find out any more about this paper. But the point was that there’s research being done, and it’s not showing a huge impact on the neighborhoods around hockey arenas. (There are other papers on this as well, just not as recent.)
30% sounded like a lot to me. I guess It all depends on what it’s being compared to, I guess.
30% of the fans is not worth anything if those people are just displacing other customers who’d otherwise be there.
Or, it might be a very nice bump in business if the neighborhood was otherwise empty those nights.
I suspect in most cases, its somewhere in between – enough for the owners of local restaurants to want to welcome the new team, but not nearly enough to justify the public subsidy.
However, increasingly, there doesn’t seem to be any counterfactual to compare it to because the “neighborhood” around the arena didn’t exist *at all* until the arena was built. All the bars and restaurants that might benefit from the arena were built alongside the arena. Their business model is not really much different from that of the concession stands* inside the arena.
* Are they still called “concession stands?” That feels like a term from the 1930s.
Here’s a good older paper, so old that the stadium in question is gone now (the Seattle Kingdome):
https://research.upjohn.org/cgi/viewcontent.cgi?filename=3&article=1188&context=up_press&type=additional
“Clearly the stadium channels economic activity in the direction of businesses that have a connection to sports. Stadium bars and restaurants and retail outlets selling sports paraphernalia benefit. Many other businesses, particularly those that do not appeal to sports fans, lose business. This occurs as a consequence of peak use of shared community resources on event day; parking and sidewalk space are the most obvious examples. Customers that ordinarily would patronize local businesses do not on event day because the cost and inconvenience of doing so increases.
Routine or normal business, therefore, is crowded out on a scale that may well offset any neighborhood gains. Unless the excess demand for key local resources is somehow mitigated, many other commercial activities in the neighborhood are destined to decline.
The policy implications are clear. Whether the stadium contributes
meaningfully to the local economy depends on the nature of that economy and its ability to minimize the disruption caused by peak stadium traffic.”
That is basically what I would have guessed.
The equation changes now that there is less “normal business” happening in these downtowns, but I suspect that building a stadium (or two stadiums. Or maybe two stadiums and a convention center) is not going to be as helpful as building more housing.
Downtowns in Europe are doing just fine with zillions of foot traffic, while the Futbol stadiums are in Tibmuktu.
People won’t go there no more. It’s too crowded.
Exactly.
My guess is that the plan B Bettman was referring to is the Point of the Mountain development over the old state prison site in Draper. Salt Lake County’s government wouldn’t have any qualms throwing public money to bring the Jazz Yetis (or Yazz, Jetties?) to the south suburbs. They may even be able to get their hands on redevelopment funds the state earmarked for that site; it was meant for housing but that hasn’t stopped local pols before. It’s a stupid location for a variety of reasons, but it’d be paid for.
Renovating the Delta Center makes the most sense. The public transit infrastructure is there, as are all of the bars and businesses that cater to Jazz fans. I’m surprised he hasn’t eyed the vacant lots across the street from Salt Lake Central Station that sit just west of the Gateway Mall development. It’s only a couple blocks south of their current location and would be serviced by the Frontrunner, Trax, Greyhound, and city bus lines. My guess is he doesn’t want to spend the crapton of money to remove the unhoused encampments over there, though. That little corridor with the Salt Palace, Delta Center, City Creek and Gallivan Plaza is hella lit up and patrolled by SLCPD to keep the “undesireables” from scaring away Jazz fans from the suburbs or conference attendees. As much as Ryan wants to blame city officials, he knows damn well that any venue outside of that footprint in downtown will be showing a side of SLC that doesn’t get included in Athletic puff pieces.
I’m a little surprised he leads off with dissing the local pols. That would inevitably come, but it seems a bit odd that he’s starting now, when the team has only just been announced and everything should be sweetness and light.
FWIW: I think the Utah Yetis should be selected right now and to hell with any fan vote or school kids competition.
I think he just wants an excuse for immediately scaling down his proposed dream development. South Salt Lake is industrial, and the ballpark neighborhood is desperate with the Bees heading out of town. Either of those would be much cheaper real estate. Funny enough, state pols mandated the new arena be in the same downtown footprint because they realized a new development south of it would simply shift paying customers away. And they still support this stupid deal!
Just wait until after the 2024 general election. Have a good team in Utah, get the name ready and let fans sit in 10,000 seats so they can bang the drum for the new arena. Especially if they get the 2034 Winter Olympics. It’s posturing at this point.
That sounds like a possibility. They could use money earmarked for the Olympics toward a new arena, just as money earmarked for the last Utah Olympics was used to renovate the University of Utah football stadium.