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Joyce Clark Unfiltered

For "the rest of the story"

Disclaimer: The comments in this blog are my personal opinion and may or may not reflect an adopted position of the city of Glendale and its city council.

On Monday, November 13, 2017 we were all shocked to learn of the death of George Gosbee,48, former owner and Governor of the Arizona Coyotes. He was also a well respected member of the Calgary, Canada community. What hasn’t been reported until today, November 15, 2017 is that he died by his own hand…he committed suicide. Here is the link: https://news–of-the-day.com/2017/11/15/yedlin-george-gosbees-death-a-devastating-reminder-of-mental-health-effects/ .

He was a man who had everything – a wonderful family, prestige within his community and wealth. Yet due to some mental illness he believed he had nothing; that life was not worth living and so, he took his life. My deepest condolences go out to his family.

Then I ran across another article posted just today by Craig Harris of the Arizona Republic detailing current investigations by the National Labor Relations Board related to the Coyotes allegedly not paying employees properly and possible union busting. Here is the link: https://www.azcentral.com/story/news/local/arizona-investigations/2017/11/15/arizona-coyotes-accused-not-properly-paying-employees-union-busting-nlrb-complaints/867408001/?hootPostID=ac31f1c4a3f168b754f5d5951be6049e .

What has happened to our Coyotes? How far have they fallen? Just a few years ago they were riding high with blockbuster attendance and a slot in the playoffs. Remember the nights of “white outs?” The fans’ enthusiasm was palpable.

Today their starting season is 0-10-1. They have the worst record in the NHL with 2 wins, 15 losses and 3 ties. Their attendance quite frankly, sucks. They have the smallest payroll in the NHL at about $55 million. Unless there is a reversal of fate, they are slated to lose at least $20 million this year.

They have sold off, traded or retired a majority of their players of note, most notably Shane Doan.  It is certainly not the fault of the players. A majority are new and relatively inexperienced. They are eager and hungry to win but they have yet to gel as a cohesive unit. It takes time.

The current owner, Andrew Barroway, and the NHL Commissioner, Gary Bettman, have threatened to leave Arizona if someone or some entity does not build the Coyotes a new arena and subsidize their playing in such a venue. Their decision and actions are certainly not the way to encourage the realization of their “ask.”

There is an alternative that Barroway has stubbornly rejected and that is to stay in Glendale and to end the ongoing saga of uncertainty. It’s also time to invest in building a team that is, at least, competitive.  Glendale has always said that it wants the Coyotes to succeed in Glendale and will offer assistance to help rebuild the fan base. A year-to-year contract does nothing to reassure fans that the Coyotes are committed to staying. It’s as if the fans keep waiting for the other shoe to drop.

I’m on the outside, obviously, looking in. I have no inside knowledge but there has always been the undercurrent of suspicion by some that these are deliberate acts. Suspicions borne from the time Anthony LeBlanc, et. al., took ownership. Some believe that their motivation has always been to leave Arizona. What better way to accomplish that goal than to decimate the team, drive down attendance and then proclaim that Arizona never was, isn’t and never will be a successful market for hockey. A season of attendance at the very bottom of the league’s barrel may finally convince Gary Bettman that Arizona is not the hockey market he believed it to be.

Seattle has plans to locate an MBA and an NHL franchise in its arena after its renovation. Bettman has always wanted to grow the league and put an expansion team into that slot. Could that change? Could he throw in the towel, as he has threatened if the Coyotes do not get a new venue here, and bless a Coyotes’ move to Seattle? I don’t know but you can bet that Barroway and Bettman do…right now.

UPDATE: NOV. 16, 2017 Today’s Arizona Republic reports that support for Phoenix’s bearing the lion’s share of the cost of renovating the Diamonback’s venue is waning. It appears politicians are finally getting it and that pouring money into the money pit of sports venues is not the best use of taxpayers’ dollars. In that same article Phoenix Mayor Greg Stanton seems to have dropped his support of planting the Coyotes in the same venue. His latest statements about the Diamondback’s facility has dropped any mention of using it for the Coyotes as well. 

 

© Joyce Clark, 2017                 

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such material. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Disclaimer: The comments in this blog are my personal opinion and may or may not reflect an adopted position of the city of Glendale and its city council.

Has anyone else noticed that Anthony LeBlanc, presumably still CEO of the Coyotes, has been publicly missing in the latest Coyotes dust-up? Where is he? We’ve heard from the General Manager, the Public Relations people, even Gary Bettman and Andrew Barroway…but not a peep or sighting of LeBlanc? Has he been muzzled or given his walking papers? Hmmm…who knows?

