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Report suggests Glendale getting raw deal with Coyotes

May 6, 2013, 12:37 PM EDT Arena

From the Arizona Republic:

The true cost to operate Arena ranges from $5.1 million to $5.5 million a year, which is about $10 million to $20 million a year less than the Glendale City Council has agreed to pay hockey-related interests to manage the facility in recent years.

The net management costs, included in documents recently published on the city’s website, are bundled in the city’s solicitation for a new company to operate the city-owned arena.

Given Glendale paid the NHL — which owns the Coyotes — $25 million a year to operate the arena in 2011 and 2012, it’s not surprising the documents have left some flabbergasted.

“It looks like we’re paying them $25 million,” said councilman Gary Sherwood. “Added on to their $5 million in expenses, that’s $20 million. I mean, that’s a surprising number to me. Who wouldn’t jump on that deal?”

The news may also make keeping the Coyotes more of a challenge than it’s already been. How can the city justify giving a prospective owner around $15 million a year — believed to be the going rate — to manage an arena when it only costs in the neighborhood of $5 million?

Granted, Glendale mayor Jerry Weiers thinks the NHL has been doing some serious penny-pinching.

“I know damn good and well that the way it’s been run, they’re not putting anything extra into it whatsoever,” he told the paper.

So maybe $5 million isn’t a sustainable annual cost.

And, obviously, there are advantages to keeping the Coyotes in town.

From the report:

The city collects revenue associated with the team and arena through leases, parking fees and tax collections for food and merchandise sales in the nearby Westgate Entertainment District. Those figures have been on the upswing, particularly since an outlet mall opened last fall.

Total collections were $4.7 million in fiscal 2011, and reached $6.4 million through just the first eight months of the 2013 fiscal year, according to the city. That money helps pay, but doesn’t fully cover, the city’s debt to build the arena.

The team also lends a certain amount of panache to the city, making it more attractive for business relocations, interim City Manager Dick Bowers said.

But tax revenue wouldn’t fall to zero without the Coyotes. The arena could still hold events, and not everyone that goes to the Westgate Entertainment District is going there because of the hockey team.

Related: Glendale a ‘big question mark,’ says Daly

  1. hockeywithdrawal - May 6, 2013 at 12:44 PM

    So maybe the city should buy the team and save itself 10-20M a year.

  2. thenewraoulduke - May 6, 2013 at 12:56 PM

    The expenses are actually $9-$10 million for managing the arena, the AZ Central article uses “costs” to refer to the losses incurred (revenue – expenses) which is misleading especially since they don’t tell people that is what they are doing. Sherwood saying that it is $5 mil in expenses is a lie.

    • esracerx46 - May 6, 2013 at 1:46 PM

      Totally agree. No way in hell you can manage, maintain, and run an arena for 5 mil a year. Just flat out misleading and its a local journalists way of expressing their desire to get the Coyotes to move, whether he knows it or not. It’s really time to make that place go away. I’m tired of hearing about it and it hasn’t worked. Please go away Glendale Coyotes.

      • thenewraoulduke - May 6, 2013 at 1:51 PM

        so what you are saying is that you want the team to lead because of incompetent reporting?

      • thenewraoulduke - May 6, 2013 at 1:55 PM


      • esracerx46 - May 6, 2013 at 2:00 PM

        No, I want the team to leave because an NHL franchise has been a failure in that area for far too long. Tired of hearing for years about how the NHL cant seem to find a buyer. They can’t come up with a lease agreement. And when an agreement is finally made between council and the NHL/ a prospective buyer, you have Goldwater or local media whining. Too few of people want the franchise there. It can not be sustained. Sorry Glendale Coyote fans.

      • thenewraoulduke - May 6, 2013 at 2:19 PM

        well if you are tired of hearing about it you can just you know stop reading articles about it considering the team being that has zero impact on any part of your life.

      • cardsandbluesforever - May 6, 2013 at 2:56 PM

        i also agree, i’d be willing to bet the power bill alone is 2-3 mil a year. keeping the ice frozen in the desert can not be cheap.

