Not Just A Summer Rerun

It’s tempting to say “here we go again” with the latest round of ownership news. It’s not the same, though, we’re further down a bunch of roads.

Some of what follows is cribbed from Craig Morgan’s piece he dropped while “on vacation” from a super secret but fun location.

Deal Fatigue

It was around this time last year the Glendale City Council approved an arena management agreement with Hockey Partners. A whole series of events followed that conspired to ensure that agreement would fail:

• Petition for a referendum to bring the arena agreement to a popular vote. That attempt failed and Glendale First! was formed.
• Petition for an initiative to gut a sales tax increase approved by the city council, characterized as “tax money for hockey” and supported by big dollar funding from well connected sources. Glendale First! also opposed this initiative which was eventually defeated after the petition was accepted.
• The NHL lockout put the agreement on hold. Again.
• Glendale insisted the deal be reworked. The deal was renegotiated with significant concessions from Hockey Partners.
• A second petition for a referendum was filed once the revised agreement was approved. Once again, Glendale First! was there and that referendum attempt failed.

One of the interested parties, Anthony LeBlanc, was sitting in the front row next to Greg Jamison as a partner in the deal when the second agreement was approved by the City Council on November 27, 2012. Now, he’s back for the fourth (Ice Edge, Hulsizer, Jamison, Renaissance) time to finally make it happen.

Remember that when doing your own mental calculations on whether Renaissance (RSE) has the chops to stick around and make it happen.

NHL First

This time around, the NHL worked with interested parties until they hammered out a deal that made sense. Their decision is apparently to go with the RSE guys, with the Kaitesdorf crew being the assumed backup plan with perhaps Greg Jamison in the lineup as well.

This differs from prior attempts in that the order of transaction negotiations shifted from Glendale negotiating a package simultaneously with the NHL to being strictly an NHL negotiation.

Certainly, a financial commitment from Glendale would be baked into ANY deal for the Coyotes if they are to remain in Glendale. I don’t know why RSE got the upper hand over Kaitesdorf for the final push, although Kaitesdorf has traditionally been looking for bottom feeder deals with little (if any) personal commitment. Perhaps that remains the case to this day.

Kaitesdorf may have the political upper hand in some parts of Glendale government, I won’t rehash that here. Rumor has it that lack of a personal guarantee may have cost that group credibility with the NHL.

Regardless, RSE is for all intents and purposes the new owner of the Phoenix Coyotes.

Assuming a deal gets done in Glendale.

It’s Glendale’s Fault

The theme from many pro-Coyotes people is now “Okay, now Glendale better not screw this up!” I completely understand that position, but believe it to be misguided. Consider the following before joining that chorus:

• Glendale committed to the Coyotes 100% when the City was essentially blackmailed by the NHL threatening a move to Winnipeg. The threat was real enough that a voice on a phone (rumored to be Wayne Gretzky) called “the team bus” on it’s way to a playoff game against the Red Wings and said the team was definitely moving. Whether that story is true or not, Glendale DID step up at that point and the team DID play lackadaisically to be whomped by the Wings that night.
• Glendale, despite being saddled with budget problems, committed to the Coyotes 100% when they approved an agreement with Hockey Partners (the Jamison group). Despite educated assurances from Glendale First! that the referendum attempt was absolutely guaranteed to fail, that deal was never consummated when the opportunity presented itself.
• Glendale continued to commit to the Coyotes with temporary arena management agreements with the NHL hoping their commitment would be rewarded eventually DESPITE the lockout that was, obviously, not Glendale’s fault.
• Glendale then further committed to the Coyotes with a renegotiated agreement, triggered partly because of a poorly constructed contract that didn’t allow for a prorated amount to be paid to Hockey Partners to compensate for the lockout.

Plenty of REAL work and personal sacrifice from City of Glendale representatives continues in support of keeping the Coyotes as the anchor tenant at Jobing.com arena. It’s disingenuous to dismiss that effort without consideration and ridiculous to assume that level of effort won’t be applied to design a deal that will work for the Coyotes and the City.

I’ve been critical of Glendale myself over the years, but the City is not “the problem here”. Glendale is saddled with a lot of debt, a mountain of which finances the sweetheart deal doled out to Kaitesdorf for Camelback Ranch. So, even though much of that debt was recently financed to the benefit of the City, very real budget issues remain and must be dealt with.

That’s where the disagreements begin.

Politics

There’s a new mayor and three new council members. Of the four votes for the Hockey Partners deal, only two (CM Knaack and CM Martinez) remain. With the new regime, support for the agreement that expired at the end of January is deteriorated.

Politics will make this debate about “public safety instead of hockey”. That’s a compelling “narrative”, and the “optics” don’t favor the Coyotes. Of course the reality of the dollars involved is significantly more complex, but the picture painted in “the papers” will continue to follow that path.

Glendale has, over the years, commissioned extensive research regarding what is the correct amount to pay a contractor to manage their city owned arena. I’ll summarize the results of the most recent commission below, but click here to read the document for yourself if you wish. It’s good information, you can see what the underlying comparison numbers for REAL ARENAS are. No secrets, no fabrications, no assumptions. Just numbers.