NHL Commissioner Gary Bettman

It seems in the light of a new day NHL Commissioner Bettman is back peddling just a tad. Today, March 8, 2017 down in Florida he said the Phoenix area is a terrific hockey market. Yep, just follow the money, Mr. Bettman. Oh, again, by the way, has Ice Arizona paid the NHL the $70 million it borrowed to purchase the team, Mr. Bettman? Yet Glendale has proven its support with millions in cold, hard cash.

It seems you have drunk the IceArizona kool-aid and have joined in the mantra of blame Glendale for cancelling its long-term IceArizona arena management contract after 2 years. I guess you forgot about Craig Tindall and Julie Frisoni, City of Glendale employees who allegedly aided and abetted IceArizona while it was negotiating its management contract with the city. I guess you forgot that IceArizona allegedly represented that the city would recoup its $15 million a year payment by receiving “enhanced revenues” from parking fees, ticket surcharges, naming rights, etc.?

Did you know that IceArizona submitted its annual financial report to the city, kicking and screaming, at least 3 months after it was due? Did you know that while some of the financial numbers presented were audited numbers some of the critical revenue numbers the Coyotes claimed as proprietary and were not audited? Glendale was told trust us and don’t verify. As a result, each year of the 2 years the contract existed Glendale did not receive verifiable, audited numbers while it received revenues that never met the IceArizona representations…actually millions less than the represented numbers.

At what point did city council throw up its hands? After the alleged collusion between IceArizona and city employees? After it received revenues that in no way met the IceArizona representations? After the city’s inability to get verifiable, audited figures?

The city’s trust had been eroded by these alleged bad acts. Did you forget that these were the reasons why Glendale cancelled its contract with IceArizona? It’s so very convenient to point the finger at Glendale and say, it’s all your fault. You’re the bad guys because you cancelled the contract while conveniently ignoring or forgetting alleged prior bad faith acts on the part of IceArizona. And it’s so much easier to say that fans won’t come to games in Glendale.

How soon you forget. Remember the recent season the Coyotes made the play-offs? The arena was filled…it was magical…seas of white out shirts…fan excitement…distance to travel to a game didn’t matter to see a winning team. The real question to be asked by all is this…is this team now unprofitable because the product on the ice is bad and Valley fans are not motivated to go to the games anywhere they are held or is it, as you claim, because the East Valley will not travel to the West Valley to support hockey? I suspect it is the former reason.

Mr. Bettman, your ultimatum to the people of Arizona created a backlash that you cannot reverse or contain. You angered not just members of your fan base but the general taxpayer population as well. And guess what? You can’t put this genie back in the jar.

Here are just a few of the comments reported by the Arizona Republic’s Facebook page since Bettman and Barroway delivered their ultimatum of pay for a new arena or we leave:

  • ): “I have to say I am a huge coyotes fan. Every game I’m not at I’m watching. But I can tell you if you’re going to issue an ultimatum to the taxpayer to pay for your Stadium or you’re leaving. Then pack your bags and get out. You guys don’t put a winning product on the ice and you’re going to lose the face of the franchise as soon as you try to to trade him or he retires and that’s game over. So tired of sports teams thinking everything should be handed to them on a silver platter as if they provide some service to society that’s beneficial.”
  • “I’m a diehard hockey fan. However, I do not support tax payer funded playgrounds that billionaires benefit from. They make the money, we just pay for the playground and the. To also watch the games. There is not one instance where a publicly funded arena – for any sport – has left the municipality ahead. It is always to their detriment. Case in point Chase Field.”
  • “You might have a bargaining chip if you had a consistent winning team. People are drawn to winners. Start winning and more people will come. DO NOT blame your revenue problems on Glendale, when it is your own doing.”

Channel 12 TV news is running a current online poll with the question being, Has the time come to tell the Coyotes to leave Arizona?  Results as of this writing: Yes 67% and No 33%.

The Arizona Republic in a recent story cited the cost to taxpayers to have publicly funded the construction of sports venues in the Valley. The numbers are astounding and the total of $1.1 billion is just for the building of 4 existent sports venues:

  • Suns $90 M
  • Diamondbacks $354 M
  • Coyotes $220 M
  • Cardinals $455 M

The acknowledgement that IceArizona has lost millions annually does nothing, absolutely nothing, to convince taxpayers that IceArizona merits this kind of investment. Their losses do nothing to assure taxpayers that they can hold up their end of the bargain and will be able to invest $170 million of their own money, what money? into the deal.

