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Bettman doesn’t understand why Coyotes’ out clause is getting so much attention

Aug 7, 2013, 9:59 AM EST

Gary Bettman

The Phoenix Coyotes finally have owners in the form of IceArizona group (aka: Renaissance Sports & Entertainment).

With that, the team won’t be moving to Seattle or anywhere else in the near future, but that doesn’t necessarily mean that they’re out of the woods entirely. IceArizona’s $225 million arena-management agreement with the City of Glendale came with a five-year out clause that can be invoked if the team loses a collective $50 million over that span.

That has led some to wonder if this really is the final chapter in the saga to keep the Coyotes in Glendale, but when the matter was brought up, NHL commissioner Gary Bettman downplayed the clause.

“I don’t understand all the attention that it’s getting,” Bettman said on Arizona Sports 620. “The fact of the matter is that every contract has a term. This term, for it to be invoked, requires the ownership group to lose $50 million, which I assure you they have no intention of doing.”

Bettman also shot down speculation that, if the ownership group wanted to, they could make the accounting numbers look like they lost more money.

“Nobody’s playing any games with that,” Bettman said. “When you have this type of clause, you can’t play accounting games. The fact of the matter is it would require them to lose a real $50 million and as I said, they have no intention of doing that whatsoever and frankly, they’re not incentivized to do that. The best outcome for them is for the community and fans, business community, to support the franchise and have this be the huge success we all believe it can be.”

Ultimately, it looks like that’s what it’s going to come down to: How quickly this franchise can grow and how much fan support it gets now that an ownership group is in place. If the franchise thrives over the next couple of years, then that out clause will become moot. If they struggle mightily, then it will loom over the team.

After years of seeing ticket sales increase with a “skeleton crew” though, Bettman is optimistic about the team’s future.

“With ownership and people being able to, without reservation, commit emotionally to the franchise because they know it’s going to be here, we think the best is yet to come and it’s going to come very quickly.”

Bettman added that he thinks there is a “very easy opportunity for the team to succeed.”

  1. handsofsweed - Aug 7, 2013 at 10:06 AM

    “Gary Bettman Doesn’t Understand”

    Sadly, you could have just stopped right there if you wanted to.

    • 0ffsides - Aug 7, 2013 at 12:25 PM

      Too bad I can only give one thumbs up to this, darn near broke my mouse trying to click more!

      • greenmtnboy31 - Aug 7, 2013 at 1:35 PM

        Exactly what I was going to say; only needed a three word headline.

    • imleftcoast - Aug 7, 2013 at 3:45 PM

      Scenario: Someone shooting a gun at your feet to get you to dance.
      Bettman: “You need to understand that we all just want you to dance, and this is an incentive to have you do that. No one wants to shoot your foot off of course.”

      Hopefully, that will help clarify how having a poison pill in the contract is really not a threat, but an incentive.

  2. kingsforever - Aug 7, 2013 at 10:44 AM

    On Toronto’s FAN 590, the new owners said that they don’t have an out clause. Weird.

  3. packerswin96 - Aug 7, 2013 at 11:15 AM

    Bettman also does not understand why P comes before B&J

  4. 19to77 - Aug 7, 2013 at 11:43 AM

    He also can’t tell why kids love the great taste of Cinnamon Toast Crunch.

  5. endusersolutions2013 - Aug 7, 2013 at 11:45 AM

    While I do not have much trust in “oft booed” Gary B, what he said about growth is plausible (vs. anywhere near certain). Looking back at attendance the last 5 years (5 years as in, Coyotes fans have 5 years to show tangible support collectively), overal NHL attendance has risen a mager 1.6%, but keep in mind 2008-2009 was during the height of the financial meltdown in the USA.

    Coyote attendance has increased 6.45%. If they fan base actually does grow under stable ownership, they will reach the likely mid-point of NHL attendance in 4 years, and pass it in 5.

    The question is, will that be enough? Even if we can take the new ownership at face value that they are committed to make it work (vs getting a franchise they can move for less than they would pay in expansion fees), will the losses generated during the 5 years exceed the 50 mil threashold?

