Breaking down the Phoenix Coyotes ownership situation
Jun 24, 2013, 5:45 PM | Updated: 6:06 pm
If you’ve been wondering who to get mad at, who to support and who to believe in when it comes to the Phoenix Coyotes, the answer is NO ONE.
Nobody is evil. Nobody is a saint. Very few are in over their heads but some are. What you must understand is no one is fighting for you. Everyone has an agenda.
I won’t tell you who to support or where to direct your anger, but I can tell you what I know and introduce the players.
JERRY MOYES: He started all this by declaring bankruptcy and trying to sell the team to someone who would move them against the wishes of Gary Bettman. This move screwed Glendale, the NHL and all Valley hockey fans. But the reason I said no one is evil is because Moyes would have made $80 more million if allowed to sell. Although all of this is his fault, wouldn’t you have done the same thing?
GARY BETTMAN: He saved hockey in Glendale at first. Now, he’s the primary reason it won’t last. He has no concern whatsoever for you. This is not about proving Phoenix is a hockey town. Bettman cares about one thing: the sale price. It is imperative for him to get as high a price as he can to justify to the other owners years of league ownership. Therefore, he’s willing to jack up the price for the Coyotes even if that eliminates profitability for the new owners on the front end. Meaning, a new ownership group will only make money when they sell the team or move it.
FRONTIER: An investment and hedge fund group. They are willing to loan Renaissance Sports Entertainment almost half of the money to buy the team as long as the lease guarantees Renaissance $15 million every year. If Renaissance can’t get the guarantee from Glendale, they’ll need to bring in someone with more money into the group or give up.
RENAISSANCE SPORTS ENTERTAINMENT (RSE): It’s a group of rich guys compared to you and me, but not rich enough to be team owners. The money loaned to them from Frontier is to be paid at 9% interest. It’s easy to see why Frontier is interested at that high of a rate. What’s impossible to answer is how will Renaissance make enough money if they are really interested in staying long term? The loan from Frontier (and a smaller one from the NHL directly) puts the ownership group in serious debt before the first face off. Where’s the money for players? Where’s the money for the scouting department?
ANTHONY LEBLANC: He’s the front-man for RSE. For marketing purposes, he’ll be seen as the owner. Nothing special, nothing bad. Just a guy who sees a business opportunity.
GLENDALE CITY COUNCIL: This is the group that’s struggled the most. You can say all you want that you’re against spending public money for sports teams, but there’s a catch since you should have said that 10 years ago. Public money has already been spent on the arena and the arena needs hockey. Blaming the last regime is a waste of time. This current group seems more intent on excusing themselves from previous council blunders instead of dealing with the situation as it stands. Some council members are handing out blanket “NOs” without finding the best-case scenario out of all the bad scenarios. It’s true, the last group of legislators really put Glendale in a bind, but this group isn’t doing enough to get it out. Arenas need an anchor tenant.
Glendale is offering a little over $6 million in guarantees. Since RSE needs $15 million to even get the money, there’s the sticking point.
WHAT DOES IT MEAN?
Saying “no” to everything proposed to keeping the Coyotes in Glendale is a mistake. Saying “yes” and allowing Bettman and RSE to walk all over Glendale is a mistake as well. The City Council needs to go at this with one mindset, either the Coyotes stay in Glendale long-term or they get out of Glendale immediately. There is no middle ground. Sign nothing that allows the Coyotes to leave within the next 25 years.
As currently constructed, RSE seems like a group of investors, to say it nicely, or carpet-baggers, to say it with attitude. Putting so little money into this up front while accepting a loan at a high interest rate makes the plan obvious. Buy the team and lose a little bit of money at first, and then make a lot of money selling the team to another ownership group. If RSE can’t put up more of its own money, where are they going to find the money to put into the team? If they skimp on the team, fans won’t show up. If there’s no fans, the owners can then claim they tried to make the Valley hockey country, but it was all of us that failed.
All of this goes away if Bettman lowers the price. There are local, hockey-loving people in this Valley who will buy the team for $140 million and ensure stability for years to come. Bettman isn’t interested in years to come. Glendale must stand its ground. Just because Bettman wants his money doesn’t mean Glendale should pay off the new ownership group. Bettman can have his sale price for a long-term lease or he should allow a different ownership group to buy it cheaper on a short-term lease.
As this situation is currently constructed, I predict the Coyotes/NHL/RSE come to an agreement in the next two weeks. There will be loud celebration. Then, little will be done to improve the team. Don’t blame GM Don Maloney. As the losses mount and the fan support dwindles, RSE will claim massive losses. They will act like millionaire victims. The Coyotes will be sold and moved.
If nothing changes, we will have hockey next year. In 2018, however, some city in the US or Canada will have a contest to name their new team. It appears Glendale is choosing a slow death.
