Coyotes Trouble: A Brief History of What Went Wrong
by The Falconer on May 6, 2009 4:27 PM EDT
11 comments
It seems that the Phoenix Coyotes are in a state of flux. There is a lot of stuff going on here but I'll try and keep it simple. I want to highlight a few points that are being under reported in the "OMG Hockey fails in the sunbelt!!!!" coverage.
A few years ago the primary owner of the Coyotes Steve Ellman thought all his problems would be solved by a new building. So he came up with the idea of the state of the art building where he could develop the real estate around the arena. He had a lot of trouble finding someone to build him his big shiney ATM of a building. Finally, the City of Glendale agreed to pay for a portion of costs associated with the building.
After the arena was finished Steve Ellman sold control of the team to Jerry Moyes, a trucking magnate. In the end the Coyotes were highly leverage (i.e. they borrowed a lot of money with the team as collateral) and the financial situation completely unraveled this season.
What were the big causes:
- The Real Estate Debt: The Coyetes were tied into the real estate development around the arena--and they ended up owing millions--not because of hockey operations problems--but because of real estate market going south.
- The Lease: Because the City of Glendale contributed to the construction of the new building the terms of the Coyotes lease was not nearly as favorable as is the case in many other NHL cities.
- The Location: The new arena proved not to be the fan magnet it was intended to be. Glendale is almost 20 miles from downtown and many people complain that it is too far to drive and there is no enough stuff to do out there before or after games.
Take those three problems and throw in a losing record with weak attendance and what you get is a team not generating sufficient revenues to cover the coast of all their loans. What you get is an owner who can't cover his bills and he can't get out of his lease.
The NHL starting advacing them money last season and effectively can take control of the team. The owner appears to have been cooking up his own side deal with Jim Balsilie and filed for bankruptcy this week. But the Balsilie offer contains a stipulation that the team be moved to Southern Ontario--which is not something the bankruptcy judge is really in a position to rule on.
What happens next is rather unclear. There's is talk that Bulls owner Jerry Reinsdort might be interested. The NHL could just fold the franchise. The bankruptcy judge might sell it to the highest bidder. If anyone tells you they know exactly how this will play out don't believe them.
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Falconer...
I think you make some good points. One item I would contend is that there is nothing to do around the stadium. That was certainly the case prior to the Super Bowl in 2008, but now there are about 10 bars/restaurants in the immediately adjacent Westgate mall area that are packed before each home game (and even on days when there isn’t a game). While being 20 miles out is a problem, it wouldn’t be a big deal if the team won…that’s the linchpin in this equation…for a team to be successful in Phoenix (be it with a new stadium downtown, in Scottsdale, Tempe, Mesa, Gilbert, Glendale or Surprise) they need to win. So if the team can make the playoffs and show that they can actually compete with the big boys, then I think they will be fine. The most frustrating part as a fan is that the team plays great against the best teams (Red Wings, Sharks), but plays down to its competition against teams they should beat…it’s very frustrating to watch as a fan, but if the team makes the playoffs and gets back to the whiteouts, I think they will see a type of renaissance like the Caps and Pens did recently…(it would, of course, help to have an Ovechkin or Crosby-esque player to help as well…I love me some Doan, but he ain’t exactly gonna win an Art Ross any time soon….).
World Ph*cking Champs! That was fun - let's do it again...
by Moridin417 on May 6, 2009 9:00 PM EDT reply actions 0 recs
I certainly am not an expert on Phoenix area hockey. I have seen some Phoenix fans complain about the arena location and nearby amenities—perhaps that was more of an issue in the past. I would point out that arenas built in the suburbs tend to draw complaints regardless of location. I’ve seen numerous comments about the Senators playing out the middle of nowhere, the old Cap Center had no good places to hang out that were adjacent to the building. The NBA Cleveland Cavs that their Richfield Coliseum way out there.
I also concur with your point about winning. If there was a hockey bible, it would say “winning cures a multitude of hockey sins.” A competitive team would certainly improved thing out west.
by The Falconer on May 7, 2009 2:46 AM EDT reply actions 0 recs
The Corel Centre
If the senators ever go south for a longer period of time they will have the same problems. The arena is a nightmare drive from the city, public transportation is a mess, and there is actually nothing around the arena.
It’s the same complaints everywhere.
