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Doan look now, but the Coyotes’ sale may happen after all

Here we go again, per the Phoenix Business Journal’s Mike Sunnucks (via the Sporting News):

The perpetually on-again, off-again saga regarding the sale of the Phoenix Coyotes hockey team is on again. Prospective Coyotes buyer Greg Jamison has brought investment money and partners back into the fold and could soon close on the purchase of the team from the National Hockey League. The sale would keep the team in Glendale at Jobing.com Arena.

Jamison’s group has been trying to buy the Coyotes since last year.

Two sources with knowledge of the three-year-old Coyotes ownership saga say Jamison now has the investors and partners in place to finally buy the Coyotes and a deal could close very soon.

All that comes as free agent Coyotes captain Shane Doan puts off signing with a new team while Jamison tries to close the deal. The fact that Doan has held off signing with a new team could be an indicator that he is waiting on the Coyotes sale to close.

Continued, of course...

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Bosephus's avatar

Sincere question to those in the know… why did Atlanta get the green light to relocate while we’ve heard this Phoenix drama since what?  09?  Second chances (Flames)?

Posted by Bosephus from Behind enemy lines, Denver, CO on 08/09/12 at 12:20 AM ET

George Malik's avatar

Easy answer here. The Thrashers had 8 owners who couldn’t agree what color the sky was on a sunny day, and were suing each other all the damn time regarding decisions made for the Thrashers and NBA’s Atlanta Hawks.

The Thrashers were also in a huge but somewhat moribund sports market and had nothing tying them to the city save their owners, employees and fans.

The Coyotes are tied to someone who owns one of the largest trucking companies in the nation in former owner Jerry Moyes, who placed the Coyotes into bankruptcy three years ago, they’re tied to a huge real estate development in Glendale, AZ, Jim Balsillie tried to buy the team (see: Bettman has stepped in to “save” every team that Balsillie’s tried to swipe) and the citizens of Glendale seem willing to fund the Coyotes’ losses by paying them a massive, taxpayer-subsidized team/arena management fee.

The Thrashers were easy to relocate. The Coyotes have been subsidized by the league since 2009 and are embroiled in massive litigation. Even the politics of power would suggest that the NHL will be bound and determined to ensure that the Coyotes remain in Phoenix simply to prove that they won’t be bullied or pushed around, even if that means ensuring the team remains in a location that’s guaranteed to be something other than profitable over time.

Posted by George Malik from South Lyon, MI on 08/09/12 at 12:39 AM ET

Bosephus's avatar

Thanks for the quick answer.  Makes sense, in that weird backwards sort of way way. I was always 80% certain Doan would stay in Phoenix.  But I never understood why a financially bleeding franchise is kept on life support. 

In other news sounds like DET is done with offseason moves unless a trade for a Dman is in the works (I hope).

Posted by Bosephus from Behind enemy lines, Denver, CO on 08/09/12 at 01:03 AM ET

Avatar

they’re tied to a huge real estate development in Glendale, AZ,

I think this is the the biggest reason the NHL fought to keep the team in Glendale, and an often overlooked difference between the Coyotes and the Thrashers.

Glendale put up a lot of money to get the team and build the arena.  It is not in the NHLs interest to walk away and leave them hanging, with an empty arena and lots of debt.  New arenas dont get built without public financing of some form anymore.  I think moving the team would have been more damaging to the NHL in the long run then the marginal gains in revenue for moving the Coyotes to a small Canadian Market

Atlanta had much different circumstances.  The Thrashers owners also own the Hawks, and have the managment contract for the arena, which is also well used for concerts and conventions and such.  The Thrashers sale wasnt leaving the City of Atlanta on the hook for millions of dollars. They also sold the team according to the NHL’s rules to a group that had already been basically approved by the league, rather then force the sale through bankruptcy to someone the league didnt want.

