Archive for the ‘Phoenix Coyotes’ Category

Very long time, no post.

In the months since the last SportVotes post… pretty much nothing has happened in Glendale.  I mean, sure… they had a solid playoff run and there was a controversial public financing plan and a threatened public referendum and a new potential owner is trying to gather the funds to finally buy the Coyotes, but really?  It’s just been long and dragged out beyond belief.

It’s honestly more depressing than anything, really.  That being said, it is somewhat amusing to go back and read through some of my own posts that more or less prognosticated the impending doom of the Yotes, only for it to get dragged on for another year (soon to be a second year) while the almost entirely ignored Thrashers up and moved to Winnipeg.

Is this the beginning of a new start at SportVotes?  Maybe.

For past articles on the Phoenix Coyotes, please go HERE.

First of all, it’s great to finally be back.  My computer problems are still persisting, but thankfully I now have a loaner laptop in my possession that will allow me to return to updating SportVotes.

In the two weeks since my last update on the subject, the situation in Arizona between the NHL, the Glendale City Council, and prospective Coyotes-owner Matthew Hulsizer on one side and the Goldwater Institute, a conservative taxpayers advocacy group, on the other, has continued to deteriorate.  The Glendale City Council had previously threatened to sue Goldwater and a number of other individuals should their attempts to block the sale of municipal bonds lead to the relocation of the Coyotes, but that threat has appeared to be mere posturing as weeks have since past with no actual move on this front.  Since then, the Goldwater Institute has apparently dug their heels on the matter and continued their efforts to warn potential bonds buyers about the questionable legality of the deal.

These moves have so seriously threatened the sale of the bonds, integral to allowing a new ownership group being able to buy the team and keep them in Arizona without absorbing exorbitant amounts of debt, that Glendale and Hulsizer have come hat in hand offering additional millions of dollars in guarantees for taxpayers to make the offer more appealing.  However, Goldwater is still convinced that the basic arrangement behind the proposed deal violates the state constitution, so they are not backing down.  NHL and Glendale officials have been trying their best to downplay the severity of Goldwater’s continued actions and threat to sue, but they are desperately worried.  Gary Bettman, the commissioner of the NHL, is on the verge of facing an outright owner’s revolt against him for failing to sell the Coyotes that has proved to be a massive burden on the league’s coffers, and Glendale has even gotten vocal support from powerful U.S. Senator John McCain to speak on their behalf to Goldwater.

And they have good reason to be worried.  The NHL’s and Hulsizer’s patience is limited, and at a certain point one or both will simply back out rather than continue to lose face.  Should that happen, there can be no denying that the Coyotes would be forced to relocate, likely as early as next season, a fact that has absolutely delighted Winnipeggers due to the likelihood that they are the prohibitive favorites to land the team in the event of a new ownership group buying the team and moving them elsewhere.  And, to date, there is no indication that Glendale is at all willing to drop their objections to the deal.

As per usual, more news on this as it becomes available.  And you’d better believe that it will be coming relatively soon.  The status quo cannot be sustained in the desert for long.

Past articles on the Phoenix Coyotes and their “Drama in the Desert” can be found HERE.

Potentially as early as tomorrow, the city of Glendale will be filing suit against the Goldwater Institute for its repeated attempts to block the sale of municipal bonds meant to finance a deal that would keep the Phoenix Coyotes in Arizona.  Claiming that losing the franchise would result in a potential net loss of a half billion dollars in future revenue sources for the city, the Glendale City Council has instructed the city attorney to file suit against Goldwater Institute.  While it should come as no surprise that Glendale would bear its teeth at the conservative watchdog after their repeated questioning over the legality of the city’s attempts to push through the controversial bond issue, what should be viewed as a shocker is the potential scope of the lawsuit.  If Goldwater continues its opposition and subsequently forces the NHL to halt efforts to keep the team in Arizona, Glendale could be seeking damages in the hundreds of millions of dollars.  On top of that, Glendale will not only be suing  the Goldwater Institute for damages, but also individual members of its board of directors and even the wife of the owner of the Arizona Diamondbacks due to allegations that the baseball team has been supporting Goldwater so as to remove a major sports competitor from their market.

In my personal opinion, this is an absolute, last-ditch effort by Glendale to keep the franchise.  Grumblings from the NHL have been growing ever fiercer for months over their continued financial hardship in administering the deeply unprofitable franchise, and the other teams’ owners have all-but lost patience for continuing to fund the Coyotes while attempts to keep the team in Arizona under new ownership have floundered.  Additionally, prospective buyers have already popped up in Winnipeg that are willing to buy the franchise and pay off the debt in order to move the team and bring back the Jets.  While the NHL has obviously been interested in keeping the team in the Southern United States in the hopes of gaining a major American television contract, the prospect of the situation in Glendale dragging on has inexorably been pushing the league’s higher-ups for cutting ties in the desert and recouping their losses by selling off the franchise back to its original Manitoban roots even at the risk of losing a major media market in Arizona.

