The Coyotes Saga Part I: The Beginning / The Coyotes Saga Part II: Coyote Ugly

[pilldoc]

From "The Hockey Writers".......

 

Very nice background story on the chaos encircling the city of Glendale and the Arizona franchise.  I have posted Parts 1 and 2.  Part 3 will be released tomorrow.

 

All I can say whay a mess........

 

http://thehockeywriters.com/the-coyotes-saga-the-beginning/

 

The Coyotes Saga Part I: The Beginning

by Michael Straw | June 11, 2015

 

 

 

 

The Arizona Coyotes had a strong start before things took a turn for the worst. (cr: dougtone@Flickr)

[This is the first part in a three-part series focusing of the long-running problems surrounding the Arizona Coyotes entitled “The Coyotes Saga”]

 

Back in the early to mid-1990s, the NHL was really going through the Gary Bettman expansion era with teams being added to non-traditional hockey markets like Tampa Bay, San Jose, Anaheim and the Greater Miami Area.

 

In addition to new expansion teams, the league saw teams move from northern markets like Quebec and Minnesota to the Midwest and South in Colorado and Dallas, respectively. Another one of those relocations involved the Winnipeg Jets moving to Phoenix, Arizona where they would be known as the Phoenix Coyotes.

 

For the first six years in the desert, the team saw success both on and off the ice. Led by Hall of Fame forward Jeremy Roenick, Keith Tkachuck and Rick Tocchet, the Coyotes made the playoffs in five of their first six seasons. The team saw over 96% of its arena capacity filled for the first three years, a statistic that can only be viewed as a success in any new market, let alone one in the Pacific Southwest.

 

Shane Doan was expected to help lead the Coyotes into Stanley Cup contention . (Icon SMI)

 

With the aforementioned players as well as a young Shane Down on the wing, Teppo Numminen on defense and Nikolai Khabibulin in goal, the Coyotes appeared to be a young team ready to make the jump into the upper-echelon of NHL teams. Unfortunately, the perception of a great team on the rise just never became a reality.

 

Though the team made it to the playoffs plenty during their early years, the success in the postseason just wasn’t there. The Coyotes would fail to win a playoff series in each of those first five attempts. In fact, the organization wouldn’t win a series until their most recent trip to the playoffs in 2012, when they made it all the way to the conference finals before falling to the eventual Stanley Cup Champions, the Los Angeles Kings.

 

This lack of success in the postseason resulted in a decline that saw attendance drop in three straight years before a slight jump during the 2002-03 season. In addition to the on-ice shortcomings, it was clear that the place they called home, America West Arena, just wasn’t suitable enough for hockey.

 

Recent Coyotes Posts:

• The Coyotes Saga Part II: Coyote Ugly
• Coyotes Respond to Lease Termination
• Don’t Read Too Much Into the Leafs Trading Down Rumours

 

At one end of the ice, a few sections of the lower level actually hung over the ice. This obstruction led to a quarter of the ice not being visible to those in the affected seats. This resulted in seats being covered as well as a second video board being installed in order to give fans in poor-sightline seats a way to watch the action. Tickets for these seats also had to be sold, as expected, at a reduced price.

 

The issues inside the arena with fans wasn’t the only major problem the Coyotes had to deal with, either. The organization was also locked into a terrible lease with the city-owned arena.

 

This lease in Phoenix saw the team lose $10-million or more every year the team was in the arena. At one point, the team had lost $40-million during a single season, nowhere near an amount that anyone would consider a “sustainable loss”.

 

The massive financial woes ultimately forced owner Richard Burke to sell the team after not being able to garner more investments into the franchise. In 2001, Burke sold the team to Steve Ellman, a developer from the Phoenix area; NHL Legend Wayne Gretzky would also come aboard as part owner.

 

With the ownership situation seemingly squared away, it was time to focus on the arena that the Coyotes called home. Because America West was so inadequate for hockey, a new building was built in suburban Glendale, Arizona. This new facility would open in 2003, and the Coyotes would move into the new facility shortly after the start of the 2003-04 NHL season. To coincide with the change in venue, Ellman completely rebranded the team with new colors, a new logo and new uniforms. It was a new era for the Coyotes.

 

And just when it would seem that things would get better for the franchise, time proved that that just wasn’t going to be the case.

 

Part II: Coyote Ugly

[pilldoc]

http://thehockeywriters.com/the-coyotes-saga-coyote-ugly/

 

The Coyotes Saga Part II: Coyote Ugly

by Michael Straw | June 12, 2015

 

 

 

(Photo By Andy Martin Jr)

[This is the second part in a three-part series focusing of the long-running problems surrounding the Arizona Coyotes entitled “The Coyotes Saga”. Part I can be found here]

 

When the Arizona Coyotes moved into the then-Glendale Arena in December of 2003, there was a buzz surrounding the franchise.

