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March 17, 2010
Prospective Coyotes buyers: Glendale pays us $6-11m a year, or deal's off
The COO of Ice Edge Holdings, the group that last year proposed buying the Phoenix Coyotes and having them play some games in Saskatoon and Halifax, has declared that the only way they'll buy the team now is if the city of Glendale agrees to substantial annual subsidies.
"Glendale has to deliver an appropriate lease, or there's probably no deal," Daryl Jones told Toronto sports radio on Monday. "The team's going to lose $20 million this year... If you just added back the attendance they had last year, that gets you $6 to $7 million more to the bottom line. Assuming you get $10 to $15 million out of a new lease per year, you get to break even or profitable pretty easily."
Jones wouldn't say what the Coyotes were paying under their old lease, but it's actually public record: about $4 million a year for 2007, the last year the team actually made its full rent payments. So that means Ice Edge is looking at asking the city of Glendale to pay the Coyotes between $6 and $11 million a year for the privilege of having them play there. Admittedly, that's less than the state of Louisiana used to pay the New Orleans Saints in negative rent, but it's still enough to make you wonder how badly Arizona really needs a hockey team anyway — or if it wouldn't be cheaper for Glendale just to buy the team itself, so that at least if the team starts turning a profit, the city might get some of its money back.
How about the Phoenix-Halifax Dos Esquis?
Wouldn't it just be cheaper for city of Glendale to burn $1M at Jobing and charge admission?
Posted by floormaster squeeze on March 17, 2010 10:26 AM
(flat, no affect voice): Oh gee whillikers, a sports team owner demanding public money. How very shocking.
Posted by Marty on March 17, 2010 11:09 AM
There is more to the lease than just the base payment. There is the parking at the entire Westgate mall area, there are the additional events, and this creepy little clause in the lease the puts the Coyotes financially responsible for the development of Westgate and the other business, hotels, and residential around the area.
The team and the arena are a business partnership and there is a way to make it work.
IEH wants to play 5 games out of market to generate the missing money, and Glendale is insisting that all games be played at home (in the current lease). The difference is about 6-11 mil per year.
There is your sticking point on top of everything else people.
If you don't know what you are talking about, please don't write or regurgitate anything.
Posted by Tony on March 17, 2010 01:24 PM
IEH expects to make $6-11m a year from five games in Saskatoon? I know those Canadians are hockey-crazed, but man...
Posted by Neil on March 17, 2010 01:29 PM
If you think playing 5 games is Saskatoon will generate 5 to 11 million you must be high. Saskatoon is a city of 250,000 people. They recently hosted the World Junior Hockey Championships and didn't sell out many Canadian games including the sem-final. There is absolutely no way playing 5 games would generate anywhere near $6 million.
Well respected hockey analyst Doug Maclean who was former preseident of the Florida Panthers and Columbus Bluejackets estimated that the maximum amount of additional revenue to be generated from teh 5 games in total is 1 to 1.5 million dollars.
They are looking for tax payers money as a subsidy and the citizens and the citizens of Glendale should not stand for it.
Neil, you are right: The "Saskatoon" games are just a red herring. They will not generate that much money from the city. To put this number ($11M) in perspective, the CUC in S'toon would have to generate more revenue per game than the Canucks do in Vancouver or the Habs in Montreal, both with newer and better arenas of 32% & 50% greater capacity, respectively, in markets more than 15 times the size of Saskatoon (just under 200k).
My new favourite Daryl Jones quote (after the one about Nashville "Hey, if they can make money why can't we!!!!)? "Well, it'd be pretty easy to be profitable with $11M from the city".
I'm sure it would be easier. But, um, Mr. Jones? If this is the business opportunity you and your frat boy friends think it is, why do you need a subsidy? And, Mr. Jones, isn't being in business supposed to be hard? If it were easy to make money on a $100M business, surely everyone would do it? I bet I could out develop the Donald if only I could find a city dumb enough to pay my bills but let me keep all the profit...
I actually feel sorry for these guys. Every time they open their mouths they just look more inept. Of course, the same is true for a good part of the NHL office...
That's the thing with unearned wealth. People who have had it easy all their lives are the most unlikely to maintain a profitable business without a kickback (or several).
Those who earn an honest profit worked too damn hard to tolerate those losers who, with connections and inside knowledge, scam their way to the ownership of sports teams. Ratner and Jay-Z, I mean you as well.
Posted by Transic on March 18, 2010 08:28 PM
The gutless wonders in Glendale got what they deserved. If they had backed the Balsillie bid, then everyone would have been made whole.
The residents should also thank the incompetent bankruptcy judge who made up the rules as he went along.
With this arena crashing and burning, those pikers in Glendale will get stuck with the tab.
Posted by Bevo on March 18, 2010 11:50 PM
One of the most entertaining sagas in a long time. And the NHL is suing the previous owner, (yeah the one who's bankrupt) and the team is dead last in attendance (1200 people out of 29th place) and the team has their best record ever as AZ or Winnipeg (not counting the WHL years).
What more can happen?
Posted by Doug on March 19, 2010 07:33 PM
Time for their next door neighbor the Cardinals to step up.
Posted by Daniel Francis on March 21, 2010 02:43 AM
That's WHA years, Doug!
Yes, it is a soap opera isn't it? Seems like an opportunity for a reality show (as one of my colleagues suggested), maybe something like "I'm an NHL franchise owner! Get me outta here!!!"
They have good attendance at present, but the haunting fear is that those fans are not paying anything like actual NHL prices for the privilege.
The NHL deserves this mess for failing to do due diligence on it's markets and in many cases it's owners. This will cost them a bundle in both cash and PR. It's really too bad that Glendale fell for their "save hockey" angle... they should have known when the league only agreed to take over the lease for one year that the NHL never intended to make a decent effort to rebuild the franchise Glendale taxpayers have poured money into lo these past 15 years.
Posted by John Bladen on March 22, 2010 04:08 PM