As a result of this, Glendale is firing directly at the bow of not only the Goldwater Institute, but at its directors and supporters in a single, vicious stroke.  They are going to try to scare Goldwater to withdraw their threat to block the bond issue with a lawsuit of their own and hit them in the pocketbook should Glendale lose the Coyotes.  And to my nose, this reeks of a desperation bully move.  Even if it is shown that Glendale did not break state law with the proposed massive bond issue, the prospect of facing a lawsuit could very likely delay the NHL’s sale of the franchise long enough that they simply give up on attempts to keep the team in Arizona and allow prospective owners from elsewhere to buy the team with the intention of immediately relocating as quickly as possible.

It will all come down to a blinking game.  If Glendale’s threat forces Goldwater down in the near-immediate future, the NHL’s sale of the franchise to an owner committed to keeping the team in Arizona will go through.  If Goldwater doesn’t back down and either keeps up their legal threats or even outright files a lawsuit against the city, then the NHL will blink and allow the team to be purchased by outside ownership groups, effectively killing the Coyotes.  This is going to be a battle that messily intertwines the sports world, the political world, and the business world before all is said and done.

3/9 UPDATE: Rather than making a new entry, I figured that I’d just add on some news here.

As of right now, despite Glendale’s initial intention to file suit as early as Monday, the city and the NHL are mostly stuck in a staring contest with the Goldwater Institute to see which one blinks first.  Both sides are threatening legal action and Commissioner Gary Bettman of the NHL is sounding exasperated over the continued speedbumps that have been thrown up at every step of the process in his attempts to sell the Coyotes.  Canadian media is getting positively giddy at the notion that the league’s patience could be on the verge of running out and that a return to Winnipeg could be coming sooner rather than later.  As soon as new information about the continued drama in the desert becomes  available, I will report on it here.  Until then, the Arizona standoff continues.

It took a while longer than I had anticipated, but we have more news regarding the continued troubles of the Phoenix Coyotes, arguably the most beleaguered franchise in major North American sports.  As I already covered previously, the Yotes have been experiencing setback after setback during their brief history in the Arizona desert.  Recently though, things appeared to finally be going in the right direction for the team, as they finally returned to the playoffs again last year, the franchise had reached an important refinancing deal that saw the city of Glendale assume a significant portion of the team’s debt, and the NHL was finally beginning to make a move on selling the team to an attractive ownership group headed up by Matthew Hulsizer, the head of a Chicago-based securities firm that has had a long interest in hockey.  The combination of Hulsizer’s deep pockets and Glendale’s willingness to not only adopt a $100 million bond issue to absorb most of the team’s debts, but also pay any potential buyer $197 million over six years to keep the team in Glendale, seemed to be a major turning point in keeping the Coyotes in Arizona.  For the first time, it would actually be financially possible for the team to turn a profit.

Could the Jets be coming back?

However, the Glendale bond issue proved to be immediately controversial amongst a significant segment of the local conservative population, as many area residents were opposed to using public funds to finance the team, especially as so many of them had been unwilling to even support the team at all during their years in the desert.  In response, the Arizona-based Goldwater Institute, an organization that has long derided the use of any public monies to fund private sports teams, has threatened to file suit against the bond issue by claiming that it actually broke state law.  This threat has effectively paralyzed the NHL’s negotiations with Hulsizer to the point where it is now actively feared that the continued opposition to the bond issue could cause him to pull out of the negotiations in the same fashion that Jerry Reinsdorf (owner of the Chicago White Sox and Chicago Bulls) did the previous year.  The mayor of Glendale, Elaine Scruggs, recently held a press conference in which she called for the Goldwater Institute to stop their legal threats and that their continued opposition could cause the entire deal to fall apart (which is exactly what the Goldwater Institute wants).

Or the Nordiques?

Or how about the Scouts?

Should the Goldwater Institute stick to its guns and keep up their opposition to the bond issue, the Coyotes troubles could very well continue to pile up.  Additionally, as the league has assumed ownership of the team, they are the ones hemorrhaging money.  The other 29 team owners are none-too-pleased at their continued flushing of money down the toilet in funding an unwanted team (especially an unwanted team that appears likely to reach the playoffs again), and their patience with the NHL’s actions have to be running thin at this point.  Canadian sports fans are undoubtedly giddy at the whole prospect of the Coyotes potentially moving out of Arizona, as several major Canadian offers have been publicly put forward to try to land an NHL team in Winnipeg, Hamilton, Quebec City, and even a second team in Toronto.  Despite the fact that the Maple Leafs would very likely block any attempt to add as second Toronto-based team, and the Leafs and the Sabres would unite to block a Hamilton-based team, the offers from Winnipeg and Quebec City would have to be viewed as extremely attractive alternatives to the NHL, especially by owners seeking to rid themselves of their shared burden in the desert.  Other American cities have likewise been lobbying for new teams, most notably Kansas City, meaning that there is plenty of interest in moving the Coyotes elsewhere from from even within the United States.

