The Arizona Coyotes held a Town Hall featuring GM Don Maloney and Co-Owner, President, CEO & Alternate Governor Anthony LeBlanc yesterday, one day after publishing a $16.458M loss number for the first fiscal year under new ownership.
A business operating in the red is rarely good news, in the case of a severely distressed business like the Coyotes were, it’s cause for optimism considering the initial projection for year one was a $20M loss.
When publicly traded companies beat projections, their stock often goes through the roof. In the Coyotes case, it hasn’t happened.
Wait For It…
Before the polite applause for better than budgeted team financial results subsided, the other financial shoe dropped.
The losses reported to Glendale include two large one time charges; the entire $10.495M buyout of Mike Ribeiro and $7.878M worth of “acquisition” costs. The loss total more than doubled and exceeded the projected loss amount by a wide margin.
The synapses of everyone familiar with the Coyotes situation immediately flashed with alarm at how close $34.831M is to the oft quoted $50M loss trigger amount for the infamous “out clause (page 23)” coming due in August, 2018.
Show Up And Ask Whatever You Wish
The Town Hall was set up on the plaza, two mics ready for people ask questions or make statements.
Any questions, any statements. There were no rules, no restrictions, no scripting.
The Coyotes even went out of their way to invite at least one overly vociferous combative (on Twitter, anyway) critic personally:
@sportshubaz We beg you to come to the town hall tomorrow & ask these ridiculous questions and assertions directly to Mr. LeBlanc.
— Rich Nairn (@RichNairn9) March 14, 2015
As far as we know, the invitation went unaccepted (as expected).
Let’s Go To The Video
The first question (at 1:51) was about the out clause and there’s another from our good friend Jo Jo at 19:05.
Mr. LeBlanc has made multiple public statements regarding the relevancy of the out clause (it’s irrelevant), yet it remains a nagging logic cloud in the minds of many Coyotes fans and Glendale residents.
Watch the Town Hall, see what you think.
Yadda Yadda Yadda
Fans of “The Princess Bride” (and who isn’t?) will recognize the title and may appreciate the image of the Dread Pirate Roberts, a terrifying pirate captain who was more of a perpetual concept than a reality.
Some will listen to LeBlanc and immediately dismiss his dismissal of the out clause as salesman hype. It’s less a condemnation of his truthfulness than a result of years of negative experiences.
Sticking with the Coyotes as “your team” has been more of a leap of faith than a logical position since (at least) the day Jerry Moyes filed bankruptcy papers for the team.
Coyotes fans had a bright flash of hope realized with the 2012 Pacific Division Championship year when an overmatched team went further than anybody outside the Valley gave them credit for.
Since then, the roller coaster ride has continued, with Jamison’s failed attempts to purchase the team, a successful IceArizona purchase of the team, and then an unexpected purchase of 51% of the team. Performance on the ice slid from barely missing the playoffs last year to terrible.
Now, already wearing mopey faces from losing 9 of the last 10 games comes this, a gigantic loss number appears unexpectedly and it’s so close to the horror of the $50M amount that we can feel it’s hot breath on our necks.
It Comes Down To Faith (with evidence)
Faith is a wonderful thing. Faith based on evidence is easier to defend.
If one chooses not to believe any of Maloney’s or LeBlanc’s assurances, examine the evidence.
The Coyotes have two first round draft picks this year, perhaps including one of the two franchise level centers available. There’s a couple first round picks next year as well.
Domi, Dvorak, Perlini et all are in the pipeline, you know who they are and have seen their skills. The team looks to be on the right track for eventual long-term success.
Long term deals for everything (TV, food, booking, etc.) have been executed, there are no one or two year deals being negotiated by the Coyotes. The argument that it’s all for appearances sake is weakened by the liability for breaking contracts in a litigious society.
The Coyotes made a major, and effective, commitment to growing the sport of hockey locally to ensure the longevity of the club. They have reached out to the people in the state that have been around youth hockey for years and have dedicated resources to help those programs grow. LeBlanc said:
“We’re working closely with the league. …the league structured the Industry Growth Fund that is purely designed to grow the game in the non-traditional markets.”
LeBlanc continues, explaining that the Coyotes are looking at making sure there’s more ice to play on, they’re looking at building ball hockey rinks, etc. Everything he mentioned was a long term goal unlikely to be undertaken if the plan was to move elsewhere in a few years.
The fact that the NHL is willing to invest so heavily in youth hockey and growing the sport means they don’t intend to disappear, either.
Plus, of course, where would the team move to?
Buy 2015-16 Coyotes Season Tickets?
We will be, and that decision was only cemented yesterday.
“The only thing we’re focused on is staying right here in this wonderful building.”
That’s the first time I remember hearing a statement that specific. It wasn’t “staying here in Arizona” it was “in this wonderful building”. That’s an important difference for us.
Watching the team this year has been a rough experience. Seeing a trade of a uniquely valuable player for a kid that will MAYBE be ready to play NHL hockey next season was upsetting.
Season tickets are expensive, and a long overdue trip to Europe has been pushed back too many times.
Yet… we had a great time yesterday despite the near certainty the Coyotes would lose their game, which they did. It’s obvious the experience of a Coyotes game depends less on the scoreboard than we thought.
There’s no doubt that there will be exciting talent on the ice for the Coyotes.
Will that happen next year? Doubtful. The likelihood of overheated fan expectations of superstar performance from young men that aren’t old enough to drink alcohol is probably overly optimistic, and another tough season may follow.
But we’ll be around Section 121 for another season. Europe can wait another year unless we get some windfall that we can’t pass up. We’re certain enough we’ll have Coyotes games to go to in Glendale in ten years to make that substantial investment and do our part.