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Joyce Clark Unfiltered

For "the rest of the story"

Jun 13

19

Non hockey management is not a silver bullet

Posted by Joyce Clark on June 19, 2013
Posted in City of Glendale • Jobing.com arena  | Tagged With: , , , , , , | 3 Comments

Some of those on council believe that all of Jobing.com’s problems regarding increasing its revenue can be solved by finding a management company that will book a ton of non-hockey events, especially major concerts.  I thought it would be interesting to take an Internet walk through the entertainment promotion industry. I don’t pretend to be an expert on this issue and I am sure somebody will correct me on something!

prop 202The gorilla in the room is LiveNation. In 2005 (last year for which I could find numbers) earned $1.3 billion dollars world-wide. It has relationships (contracts) with 135 venue sites world-wide and 92 of those are in the United States. It has relationships with Desert Sky Pavilion, Talking Stick, Comerica and Celebrity Theater (as of 2005) in the Phoenix Metropolitan area. It, like other promoters, also has a roster of national, well known artists that perform exclusively at LiveNation venues.

enter 1 The second largest is Anschutz Entertainment Live (AEG). In 2005 it earned $417 million dollars—only 20% to 30% of LiveNation’s income.  In September, 2012 AEG announced it was selling off its Entertainment Live subsidiary only to reverse that action in March, 2013. AEG is the company that currently manages Glendale’s Jobing.com Arena. The third largest company is the House of Blues Entertainment. In 2005 it earned $245 million dollars—about 10% of LiveNation’s income. But wait…the following year, 2006, LiveNation acquired the House of Blues and picked up Casino Arizona as another contract in the Phoenix area. There are many small firms (less than a handful in the Phoenix area) whose annual income is less than $20 million dollars a year.

Let’s look at the two most comparable venue sites to Jobing.com Arena. One is US Airways, home to the Phoenix Suns. It is run and events are booked by Phoenix Arena Development (one of the two bidders to be considered by Glendale). It is also the home of the Arizona Rattlers and Phoenix Mercury. In essence, it has 3 anchor tenants. Between June and December, 2013 there are 10 major concerts booked. The other comparable site is Chase Field, home to the Arizona Diamondbacks, its only major anchor tenant. SMG World manages this venue (and is also a finalist in Glendale’s bidding process) and uses Select Artists Associates of Scottsdale as its event promoter. It has 3 major concerts booked between June and December, 2013. It will be very interesting to see what each of these companies want in terms of an annual management contract. Will there be penalties in the contracts if a named minimum number of events is not achieved? Will there be an incentive if the company exceeds a mutually agreed upon goal?

As you can see, the Phoenix Metro area is a highly competitive market. There many venues from which to choose and LiveNation have contracts with many of them. You can be sure LiveNation, with a virtual monopoly in this country, dictates the terms and fees for the major events it books.

enter 3Just to give you an idea of how competitive our market is, here are just some of the sites that can and do host major concerts: ASU Gammage, Desert Sky Pavilion, Celebrity Theater, Chandler Center for the Arts, Chase Field, Comerica Theatre, Fort McDowell Casino, Herberger Theatre, Grand Canyon University Arena, Jobing.com Arena, Mesa Arts Center, Scottsdale Center for the Performing Arts, Orpheum Theatre, Talking Stick Resort, Tempe Center for the Arts, US Airways Center and University of Phoenix Stadium. This list is by no means complete and does not include dozens of smaller venues. This market is not an easy one. Steve Ellman, when he controlled Jobing.com Arena was highly successful in booking major concerts. When Jerry Moyes and the NHL took control of the arena that was not their focus and so we saw fewer and fewer major events at Jobing. This year the number of major events booked was so few that it is embarrassing.

What can a venue manager do in this highly competitive market of at least 17 major venue sites if there is no relationship with LiveNation or AEG? They host smaller, less lucrative events such as rodeos, religious groups and family events. That works well if your venue is small but large ones like Jobing.com Arena need large events to offset the costs associated with hosting. Note than even the UofP Stadium hosts RV and car sales nearly every weekend in addition to gun shows in an attempt to shore up its bottom line. I suppose a venue manager could undercut the big boys and offer the venue for rock bottom rental fees and hope to cover all or part of the loss with concession and parking revenue but that is risky on so many levels.