Posted by jwad on 08/09/12 at 08:07 AM ET

BrendonR's avatar

I think moving the team would have been more damaging to the NHL in the long run then the marginal gains in revenue for moving the Coyotes to a small Canadian Market.

This is the biggest misconception that Americans seem to be making about the situation.  There.  Are.  No.  Fans.  In.  Phoenix.  This is not a sustainable enterprise, regardless of the significant initial investment.  Trying to make hockey franchises survive in a market that will never truly care about the sport is inherently flawed.  This is why there is one, count it: one, MLB franchise in Canada, because the sport will basically never see dedicated support outside of the biggest urban centre and most multicultural city in the country (Toronto).  This is also the basis for Little Gary’s entire tenure as the Commish.  One thing has been solidly proven in that time: hockey, like any sport, belongs where the fans are.

Describing Hamilton as a small hockey market is like saying New York is not a very good baseball market.  The GTA and surrounding cities (such as Hamilton) is hands-down the most enthusiastic and profitable hockey market on the planet, which the NHL agrees with as we learned during the Moyes bankruptcy trial.

Posted by BrendonR on 08/09/12 at 10:00 AM ET

Avatar

Describing Hamilton as a small hockey market is like saying New York is not a very good baseball market.

Folks can talk about Hamilton all they want, but it will never happen.  Buffalo and Toronto will oppose it.  No one wants to undermine the Sabres. A second team on Toronto may happen some day, but that will only be with a large payment to the league and the Leafs.

This is the biggest misconception that Americans seem to be making about the situation.  There.  Are.  No.  Fans.  In.  Phoenix.

This is the biggest misconception to many in Canada. Funny how they forget that Toronto almost folded in its early years, Ottawa went bankrupt, “lil Gary” saved Edmonton and Calgary with league money, Winnipeg failed once and Quebec failed. This doesn’t mean there aren’t hockey fans in those cities but economics and quality of the team have a huge effect. Phoenix isn’t a failed market, it has been badly managed for many years and is now threatening to leave every other weak. NO market would support a team in that situation and that INCLUDES Canada!

Posted by timbits on 08/09/12 at 10:26 AM ET

mrfluffy's avatar

Phoenix isn’t a failed market,

Bollocks. A city is bankrupting itself to keep a hockey team.

They already cut city staff to minimums due to layoffs last year…what else should they do?

Posted by mrfluffy from A wide spot on I-90 in Montana on 08/09/12 at 11:48 AM ET

awould's avatar

A city is bankrupting itself to keep a hockey team.

Don’t confuse the economic woes of an entire nation and the fact that Glendale sits in the middle of one of the hardest hit regions and the hockey team. There is a very good case to be made that spending to keep the team will cost less than losing the team altogether.

Posted by awould on 08/09/12 at 12:51 PM ET

awould's avatar

This is the biggest misconception that Americans seem to be making about the situation.  There.  Are.  No.  Fans.  In.  Phoenix.  This is not a sustainable enterprise, regardless of the significant initial investment.

Here’s a repost of my response the last time an uninformed Canadian made this same comment:

..............
From 2000-2002, the team played in a crap arena and were historically bad. Their attendance numbers declined nearly every year they were in the valley, pretty much along with their win-loss record. They moved to Jobing.com for the 2003 season and their attendance jumped up quite a bit from 29th to 19th in the league. But they still sucked. And then the lockout happened. Hardcore fans will come back, as we all did, but they lost any traction they gained from the new arena. And they continued to suck, bad. The first time they iced a decent team was when Tippett was hired in 2009. By that point, the team was in BK and this ownership saga had started and the economy tanked. From 2008 to 2009, the team went from 87% capacity to 70%, despite improving the on-ice product.

