Lease approved for Jobing.com Arena, but Greg Jamison must find purchase money for the Coyotes.
Maybe Phoenix captain Shane Doan knows something we do not know, something that remains hidden.
Perhaps it’s some inside information regarding the future of the Phoenix franchise and whether life support will continue or the plug will be pulled on the NHL in the desert.
At that time, Doan did not sound very cheerful or optimistic about continuing his career as a Coyote.
Doan, who becomes a free agent on July 1, spent his entire NHL career with the Winnipeg/Phoenix franchise. In talking with reporters in front of his locker, Doan did not appear very optimistic that a buyer could be found within a reasonable amount of time. More importantly, he sounded like a lost soul who was torn between loyalty and realism.
As captain of the team on the ice, Doan did not rule out exploring prospects with other clubs but said his heart remains in the desert.
“I have four kids and they all have been born here,” he said the day the Coyotes cleaned out their lockers. “My kids play sports here, they go to school here, their friends are here, and this area is the only place they have known. Sure, I want to stay here, but I also have to be realistic.”
That’s where the latest scenario begins and could abruptly stop.
On Friday afternoon, the Glendale city council, site of the Coyotes home rink of Jobing.com Arena, wrapped up two days of a special workshop devoted solely to the Coyotes' future. The body approved the award of $17 million a year, over a 20-year period, to Arizona Hockey Partners, LLC to operate Jobing.com Arena. That obligates the city of Glendale to a $324 million commitment over the life of the agreement, and that figure does not sit well with opponents of this lease agreement.
The measure passed represents only a lease agreement to manage Jobing.com Arena and does not address the actual purchase of the Coyotes by any buyer.
While there are other economic considerations and a possible attempt by the Goldwater Institute, a conservative think tank based in Phoenix, to block the deal, this city council action represents a “chicken or the egg” development.
Forbes Magazine is reporting Arizona Hockey Partners, headed by former Sharks executive Greg Jamison, cannot find investors with enough money to buy the team. With its Friday vote, the Glendale city council made a concerted effort to keep the Coyotes in Jobing.com Arena, but the cruel part is there is no current buyer willing to come forward with serious amounts of money and take ownership of the franchise.
Following the council vote Friday, the Goldwater Institute said it would challenge the city’s action because, as Goldwater contends, the city council vote violated open meeting rules and the failure to disclose public records.
Goldwater said it would proceed with court action on Monday, June 11, and if successful, could delay acquisition of the Coyotes by Jamison’s group.
Currently, the Coyotes are owned by the NHL, and league commissioner Gary Bettman has expressed confidence that Jamison’s group will eventually secure the franchise.
In May of 2011, the Glendale city council, in a move to keep the Coyotes in the desert, agreed to pay the NHL $25 million to operate the team for the 2011-12 season. That obligation is now due, but there could be a new wrinkle in this aspect of the overall circumstances.
“I spoke with (Bettman) earlier today,” Glendale city manager Ed Beasley told the city council during its workshop on Thursday afternoon. “He told me the NHL is willing to work with us and work out terms.”
Beasley would not elaborate but the hint was clear. The NHL recognizes the city of Glendale faces a current economic meltdown of a $35 million deficit and is willing to wait for its money.
That would indicate if Jamison’s group cannot find enough money, the city of Glendale would not be in a position to hand over another $25 million to the NHL to operate the Coyotes for the 2012-13 hockey season.
In effect, Jamison’s group will likely represent the Coyotes' last stand to remain in the desert.
In reality, the Phoenix NHL franchise does not look like a very good investment.
The team has continually lost around $30 million a year over the past several years, and Forbes currently lists the Coyotes as the least valued NHL team. While putting Toronto as the most valued NHL franchise at $521 million, Phoenix is last in value at $134 million.
The NHL asking price for the Coyotes is said to be $175 million, so that would put the franchise as currently under-valued. Forbes estimated the Coyotes lost $24.4 million last season, and that was the largest figure among NHL teams. Columbus was next, with the Blue Jackets losing an estimated $13.7 million.
The Leafs made the most money last season with an estimated profit of $81.8 million.
“We cannot leave (Jobing.com Arena) it vacant,” said Joyce Clark, a member of the Glendale city council during the workshop Thursday. “Jamison has a track record of turning San Jose around and I have full confidence he can do the same for the Coyotes.”
Perhaps, but first, Jamison and his group must find investors with deep pockets, a deeper tolerance for losing money and an untold amount of patience.
Mark Brown is a Featured Columnist for Bleacher Report. Unless otherwise noted, all quotes were obtained first-hand.