Hiring a non hockey arena manager has never been in the best interests of the arena or Glendale. A permanent team owner hired to manage the arena guarantees 41 nights of hockey with “butts in seats.” It will be in the owner’s best interest to mount a strong marketing campaign for the Coyotes and put even more butts in seats as well as to work to acquire as many non-hockey events as possible to increase the bottom line of profitability. This is not a difficult concept to understand and yet there are those on Glendale’s city council who refuse to acknowledge this concept—out of sheer stubbornness or because of another agenda?

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Jun 13

18

Council news door opens a crack…

Posted by Joyce Clark on June 18, 2013
Posted in City of Glendale  | Tagged With: , , , , , , , | 3 Comments

cit mtg 2Wow, we just saw a window into council priorities. Since January and the new council began meeting, their meetings are conducted with lightning speed, usually lasting half an hour and on rare occasion because of the sheer number of items on their agenda it may go as long as an hour. Today, June 18, 2013 there were only 6 items on their workshop agenda and it took them over an hour to deliberate. Why? Because these were all items that have a direct impact on them and their business.

Here’s the lineup:

  1. Council has changed the voting meeting time from 7 PM to 6PM.
  2. The Vice Mayor’s position will follow a calendar year (Jan. to Jan.) rather than the fiscal year (July to June).
  3. Council subcommittees will remain annual appointments with a 2 year consecutive term limit. After serving 2 consecutive terms a councilmember must move to the other subcommittee (there are only two). After being off for 2 years councilmember may again sit on committee vacated.
  4. Response time for Council Items of Special Interest remains 30 days for staff response.
  5. Council has traded Moment of Silence for Prayer after they have opportunity to review suggested guidelines for conducting a Prayer.
  6. Workshop meeting location has moved from Council Chambers back to its old haunt, Room B-3, or the “basement” as Mayor Weiers likes to call it.

calendarInterim City Manager Bowers announced that at the June 25, 2013 meeting the Internal Audit will come forward. After the open meeting, Council went into Esession and it was an unusually long one for them, starting at 2:45 PM and ending at about 6:30 PM. The issues were substantive. From various statements made to the media by the City Attorney and some councilmembers there will be no vote on the Coyotes deal on June 25th. So look for June 28th or July 9th. However, Council has a vacation break in July so it makes more sense for it to become an agenda item at the specially called meeting for June 28th.

polling 1We know council was briefed on the PAD and SMG bids and council probably learned their asking price to manage the arena. It probably made Councilmember Alvarez’ heart beat faster and I imagine she offered an impassioned but hardly eloquent plea for acceptance of one of them. We know another topic of discussion was the Renaissance Sports and Entertainment (RSE) bid. Councilmember Sherwood publicly admitted that there were deal points that caused council difficulty. I would think the city’s guarantee of $15M (or X number—you fill in the blank) a year without any guarantee that there would really be the elusive $8M-$11M in enhanced revenue going to the city could have been a stumbling block. Whatever the issues were, council would have given direction to staff to go back to RSE and renegotiate those deal points. The ball in now in RSE’s court. If RSE is serious, it will have to make further concessions that demonstrate their skin in the game. Councilmember Sherwood also publicly acknowledged that the deal points need to be publicized one week before the vote. I applaud council for their stance on the side of reasonable and prudent public disclosure.

Councilmember Alvarez walked out of Esession in disgust, complaining that council was making “too many concessions” to RSE. The mere idea of entertaining the RSE bid is a “concession” in Alvarez’ mind. One other Alvarezism from the open meeting springs to mind. While discussing putting public comments at the beginning of the meeting she virtually accused her fellow councilmembers of not championing Democracy and the American Way by accusatorily saying, “We’re not dictators.”