After attendance fell to the low 13,000s for a couple of years, the crowds saw a spike back above 15,000 with the move. People seemed excited about the future of the team.

 

After the league lost the 2004-05 season due to a lockout, the Coyotes came back with a renewed vigor in 2005 under new ownership, yet again. Ellman sold the Coyotes to Jerry Moyes after financial issues forced Ellman out of the hockey business.

Though court findings showed that Moyes never really wanted full control of the organization, he purchased the team and kept Gretzky on as part owner and head of hockey operations. Shortly thereafter, Gretzky named himself as the team’s head coach.

 

Recent Coyotes Posts:

• Coyotes Respond to Lease Termination
• The Coyotes Saga Part I: The Beginning
• Don’t Read Too Much Into the Leafs Trading Down Rumours

 

Brett Hull was then signed to a two-year contract, giving the team a known face to market to fans in the Southwest. However, after just five games with the Coyotes, Hull abruptly retired, citing that he could no longer play at the level he expected to perform at.

This left the Coyotes without a major marketable name to draw in new fans. Attendance then began to drop once again after it was realized that the on-ice product just wasn’t good enough, and Gretzky, as great a player as he was, just wasn’t cut out to be an NHL head coach.

 

 

Attendance averages in Arizona since 2000.

 

On top of the problems on the ice, there were a number of problems going on behind the scenes that were about to catch up to the Coyotes.

 

In 2008, it was found out that the organization had been losing a high amount of money yearly. In addition, the media discovered that the NHL had been paying the bills for the organization after Moyes gave control of the team to the league without many finding out. Moyes then put the team into bankruptcy in May 2009, around the same time that commissioner Gary Bettman was set to present an offer from Chicago Bulls owner Jerry Reinsdorf regarding the sale of the team.

 

During the bankruptcy hearings, it was revealed that the team had lost $200 million over a seven year span. This included a loss of $54.8 million during 2008, alone. It was also revealed that the team had never turned a profit since relocating from Winnipeg over a decade prior.

 

Though two bidders – Reinsdorf and Ice Edge Holdings – came forward during the court hearings as potential purchasers, neither party put in a formal bid for the organization. Instead, Jim Balsillie, the former CEO of Research in Motion, was the only outside purchaser to make a formal bid on the team.

 

Jim Balsillie tried his damnedest to buy the Coyotes and move them to Hamilton, Ontario. (Wikipedia)

 

His bid of $212.5 million came with the condition that he would be able to relocate the team to Southern Ontario, specifically Hamilton. In order to counteract this bid, which the NHL claimed to have been negotiated when Moyes had no power to do so, the league put in a bid of their own.

 

Both were ultimately rejected for various reasons, leaving the Coyotes without an owner; their future still very much in question.

After the bankruptcy hearings concluded, the NHL began negotiating with both Reinsdorf and Ice Edge Holdings in order to work out a deal that would see the team stay in Arizona for the long haul. After months of negotiating, both bids wound up falling apart due to both having a condition within them that saw any losses suffered by the team be covered by taxpayers.

 

In 2011, yet another potential owner would come forth in an attempt to keep the team in town. Chicago investor Matt Hulszier reached a deal with the league on the purchase of the team as well as its lease agreement with the city of Glendale. Unfortunately, this deal collapsed as well due to a threatening lawsuit by the Goldwater Institute.

 

Because of this falling through, the city paid $25 million in order to keep the team in town for the 2011-12.

All of this drama off the ice overshadowed the fact that the team had seen a resurgence under head coach Dave Tippet. The Coyotes posted a franchise-best 50 wins and 107 points during the 2009-10 season.

 

In the 2011-12 season, the one saved by the $25-million payment from Glendale, the Coyotes one their first ever division crown as well as their first series since moving from Winnipeg. That season ended with a loss in the Western Conference Final against the Los Angeles Kings. Still, despite the success on the ice, the fans were skeptical to get behind a team that was shrouded in mystery regarding it’s future. Because of the skepticism, attendance dropped to an all-time low average at just over 12,000 fans per game.

 

Even when the team was successful on the ice, fans didn’t show much support. (Reddit)

 

More failed attempts to sell the team came over the next couple of years. Former San Jose Sharks owner Greg Jamison and California executive Darin Pastor both failed at their attempts; it appeared that the NHL was running out of time to find an owner.

The league was at the point where it had no other option to relocate the team if a deal wasn’t done with a new owner by the start of the new league year in 2013. At the last possible moment, the Renaissance Sports and Entertainment (RSE), a group led by members of the Ice Edge Holdings group that tried to purchase the team in 2009, came forward with a deal to buy the Coyotes.