First is list is the arena used for comparison, then the result (per year) as it pertains to Jobing.com arena.

• Arena 1 (not named) – $15M-$20M for Jobing.com Arena
• Nationwide Arena – Columbus, OH – $14M-$16M for Jobing.com Arena
• New Sacramento Arena – Sacramento, CA – $15M for Jobing.com Arena
• Conseco Fieldhouse – Indianapolis, IN – $13M-$15M for Jobing.com Arena.

None of the above numbers is less than $13M (per year). All of the above numbers are more and are being ignored in favor of a $6M figure being politically bounced around. In hindsight, perhaps a more strenuous objection to the $6M should have been made when it began life back around election day as a budget “placeholder”.

RSE and the NHL are expected to come into town and present a number more in line with the numbers from the report Glendale commissioned and close to the deal struck with Hockey Partners.

Plenty Of Possibilities

Conventional wisdom holds there is a gap between the maximum $6M the City will offer for managing their arena and the $13M-$15M the ownership group needs to make their financials and business plan presented to the NHL work.

There, the suppositions diverge as to what will happen and why.

• A realistic compromise will be reached and the Coyotes will remain in Glendale.
• The NHL will be moving the Coyotes to Quebec City (or Seattle) and the NHL is going through the motions with the RSE folks. They will show up in Glendale, present a “$15M, take it or leave it” proposal, and then throw up their hands when the City tells them to shove their hockey team.
• There are “three pro-Coyotes votes” no matter what the deal is and the team will be relocating once any vote is required.
• The Coyotes can’t move because the NHL just realigned the league and there’s no time to do that over.
• The deal in Glendale won’t happen and the team will move back to downtown Phoenix “where they belong”.
• A deal will be reached but the Coyotes won’t garner the support necessary and they will be moved to Canada as soon as the “out clause” expires.
• The NHL will be sure ANY deal is in place because they don’t want to lose the TV market in Phoenix.
• Etcetera

Speculation is sometimes fun, but it hasn’t been anything but exasperating for Coyotes fans for years. Since much of the speculation is now in French, and the number of people EXPERT in Glendale politics and the inside workings of the Coyotes have climbed exponentially, it becomes less fun each day. The black hole of ignorance and misinformation, fomented by jingoistic “journalists” from news outlets like the Globe and Mail, continues to grow. The only way to stop the creep of misinformation is with an owner for the team and a deal in Glendale. Both are in the works to be resolved in the near term.

There are really two important pieces of information speculators don’t have, and one piece nearly ALL choose to ignore.

Missing Information

One of the more important bits of information missing is the true intent of the inscrutable NHL. The league has the best interests of the league in mind, period. The wellbeing of Glendale is not their concern. Hockey is a business, that’s the way it should be.

Professional sports leagues and teams continue to take advantage of municipalities everywhere, witness the recent blackmailing from the Edmonton Oilers or the Sacramento Kings mess.

Nobody REALLY believes the NHL doesn’t have “Plan B” in their back pocket or that they’d hesitate to use that plan to further their cause.

It’s also EXTREMELY likely that the league actually wants Glendale to be the home of the Coyotes for the foreseeable future, but we already know they will be happy to play hardball in any negotiation. Remember the threatened move to Winnipeg? Remember the lockout(s)?

The true colors of the NHL won’t fly this Tuesday, either, but the City will get a peek at them.

The other missing information pertains to the bids submitted to Beacon for the arena management deal. The deadline for submitting bids was extended a week, one could reliably assume it was extended to suit the purposes of a bidder that needed something before they would be able to complete their bid.

Once those numbers become public, and so far it’s been impossible to get them, the negotiations can begin in earnest. Until then, there’s no possibility of ANY vote being taken.

With the extended deadline, some bidders submitting to Beacon will have the significant advantage of a peek at what the NHL and RSE need to make their deals work. Let’s just assume at least one of the people briefed in the “private” meetings coming up Tuesday will pick up the phone or meet somebody for lunch and compare bid notes. Then we can expect to see the bids from the “non-hockey” people, revised to compete more successfully against the RSE deal to show up and the game is on.

Ignored Information

The bit of information being ignored by nearly everybody is the resolve to make the Coyotes work in Glendale.

Being dismissive of the City Council people with a phrase like “morons in Glendale” is wrong. Thanks to “morons”, the Coyotes are STILL HERE more than four years after being run into bankruptcy. Much of that credit goes to the people of the Glendale City government and they deserve respect.

I do believe some members have political or personally selfish reasons for objecting to ANY “Coyotes deal” no matter how beneficial it is to the City, it’s counterproductive to dismiss them or publicly assume they don’t have the best interests of their City in mind.

Once somebody decides to lay the cards on the table, the work OUT IN THE OPEN (where it belongs) can begin.

Once there is opportunity to work towards a concrete goal with parameters that are public instead of speculated, you’d be foolish to count out people that make “Hockey The Hard Way” a way of life. A loss for them is still possible, but the winner will be bloody and limping.