With New Naming Rights to Their Arena, Arizona Coyotes Make Economic Statement

Mark BrownContributor IAugust 13, 2014

Pending city of Glendale approval, the Coyotes will play, beginning this September, in the Gila River Arena.
Pending city of Glendale approval, the Coyotes will play, beginning this September, in the Gila River Arena.Getty Images / Christian Petersen

For those critics who contend the now Arizona Coyotes have little future in the desert, those comments were addressed on Wednesday afternoon.

In moving forward with a nine-year agreement with the Gila River Casinos for naming rights to the Coyotes home rink, the message sent is that the franchise is not only here for a considerable period of time but have interests and partners to support their long-term goals.

President and CEO Anthony LeBlanc, in a Wednesday afternoon conference call with reporters, said the agreement announcing the name change represents "the most significant deal" for the franchise since IceArizona acquired the team from the NHL last August.

While the financial terms were not disclosed, revenue generated for the Coyotes would likely be higher than the previous contract with jobing.com, current naming rights holder of the arena. That deal, signed in 2007, was worth a reported $30 million over the life of the 10-year agreement, according to The Phoenix Business Journal.

Though the contract with jobing.com can legally be terminated, IceArizona is now in a position to move forward.

"When we bought the team from the NHL, we had the right to terminate any long-term agreement previously signed," LeBlanc said. "We looked at naming rights as a priority but also let the issue wait for one year. Then, around January, we began to explore naming rights and that all came together about two weeks ago."

Going forward, the arena will be known as Gila River Arena, and LeBlanc said this is only one aspect for a business plan designed to bring the Coyotes financial stability.

The official name-change is pending approval from the city of Glendale, which owns the arena. Though LeBlanc anticipates no opposition to the change, he did explain that part of the agreement between IceArizona and Glendale is to supply revenue streams to the city. Here, LeBlanc said the naming rights deal provides $600,000 to the city. That number will likely stabilize over the course of the nine-year agreement.

"Currently, we have three revenue streams we completely control," he said. "We charge a surtax on each ticket sold for a Coyotes game. Also, we charge a supplemental surcharge and we control naming rights. The two areas we do not control is parking and the effort to put more events in the arena, like concerts."

With the IceArizona ownership in place now for one year, LeBlanc reports the bottom line currently is exceeding expectation. For a team that missed the Stanley Cup playoffs for the second, consecutive year, ticket revenues jumped 16 percent for the 2013-2014 season, LeBlanc said. Yet, the biggest gain is in agreements with the business world.

"There’s been a tremendous up-size in corporate partnerships," he said. "We’re moving in the right direction."

With that assertion, LeBlanc said he couldn’t care less what critics have thundered about the Coyotes' economic viability in the desert. To that end, he simply said, "I really don’t care what they say because they do not have any kind of understanding of what we’re doing."

Within the past year, LeBlanc pointed out, the Coyotes entered into five long-term deals. While he said these are individual pieces, they collectively represent a picture of growing business interests and the Coyotes’ aggressive desire to address a woeful economic past.

LeBlanc said the Coyotes have entered long-term agreements with the Levy Corporation for the concessions, FOX Sports Arizona to televise Coyotes games, TicketMaster, and Fanatics, Inc., for apparel and team merchandise.

While individual game tickets have not been released for sale, LeBlanc pointed out, "You can be sure we’ll sell out on opening night." That would be Thursday October 9 against the Winnipeg Jets.

Mark Brown is a Featured Columnist for Bleacher Report. Unless otherwise noted, all quotes were obtained first-hand.

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