 

After a 4-3 vote of approval by the Glendale City Council, a new 15-year lease was put into effect for the Coyotes to play at the city’s arena, now known as the Gila River Arena. RSE then purchased the team for $225 million in August of 2013.

 

The new lease agreement saw the city give RSE $15 million per year in management fees. RSE, which would operate the team under the name IceArizona, had a clause in the lease that the team could relocate after five years should it accrue more than $50 million in losses. This new deal would seemingly start to put an end to all of the problems for the organization.

 

The City of Glendale terminated the lease agreement for Gila River Arena with the Coyotes (Wikipedia)

 

But the problems just never seemed to go away. In its first year under new ownership, the team continued to lose money to the total of $16 million. On top of that, it was a little more than a year before IceArizona sold 51% of its stake in the team to Philadelphia entrepreneur Andrew Barroway, giving him majority control of the Coyotes. Completing the purchase in December 2014, Barroway became the team’s fifth majority owner since it moved to the desert in 1996, proving that stability wasn’t a thing in Arizona.

 

After putting into motion plans for the team’s on-ice future, the off-ice drama came back around when the Glendale City Council announced that it was set to vote on the possible termination of the lease between the city and the organization that had been negotiated on just two years prior.

 

The city used a state statute that happened to be included in the lease agreement that stated that the state can cancel a newly-agreed upon contract within three years if anyone involved in the negotiations is an employee for any other party in the contract. In this case, it was former Glendale city attorney Craig Tindall, who had recently gone to work for the Coyotes, which led to the statute being acted upon.

 

The motion to terminate the agreement passed with a vote of 5-2, leaving the Coyotes without a home are for the upcoming 2015-16 NHL season. The termination also added even more of a strain on the already damaged relationship between organization and city, one that will only get worse as the team threatens litigation.

[ScottM]

I just hope this is the thing that forces Bettman to allow them to move. It may not be the most modern arena, but Hamilton has an arena, and Quebec City has one almost ready, if it's not ready (I really haven't kept up on the progress of that). What I'm not as sure about is whether or not Seattle currently has a hockey ready rink. I know Hamilton or Quebec City would cause geographical issues, but it could be done for one year until expansion franchises could be awarded to help balance things once more. I'm sure there are other places that could serve as an at least temporary home as well.

[ScottM]

Then I see this: http://prohockeytalk.nbcsports.com/2015/06/12/back-downtown-phoenix-mayor-reaches-out-to-coyotes/?utm_network=twitter&utm_post=3796313&utm_source=TW%20%40NHLonNBCSports&utm_tags=srm%5Bhockey%2Carticle%5D

 

Aww nuts...

[pilldoc]

@ScottM

 

wow...I did not see that ..thanks for sharing.  Looks like decisions were made in hast and in the heat of the moment.  I do believe though that there are better hockey markets than Glendale / Phoenix

[ScottM]

@ScottM

 

wow...I did not see that ..thanks for sharing.  Looks like decisions were made in hast and in the heat of the moment.  I do believe though that there are better hockey markets than Glendale / Phoenix

 

I saw it i the Twitter feed on here. It appears to be very recent. I really hope that falls through...

[pilldoc]

the plot thickens.....

 

http://coyotes.nhl.com/club/news.htm?id=770684

 

Coyotes Issue Statement Regarding Legal Actions Taken Against City of Glendale

Friday, 06.12.2015 / 12:30 PM MT / News

Arizona Coyotes

Print

 

 

FOR IMMEDIATE RELEASE:
Friday, June 12, 2015

 

 

GLENDALE, ARIZONA --- The Arizona Coyotes issued the following statement today:

"The Arizona Coyotes have acted to defend their rights and reaffirm their continuing commitment to their great fans by seeking a restraining order to stop the City of Glendale's baseless attack on, and improper attempt to void, the Coyotes' lawful and proper lease to play at Gila River Arena. The suit was filed in Maricopa County Superior Court against the City of Glendale, the Glendale City Council and other City officials."

[pilldoc]

Cooper Rummell@CooperRummell

 

#BREAKING Judge grants @ArizonaCoyotes temporary restraining order against Glendale. @KTAR923

Retweeted by Elliotte Friedman

[idahophilly]

Oh my... That sets up a potentially LLLOOOOOONNNNGGGGG legal battle. Unless they just throw their hands up and move, either downtown or out of state, this will get even more ugly. Looks like we are gonna be hearing this for a year(s). And, who gets screwed there? The fans. Hell, I even feel a twinge for the players. Hockey players only get to play so long. Who wants to play under these circumstances. Yeah, I know they are well compensated. Never the less it stinks.

 

Well Gary, those chickens are coming home to roost. For what ever reasons one wants to come up with, hockey just wasn't meant for the Phoenix area. You can't fight fate.