Pension Plan Puppets: A Toronto Maple Leafs blog and a group therapy session.
by PPP on May 7, 2009 10:59 AM EDT up reply actions 0 recs
There are now plenty of food options near and literally next to the arena. I don’t see the Cards having issues selling tickets to a stadium right next door due to “food options”. The location is an issue on weeknights due to traffic.
Interesting you bring up the Cap Centre. I grew up going to games there. Funny that when I first started going to games in 1980/81 it was half empty many nights. The team was mediocre on a good night. It had a woeful history, had never been to the playoffs, and an owner who basically got the franchise to fill his building on nights when the Bullets weren’t playing. All of a sudden the team starts winning and the place is packed.
Winning cures pretty much all ills except for bad leases or leases where a team is tenant and gets little to none of the ancillary revenue.
by CP2Devil on May 7, 2009 11:05 AM EDT up reply actions 0 recs
I look back on my Cap Centre games fondly. New college graduate and I was very excited to be able to attend NHL games in person after mostly watching them on TV. But traffic really sucked there and the only place to hang out right after a game was that hotel bar.
by The Falconer on May 7, 2009 1:19 PM EDT up reply actions 0 recs
How about their local TV coverage? Have you talked to anyone who lives in Phoenix who can vouch for how available the games are (i.e. for a person paying for the typical $50/month to get standard cable, not having to buy the high end sports packages)? I think that TV coverage has a lot to do with a growing fan base, especially in a new NHL market and especially in an economic recession.
From slapshot blogs at NY Times: Phoenix ranks 19th out of 22 US teams analyzed for TV viewers (2 US teams and 6 Canadian teams data were unavailable.) That was 9,279 households per game viewing, on average. Atlanta? 21st at 5,450. Link http://slapshot.blogs.nytimes.com/tag/hockey-on-tv/
by ThrashersRecaps on May 7, 2009 9:23 AM EDT reply actions 0 recs
And howabout Florida? 2,000 a game? Why would anyone even pay to advertise?
Winning is the best cure for what ails ya, one reason because it can expand the tv ratings. When you look at the numbers of ratings you posted, almost all of the teams in the bottom half missed the playoffs. A losing team = less viewership. As an Islanders fan, I can tell you that our ratings were much better the first part of the decade when we were making the playoffs than in the last 2 years. But for a team like the Yotes, where they don’t even have the money to pay the players they currently have, it is nearly impossible to win with no money at all. Revenue sharing isn’t even close to enough to cover their payroll and other operating costs. They only way to get the ball rolling on this team is an immediate, direct, and substantial infusion of cash, much more than the reported 35 mill that the NHL has put in this past year. If investors who want to keep the team in Phoenix can do that, then they may have a shot at getting thru this. Otherwise, unfortunately, this is a lame-duck team.
by DanNOLA on May 7, 2009 10:47 AM EDT up reply actions 0 recs
Winning is fundamental. Dallas and Anaheim probably have very low TV ratings but if you have some success you can draw fans to your building. Tampa basically was good for a 2-3 year window but that one Cup has helped them create a sizeable hockey fan base in Tampa despite two poor seasons in a row now.
by The Falconer on May 7, 2009 1:21 PM EDT up reply actions 0 recs
We have ambivalent hockey coverage, despite having a tv pairing of Dave Strader and Darren Pang that are among the best in the biz (albeit with Panger’s homerism). But only about 80% of the games are televised locally, and less than half are in HD (maybe 20 games per season, maybe…). The games that are not shown on FSAZ are shown on AZTV which has crappy, crappy video. But all of those games are available under either basic cable or the first level up to get FSAZ…
We have 0 press coverage and our sports talk radio people hardly ever talk about the Coyotes (at least during morning commutes when I might tune in). A lot of the players get on the radio, though, and do a pretty good job talking up the team (Doan is hilarious)…
World Ph*cking Champs! That was fun - let's do it again...
by Moridin417 on May 7, 2009 1:23 PM EDT up reply actions 0 recs
This sounds almost identical to Atlanta, except that Strader is much better than our guy, but I like our color guy much better than Panger (who annoys me after about 1 period).
by The Falconer on May 7, 2009 1:58 PM EDT up reply actions 0 recs
Nice post on what’s wrong with the Coyotes. I just want to put in my 2 cents, since I lived in the Phoenix area until a year ago. Glendale is a dump, the sort of place people get on the freeway to avoid. No one goes there unless they want a burrito or an “Asian massage”.
by Socal2009 on May 9, 2009 4:38 PM EDT reply actions 0 recs
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