Sports And Money: Glendale Takes On The Arizona Coyotes

by June 12, 2015
coyotes

Via Wikimedia

The NHL season is coming to a close with the Tampa Bay Lightning and Chicago Blackhawks vying for the Stanley Cup — a matchup that’s been great for NBC’s TV ratings, as our Micheline Maynard wrote on Wednesday.

But the league’s hottest showdown this post-season might end up taking place in a courtroom.

The Glendale City Council voted Wednesday night to cancel its arena lease agreement with the Arizona Coyotes, cutting short a 15-year, $225 million deal that the council agreed to just two years ago, according to The Arizona Republic.

Of course, the team isn’t happy.

Sports and money logoThe council based the cancellation on a conflict-of-interest statute within the agreement, pointing to the Coyotes’ hiring of former Glendale City Attorney Craig Tindal.

But some local commentators, like The Republic’s EJ Montini, believe it’s really a “power play” to negotiate a better deal.

And the deal, as Montini (rather humorously) points out, hasn’t been a great one for the city.

Glendale lost more than $6.3 million on hockey and concerts at Gila River Arena through April, The Republic reports. That’s up nearly 14 percent from a year earlier. In the 2013-14 fiscal year, it lost $8.1 million on its investment in the team.

The team wasn’t much of a draw for fans this year either. The Coyotes averaged only 13,345 fans per game this last season, third lowest of any team in the NHL. Often, there were more snowbirds rooting for their home teams, like the Blackhawks and those from western Canada.

Now, litigators for the Coyotes say they will start work on $200 million worth of claims from the city. The Coyotes will also have to find a place to go, with downtown Phoenix coming up as an option.

With the Coyotes franchise now plunged into turmoil, other cities might have the opportunity to claim a hockey team. There’s hope they might find a new home in Seattle, according to MyNorthwest.com, and cities like Las Vegas and Quebec have wanted a team for some time.

No matter the outcome, this is a story that reverberates elsewhere.

Back in January, our Zach Bergson wrote on how messy building and funding sports stadiums can be. This is certainly an example of how a deal between a city and a team can quickly sour.

With constant pressure to tighten budgets, cities will look to cut any expense they can. When there’s as bad as a loss as there is with the arena in Glendale, it certainly makes sense.

But there are other considerations to make as well. Having a sports team helps bring a lot of people and money to local business, but the return on the investment in stadiums isn’t always worth it.

Sports teams are obviously big business and it seems like more and more teams are using the need of publicly funded stadiums as leverage to keep a team in an area. Of course, there are legions of avid fans that will do anything to keep a team around, as the Glendale mayor and council found out Wednesday night.

For story ideas, take look into the business relationship between any sports teams in your area and the city they’re in. And remember that stadium disputes aren’t just a problem at the professional level.

High school referendums to build athletic complexes are often sold by local school boards as something that helps build communities, but many voters don’t buy into the investment. Check up on any local stadiums and fields and see if there is any need for an update. Find out how these issues are usually solved locally.

STORY IDEAS

Forbes Opinion: Taxpayers lose with publicly funded stadiums.

Time: Scott Walker and the Milwaukee Bucks arena