 

(and somewhere, ranked draftee's in the 3-6 pick range are praying to god they don't go 3rd...)

[pilldoc]

@idahophilly

 

Great post idaho..... I totally agree with everything you mentioned.  Might I also add, if this ends up going into a long legal battle, this is gonna cost lots of $$$$$$$.  The only persons who are gonna benefit from this are the lawyers representing both sides.  Wonder who is footing the bill?

[idahophilly]

Well, right off the bat, best case scenario for the taxpayers is that they get to pay the legal fee's and since the city is out of money they get the added bonus of paying the interest on the money they borrow to pay the legal fee's. But wait THERE'S MORE. Still operating under the BEST case scenario, they come to a deal that keeps there maligned team there and they, the tax payers, continue to pay the hated team millions of dollars to run a team no one there wants, goes to watch, loses money every year AND when the tax payer well runs dry, LEAVES the city anyway.

 

Now here is the fun part! The worst case scenario (or something approaching the worst), the team wins it's 200 million dollar law suit, moves to downtown (or maybe Glendale effed it up for Phoenix and Scottsdale to) or leaves the state altogether. And what's that you say? Oh yeah. There is still a huge empty stadium sitting there with the TAXPAYERS making the payments on it with no tenant because 1) the city of just 220K people was STUPID enough to build the thing in the first place (that city's tax base isn't big enough) and 2) they drove the only major tenant away(oh hell, they don't even have another minor tenant ready) and adding insult to injury being the fact that they built the place for the tenant they drove away! 

 

They seem to be forget some very basic facts: The stadium can't move. The city is stuck with it and the costs of running it and paying for it. The team isn't stuck. They can move. I'm sorry that some 40% of the cities debt is because of sports teams but don't you think they should have put a wee bit more thought into it? I do and I know most of us would have because we know hockey, we know how far we are willing to travel several times a week or even a month to see a regular season game. Location, Location, location.  And we dispelled another myth: If you build it, maybe the won't come! Who wants to "get into" the team with this kinda history. I wouldn't be spending my money on them except for the one time a year the Flyers came to town.

 

Well, that's it for now! It will be fun in a car wreck kinda way to watch the whole thing unfold...

[idahophilly]

This also sums it up:Piece by James Tanner. Sad, sad, sad...

 

http://www.hockeybuzz.com/blog/James-Tanner/Restraining-Orders-and-Phil-Kessel/200/69259

 

"In a slightly interesting new development, the Coyotes were granted a restraining order - which seems like a strange use of a restraining order to me, but most of my law schooling comes from John Grisham books - which will allow the team to play in the arena until and continue operations until this mess is sorted out. 

But wait - the next thing I read was that the Council will meet next week to decide whether or not to send the Coyotes a letter severing their agreement. Because nothing is official until you hear about it in a letter, apparently. 

 

So if I have this right, until things are resolved, the Coyotes can continue on as if nothing is happening - which since they don't need the arena until September at the earliest, nothing is. And until they receive a letter confirming what has already been stated as a fact, nothing has technically happened anyways? 

The whole thing is stupid - but it's going to get sorted out one way or the other. I can't fathom giving updates about this daily - it's crazy boring, at least until something happens because this crap has been going on way too long. 

The worst part is that this is undoubtedly going to affect the team. There are some important RFA's to sign - Boedker, Dahlbeck and a few more - and why would they even want to? 

If the Coyotes draft Dylan Strome, it's not like he's going to be pumped to come to the Coyotes amid all this garbage. What is supposed to be the happiest day of the kid's life is likely going to be a horrible disappointment: a kid known to be a hardcore Leafs fan is going to be picked one spot ahead of his hometown team's selection and go to where it would be a miracle (and not the dubious posthumous kind) to somehow emerge from this mess with a team that can be competitive annually for years to come. 

It's just sad really. "Hey fans, come to our draft party where if we freeze the frame exactly right, you'll see the exact moment where Strome's heart breaks."

Because, make no mistake, this sideshow and uncertainty will take a market where making enough money to ice a competitive team is already hard and make it damn near impossible. Why would players re-sign with the team? Why would UFAs come here? Why would anyone buy tickets, jerseys or hats? 

At a certain point, people just get a "this again?" attitude and stop caring. If the Coyotes aren't at that point with this recent chapter of their saga, then they are dangerously close to it. 

And the rumours that the Coyotes have interest in Phil Kessel? Well, here's the thing: adding a high scoring superstar might make sense because he'd help the team sell some tickets, but guess what? 

Phil Kessel can block a trade to 21 of the 29 teams the Leafs could possibly move him to because his current contract allows him to submit a list of eight teams he would accept a trade to. I don't know Phil Kessel, I've never met him and I have no inside information, but I can make a fairly educated guess that the Coyotes are not on that list. 

Why would they be?"