The city council of Glendale, Arizona, voted Wednesday night to end the deal it made to host the Phoenix Coyotes hockey team.
For some time the city has been in the midst of buyer’s remorse over the $225 million deal for the NHL team and has been threatening to end the 15-year agreement. And on Wednesday, the 5 to 2 vote did just that.
Earlier the city issued a statement that said: “The City Council has scheduled a discussion and possible vote regarding Glendale’s contract with the Arizona Coyotes. Discussions and negotiations regarding the contract have been ongoing for months. Specifically, the City is open to a resolution but it must be one that provides certainty and fairness to both parties, especially the taxpayers. The Council has agreed to stand for transparency and the highest standards of ethics for any future agreement with the Coyotes.”
Despite the saber rattling by the city, the NHL continued to say that it fully expected Glendale to live up to its agreement to allow the team to play at the Gila River Arena (formerly Jobing.com Arena) at least until the contract the team signed ends.
But shortfalls in revenue as the Coyotes have realized some of the worst attendance in the league forced the city’s hand, officials say. The city lost $8.1 million last season and expect to lose as much as $8.7 million this year. That is millions in tax dollars down the tubes as far as the city is concerned.
But the city didn’t cite money as the reason it voided the contract, and instead relied on a technicality.
The city, ESPN reported, “cited a state statute that allows an agency to cancel a contract if an employee directly involved with the agreement becomes an employee or agent to the other party. At issue was the Coyotes’ hiring of former city attorney Craig Tindall as general counsel in 2013.”
Still, Nick Wood, the Coyotes’ outside counsel, says that the team will file a lawsuit against the city over the broken contract and says that any new negotiation is pointless.
“At this point, the damage has been done,” Wood told the media. “How do we negotiate our way out of being shot in the head by the city?”
But Glendale’s vice mayor Ian Hugh disagreed. “It’s not about hockey,” Hugh said. “It’s about the integrity of the process.”
This isn’t the first time a sports deal has left Glendale unhappy and losing tax dollars. Earlier in the year, Glendale Mayor Jerry Weiers noted that the city lost money on the Super Bowl, as well.
“A study funded by Arizona’s Super Bowl committee found that visitors spent $218 million around the 2008 game,” ESPN’s Mina Kimes reported in January, “but some economists say the actual profits were much lower because football fans crowded out other tourists. Little of that money aids the city directly. Glendale said it spent $3.4 million in 2008, mostly on public safety, and earned only $1.2 million in taxes from direct spending at places like hotels and restaurants.”
And the Coyotes are not helping themselves in Glendale, either. As the Sporting News‘ Ray Slover points out, the team had a dismal record this year both on the ice and in the stands.
“Remember: The Coyotes finished the 2014-15 season with the NHL’s worst attendance, second-worst record, and a flood of questions,” Slover wrote. “The NHL needs an answer to the Gila River Arena problem yesterday. Waiting on the city of Glendale, which owns the venue and wants to renege on its lease, is for losers.”
The team also warned the city council to be careful of what information it allows to go into public record. For instance, the team warned the council against releasing the team’s financials to the public, claiming that it would be a violation of a confidentiality agreement the city entered into with the Coyotes.
Follow Warner Todd Huston on Twitter @warnerthuston or email the author at igcolonel@hotmail.com
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