What this all means in brief plain English.
First I guess I should explain in plain English what this all means for the Coyotes and City of Glendale Arizona. The City of Glendale held a vote to break their lease with Renaissance Sports Entertainment or RSE using a clause in state law and citing a conflict of interest. Now as no legal documents has been filed we don’t know what this conflict of interest actually is, however assumed to revolve around former city attorney Craig Tindall who now works for RSE and his involvement in the current deal itself. As of this moment right now the Coyotes no longer call the Gala River Arena home. It’s very important to remember that what everyone says about what happens next is including everything I write now is based solely on speculation. Until documents are filed in court there is no way to know for sure how this ends.
More Details?
With that summary out of the way let’s get into a little more detail. First here is the law that the City of Glendale used to call this vote to begin with.
A.R.S. 38-511
A. The state, its political subdivisions or any department or agency of either may, within three years after its execution, cancel any contract, without penalty or further obligation, made by the state, its political subdivisions, or any of the departments or agencies of either if any person significantly involved in initiating, negotiating, securing, drafting or creating the contract on behalf of the state, its political subdivisions or any of the departments or agencies of either is, at any time while the contract or any extension of the contract is in effect, an employee or agent of any other party to the contract in any capacity or a consultant to any other party of the contract with respect to the subject matter of the contract.
So now that the Coyotes have basically been evicted from their home what happens next? First let the law suits begin, the first legal action that RSE will make is to seek an injunction that will basically protect themselves from the cities vote until a legal ruling can be made to see if the City of Glendale applied the law properly or more importantly whether or not there was indeed a conflict of interest in Craig Tindall’s involvement in the deal. If they can’t get an injunction than this becomes very messy very quickly but with my limited legal knowledge it’s very common for an injunction to be granted in a case like this. Also expect for RSE to file a counter suit for damages to the tune of $200 million dollars.
So what does everyone win or lose? What is the next move?
The City of Glendale
Wins – If the City of Glendale has their way they will free themselves of what basically amounts to a $15 million dollar a year subsidy to the Coyotes for managing the arena which not only includes Coyote home games but other events in the arena. Let’s be honest the money that they are paying the Coyotes to manage the arena is basically flushed down the toilet if the Coyotes use their out clause.
Loses – The obvious is a tenant that fills puts butts in the seats 41 days of the year plus the potential of playoffs which they won’t replace, they may get to borrow the NBA suns for a couple of years if their new arena goes ahead in downtown Phoenix, but I don’t know if an NHL team has issues what chance would a minor league have for example. Once again if they lose in court and are forced to keep their deal with the Coyotes that was signed in good faith then they are at risk of being burned by the out clause.
Next Move – The City of Glendale is probably going to try and make a deal with the company that RSE is using to fill the non-hockey dates and start making a schedule for next year that does not have the Coyotes on it to try and force their will in court. They could also sign a contract with a different company that would be valid upon a Glendale victory in court.
Official Stance: The current lease agreement was signed in bad faith and as the owner of the arena they are with in their rights to evict the Coyotes.
RSE /Arizona Coyotes
Wins – The Coyotes obviously win if they are able to get an injunction that allows them to play out the next season in Glendale even if they ultimately lose the case.
Loses – The Coyotes ultimately have everything to lose in this deal even if they do win. They are going to have a hard time signing free agents because of the uncertainty that this vote has caused. Ticket sales are going to hurt because this is not only a bad team right now but the uncertainty about their future in Glendale. They are going to lose some corporate support as well I’d imagine. Oh and there is that whole possibility of not having anywhere to play come fall.
Next Move – Sue the city and attempt to prove that the vote was done unlawfully and has no legal ground. They will also sue the city for potential damages for lost revenue from their actions.
Official Stance: The City of Glendale has acted irresponsibly and in bad faith.
The National Hockey League
Wins – Honestly I don’t know how the league itself wins in any way shape or form.
Loses – This has happened at the worst possible time for the NHL, they want all eyes on the playoffs and this is definitely a distraction that they don’t want or need. Bettman does not want to answer questions about this situation. Also the league has fought very hard to keep the Coyotes in Glendale so this turn of events casts them in a bad light regardless of outcome. Also the schedule for next season should be done in around 4 weeks, this uncertainty makes that process a nightmare.
Next Move – Support RSE in its legal action and start coming up with plans A, B and C.
Official Stance: The Coyotes will play in Glendale next year and they support RSE.
What are some of the scenarios for what happens next in order of most to least likely and their implications?
1) RSE files a lawsuit and the City of Glendale and RSE settle on a new lease agreement that sees RSE continue operating as is at a lower price point than the current $15 Million allowing them to both settle out of court where both sides save face. This would obviously allow the team to stay in Glendale for the time being.
2) RSE moves the team back to the former US Airlines arena and share space with the NBA Suns. I don’t know if this is a long term idea, the Suns are trying to get a new arena built but I don’t know if that arena has hockey sight lines in mind. If a new arena is to be built are the welcomed back in Glendale short term? The other question is do they move to Vegas when that arena is ready?
3) The team temporally relocates to Phoenix only to move to Vegas when the arena is ready. I can’t see the NHL being very happy about this situation because they would lose out on some big expansion fee’s but it would not unbalance the conferences further. Also does the current Coyote ownership want to sell the team to Bill Foley or continue to own it in another location is a question that must be asked.
4) The team moves to Quebec City in a method similar to when the Thrashers moved to Winnipeg. Again there is a loss of expansion money but the team would be in a place where it would for sure be expected to succeed. It would be impossible to re-align the conferences so you’d have Quebec City playing as though they were in the Pacific Division for at least a year and unless there is further expansion would that cause a team like the Blue Jackets to be forced back into the Central Division of the Western Conference.
5) The team moves to Seattle and occupies the Key Arena hoping to force a hockey first new building to be built in Seattle. The current agreement for a new arena to be built in Seattle at this time is a NBA tenant to occupy it and then an NHL team could share the arena. The Key Arena is not only dated but pretty terrible for hockey. This would be a huge gamble for the NHL.
6) They move to a unexpected city. Kansas City and Portland are both cities with arena’s that could potentially support NHL hockey.
Final Thoughts
After this I personally don’t see how the NHL can remain in Glendale after this move by the City of Glendale. I really think the NHL has given this their all with every effort to keep the team in Glendale. It’s time to face facts though the city does not want them there and they are losing tons of money. With RSE holding an out clause that they could trigger as soon as next year are we not prolonging the inevitable here? Now those that know me will tell you I’m not your typical move all the teams to Canada kind of guy but in this case what else can you do? In my opinion putting more teams in Canada while safe for the most part will give you short term revenue gains, the real long term gains come from growing the game into markets that are not safe and while economically you can call Phoenix/Glendale a failure but look no further than next year’s draft to see the success of having a team in the desert when Arizona’s own Austin Mathews is taken with the first overall pick. That does not happen if he does not grow up watching the Coyotes.
