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Report: Glendale to guarantee $306 million in management fees for Arena

May 8, 2012, 12:36 PM EDT

Jamison, Bettman Getty Images

If you haven’t had your fill of Canadian sportswriters ripping the NHL for fighting to keep the Coyotes in Glendale, here’s another article, this one courtesy Sportsnet’s Michael Grange.

Mostly we’re linking to it for Grange’s reporting on the specifics of the deal to sell the franchise to Greg Jamison that’s expected to be presented (and approved) by city council shortly.

According to long-time Glendale city councilor Phil Lieberman, the terms of the deal being given to Jamison — who has partners, apparently, but wouldn’t name them — basically see him guaranteed $306 million in management fees for Arena over the next 21 years, or an average of $14.6 million a year. A large chunk of that money is front-end loaded, with Glendale on the hook for $92 million over the next five years.

Suffice to say that’s a lot of money for a city with a significant budget shortfall to guarantee.

It’s hard for me to say if it’s a good deal for the people of Glendale — I’m not the treasurer — but Lieberman’s appraisal is clear: “If I had to choose between the Coyotes staying and them leaving, I wish they were leaving.”

  1. madmediaman - May 8, 2012 at 1:22 PM

    This isn’t too difficult and I cannot for the life of me see how the Canadian press does not get this… Glendale is already on the hook for some $400 million plus for the arena whether the Coyotes are there or not, and they would be paying someone to manage that facility for concerts, sporting events and community events anyway…COG would be stupid not to pony up the dough.

    • madmediaman - May 8, 2012 at 1:24 PM

      Sorry $200 million for the arena…

      • kwells44 - May 8, 2012 at 1:34 PM

        Exactly. Hopefully, which I have not seen in any of the past coverage, someone will put the numbers side-by-side – if the Coyotes stay under whatever the new agreement is vs. if they leave and not focus solely on the payments to be made rather than also considering the revenue that will be generated for the City. There would be a HUGE difference in sales tax revenue, both direct and indirect, if the Coyotes stay vs. if they leave and that’s not the whole revenue story.

      • madmediaman - May 8, 2012 at 1:52 PM

        Westgate’s future success was already dicey as a number of business in the shopping closed when the economy took a dump. If the Coyotes leave you might as well demolish the arena and the entire shopping district and hotels in the vicinity (I mean I suppose you could keep the Cabelas… LOL). The lost tax revenue would be staggering.

        The reality is the arena should have been built in Scottsdale as originally planned, but development around the arena and in areas like Avondale, Tolleson and Goodyear are finally making the Westgate area viable… if the cities of Phoenix and Glendale ever manage to connect the arena with reliable public transit it would certainly help attendance (at one time the boondoggle known as the light rail was supposed to run directly to the arena… never happened).

      • ray2013 - May 8, 2012 at 6:39 PM

        You make a strong argument for why the COG would want to keep the Coyotes. It’s one that I haven’t heard before. A lot of the discussion has been on the profitability of moving the Coyotes to a new market, like we saw with the new Jets, and little thought has been given to the sheer investment made by the COG to bring the old Jets there in the first place.

        I just wonder how the thought-process has changed since the recession. We’ve seen a lot of businesses throughout Canada and the US that have suffered severely since people are saving their disposable income for necessities instead of spending them on luxuries. At what point does the COG and the NHL determine it easier to cut their losses and move the team versus keep them there?

  2. greatminnesotasportsmind - May 8, 2012 at 2:14 PM

    That makes a lot of sense. Spend 200 million dollars and level it 10 years later. Where is the logic in that?

  3. comeonnowguys - May 8, 2012 at 5:42 PM

    That’s a lot of money to pay for a team that will play in an empty arena next year.

  4. atwatercrushesokoye - May 8, 2012 at 5:53 PM

    Why don’t they just get $306 million in cash and burn it in the parking lot? They’ll end up with the same results. I’m calling it right now, within 18 months this guy will either be walking away from the team or he’ll be trying to move it, hockey in the desert doesn’t work, but I’m sure he’s smarter than all of the previous owners….

    $14 million per year seems a little high to manage an arena, will they still pay him that money when the Coyotes are gone?

    Glad I’m not a citizen of Glendale cause they’re going to be paying for this white elephant for a long time!

  5. AlohaMrHand - May 8, 2012 at 6:12 PM

    Will they be paying him in pretend money like my daughter does when we play supermarket?I thought Glendale was bankrupt?

  6. pavelfitzgerald - May 8, 2012 at 6:35 PM

    Where’s Wisbadgers spitting out his golden nuggets of truth?
    As much as Glendale doesn’t want to admit it they NEED that team for the arena they need them so they will lose less money if they go. At the end of the day the Coyotes moving to Phoenix was an awful idea & whoever owns them is just trying to make money off Glendale. I’d hate to be a taxpayer there

  7. guitarmy204 - May 8, 2012 at 7:16 PM

    It boggles me they don’t have anyone booking for the arena right now. have you seen the schedule for that thing? barely any events outside of hockey.

    I also enjoy how most of the people who say just do the deal say that because they do not live in Glendale and will never have to cover the losses with raised taxes.

  8. wisbadgers - May 8, 2012 at 10:29 PM

    PavelFitzgerald, you’re still trolling around. Don’t hate cause of your fear of the lights being turned off.

    Here’s the reality, the COG will have to pay operating expenses whether the Coyotes stay or go. Without an anchor attraction for Westgate, their is no hope for generating revenue. Whether bringing the Coyotes to Glendale was a good decision or not is moot (FYI, I’m still pissed off at Scottsdale over this mess), the reality is the COG needs the Coyotes to at least attempt to recoup some of this money that they will spend either way.

    By the way, did anyone see Bryzgalov giftwrap that goal tonight? What happened to that guy? He’s crumbling under the pressure of playing in Philly.

  9. blomfeld - May 8, 2012 at 11:24 PM

    We Kings fans don’t care one way or the other … we say bring on “AIG” right now !

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