To the team owners…it’s time for cooler, saner heads to prevail. Stop bad mouthing Glendale for your failures. Come back to the table. AEG stands ready to negotiate a mutually beneficial arrangement with you – one that is fair to all. That kind of arrangement will win the support of Glendale. It’s time to concentrate your energies on reviving superior management, a robust marketing strategy and a team that wins your fans back.

© Joyce Clark, 2017               

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such material. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

It has been 17 years and 107 days since the city’s pledge to build the West Branch Library.

USA Today photo

Andrew Barroway, Anthony LeBlanc Courtesy USA Today

On December 31, 2014 we were greeted with an announcement released by Coyotes Co-Owner, President and CEO Anthony LeBlanc, “Today is an exciting day for the Arizona Coyotes and our great fans. The addition of Andrew Barroway to our ownership group further solidifies the Coyotes long-term future in the Valley. Our entire ownership group is excited about this opportunity to work with Andrew in taking this franchise to the next level. It’s a great day for hockey in Arizona!” Here is the link: http://heatwaved.com/2014/12/31/andrew-barroway-approved-buy-arizona-coyotes/ .

We were told that Andrew Barroway’s purchase made him majority owner of the team holding 51%. The deal was praised as a means of creating financial stability for the team and some of the money would be used to raise payroll. Barroway said, “he and the nine minority owners were committed to infusing $30 million back into the team, with up to $9 million going directly to upgrading the on-ice product through trades and free agency.” As majority owner, Barroway would be the team governor, current governor George Gosbee would be alternate governor, and Anthony LeBlanc would remain as chief executive officer.

Two days later, on January 2, 2015 Craig Morgan of Fox Sports News interviewed Barroway. Here is the link: http://www.foxsports.com/arizona/story/q-a-with-coyotes-majority-owner-andrew-barroway-010215 . Morgan asked Barroway how active he would be as the new owner. Barroway indicated that he planned to be an active owner and would take part in all major decisions regarding the team. Morgan also asked if there would be any major changes and Barroway responded that he didn’t expect any.

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Where’s Waldo?

That was 4 months ago. So where’s Waldo? Er, Andrew Barroway? Sources inside Glendale City Hall indicate that Barroway, as the  majority owner of the team, has not signed the lease management contract. At the very least, that should have occurred after the Board of Governors approved the sale to Barroway on December 31, 2014. Does Barroway’s absence from the team scene and Gila River Arena plus a lease management contract without Barroway’s signature signal trouble with the deal? At the last game of the season the Coyotes distributed their annual book replete with statistics, photos and bios of everyone (except God) including the owners minus any mention or photo of Andrew Barroway. It makes you scratch your head and ask what’s going on.

thDYDNS84PThere’s another Where’s Waldo moment…the failure of the Coyotes to submit a certified financial team audit to the City of Glendale as stipulated in the lease management agreement. It was due September 30, 2014…7 months ago. In anticipation of receiving the audit the city hired Tony Tavares in December of 2014 to perform the city’s audit.

Peter Corbett of the Arizona Republic in an April 17, 2015 article offered some very interesting comments from principals involved. Here is the link: http://www.azcentral.com/story/news/local/glendale/2015/04/17/glendale-arizona-coyotes-first-season-audit-drags/25922095/ . He reported that:

  • “Coyotes officials said the reports were late because it was the organization’s first year of operations under the new deal and more complications surfaced when a new majority owner acquired the team at the end of last year.”
  • “The financial-reporting delay has created tensions with Glendale officials who are frustrated that the team has not closed the books on its first season even as the second season wrapped up April 11 on the ice at Gila River Arena.”
  • “Ian Hugh, Glendale vice mayor, said the Coyotes must be held accountable for the money the team is taking from taxpayers. ‘I expect both sides to live up to our agreement,’ he said. ‘Our auditor is still trying to get information from the Coyotes’.”
  • “Jeff Shumway, Coyotes CEO from 2006-09, said that during his tenure the team typically completed its audits by November. The audit reports were public documents that were available to anyone who made a records request to Glendale, he said.”
  • “The current Coyotes arena-management agreement includes language that requires the city to protect the team’s proprietary information.”

What’s so “proprietary” about an audited financial statement of profit and loss submitted to the City of Glendale that shouldn’t be a public record? After all, Glendale’s taxpayers are paying $15 million dollars a year. You would think we would be entitled.