More on this undoubtedly at a later date.

Had I begun this blog a mere year ago, I undoubtedly would have already created dozens of individual posts about the continuing drama surrounding this team.  For those that don’t know the history of this NHL franchise, I’ll give a “brief” history below:

The Coyotes began their existence far away from the sun-baked deserts of Glendale in the frozen tundra of Winnipeg, Canada.  Founded in 1972 as the Winnipeg Jets of the World Hockey Association (WHA), the future-Coyotes entered the world of professional hockey at a crucial crossroads of the sport’s history.  The NHL had only just recently expanded for the first time in decades, literally doubling almost overnight from six franchises to twelve in 1967. While this expansion allowed the league to bargain for lucrative American television contracts and brought professional hockey to markets that were starving for a chance to host NHL teams, namely Philadelphia, Pittsburgh, Minneapolis-St. Paul, St. Louis, Los Angeles, and the San Francisco Bay Area, it was also a highly controversial decision. By doubling in size immediately, rather than instigating gradual growths as Major League Baseball was slowly implementing, the overall talent pool of professional hockey was watered down significantly.  Questions over the legitimacy of the St. Louis franchise, seemingly only founded so as to allow the very powerful owner of the Chicago Blackhawks to sell off an arena that he owned in St. Louis (the St. Louis Arena, home of the Blues for the first quarter century of the team’s existence), were raised by many hockey observers.  And, most importantly, the NHL did not add any more teams in Canada, meaning that despite the fact that the vast majority of the players were Canadian and Canadians as a whole were much more rabid followers of hockey than Americans, the 1967-68 season would feature only two Canadian teams and ten American teams.  To potential fans across Canada, and especially in Vancouver (which many assumed was a shoe-in to receive an expansion franchise in 1967), this was a complete travesty.

As a result, over the span of the next decade, the NHL began to undertake a series of haphazard expansions that instigated a phase of intense growing pains that would haunt the league for years to come.  Over the next decade, the NHL would add franchises in Vancouver, Buffalo, Atlanta, a second team in New York, Kansas City, and Washington D.C.  With the floodgates open and the expansions continuing, a rising discontent grew in municipalities angered over the fact that they were not receiving franchises from the NHL.  In response, a second professional league, the Western Hockey Association (WHA) was formed to challenge the monopoly that the NHL held on professional hockey in North America, founding franchises across Canada and the United States.  While this league proved to be nowhere near as stable as the elder NHL, the war between these two leagues lead to rapidly escalating player salaries, increased cost overhead, and decreased profits and available talent. By 1979, both leagues were at their breaking point.  The WHA was nearing fiscal insolvency and several NHL franchises were either on the verge of outright collapse and/or strongly considering relocation to other cities in hopes of a brighter future.

After prolonged and intense negotiations, the WHA agreed to merge with the NHL, bringing the Winnipeg Jets and three other franchises into the NHL. While the now 21-team league stood as the sole major professional hockey league in North America, it had been incredibly bloodied by its feud with the WHA. The California Golden Seals had been forced to relocate to Cleveland before eventually merging with the Minnesota North Stars in 1978 in order to keep that team alive.  The Kansas City Scouts barely lasted two years before moving to Denver in 1976 to become the Colorado Rockies (the later MLB team would take their name from this hockey team) before being forced to relocate again to New Jersey to become the Devils in 1982.  The Atlanta Flames, the league’s first real attempt to expand into the American South, failed miserably and moved to Calgary in 1980.  And to make matters even worse, in a vindictive fashion the NHL stripped most of the talent from the four former-WHA franchises in order to placate the hardline owners of teams already in the NHL.

Despite this, the former teams of the WHA, the Jets, Quebec Nordiques, Hartford Whalers, and Edmonton Oilers, initially thrived in their new surroundings. The Oilers would go on to put together one of the most impressive dynasties in all of professional sports history, winning the Stanley Cup an astonishing five times in the span of seven years from 1984 to 1990.  The Nordiqes built a strong and passionate rivalry with their fellow French-speaking Canadian rivals, the Montreal Canadiens, and the Whalers built a loyal fanbase in Connecticut while competing strongly with more established rivals in nearby New York and Boston.  Finally, the Jets became the pride and joy of the city of Winnipeg and the province of Manitoba throughout the 1970s and 1980s.