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Jun 13

17

In the best interest of the city

Posted by Joyce Clark on June 17, 2013
Posted in City of Glendale  | Tagged With: , , , , | 18 Comments

moyes

Jerry Moyes

It is time to review some previous ownership deal making history. Jerry Moyes threw the Coyotes into bankruptcy in late 2009. In 2010 Glendale and the NHL began to entertain offers for a buyer of the team. Everyone assumed that it would be a fairly quick process but that was not to be. One deal after another was rejected throughout 2010 and 2011. In order to continue the process the NHL held up the city to the tune of $25M a year. In 2012 Greg Jamison entered the picture and a majority of council (I being one of that majority) believed we had a solid deal that was in the best interest of the city.

In June 2012 a majority of council made two significant votes. One was to accept the Jamison deal after the management fee had been reduced and penalty/incentive clauses were added. During contentious council discussions Interim City Manager Skeete presented the council information about the financial impacts of keeping the Coyotes or losing them. One of the bullet points that I remember to this day stated that over the 20 year life of the deal Glendale was better off by some $20M by keeping the team. Skeete, at that time, had worked out a financial plan that called for budget cuts over 5 years. Many became confused and blamed those projected budget cuts on keeping the Coyotes. Not so. Those budget cuts were in anticipation of losing the sales tax increase in 5 years. His plan was solid, accommodated keeping the team and was in the best interest of the city.

That same month a majority of council voted to raise Glendale’s sales tax for a period of 5 years. A fire storm lasting 6 months erupted. Ken Jones, virtually single-handedly, although the Goldwater Institute was lurking about and seen helping Mr. Jones on occasion (later they would part ways), mounted a Referendum petition drive to reject council’s vote on the Coyote deal. He failed but it created unanticipated delay. Shortly on the heels of that effort another group began an Initiative petition drive to get rejection of the sales tax increase on the November, 2012 ballot. They were successful and the voters rejected their initiative in the November election. But it created further unanticipated delay. These folks were not working to further the best interest of the city.

Leblanc

Anthony LeBlanc

The city imposed a deadline of January 31, 2013 for Jamison. He failed to meet that deadline and that is a story for another time. In May of this year the NHL identified Renaissance Sports and Entertainment (RSE) as a buyer of the team and rejected the Pastor bid outright. Has it occurred to anyone that RSE is, in fact, the ONLY bidder the NHL has? To this day they have never made a formal announcement of RSE as the buyer. Is this deal in the best interest of the city?

There are some councilmembers who understand that keeping the team is vital to the city but they are having problems guaranteeing that $15M a year that RSE has said it must have. They are between “a rock and a hard place.” It reminds me of the original Ellman deal. At one point council was presented a “bucket list” graphically. One of the diagrams showed an enormous amount of revenue being literally poured into city buckets. Unfortunately those buckets filled with oodles of revenue to the city never materialized. “Fool me once, shame on you. Fool me twice, shame on me.” Now the current council is being presented with another version of a “bucket list.” This time RSE had identified additional revenue streams that will reimburse the city for its guaranteed pledge of $15M a year for a lease management fee. Some have asked why doesn’t the city just pay the $6M a year and RSE keeps ALL of the additional revenue streams itself. It accomplishes the same thing. The assumption is that to satisfy its lenders RSE must show that it has an annual guaranteed source of $15M. Who better to guarantee that amount than a city? The problem is, will those additional revenue stream buckets fill up as assumed? No one knows. Those additional revenue streams could bring $4M or $5M a year to the city or (hallelujah chorus) they could earn $11M a year. Yet the city will guarantee $15M a year. Why is it the city’s responsibility to assume this financial risk on behalf of RSE? Is it in the best interest of the city?

Let me be very, very clear. I want the team to remain in Glendale but not if it does further financial harm to a great city that I love. My frame of reference for any deal has been in terms of whether it meets the best interest of Glendale. I have demonstrated my commitment by voting in the affirmative for the Jamison deal and subsequently losing my council seat. If not for my vote and that of 3 others, there would be no RSE deal to consider today. I want a clean deal that the city can afford to pay and I suspect some councilmembers want that as well. Can they make that happen? We won’t know until the deal is made public. I, for one, will be reading every comma, period and paragraph. Only then will we truly know if this deal is in the best interest of Glendale.