The team’s financial audit wasn’t “proprietary” when Steve Ellman and/or Jerry Moyes owned the team. Did LeBlanc fudge in his public statements about the team’s losses? Who knows? Apparently we, the public, the taxpayers of Glendale and the fans supporting the team with ticket sales, will never know the truth. Former President Ronald Reagan said, “Trust but verify.” LeBlanc and company want all of us to trust but at the same time they don’t seem to want us to verify.

Questions remain unanswered…Where is Waldo? Where is Andrew Barroway and where is the certified team financial audit? There are answers but we are not getting them.

Post Script: Today is the NHL Draft Lottery. Coyotes placed third in lottery line up. Anthony LeBlanc tweeting a good face on the situation…but Where’s Waldo?

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

It has been 17 years and 95 days since the city’s pledge to build the West Branch Library.

For 4 years, from the time Jerry Moyes declared the team bankrupt in 2009 until the end of 2012, as a councilmember I was part of the high drama surrounding the Arizona Coyotes and the arena, a city owned facility. Suitors to buy the team came and went with regularity. The city paid the NHL $25 million a year to manage the arena while everyone desperately hunted for a new owner. In 2013 a new city council was seated and promptly approved the current management agreement of $15 million dollars paid annually to IceArizona, the new owners of the team. If truth be told that $15 million goes directly to Fortress Lending and the NHL as interest payments on the IceArizona’s purchase debt owed by LeBlanc, Gosbee, and et.al. If you remember the cash raised for the team purchase was approximately $45 million. The rest of the purchase price of $170 million was strictly debt. Today Andrew Barroway is the majority owner (51%) of the team.

A recent article on March 30, 2015, by Mike Sunnucks of the Phoenix Business Journal entitled Could the Phoenix Suns, city build a new arena at Phoenix Convention Center site? It is intriguing to say the least. Sunnucks reports on speculation about where the Phoenix Suns will be playing its games in the future, “ ‘US Airways Center is owned by the city of Phoenix and the Suns lease doesn’t expire until 2029’, according to city spokeswoman Deb Ostreicher. The Suns could look to the city for renovations of the downtown arena or could look for a new home.” Sunnucks goes on to say, “One scenario being talked about — at least in real estate and downtown Phoenix circles — is a new arena being built where the current South Building of the Phoenix Convention Center is on Jefferson and Third streets. That is the oldest convention center building and is a block away from the Suns’ current arena.”

Granted all of this is extremely speculative but there is the possibility of the Phoenix owned US Airways Center becoming vacant if Phoenix and the Suns decide to build a new arena at the site of the south building of the convention center. Take it a step further and it is not outside the realm of possibility that Phoenix would attempt to lure the Arizona Coyotes to a newly renovated and vacant US Airways Center with better sight lines for hockey patrons.

Think about it. Since purchasing the team two years ago IceArizona has consistently lost money due to many factors. One of those factors has always been fan complaints about trekking out to Glendale for the games. Many in the East Valley as well as from other locations such as Tucson simply choose not to make the trip. A more centrally located arena in downtown Phoenix has a certain appeal for many.

One wonders if it appeals to Barroway. Today, 2015, the Glendale arena is 12 years old, having opened in December of 2003. In another 3 years, by 2018, the arena will be 15 years old and the Coyotes will have the available option of moving due to the opt out clause any time thereafter. One of Barroway’s imperatives is to keep the team viable over the next 3 years until some major decisions are made.

In 8 years, by 2023, the arena will be 20 years old and in need of major renovation and upgrades. In the meantime, if Barroway and the City of Phoenix worked out a deal regarding US Airways it could solve one persistent fan complaint by relocating to a more convenient and centralized location. It would certainly fulfill the owners’ mantra of “here to stay”…just not in Glendale.

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Make no mistake. The team has a new owner…Andrew Barroway. Below is the press release on the Arizona Coyotes website with the announcement:

NHL Approves Agreement for Andrew Barroway to Become Majority Owner of the Coyotes

Wednesday, 12.31.2014 / 10:16 PM

Arizona Coyotes

FOR IMMEDIATE RELEASE: Wednesday, December 31, 2014

GLENDALE, ARIZONA — The National Hockey League (NHL) and the Arizona Coyotes announced today that an agreement for IceArizona to sell 51 percent of the Arizona Coyotes franchise to Andrew Barroway has been finalized by the NHL’s Board of Governors. Barroway will serve as the Coyotes Chairman and Governor immediately.

‘This is truly a dream come true for me and my family,’ said Barroway. ‘I am extraordinarily grateful for the opportunity of a lifetime and look forward to working and solidifying a strong partnership with the Club’s current ownership group.