  3. stevebass2 - May 6, 2013 at 12:59 PM

    The article also mentions (if you read the whole thing rather than just the little snippet cut by PHT) that the arena has been run well below even the more bare-bones level of any other arena in the NHL. No frills, no extra expenditures, no nothing that would go along with the actual price that a real arena manager would spend on maintaining the building. Additionally, if you look back at the arguments that the City of Glendale had between pro- and anti- coyotes groups, even the most conservative estimates provided by the independent analysis groups said that it would realistically cost around 10 million to operate this arena to average league-wide standards. I agree, 15 million is a bit too much for the team, but just taking into account the amount that the league has spent these past few years running a bare-bones operation is a little misleading.

  4. lostpuppysyndrome - May 6, 2013 at 1:03 PM

    Or they could just move the team and remove this albatross that we have to keep hearing about.

    • comeonnowguys - May 6, 2013 at 1:08 PM

      Agreed. Move to a town that wants it where fans will actually show up.

      My heart really does go out to the dedicated fans and the handful that show up here win or lose, but at some point reality has set in.

      Unless your name is Gary Betteman–which is why the Coyotes will remain in Phoenix for another 20 years–unless the town kicks them out.

  5. pimares - May 6, 2013 at 1:58 PM

    I live here in Arizona and we hear and see a lot of people from other places put in their two cents. The fact of the matter is that last year 724,000 people went to, good number right?, well of that number 600,000 were there for Coyotes games. If we lose that team we lose over a half million people going to the west valley. There is not much to do in the West Valley, people who would otherwise not go to Glendale go to see the Coyotes. The city bet big on the Yotes and the former owners screwed them big. We have 180 million dollar arena that needs a pro sports team. To listen to critics wishing financial disaster to an entire City District is astonishing. Just give us an owner that actually is competent and this team will do well.

    • esracerx46 - May 6, 2013 at 2:10 PM

      The previous owners definitely screwed Glendale over, but all these critics myself included are sick and tired of this never ending saga. The fact of the matter is, when the franchise moved to Phoenix, they blamed everything on the arena not being suited for hockey. There are two problems with that thinking. First, why move to a place where you don’t have a suitable arena to play in? Second, the old arena wasn’t why they had problems getting people in the seats. They get a suitable arena, but it’s not in Phoenix and like you said, their isn’t much else there besides the Coyotes. Part of the problem is that the city owns The arena is a major way teams make money. When Hockey isnt there, a concert is. Hockey alone isnt enough of an attraction in the desert to make money.

      • pimares - May 6, 2013 at 3:01 PM

        The Team almost moved to the East Valley under the Los Arcos Arena bond in Scottsdale, the citizens of Scottsdale approved the bond but the former owner Steve Ellerman the snake that he was didn’t cooperate with the city and so it failed. Good because that was a 627 million bond, makes Glendale look like they got a deal. They did kinda (180 million) and the former owner Jerry Moies and Steve Ellermen began their mismanagement of and the Coyotes. These owners screwed not just Glendale but other cities in the Valley, they played everyone. So like I keep saying give us a competent owner and this will finally turn around.

  6. dreamsbvw - May 6, 2013 at 2:09 PM

    Actually, the real title of this story should be: “Newspaper Reporter’s Interpretation and Misrepresentation of a Report suggests Glendale Getting Raw Deal with Coyotes”.

  7. pavelfitzgerald - May 6, 2013 at 2:41 PM

    You mean, hockey doesn’t work in Arizona?!?!? What ?!?!?
    Enough with the excuses. First it was the arena wasn’t built for hockey. Then it was, it’s too far, then it was, we need more time.
    16 years straight of loaing money. Not once did the Coyotes turn a profit, not once!!
    You’ve had 2 arenas, half a dozen owners, enough is enough. Move the team to a market that cares. It’s great that tou & your buddies care but the numbers show Glendale, Phoenix, Mesa, Arizona don’t care enough to support a team

  8. giantssb42champs - May 6, 2013 at 3:12 PM

    Glendale = next municipal bankruptcy

  9. jernster21 - May 6, 2013 at 3:17 PM

    The NHL has made it pretty clear (in my opinion) that the $25 million they’re getting from the CoG isn’t only to manage the arena, but to also cover a portion of the incurred losses each year.

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