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Jun 13

13

Before you buy…kick the tires and check under the hood

Posted by Joyce Clark on June 13, 2013
Posted in City of Glendale  | Tagged With: , , , , | 12 Comments

I wrote this blog on June 10, 2013 and have been sitting on it. Late this afternoon, June 13, 2013 Mike Sunnicks of the Phoenix Business Journal reported on Glendale’s concerns about the RSE bid. I share the city’s concerns. I see no reason to hold this back any longer.  Remember I am looking at the RSE deal having been a former councilmember. The fact that RSE is using borrowed money to finance this deal with very little of their own equity is disturbing. With such a small proportionality of investment it allows RSE a great deal of latitude to abandon Glendale and relocate in a few years.

I know how desperately fans want to keep the Coyotes here. I share that sentiment but not at any price. It’s time we all took an objective look at this deal before embracing it. There are those who will say if it’s not a Jamison deal I am against it. That is not true. If I were still on council I would have a fiduciary responsibility to make decisions that are in the best interest of Glendale based on the facts. Truthfully, if I were on council, I would not accept this deal based upon the facts that are publicly available about RSE’s deal at this time.

So please save your hate email and nasty tweets. I know that I have angered you but once you get past that initial anger, please take a hard look at this deal. Here goes what I wrote several days ago:

Everyone is well aware that the NHL blessed Renaissance Sports and Entertainment (RSE) as a legitimate contender for ownership of the Coyotes. They even chaperoned RSE’s first meeting with Glendale City officials. However, note that the NHL has NOT made a formal announcement to date stating that they are in fact, selling the team to RSE.

Coyotes logoMost of the Coyote fan base and the media seem enthralled with the news and are ready to embrace an NHL/RSE deal. But there are two factors that have so far been ignored. No one in the media has really “kicked the tires and looked under the hood” of this deal; and will Glendale be willing to pay a lease management fee greater than its budgeted and soon-to-be-approved $6M a year?

So why don’t you and I? Let’s take a closer look at this deal. RSE has raised $45M in equity ($10M coming from Gosbee). We will use these figures all of which have been widely publicized in the media and to date unquestioned by any journalist. RSE is getting $200M in loans. One loan from Fortress Investment Group is $120M. Sources say the interest rate is 8%. RSE is getting a loan from the NHL for another $80M. Sources say the interest rate is 5% and that payments start the first year – not in 5 years. The interest on these two debts could be as much as $13.6M a year. My goodness! $13.6M a year in interest! That’s WITHOUT any payment on the principle! Is it any wonder that RSE would like to get an annual lease management payment of $13M-$15M? This deal is heavily debt laden.

Let’s look at costs associated with Jobing.com. According to Coyotes Newco, LLC, the NHL entity that runs the arena, in their Annual Budget submission to the City of Glendale for Fiscal Year ending June 30, 2014, Total Annual Expenditures are projected at $12,468,912 and the Annual Net Cash Requirement as projected by the NHL is $9,088,193. Earned revenue from events will be in the $3.3M range. Based upon these figures submitted to the city by the NHL, the entity currently running the arena, RSE will spend a minimum of another $9M as a Net Cash Requirement. Who would know better what it costs than the NHL currently doing the job?

So we have $13.6M in annual interest payments and $9M in cash needed to operate the arena. Simple math says the minimum figure that RSE will spend every year is $22.6M. The $45M of equity that RSE raised will last almost two years. Where do they get the money to continue? Don’t say from the revenue generated by the arena events. That revenue will offset the total annual arena expenditures of $12M. Ok, tires kicked and the hood has been looked under.

Fortress is not in this deal out of the goodness of its heart. The reason Fortress has the option to purchase equity in the team is that they know darn good and well that when RSE flips the team, it will be much more profitable for them to be in the game and get their expansion check profits than just simply to be repaid at 8%. If RSE can get out of its lease in year 3 or 4 it’s a brilliant strategy. They will make a killing on expansion fees and will have essentially bought a team for only $45M in real equity.