As the 1990s approached though, the situation for these (and other) franchises worsened considerably.  The economy across North America grew weak as both Canada and the United States sunk into recession, and the Canadian dollar fell to all-time lows, drastically hurting teams across the league, especially the newer franchises in Quebec City, Hartford, and Winnipeg.  All three teams would seek greener pastures to the south in response to fiscal uncertainty.  The Whalers would abandon Connecticut for the Carolinas in 1997 to become the Hurricanes.  The Nordiques left for Denver to become the Avalanche in 1995, where they proceeded to win two Stanley Cups in their first six years in their new city.  And the Jets, in a move viewed as most peculiar of all, moved to the deserts of Arizona to become the Coyotes in 1996.

The story of this franchise could easily have ended there, but drama would continue to follow the Coyotes in their new environs.  Despite starting out strong, making the playoffs in five of their first six years in Arizona, the Coyotes continued to be marred by difficulties. The first arena they played in, the American West Arena, was completely inadequate for hockey purposes.  Almost immediately, the team attempted to gain local support in the construction of a new arena, only to face challenges at every step of the way.  Over the next several years, the Coyotes changed ownership twice and began to suffer on the ice despite bringing in all-time great hockey player Wayne Gretzky to coach the team, proving the old standard that great players don’t always make for great coaches.

But, after long legal wranglings and attempts to woo popular support for the construction of a new arena, the Coyotes were finally successful in building the Jobing.com Arena.  Despite its very odd name (which I personally believe to be the worst named arena in all of professional sports, and the second worst named facility after only the 1-800-ASK-GARY Amphitheatre, an outdoor concert facility in Tampa, Florida), the team finally got a venue that they could be proud of…. at a very high cost.  As a result of the years of demands and requests for public funding for the new arena from the team, the construction of the Jobing.com Arena left the Coyotes tens of millions of dollars in debt and had alienated a large portion of their fanbase.  During the first decade of the 21st Century, the team slid into deeper and deeper mediocrity and debt.  The team’s average attendance sunk to the near bottom of the league and they failed to reach the playoffs for six straight seasons.

This all came to a head in 2009, when the Coyotes filed for bankruptcy after they had lost over $50 million in 2008 alone, forcing the league to step in and take over ownership of the team.  In that same year, Forbes magazine released their annual valuations of every single NFL, MLB, NBA, and NHL franchise.  Out of 122 teams, the Phoenix Coyotes were ranked dead last, 122nd place, as the lowest valued major sports franchise in North America.

Despite oddly making it into the playoffs that season, thanks in large part to the league’s willingness to spend money on the team’s payroll and to hire competent coaching in order to raise the potential selling price of the team to prospective buyers, the Coyotes continued to muddle around.  Despite attracting several potential high profile buyers, notably Jerry Reinsdorf, owner of the Chicago White Sox and Chicago Bulls, every major potential investor balked at the league’s demands that they promise to keep the team in Arizona.  What’s more, whenever the team’s record books were made available to potential investors, the sight of all the red ink seemed to have scare off everybody that the league was willing to sell the team to.  Only Jim Balsillie, an eccentric Canadian billionaire who has repeatedly attempted to purchase NHL teams with the expressed intention of moving them to Hamilton, Ontario, Canada, remained willing to buy the franchise from the NHL, much to the NHL’s increasingly costly chagrin.

In 2010, the NHL seemed to finally score a major victory by getting the Glendale city council to agree to a $100 million bond issue on Jobing.com Arena, thereby seemingly eliminating a great deal of the team’s debt and opening the door to for a potential sale to people other than Balsillie.  While the NHL quickly trumpeted this achievement and began moving ahead with plans to sell the franchise to another group of prospective investors, it proved to be very controversial, as many Glendale residents were unwilling to financially support a professional sports team with public funding, especially one that many seemingly had no interest in supporting even as fans.

And all that brings up to the current situation, with the conservative Goldwater Institute seemingly on the verge of filing a lawsuit to block the bond issue, and subsequently any potential sale that the NHL is planning.  A lot is expected to happen regarding the Coyotes saga in the next week or two, so a lengthy background was needed before I could potentially go into any additional news on the franchise.  Drastically different outcomes could arise in the next several days, ranging from the NHL using the safeguard established by Glendale’s bond issue to finally sell the team to the Goldwater Institute blocking the bond issue and, by extension, preventing any potential sale of the team.  Depending on what happens, the Coyotes could just as easily be able to stay in the Arizona desert for years to come or be forced to pack up and leave the Grand Canyon State for another city, potentially even back to their original home of Winnipeg.

More news to come soon, in all likelihood. Hopefully there will be light at the end of the tunnel for this team sooner rather than latter and they they can find success wherever they end up.