    I hope, for the sake of the NHL overall that this is measured against operating income based soley on their operations, advertizing and broadcasting, and does not include what they take in in league revenue sharing.

    Either the franchise can stand on it’s own in the PHX metro area or it can’t. Pretty clear bottom line.

  6. MyTeamsAllStink - Aug 7, 2013 at 12:17 PM

    Ice Arizona….sounds great together just like Snow Death Valley

  7. rodeoclowndc - Aug 7, 2013 at 1:33 PM

    The housekeeping people will be under strict orders to find any dropped pocket change and turn it in to the accounting department, to help keep them away from the $50 million…

  8. smgraff4 - Aug 7, 2013 at 2:26 PM

    If you look at it carefully, even in places like Pittsburgh and Washington, there isn’t enough grassroots interest in hockey–and not a whole lot of local born kids from these places that are making it to the NHL. And these teams cover up that fatal flaw by signing Canadian players (and Russian, and other European players).

    If there’s a rebel Canadian-only hockey league that will pay more than the NHL, and if the current Canadian NHL teams left and joined those other Canadian teams, you’d see the quality of hockey go down because every Canadian player now has the same opportunity as every Russian player and play in his hometown (or play where he played Junior Hockey). And that’s the big flaw in all of this–is that with the expansion into the USA, there haven’t been enough Americans from maybe outside non-traditional hockey regions that weren’t relatives of former players, etc. (outside of the grit guys), who’ve made it into the NHL and made successful careers in the NHL,

    The fans will go away because the grassroots and the quality of product coming from the grassroots isn’t there–outside of Michigan, New England, Upstate New York, Michigan, Minnesota, ND, Wisconsin, N. Ohio, etc., and still really isn’t there.

    You can look at attendance or not, but believe it or not, until hockey really becomes ingrained in multiple generations of people in the area, in my opinion, you still have to work on really entrenching hockey.

    From a money issue, it doesn’t make sense to play in Phoenix unless you play in a much smaller arena (and spend that other money you would’ve used on a lease to build rinks–ice rinks, or floor rinks, etc. and making hockey as “cool” and as exciting as basketball or football).

  9. blomfeld - Aug 7, 2013 at 11:07 PM

    BREAKING NEWS … BETTMAN NO LONGER ROCKS !

    For more than a year now here at PHT, I’ve actually been supporting this man, albeit oft in a ‘tongue & cheek’ manner. Nonetheless, I truly believed that Bettman wanted nothing but the ‘best’ for our game, if for no other reason than his own ‘selfish’ purposes. Well as of tonight friends, I can tell you that the House of Blomfeld is no longer on this man’s side. I mean seriously, how on earth does a concern losing circa 35 million ‘per annum’ over the past 10 years, now stand a ‘snowball’s chance in hell’ of not losing more than 10 million per annum over the next 5 years ? It simply isn’t going to happen and Bettman knows that, as do the vermin who constitute Renaissance Sports & Entertainment. And you can’t get mad at the Coyote’s fan base, who like a mirage in the desert simply don’t exist. No sir, what these people are doing is continuing to prop up an ‘artificial’ sports entity for the obvious ‘tax write-off’ benefits and considerations … no two ways about it. And while that may be fine in itself, the problem remains that the NHL is skating on very thin ‘financial’ ice these days. And this idiotic ‘stand in the desert’ by Bettman is like some heavy Zamboni which is going to obviously fall through and thus take our entire ‘beloved’ league and sport with it ! :(

    GO TO HELL BETTMAN …

  10. Lupy Nazty Philthy - Aug 7, 2013 at 11:33 PM

    Of course Bettman will downplay the out clause. The Phoenix Coyotes are his baby… he can’t admit putting a hockey team in the middle of the desert was wrong.

    The team is as good as gone in 5 years if they only have to lose $10M per season. A “good” season for Phoenix is when they only lose $20M instead of the usual $30M.

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