Glendale City Council

Glendale City Council

That leads to the second question. Will Glendale be willing to pay a lease management fee greater than $6M a year? For the sake of argument let’s say Glendale is willing to go as high as $10M a year. How does it find the $4M it is short? Preliminary approval of the budget says monies within the budget may be reassigned to different departments/categories but overall budget expenditures are capped at the approved amount and may not be increased. One scenario could be that the NHL is willing to forgo the second $25M payment owed to it by the city. The city could then apply those funds and cover the $4M shortfall needed to pay a $10M annual lease management fee for 6 years. Or the city could ask for greater revenue sharing from the new owner in the form of a percentage of the concession revenue, a larger ticket surcharge, all of the naming rights revenue and have the team create a new revenue stream in the form of a parking charge. All seem counterproductive but could happen. Would it cover the $4M shortfall?  I am sure somebody somewhere will have created positive projections but there is no way to be sure until one sees the revenues generated in the first year of this scheme.

If the city were to agree to pay $10M a year that would cover RSE’s need for cash to operate the arena but obviously it does not cover RSE’s $13.6M (or thereabout) annual interest payment on their debt. It looks like RSE’s equity investment if used to cover only that debt would last about three years. Then what??

There are those who will be very unhappy reading this analysis because they will perceive the recitation of these facts based upon widely media reported numbers as “negative.” Why bother with facts and dash hopes of RSE becoming the new owner? These numbers are as reliable as possible using sources available. These concepts are known to the NHL and potential owners. Now the fan base should objectively analyze these numbers (or any other numbers revealed by the NHL, potential owners, the city or the media) as we hope and wait (not so patiently) for a final end to this misery of limbo regarding team ownership.

The obvious conclusion is that RSE will bleed money and that will be the rationale for their relocation of the team after a few, short years. Just the news no red-blooded Coyotes fan wants to hear.

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Jun 13

11

The joke’s on Glendale voters…

Posted by Joyce Clark on June 11, 2013
Posted in City Council Actions • City of Glendale • Glendale elected officials • Jobing.com arena  | Tagged With: , , , , , | No Comments yet, please leave one

agenda 1June 11, 2013 will be a regular Glendale City Council meeting. The agenda, however, is anything but regular. There are four items of special note. All but one item is under Consent Resolutions. Consent Resolutions means that unless an item is pulled by a councilmember for further discussion that item will be passed or rejected along with the 13 other consent resolutions and there will be no discussion – nary a peep out of anyone. The usual disclaimer prior to introduction of the consent resolutions is to say, “They are of a routine nature or have been previously discussed by council in a workshop session.”  Let me assure you two of the consent resolutions are not of a routine nature and have never been discussed publicly by this council. They are consent resolutions #13 and #14. Here is the link to council’s meeting agenda of June 11, 2013:  http://www.glendaleaz.com/Clerk/agendasandminutes/Meetings/Agendas/061113.pdf .

Both of these consent resolutions require doing business with the Tohono O’odham Nation. Item 13 is a grant request from the TO on behalf of the Aguila Youth Leadership Institute (http://www.aguilayouth.org/) in the amount of $112,100. The second item, item 14 is another grant request from the TO on behalf of Heart for the City in the amount of $100,000.

In the Staff Report, staff’s apparent rationale for doing business with the Tohono O’odham is that we have submitted for the same type of grants from the Gila River Indian Community.  So, if we could take grant money from the Gila River Indian Community then by golly, we should be able to take grant money from the Tohono O’odham. Between August, 2010 and June, 2011 the city received grants totaling $290,188 from the Gila River Indian Community. The funds were used by From the Heart, Boys & Girls Clubs of Metropolitan Phoenix and the Glendale Parks, Recreation and Library Department. The Gila River Indian Community have been one of our staunchest allies in the legal warfare with the Tohono O’odham since the issue of a casino IN Glendale (not near Glendale –darn it – but IN it) arose.

Is something missing? Have all legal issues between the City of Glendale and the Tohono O’odham been resolved? Are we suddenly buddies? Receiving grant money from a legal ally is far different than receiving grant money, no matter how well intentioned, from your legal enemy. It is the height of hypocrisy on Glendale’s part. I am ashamed that staff has brought these items forward. If I were on council and could take action at the meeting I would pull both items off of the Consent Resolution Agenda and speak directly to them and vote a resounding “no” on both – no matter how well intentioned they are. If council approves these two consent resolutions, where are this council’s principles?

