1. How Did the Coyotes Financial Mess Happen?

    During the Phoenix Coyotes’ current Stanley Cup playoff run, the juice turns up even more at Glendale’s Westgate entertainment district, the die-hard fans mixing with the new ones who have jumped on the desert dogs’ bandwagon to create a giant block party under the bright lights.

    Hockey has become hot in the desert again and, for once, there’s reason to believe support for the Coyotes will be sustained. Fans have been hesitant to become invested in a team they’re not sure will stick around.

    Throw in a lack of sustained success - the Phoenix version of the franchise hadn’t won a playoff series in seven tries before this season - and it’s been hard for the Coyotes to gain a foothold with fickle Valley fans who, for the most part, are only willing to support a winner.

    Coyotes have never turned a profit since moving to the Valley in 1996. The Coyotes have lost as much as $40 million last year, prospective buyer Matthew Hulsizer told the media. Glendale posted $25 million to partially cover the losses. 

    In fact, they’ve never even come close. According to the Goldwater Institute, the Coyotes have “consistently lost between $25 million and $40 million annually.” The team still is trying to recover from the loss of season ticket purchases, corporate suite sales and sponsors during the 2010 bankruptcy fight.

    In 2009, the former owners of the franchise filed for bankruptcy. Glendale’s rush to put together a new incentive package came about because interested buyers wanted to move the team to Canada, leaving the $180 million arena without a major tenant. 

    In Stephen Brunt’s column notes that the Coyotes are merely “the first domino.” In Brunt’s view — and the view of many who bemoan the NHL’s ambitious move to the Sun Belt of the last two decades — the missionary work that bum-rushed hockey out of traditional markets and into the American South in order to save it, has in fact, torpedoed the league.

    “Historically, the Coyotes are a symptom, not the disease,” Brunt writes. “They exist in their current straits because of the NHL’s rose-coloured aspirations to conquer America, aspirations that had been kicked around for decades but really took flight after Gretzky was sold to the Los Angeles Kings in 1988 and set off hockey mania in Southern California. The Phoenix franchise shifted from Winnipeg because the league had in theory outgrown that city and the market. The question of solid, grassroots hockey interest was beside the point; the sport packaged properly, the conceit was that the league could sell it to anyone.”

    To get back specifically to the Coyotes, here’s another forgotten chapter in their sad saga. While serving as tenants in the Suns’ formerly known America West Arena now U.S. Airways Center (where the view to one of the goal nets was obstructed from a few thousand seats), Burke made a deal to sell the club to Steven Ellman, a real estate mogul who brought Wayne Gretzky into the picture.

    Ellman wanted the Coyotes’ new arena built in Scottsdale, which is directly east of Phoenix and the most prosperous area of the Valley; the team might have flourished there. But Ellman sparred with the Scottsdale government on all sorts of things, including paying for the demolition of Los Arcos Mall, where Ellman wanted to build his arena and a new entertainment complex.

    There were the typical demands and ultimatums seen in all these matters, and in the end Ellman took his team in a huff west of Phoenix, to Glendale, an area that was hardly developed, had little decent highway access and was some distance from the fan base the team had established.

    The fans who might have flocked to a Scottsdale rink centrally located in heart of the Valley haven’t flocked to Glendale where, as Shoalts points out, “the arena is in the middle of nowhere.”

    You’d like to say that Ellman’s decision to spite the Scottsdale city fathers has come back to bite him, but he’s not in the ownership picture any longer, having sold his piece to trucking magnate Jerry Moyes, who joined Ellman as a partner and bought him out in 2006. Moyes, whose trucking business has been struck hard by the downturn in the economy, is taking all the hits here.

    So things might have been different for the Coyotes, and perhaps there is some karma, some rough justice at work here. Bad decision has piled upon bad decision, leading to the current mess. There are likely to be more messes as the economy staggers, wobbling like one of the punched-out boxers Brunt writes so eloquently about when he covers that sport.

    Before Phoenix's clinched its second-round series against Nashville in Game 5 Monday night, NHL commissioner Gary Bettman announced that the league had a tentative deal in place to sell the team to former San Jose Sharks CEO Greg Jamison.

    There’s still plenty of work to be done on the deal and the Coyotes have been through heartache before, losing a potential owner when Chicago businessman Matthew Hulsizer pulled out last year after a conservative watchdog inserted itself into the discussion.

    Still, there’s a feeling this deal with go through and that Jamison is a good fit for the franchise with his history of success in San Jose, a combination of hope and stability that should keep this wave of momentum rolling.

     
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