Jun 27, 2013, 2:18 PM EDT
The City of Glendale posted the details of their offer to Renaissance Sports and Entertainment (RSE) to help keep the Phoenix Coyotes at Jobing.com Arena. As you might expect from this ordeal, the details are dizzying.
The agreement has the Coyotes staying at Jobing.com Arena for the next 15 years as the arena’s anchor tenant with Glendale paying RSE $15 million a year to run the arena. There’s a catch to all this, however.
According to Mike Sunnucks of the Phoenix Business Journal, RSE has a five-year out-clause to move the team if they pile up $50 million (or more) in losses over that time frame. The City of Glendale has a lot of “unresolved serious concerns” with the deal. Those are:
- The city bears all the risk if the revenue projected by Renaissance is not realized.
- The deal requires a $15 million management fee to Renaissance. The city has budgeted $6 million to pay for part of the $15 million arena management fee and Renaissance has projected shared revenue streams to help bridge the gap. Should those projections not be realized, and the city does not receive the projected revenues, then the city would need to make up that loss.
- The proposed agreement is for 15 years and does not allow for the city to terminate the deal if revenue projections are not met as long as the Coyotes play in the arena.
- The proposed contract can be terminated by Renaissance if their cumulative losses reach $50 million, and, in any event, after five years.
The plan is to have the proposal voted on on July 2. Should this deal not pass, the NHL could seek to move the team to Seattle immediately. Next Tuesday will be decision day one way or the other.
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