Glendale City Council

Glendale City Council

Another Consent Resolution is more amusing in context. Item 8 calls for adoption of council’s Key Priorities for Fiscal Year 2013-2014. This one is a hoot! Council’s very first priority is, “Transparency internally and externally to assure the community that the decisions made for the well-being of Glendale are discussed openly with input invited.” Followed by their second priority, “Arena management, debt service, hockey agreement and enhanced revenues will play a large role in policy formation and financial strategy. The above noted transparency will be vital to gaining community support for decisions necessary to optimize the arena value to the Glendale community” (Italics mine). It appears that we all have missed something in council’s translation of transparency.  It looks like council’s definition of transparency is not what the general public assumes it to be. We certainly haven’t seen much transparency when it comes to the Beacon RFP process or Renaissance Sports and Entertainment Group’s discussions with city personnel or council.

greed 1Which brings up our last target of incredulity, Item 21, Fiscal Year Budget Amendments, as an Ordinance to be adopted. I love numbers. While most people won’t go to the numbers pages and really read them. I always do with gusto because they are so revealing. These amendments are transfers from one hand in the budget into a different hand in the budget. The transfer is from Contingency (you know, the “rainy day” account the city is trying to rebuild) to the City Manager’s Office.  In this case, did you know that this council is paying $500,000 for the Council Special Audit? Can you imagine it? Half a million dollars on a special audit – an audit whose primary purpose is to fix blame on somebody. Let’s hope they find a half million dollars worth of blame because they certainly are not going to find a half million dollar pot of gold at City Hall.

The council is also spending another $100,000 on the Arena RFP Process run by their hired consultant, Beacon Sports.  We all thought Councilmember Alvarez wanted to “get rid” of all the consultants? Not so. They must be OK if they are consultants that serve her purposes. Remember, this RFP process is the same one that NHL Commissioner Gary Bettman characterized as “silly.” All of this comes from a council which, when 4 of them were running for office, ran around wringing their hands, complaining about the previous council’s fiscal irresponsibility and vowing it would never occur again because their mission was to be fiscally accountable and transparent about it all. Looks like the joke is on you, Glendale voters.

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Jun 13

11

Majority sentiment?

Posted by Joyce Clark on June 11, 2013
Posted in City Council Actions • City of Glendale • Glendale elected officials  | Tagged With: , , , , | 1 Comment

blog symbol 1A lot of people are reading my blog. The count as of June 10, 2013 is nearly 40,000. The reason I bring this up is that on March 7, 2013 I posted a blog entitled “Twistn n Turnin.” In it I raised some serious questions about the proposed Cardinals training camp to be located on Glendale’s youth sports fields and the costs associated with using the Bidwell’s company, Rojo Management. Councilmembers may have given some thought to the concerns I raised and now may share them.

In my March 7 blog I pointed out that, “There are lots of questions about this staff presentation that were not asked by councilmembers. Without context it’s like comparing apples to oranges.  Global Spectrum’s contract calls for managing and renting out the sports fields all year long for $216,000. We must assume that Rojo’s contract would call for the same yet their management fee is $69,000 higher.  Why? Do they need more people to do the same job that Global does?  Do they pay higher salaries to their personnel than Global does?

“There are many youth sports leagues that rely upon the use of and rent these fields all year long – from soccer to football leagues. There is a major discrepancy between both contracts relative to utility costs. The $40K figure that Rojo cites, by assumption, does not seem to reflect the fields’ usage all year long. Is it their intent to only reflect utility costs incurred during training camp? Or was it a low-ball figure designed to make Rojo’s bid more attractive? I don’t know but these are questions that should have been asked. Rojo, by the way, is a Bidwell subsidiary.