‘As a group we are committed to serving our fans with a new level of excellence and our collective goal is to put a competitive team on the ice every season and, one day, win the Stanley Cup.’

‘Today is an exciting day for the Arizona Coyotes and our great fans.’ said Coyotes Co-Owner, President and CEO Anthony LeBlanc. ‘The addition of Andrew Barroway to our ownership group further solidifies the Coyotes long-term future in the Valley. Our entire ownership group is excited about this opportunity to work with Andrew in taking this franchise to the next level. It’s a great day for hockey in Arizona!’

Andrew Barroway is the Managing Partner of Merion Investment Management LP, an event driven hedge fund that currently manages more than $1 billion. Merion was founded in January 2009. Barroway graduated from the University of Pennsylvania Law School in 1991.”

Andrew Barroway is the new owner of the team. A simple analogy is this. You can no longer afford to make the mortgage payment on your house. You get your uncle to buy 51% of the value of your home. Then you decide you want to repaint and recarpet your house but your uncle says, “No.” Who prevails? Your uncle, of course. He is the majority owner.

It’s the same with the team. Rumors abound that the Gosbee/LeBlanc group have been missing their cash calls. Missing a cash call means that the ownership group (prior to Barroway) refused to use personal funds to cover losses. This probably made the NHL (Commissioner Bettman and the other team owners) very, very nervous. No wonder Bettman worked so hard to find another investor for the team.

One has only to look at this photo to see how thrilled George Gosbee and Anthony LeBlanc are to relinquish control of the team. While it is an old photo it reflects what each must have felt. Each looks as if their dog died.

image1

Photo credit: Matt Kartozian, USA Today Sports via Five for Howling by Brendan Porter

 

The minority owners have no choice but to put a ‘good face’ on the situation. LeBlanc’s mantra was Barroway’s purchase “further solidifies the Coyotes long-term future in the Valley.” Barroway offered “our collective goal is to put a competitive team on the ice every season and, one day, win the Stanley Cup.” Barroway’s function over the next few years will be to shore up the team financially and to cover those pesky cash calls.

On Friday, January 2, 2015 there was a press conference at the Gila River Arena to introduce Barroway to the Arizona fan base. (By the way with the name change to Gila River Arena, why does the very top of the arena, seen in aerial views, still say Jobing.com?) The presser was interesting on many levels. Anthony LeBlanc made several rather telling comments. In terms of a sale of the majority interest to Barroway, “we (the ownership group) weren’t looking for this.” They might not have been looking for it but it appears that Bettman and company most certainly were. He also confirmed that the sale consummated on the last day of 2014 “offers tax advantages for 2014.” The best face LeBlanc could offer was that the sale provides “financial flexibility.” Don Mahoney, the team’s General Manager, confirmed the importance of the sale to Barroway by saying, “we (the team) are solvent” and the sale provides “(financial) stability for long term success.”

It is no secret that Barroway has been trying to acquire a hockey team for years. Witness his attempts with the Philadelphia 76ers, the New Jersey Devils and the New York Islanders. In his case, the 4th time is a charm or as Barroway put it, “keep trying and don’t quit.” With regard to his relationship with the City of Glendale Barroway praised the “strong partnership” with the city. It seems the strong partnership is the $15 million a year the city pays the team. Le Blanc and Barroway reiterated that they are “committed to be here.”When asked about the “out clause” in the current Glendale/IceArizona deal, Barroway casually confirmed “the out clause remains in place.” As long as that option remains so will the speculation about a move after 5 years of losses. If Barroway is truly committed to keeping the team in the Valley working with Glendale to remove that stipulation would scotch the notion once and for all but don’t hold your breath. Barroway emphasized that he will be “very involved in all major decisions” and that “the buck stops with me.” LeBlanc painfully agreed by saying Barroway “wears the crown” as the majority owner of the team.

Just as every Coyotes fan, I desperately want Barroway and the team to succeed for that insures the team in Glendale for a very long time. An integral part of that scenario is constantly building a strong and ever growing fan base. That is difficult to do in today’s climate. Everyone, especially a fan base, loves a winner…a loser, not so much. The team’s performance is in a state of flux as older, experienced players are replaced with young, unproven new faces as part of a rebuilding cycle. The only star player the team will probably retain over the long haul is Shane Doan and he can’t do it alone. The financial bleeding will diminish when the team’s performance proves to be a consistent game winner.

