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June 08, 2012
Goldwater seeks restraining order against Coyotes vote
And here we go: The Goldwater Institute has released a brief statement indicating that it is seeking a temporary restraining order on the Glendale city council voting on the proposed Phoenix Coyotes $224 million subsidy deal today, on the grounds that not all documents surrounding the deal have been made public, in violation of Arizona open meetings law.
This is something the council can get around by simply (or not so simply — Goldwater didn't say how many documents were involved) releasing the missing documents, but more than that, this looks to be the opening salvo of the long-awaited war between the conservative-libertarian organization and the city over whether it's legal to hand over tens of millions of dollars a year to help make buying the Coyotes and keeping them in Glendale a profitable enterprise. And speculation whether even the threat of a lawsuit could scotch the sale of the team to Greg Jamison and lead the NHL to move the Coyotes elsewhere.
Earlier this week Forbes reported that Jamison is still having trouble raising the $170 million the NHL wants for the team, as investors don't think that it can turn a profit at that price even with a $200-million-plus subsidy. (Read that sentence over again and think about it for a minute.) Of course, that could always be NHL sources trying to scare Glendale into thinking that a subsidy for Jamison is their last, best hope — as could be the unsourced Twitter traffic that Jamison will bail if a TRO is ordered and that the NHL is about to go all Roger Goodell on Glendale's ass.
Or, it could just be a sign that hockey in the desert is such a bad idea that even with massive public subsidies, nobody will want to plunk down $170 million to buy into it. Of course, the NHL could always cut its price to something that reflects what the Coyotes are worth, but maybe Jamison doesn't have change for a nickel. At a certain point, while no doubt the few Coyotes fans would be saddened by the loss of the team they grew up with (provided they're under age 16), this is one case where it might well make more sense for everyone involved to move the team, rather than keep throwing good public money after bad.
And if you want to hear me pontificate a bit more about this, I'll be on Corus Network's The Rutherford Show at 11:30 am Mountain time today across Alberta. For those not lucky enough to be in the Texas of Canada, you can stream it online here.
Well the city of Glendale "won" round 1. The court denied the Goldwater Institute's request for the restraining order. The city will be voting in the next hour or so on the cockeyed sale.
Posted by Dan on June 8, 2012 12:47 PM
Neil;
Jamison may be having trouble raising the $170m (or whatever) from investors. That would be surprising to no-one.
However, I don't believe that the NHL cutting it's price would necessarily have any effect on investor interest. If they offered the team to anyone willing to take it for nothing, that "discount" would cover a maximum of 5 years losses at the present rate (2009-2011).
Not surprised that the court denied the TRO request. As history (in Glendale in particular) shows, Councils are not required to be well versed on issues to vote on them. In fact, they can be - and frequently are - completely oblivious to the results of their actions...
Posted by John Bladen on June 8, 2012 02:13 PM
Interestingly, though the judge said she didn't have jurisdiction to issue a TRO, she did say she believes the council is violating a previous court order on releasing public records:
www.abc15.com/dpp/sports/sports_blogs_local/judge-denies-goldwater-institute-motion-on-coyotes-vote
Posted by Neil deMause on June 8, 2012 03:04 PM
As someone living in Alberta I noticed in that last sentence you messed up and incorrectly placed a word too soon in the sentence:
For those lucky enough to *not* be in the Texas of Canada, you can stream it online here.
Fixed!
Posted by Andrew T on June 8, 2012 07:48 PM
Word order is what always trips me up when I try to speak Canadian.
Posted by Neil deMause on June 8, 2012 08:09 PM
Thanks for the link, Neil.
I believe the Judge is correct. As I recall, the city failed to turn over (or make public) a significant number of documents relating to the Hulsizer "bond" deal to Goldwater as well. They have a long history of failing to provide the information the law requires them to provide.
I was a little surprised that GW sought the TRO as they would certainly know that that court cannot act on their request for reasons of jurisdiction. I wonder if this was a procedural matter for them? Or if they just hoped they could get more time to review the documents?
Either way, the ball is now in their court. The city has agreed to the massive bloated subsidy needed to try and paper over their massive expensive mistake from 2003 (building an NHL arena where too few people are interested in NHL hockey to make the business work).
Sale & lease approved by Glendale 4-2. www.azcentral.com/community/glendale/articles/20120608phoenix-coyotes-sale-approved-by-glendale.html
Posted by SteveR on June 8, 2012 09:11 PM
Congratulations to the city of Glendale on keeping a failing NHL franchise in their city. Seriously, is this farce ever going to come to an end? We will be hearing about the Phoenix Coyotes and their viability in Glendale throughout this entire summer and once again around playoff time (assuming there is an NHL season next year).