“Another question not asked is, what was the revenue generated by Global Spectrum last fiscal year? The city receives 50% of it from Global. Should we not know what that figure is? Rojo is proposing revenue share of only 20% and that is after the first $150,000 is generated. I am sure staff in preparation for this presentation should have been able to supply an estimate of revenue it expected to receive under the Rojo contract. Council should have asked about revenue projections or staff should have provided this information to council.”

Sherwood

Gary Sherwood

Councilmember Sherwood’s comments in a Craig Morgan FoxSportsAZ article of June 10, 2013 (here is the link: http://www.foxsportsarizona.com/nfl/arizona-cardinals/story/Cardinals-Glendale-still-at-impasse-over?blockID=910423&feedID=11331 entitled Cardinals, Glendale still at impasse over camp has Sherwood saying, “It’s a worse deal than the one we have right now. We lose money. I have no idea why we would agree to it.” or “They still want to make money off of us, and we can’t do that.” One hopes that this is a majority sentiment of council.

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Jun 13

5

Did you ever wonder?

Posted by Joyce Clark on June 5, 2013
Posted in City of Glendale  | Tagged With: , , | No Comments yet, please leave one

nealy

Mike Nealy

Did you ever wonder who the real heroes of this whole Coyotes mess are? Everyone has an urban legend about the CEO and an administrative assistant who really ran the company. While everyone is running around trying to figure out who the new owner will be there has been a largely unnoticed cadre of people who have kept the team and arena functioning – and even thriving. Those are the people who run the arena and manage the team.

Maloney

Don Maloney

Ever since 2009 when Jerry Moyes declared bankruptcy there have been about 135 people (not counting the vendors and their employees) who have seamlessly kept the arena operating under extremely difficult conditions. Leading that list is Mike Nealy, President, Chief Operating Officer and Alternate Governor (of NHL Board of Governors). Add to Nealy, Don Maloney, Executive Vice President, General Manager and Alternate Governor; Brad Treliving, Vice President of Hockey Operations and Assistant General Manager; Jim Foss, Senior Vice President and General Manager; Rich Nairn, Senior Director of Communications; and Chris Wojcik, Senior Manager of Media Relations. The entire organization of over 100 people is to be commended but listing them all would simply take too much time and space.

Mike Nealy is a first rate COO. Without a bona fide owner other than the NHL, this man of integrity, honesty and little to no ego has skillfully managed to grow attendance last year-over-this year by 13% (social media has pegged attendance increases anywhere from 10% to 16%; 13% is an extremely reliable figure) and grown revenues substantially (double digit % increase). This occurred in a market where no one knows if and when the team will remain in Glendale, much less Arizona.

Any new owner, if even half-way intelligent, would keep this team intact recognizing that Nealy and his team have already proven themselves by fire. I’ve often wondered why anyone who is interested in buying the team has not enlisted Nealy as part of his negotiating team with the city. To date Nealy is an untapped asset.

Don Maloney adds to the success the arena and team have enjoyed. The man is a genius of a hockey general manager. His cobbling together of a competitive team on a shoestring budget is legendary. Add to these two extremely talented men the likes of Foss, Nairn and Wojcik. All of these men have added to the organization not knowing if any particular day would be their last day serving an organization that they not only work for, but love.

Then there are all of the other employees who genuinely love working for this organization and it shows. It includes maintenance to ticket sales and everything in between. Can you imagine going to work every day, giving 100% and not knowing if you have a job tomorrow? Did you ever wonder if you could do that?

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Jun 13

4

So much for transparency

Posted by Joyce Clark on June 4, 2013
Posted in City Council Actions • Jobing.com arena  | Tagged With: , , , , , | No Comments yet, please leave one

Glendale City Council

Glendale City Council

Today, June 4, 2013 Glendale council will conduct a workshop meeting. Here is the link to the agenda:  http://www.glendaleaz.com/Clerk/agendasandminutes/Workshops/Agendas/060413.pdf

Workshops are not like regular evening meetings. They are intended as a means of staff bringing forward subjects they believe are important or staff is responding to a councilmember’s request for further study on a subject. Unlike night meetings there is no opportunity for public comment.

