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Coyotes ‘out clause’ means more uncertainty in the desert

Jul 3, 2013, 11:20 AM EST

Last night was a good one for Coyotes fans. The prospective owner of the club, Renaissance Sports and Entertainment, got its $225 million arena-management agreement approved by the City of Glendale, allowing the club — to be called the Arizona Coyotes — to remain in the desert.

“For the people of Arizona and for Coyotes fans, we’re finally in a position to begin focusing on life without all the uncertainty,” NHL commissioner Gary Bettman said.

But with all due respect, much uncertainty remains. In large part because of this:

source:

That there is the contentious out clause that RSE was able to negotiate, allowing it to terminate the agreement (and relocate the team, presumably) after five years should cumulative losses reach $50 million.

RSE has repeatedly said its intention is to keep the franchise in Glendale for the long term and that the out clause was only needed to satisfy lenders.

Others are more skeptical, wondering if RSE’s end goal has always been to relocate the Coyotes. It should be noted that, in five years, new arenas could be standing in Seattle, Quebec City, and Las Vegas.

Whatever you believe, the following questions are worth asking now and monitoring going forward:

Will Coyotes fans rally around the out clause, knowing if they don’t support the team they could lose it? Or, will the out clause serve as an ongoing roadblock to making a financial and emotional investment?

How will the Coyotes address payroll? They’ll need to spend wisely to keep losses to a minimum; however, if they don’t spend enough they’ll risk icing a bad team and missing the playoffs (which would, of course, hurt revenues).

How high will the salary cap/floor reach over the next five years? Some have suggested it could go up considerably, making it even tougher on the NHL’s have-nots.

Yesterday, Bettman sounded optimistic at the potential for success with the Coyotes no longer being run by the league.

“With ownership that’s committed to making the franchise a success, with an opportunity for businesses and fans to know that there’s no uncertainty, we think that this franchise can do very, very well,” said Bettman.

We shall see.

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