What does the future hold for the Arizona Coyotes? Only Andrew Barroway knows and he’s not telling. Remember there is an option in the Glendale/IceArizona deal that the team can move after demonstrating 5 years of loss. Barroway, first and foremost, is a smart businessman. While he expects losses he also expects those losses to diminish over time as he works to build a more competitive and winning team. Only Andrew Barroway will decide if the team’s future includes a move to a more profitable locale with the financial resources to build his dream team that wins the Stanley Cup. We all hope that the dream of a Stanley Cup includes Glendale, Arizona. We all hope that is Barroway’s dream as well.

© Joyce Clark, 2014

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

A crack in the ice

Posted by Joyce Clark on December 2, 2014
Posted in Arizona CoyotesCity of GlendaleGila River Arena  | Tagged With: , , , | 5 Comments

Several days ago a blog follower suggested I go to Jo Jo Fraser’s FB page. Jo Jo is a good guy. He has been and continues to be a staunch supporter of the Coyotes. His recent FB posting demonstrates the, up until now, silent sentiment of many Coyotes supporters. What is so surprising is his openness in questioning the direction of the team’s ownership and plans for the team. It is the first crack in the ice of support for a team performing poorly. His post evoked replies both pro and con. Here is what he posted and a sampling of replies:

Jo Jo Fraser

November 29, 2014

“Driving home from the game tonight I couldn’t stop asking myself if I had fun tonight. I love NHL hockey as much as anything in this world but going to the arena is not fun right now. After riding the roller coaster since the great playoff run all I can see is the bleeding off of true NHL players that have not been replaced ( starting with Raffi and going through Verby ) . I have to ask myself who is to blame for this. Up till now I was unwilling to question the new ownership group because I was just so glad to have my team here but that started to change over the summer with no movement to get some quality talent to fill the holes that were vacated. I was told the idea was to put a winning product on the ice RIGHT away to start to build the fan base back. That has turned out to be all talk and no walk.  We are now heading towards our third year out off the playoffs and the team seems to be in complete disarray with no clear direction.  We are not a big team and we are not a fast team so what are we? What is the direction we are heading? GMDM says he thought we were going to be a playoff team. I am not sure what he is seeing because I see a team that is just a touch better than the oilers. I am finding myself expecting this team to lose. This is not a recipe to grow the game. If a die hard fan like myself is having a hard time getting up to go to a game how in the heck are we suppose to get new fans to come seem this team. We have the best captain in sports in the twilight of his career and he deserves better from ownership and management for his loyalty when the team was at its lowest. Oh and can someone tell me what all the great improvement to the arena over the summer were. All I see is they tore out the tile in the team shop and said it is newly remodeled. I hope something changes soon.”We are now heading towards our third year out off the playoffs and the team seems to be in complete disarray with no clear direction. We are not a big team and we are not a fast team so what are we? What is the direction we are heading? GMDM says he thought we were going to be a playoff team. I am not sure what he is seeing because I see a team that is just a touch better than the oilers. I am finding myself expecting this team to lose. This is not a recipe to grow the game. If a die hard fan like myself is having a hard time getting up to go to a game how in the heck are we suppose to get new fans to pay money to come seem this team. We have the best captain in sports in the twilight of his career and he deserves better from ownership and management for his loyalty when the team was at its lowest. Oh and can some one tell me what all the great improvement to the arena over the summer were. All I see is they tore out the tile in the team shop and said it is newly remodeled. I hope something changes soon.

Mike Doyle Well said Jo Jo. It is really sad. I’m starting to think we were sold a bill of goods by ownership to fail so they can move in 5 years.

Jon Pletcher Do you see the ownership walking around anymore? You saw that all the time last year. And they were always vocal as well. I see nor hear that no more. And honestly that really makes me nervous.

Paul Gheduzzi I’m getting really concerned, but not giving up, Jo Jo. Right now, I have a feeling that the ownership issue is getting sorted out with Andrew Barroway and afterwards we could see changes that can help improve the team on the ice. Same with their visibility. The Coyotes unfortunately are playing poorly in a number of areas while the young guys go through the growing pains. The veterans the team has are just not enough to compete in a tougher Western Conference. All I know is, the team cannot stay status quo. It can’t. And I’m not going to target either Don Maloney or Dave Tippett because this is on the players, not them. Agreed it is unfair to Shane Doan he isn’t getting to play for a winning team right now before retirement comes.

Mike Doyle They promised Doan a winner and that is why he signed a home town discount contract. Many teams offered him lots more money but being the great person Doan is he believed them just like we did.