Posted by Matt on June 9, 2012 10:40 PM
@ Matt
Once upon a time it was unheard of to think of the NHL without the Dallas Stars. They had a solid, competitive franchise coupled with a fervent fan base. Today they are selling tickets for $9 and still not selling out. Suddenly their long term existence in Dallas is questionable.
Take a good look at the Florida Panthers, the Nashville Predators and the Tampa Lightning: all three have enjoyed some success the last two years and the watch on their demises has subsided. If the Predators get gutted and lose Ryan Suter and are forced to trade Shea Weber and aren't that competitive next year - watch the vultures return. Same with the Lightning. Same with the Panthers.
If this Glendale deal goes through I imagine the Coyotes questions will quiet for a couple of years but I can't imagine if they aren't a SC contender every year they will continue to get support. And once the euphoria ends from this years run and people realize they don't have serviceable parks for the kids among other public facilities they may question why they should support the Coyotes. If they haven't already.
I think it's worth mentioning that the team will never make money in the Jobing.com arena for the simple reason that it's located in the wrong part of Phoenix. It's in Glendale, so the majority of the population in the region has to drive across Phoenix just to get to the arena (usually in rush hour traffic, mind you). Sure, they sold out most of their playoff games but where the bulk of the money from ticket sales is made, in the regular season, attendance was very poor even with the team winning. Logistics is the reason hockey will never make money in Glendale. Now maybe it would if they were downtown in US Airways arena, with a new light rail system servicing the area and an ASU campus nearby, and if ticket prices were more reasonable. These are all big ifs. Instead, we have yet another case of a pro sports team holding a city hostage and using tax money as the ransom.
It would probably make for an interesting post to find out why the Coyotes moved from Phoenix to Glendale in the first place. I'm sure someone made money.
Posted by D. Greene on June 10, 2012 09:42 PM
US Airways Arena was actually claimed to be the problem years ago and the "fix" was a new arena.
Reported attendance was an average of 15,600 in the first season in Phoenix (US Air Arena max of 16,000) steadily dropping down to 13,200 in 02/03, their last season there. When they moved to the Glendale Arena (max 17,000), attendance went up to 15,500 but again steadily dropped to 14,800 in 08/09. The last two seasons have been down to 12,500 or so mostly due to the off ice drama. Apparently no one cares now that they have a very respectable product.
Posted by Doug on June 10, 2012 10:42 PM
@ D. Greene
No offense, but if you think ticket prices need to be more reasonable in Glendale, then the team definitely needs to move. I watched ticket prices on StubHub during the playoff run. Had the Coyotes forced Game 7 it would've been a Saturday night game for which tickets for the first row in the 200s were going to $100. A great seat in my opinion. Similar tickets to a game here in Edmonton in the dead of winter during a wasted season don't go as cheap as $100 - certainly not on StubHub. Maybe at the door from a scalper ten minutes into the game. And if that was a Game 7 playoff game? Those tickets would've paid your monthly mortgage payment, maybe two.
Your ticket prices are more than reasonable - one reason some friends and I almost went down for a game - and if those are the prices the greater Phoenix area can afford or is willing to afford then the only way hockey stays in Arizona is if there's more revenue sharing from profitable Canadian clubs and some of the bigger US clubs.
And that is completely unreasonable.
Posted by Andrew T on June 12, 2012 10:00 AM
Andrew:
The only thing 16 years in the desert have proved is that "Phoenix" has a limited appetite for hockey... they have supported the Coyotes in AHL numbers and at AHL prices.
Phx, on average, generates well under half the revenue from ticket sales that is required for survival in the modern NHL (even before the bankruptcy and league ownership, they were doing well to top $15m in total gate. Decent franchises are in the $40-45m range, good ones do $65-80m).
If the fan base will support hockey at the AHL level only, the answer to the "problem" is obvious... and it's not a taxpayer operating subsidy for NHL level hockey.
Posted by John Bladen on June 12, 2012 07:10 PM
@ John Bladen
I've heard the obvious fact that the Coyotes don't generate enough revenues but I'd love to see a link guesstimating how much in ticket revenues they generate in a year.
And I agree - being in a major hub like the Phoenix area I can't imagine too many teams not jumping at the opportunity to move their AHL franchise to that arena. I can't imagine too many NHL cities that aren't a direct flight away from Phoenix.
If I were one of the California based teams I'd be all over that.
Posted by Andrew T on June 14, 2012 09:59 PM