Coyotes Seek NHL Bailout

NHL Commissioner Gary Bettman's grand Sun Belt expansion strategy has been troubled for several years now, as attendance at the Southern US franchises has been, well, less than one would hope in a league where a team's financial success is driven by ticket sales. Nowhere has that been more evident than in Phoenix. The Coyotes financial problems have gotten so bad, the team has turned to the NHL for help in meeting its payroll. According to a story in the Toronto Globe and Mail, the NHL is advancing the Coyotes' portion of shared revenue to ensure that the team is able to meet its payroll and other obligations timely. The Coyotes have no other lending source as the team's entire assets and all revenue have been pledged to secure a loan from a hedge fund controlled by Dell Computer founder Michael Dell. The team is expected to lose $30 million this year following losses totalling as much as $200 million since the current owners bought the team in 2001. The principal owner, Jerry Moyes, is actively seeking a buyer for the club.

One difficulty is the team's lease of its current home in Glendale. The arena is new and the club has a 30 year lease which is only breakable in bankruptcy. The team and the city are currently renegotiating the terms of the lease, but most revenue streams from the arena now go to the club, so there is precious little room for improvement. That also means, short of pitching the team into bankruptcy and the new owners then buying the club out of bankruptcy in order to move it, there is little chance the club can move. Without relocation, there is little likelihood the club will survive. Phoenix is not a particularly good hockey town - who thought sticking a team in the desert was a good idea anyway - and the location of the arena in Glendale away from everything makes success more difficult. The club should be moved back to either its former home in Winnipeg or to Hamilton, Ontario which desperately wants a club and would be able to support one in the manner in which a NHL club is deserving. Maybe then, The Great One will be able to get a club with players and fan support worthy of his nickname and we'll all learn whether he can really coach.

KelsdadAll-Star

319 days ago

Score 0

The Coyotes are the only team in the NHL which doesn't charge for parking. It's estimated they lose upwards of 10-12 million per season. And not only do they not GAIN revenue from parking, they actually PAY the city of Glendale $2.47 PER vehicle for parking. This covers the security/attendants, etc used per game.

Another questionable expense is the seven million Gretzky is paid to coach. When taken into context the average NHL coach makes less than one million, it's not hard to see why Gretzky's salary can be viewed as wasteful. Even if the Coyotes were to fire him, they'd still be on the hook for his money, a better option would be a restructuring, extending him out in deferred payments, giving him a higher ownership stake, whatever.

Just these two issues resolved would put the 'yotes more in line with some other teams, losing 10 million is better than 30.

Permalink | Reply

Basketball110Soccer Kid

319 days ago

Score 0

But wouldn't jobing.com Arena take the money for parking?

Permalink

RawbeezeitzMajor Leaguer

319 days ago

Score 0

But if they charged for parking, how many fewer fans would go to games, or at the very least, curtail their spending on concessions?

Permalink