Jeanne Ruairí I understand you’re frustrated, but the things this ownership group inherited to fix cannot be done overnight. The improvements to the arena was food, repairs, cleaning, extermination, etc that was ignored for 4yrs. As for GMDM, he’s done what he’s can with what he was given. We all want a winning team, but unfortunately it has to be rebuilt. I do still see the owners walk around, granted not as much as I think they’re probably try to figure out how to fix this funk. We’re not set up to fail, but any business bought out of 4yrs of bankruptcy doesn’t get fixed overnight.

Mike Doyle Losing 50 million to make twice that in the following 2 or 3 years is not out of the question. Tom you and I are normally on the same page but this time we differ in a huge way. I am always up beat about our team but I’m having second thoughts now. Many conversations you and I have had about internal situations are not a good sign either. I am very skeptical right now.

Paul Gheduzzi Understood, Tom. Again, I’m just concerned. But I already knew that the turnaround wouldn’t happen overnight. Just very tough because we saw some momentum after the 2012 playoff run and the securing of new ownership, keeping fans and growing the fan base is sensitive at this very stage to how the team plays. I have faith in everything working out, but it’s a concern if we don’t start seeing changes for the better in the near future.

Mike Doyle Everyone knew from the get go to get the fan base back we had to put a good product on the ice. That was a no brainer about sports teams in the valley.

Jo Jo Fraser Tom Kennedy makes some good points but I think maybe the priorities are screwed up. Nothing changes overnight but a direction for the team could be set. GMDM said we are a playoff team. That doesn’t add up. If they came out and said we are two or three years away I could get behind that. I don’t buy for a second that there are plans to move the team in four years I just want to see a direction for the team or hope for the future. I don’t like what I have seen so far. I am wrong a lot and I’m sure if I was privilege to information the big wigs have I would feel better but I don’t. I’m just a very disappointed and frustrated die hard fan. Going to a game and expecting the Coyotes to loose is not a fun place to be but it is a current reality.

There are many fans who are concerned. The unknown factor is Andrew Barroway. The general assumption is the NHL Board of Governors will approve the sale this month making him the majority owner. Little is publicly known about his plans for the team. We are sure to learn more when he is officially approved. A major take-away is Anthony LeBlanc, George Gosbee and all of the other current owners will be in the minority and can no longer determine the team’s eventual fate. It is to be expected that their visibility and cheerleading would wane given the circumstances. The bloom is off the rose as they realize they can no longer call the shots.

Jo Jo Fraser’s comments are illustrative of the growing fan base frustration and discontent. It is an issue the current owners must address quickly or their failure to grow the fan base will cause  further cracks in Coyote ice.

© Joyce Clark, 2014

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This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Ever since the news of Andrew Barroway’s purchase of a 51% interest in the Coyotes (expected to be ratified by the NHL’s Board of Governors) there have been questions about the original management agreement between IceArizona and the City of Glendale.

One of the questions that surfaced was would there be an opportunity to renegotiate the agreement. In reading the contract there does not appear such an opportunity.  Technically Barroway is becoming the majority owner of the team and for now the arena manager remains the same.

The arena manager is responsible for the operation of the arena and for leasing space to the team. The issue is addressed in Section 5. Demise of Arena and Use Rights. In 5.1, Demise of the Arena it states, “The City hereby demises and lets to the Arena Manager, and the Arena Manager hereby takes and leases from the City, effective on the Closing Date, for the Term and upon the provisions (i) The Arena Facility…” In Section 5.2, Grant Use of Rights, it says, “In addition to the rights granted by the City to the Arena Manager in the other provisions of this Agreement, the City hereby grants to the Arena Manager, and approves the right of the Arena Manager to grant to the Team Owner, during the Term, the exclusive right and obligation to use and occupy the Hockey Event Spaces…”

In Section 6.2., Sublease of Exclusive Team Spaces, it says, “The Team Manager hereby subleases the Exclusive Team Spaces to the Team Owner…”  The team is a subtenant of the arena. We know that Barroway is securing a 51% interest in the team but we do not know if he is also acquiring a majority interest in the arena management company.

Even if Barroway became a majority owner of the arena management company in Section 4.2.3, Arena Sub-Manager, “The Arena Manager may, from time to time, delegate all or a portion of its duties and responsibilities to an Arena Sub-Manager…” There is no provision that I can find whereby a change in team ownership requires a renegotiation of the lease since: (1) the lease is with the arena management company and (2) the arena management company can sub-lease to an arena sub-manager without city approval as long as all duties and responsibilities continue to be met satisfactorily.

