PHOENIX — The city of Glendale released the proposed terms of an arena management deal Thursday that would keep the Phoenix Coyotes at Jobing.com Arena for 15 years.
Under the agreement, the city would pay the Renaissance Sports and Entertainment group $15 million annually to manage the city-owned arena. The city has $6 million budgeted annually to pay a management group.
To bridge the shortcomings, RSE has proposed to reimburse the city through a revenue sharing program. The city would receive about $7.3 million annually from ticket fees, parking fees and other sources of revenue to bridge the shortcoming. According to documents provided by the city, the estimated revenue share would leave about a $1.2 million gap that the city would be responsible for.
However, RSE has proposed an additional $1.50 ticket fee, the proceeds of which would be placed in an escrow account. Following a year-end audit, the city would then be able to withdraw funds from that account to shore up any shortcomings. Should the other revenue streams cover the city’s needs, the money in escrow would transfer to RSE and the account reset to a zero balance.
The amount of money provided to Glendale through the revenue sharing program will increase as attendance levels rise, among other factors.
The proposed agreement does have a clause that would allow RSE to leave Glendale after five years and if total losses exceed $50 million anytime during the agreement.
City officials have expressed concern that Glendale would be responsible for any revenue shortcomings and that the city would not be able to terminate the deal should revenue goals go unmet.
The deal is anticipated to be voted on by the city on Tuesday. The city council announced an emergency meeting to be held on Friday to discuss the deal.
To read the full agreement, click here.