But before everything fell apart, in the midst of the very bottom of their team success in the 2006-2007 season when they netted a whopping 67 pts, were dead last in the Pacific Conference and 29th in the league, their attendance was #24 at 88% capacity. Behind them in attendance were the great fans of Boston, Washington, Chicago and St. Louis. Coincidentally, all of these teams also sucked. Yet the total crap fans of Phoenix still managed to show up more than the fans of these stronger hockey markets. Or you could point to Pittsburgh as an example - it wasn’t until their ownership mess was settled and they started winning that their attendance figures turned around. So perhaps sucking correlates to poor attendance. I’m sensing a relationship here. And hey, look at New Jersey. They were #22 in attendance this past season and made it all the way to the Cup Finals - I imagine their ownership issues affected the attendance.

Even during the past three years, their attendance has eked up some as the team has shown some life. Now if the team gets stable ownership and some firm footing, and the economy has turned around some (at least in Phoenix it has), then I would expect the attendance capacity to bump up to atleast the 87-90% that they did from 03-08. And that’s not taking into account that it will likely be higher if the team can continue winning on the ice. At 88% capacity, that would put them in the #20-22 ranked arena. Not super awesome, but then again nobody is claiming they’re Montreal or Detroit.

My point is that the factors contributing to the disaster are more related to these other influences than the fanbase. A losing team, ownership turmoil and a historically bad recession have not been kind to the Coyotes so what I was saying was to claim the team is failing due to the fans is a sign of ignorance to the scope of the problems.
..............

Also, what timbits said.

Posted by awould on 08/09/12 at 12:56 PM ET

Avatar

This is the biggest misconception that Americans seem to be making about the situation.  There.  Are.  No.  Fans.  In.  Phoenix.  This is not a sustainable enterprise, regardless of the significant initial investment.

I dont think you understood my point.

I am positive that there would be more fans for this franchise in canada.  I am positive they would sell more tickets, and probably generate more revenue.

I am also positive that Gary Bettman and all of the NHL owners recognize this as well.

But, the NHL and all of its owners also rely heavily on public financing and subsidies like the ones Glendale provides to the Coyotes.  If they dont right now, they will when its time for them to build or upgrade their stadium.

It is a bad move for the NHL to leave Glendale on the hook for all of that money.  It would come back to hurt the NHL and other owners in the long run.

And, since many NHL teams in good markets are not profitable, or only slightly profitable, why throw glendale under the bus and take the risk.  For the current owners, particularly without any revenue sharing, there is much more at risk by moving them then there is a potential gain. 

also what awould said

Posted by jwad on 08/09/12 at 02:05 PM ET

awould's avatar

Posted by jwad on 08/09/12 at 01:05 PM ET

I’d think that owners of any major league team in every sport would be concerned if the NHL defaulted on the Jobing.com lease and stuck Glendale w/ a huge bill and an empty arena. It would be the cautionary tale that may keep other city governments from even considering forking over tax money to fund a stadium for a billionaire’s toy team.

I totally get that a stadium has a positive impact on the surrounding area and produces a lot of sales tax revenue for a city, and I agree it should be subsidized. But I think the team owner should be on the hook for a good portion as well. After all, it is the citizens of a community that spend the money that pays his bills and makes his team successful (or not).

I think a city should require the league to guarantee any lease on a taxpayer funded arena so if the franchise fails or moves, they’re not totally screwed. And if/when Glendale gets left holding the bill, I imagine every small market NHL city will have some serious requirements before they build a parking lot to serve their NHL team, much less an arena.

Posted by awould on 08/09/12 at 02:14 PM ET

Avatar

Arizona is a show-me state. Cardinals had the same type of attendance problems. Win and people will show up. They’ve been brutal since inception leading to declining interest. Then they get decent but the black cloud of bankruptcy and moving happens so fans don’t want to get emotionally invested. If they get through this and stay competitive there is no reason the team can’t be middle-of-the-pack attendance.

Don’t forget Pitt and Washington were in dire straights until they became perennial playoff teams too. There are like three or four fanbases in all of pro sports that can suffer for ten years of inferiority without declining attendance.

Posted by Andrew Mack on 08/09/12 at 04:31 PM ET

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Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.

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