The other question that has been raised is the city’s ability to audit. A little background is in order. Under the team ownership of Ellman and Moyes the city received financial reports but had to accept them without any corroboration. This eventually became problematical for the city. City Council wanted a mechanism whereby it could verify what the arena manager was reporting in terms of revenues and costs associated with the arena’s management and operation. Hence Section 8.16, Financial Reports and Section 8.17, Audits were incorporated into the agreement. Financial reports must be submitted to the city monthly, quarterly and annually. To ensure the veracity of the reports submitted, in Section 8.17.1, “The City shall have the right to conduct an independent audit of the management and operation of the Arena (or any part thereof) and the Account Records (or any part thereof) and the Team Owner Records (or any part thereof) by City Staff or by an independent certified public accounting firm selected by the City.” This section clearly grants the city the right to audit not just arena manager financial records but financial records of the team as well.

Keep in mind that this agreement was devised by attorneys and as a result, their interpretations of the terms can vary. That’s how they earn their fees…by arguing exactly what a term or provision of a contract actually means. They could argue how many gnats are on the head of a pin.  

As a result you can be sure that every sentence within the agreement can be disputed and argued by attorneys. On the face of it, it appears the city has no legal right to renegotiate the management agreement with IceArizona. IceArizona would have to agree to do so voluntarily and that’s not going to happen. However, the city does have a legal right to audit manager and team financial records and to thereby confirm the revenues and expenses that are reported to it.

© Joyce Clark, 2014

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

On October 2, 2014 Larry Brooks, a reporter for the New York Post, reported that a 51% interest in the Coyotes is in the process of being acquired by Andrew Barroway. Barroway is managing partner and founder of Merion Investment Management LP based in Radnor, PA. He is a failed suitor in the purchase of the Devils and Islanders.  At this point the story is speculation as neither the NHL nor the Coyotes’ owners have confirmed the deal. Here is the link: http://nypost.com/2014/10/02/spurned-islanders-buyer-to-purchase-coyotes-instead/. As an exercise, let’s speculate some more.

Why is Barroway acquiring a majority interest in the team? He wants to own a hockey team. That is evident in his two failed attempts. But he wants more than that. He wants to be in control and to make the ultimate and final decisions about the team’s fate at a future date. The team cannot and will not leave for 5 years. We can enjoy hockey in the Valley through the 2018-2019 season. After that you will need to consult your crystal ball.  Although I would expect that when the fans finally realize the team’s days may be numbered attendance will drop like a stone.

According to the agreement the team cannot leave for 5 hockey seasons and must demonstrate $50 million in operating losses. Here is the exact language in the management agreement: Section 3. Term. 3.3. Early Termination by Arena Manager/Team Owner. “Notwithstanding the other terms and provisions of this Agreement, Team Owner and Arena Manager jointly shall have the right to terminate this agreement without penalty or cost by delivery of written notice to the City at any time within 180 days following the end of the fifth (5th) hockey season year after the execution date if (a) neither terminating Party is in material default of any term or condition of this Agreement, and (b)Team Owner has incurred a cumulative Operating Loss of $50,000,000 or more, calculated as the sum of Team Owner’s operating income/loss for each the Fiscal Year periods then ended, provided that if such notice is given during any NHL hockey season, the termination shall not be effective until the end of the applicable hockey season, including all Home Games associated with the season. In this regard, Team Owner shall deliver to the City, not later than ninety (90) days following the end of each Fiscal Year, a statement (certified to the City by the Team Owner’s chief financial officer or the Team Owner’s certified public accountants, at the option of Team Owner) of the Team Owner’s claimed operating income or loss for such Fiscal Year, which statement shall be subject to audit by the City and the result f such audit shall thereafter be conclusive upon team Owner with respect to the determination of Operating Losses.” This exact same provision applies to the city as well.

The New York Post story cites the team loss in its first year of operation at $24 million. Educated rumors are that it’s on the low side and could be more. As long as we’re speculating, let’s peg their losses at $20 million a year. At the end of 5 years the team’s losses will be north of $100 million and will meet the terms of the agreement.  Barroway’s investment in the team now will cover those expected losses and he will be in the cat bird’s seat to decide the team’s future move.

Let’s wait to see if a majority interest is indeed sold to Barroway. That will deliver a strong message to everyone and you can then decide how much of an emotional investment you wish to make in the team. And just when we thought the Coyotes saga was closed…so it continues.

© Joyce Clark, 2014

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

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