The public agenda is short. There are only two items: an update on Glendale’s airport and council selection of its members for the two standing subcommittees, Government Services and Sustainability as well as selection of Vice Mayor. The airport issue is one that Councilmember Sherwood brought forward. For years the airport has been vexing as it has never reached its full development potential. That is a topic for another posting. We could see some interesting dynamics play out in the self selection of councilmembers to serve on the two standing subcommittees.

The more troubling aspect of the agenda is the Executive Session agenda. Executive Sessions are designed to allow council and staff to discuss, in a non-public setting, contracts, personnel and property leases/purchases. Its interpretation is often overly broad by a city’s legal department. There are 8 items on the Executive Session agenda. It is 4 times as long as the open session! Some of topics placed on the Esession agenda are questionable and were not decided in favor of the public.

One of the topics is the city’s external audit requested by this council. There have been several Esessions that included a secret discussion of this item. One would think that since this has been visited in Esession several times previously that a public update would be provided. Tsk…tsk, council. So much for transparency.

Another item that was previously discussed in workshop is the Cardinals training camp proposal. See this link to get more information from council’s March 5, 2013 workshop:  http://www.glendaleaz.com/Clerk/agendasandminutes/Workshops/Agendas/030513.pdf . The original proposal wasn’t so hot for the city. Since it was discussed in open session previously it probably would have been a good idea to bring this item forward publicly once again. So much for transparency.

jobing.com arena

Jobing.com arena

There are two more items that certainly deserve public scrutiny. Both relate to Jobing.com arena and the Coyotes ownership. The drop dead date for submissions to Beacon Sports, the city’s consultant, for arena management was May 31, 2013. Of course, at city discretion, it can accept bids after that date because of the disclaimer clause in the RFP. One Esession item deals with “potential agreements related to the management of the arena” and the other Esession item is to provide “instruction in connection with potential agreements related to the Hockey Team…”

Yet Mike Sunnicks in his story of June 3, 2013 in the Phoenix Business Journal quoting Glendale spokesperson Julie Watters, says, “Initial responses to the RFP have been received by Beacon Sports. The submissions are currently being reviewed by Beacon to determine completeness and if they qualify for further consideration,” Watters said. “We will follow up tomorrow (Tuesday) with Beacon to determine the status.” Sunnicks provides the reader with a rehash of old information — nothing new. This is the link to his story: http://www.bizjournals.com/phoenix/morning_call/2013/06/glendale-awaits-qualified-bids-for.html?ana=twt

Yet this is one of the secret items to be discussed by council at its workshop today (Tuesday). Methinks the council has been given a report by Beacon with those who have made bids (to date) to manage the arena. How else could council discuss this very topic?  So much for transparency.

Cardinals training camp proposal…external audit…management of city owned arena…the hockey team’s very survival in Glendale…all topics of extreme interest to the people of Glendale. Yet the only discussion to be had will be secret. So much for transparency.

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May 13

30

Go figure

Posted by Joyce Clark on May 30, 2013
Posted in City of Glendale  | Tagged With: , , , , , , , | 3 Comments

Leblanc

Anthony LeBlanc

Ever since the NHL principals and Renaissance Sports and Entertainment group (RSE) principals descended upon Glendale on Tuesday, May 28, 2013 new speculation blossoms. On May 30, 2013 Forbes online posted an article by Mike Ozanian entitled Phoenix Coyotes $170 million sale to be partially funded by NHL. Here’s the link: http://www.forbes.com/sites/mikeozanian/2013/05/30/phoenix-coyotes-170-million-sale-to-be-partially-funded-by-nhl/. The article appears to be factually correct and correlates with the information learned several days ago about the Renaissance deal. Thank God, at least it’s not a hatchet job from the Arizona Republic (or as it is fondly called in some circles, the Arizona Repulsive).

Bettman

Gary Bettman

Breaking it down RSE gets a $120M loan (or 70% of the purchase price of $170M) from Fortress Investment group. Unconfirmed sources say the interest rate is 9% but I have no information on the length of the loan.  It gets another loan from the NHL of $80M (50% but no info on rate or length of time) and RSE puts in $45M (26% equity investment). Sources indicate that George Gosbee’s participation is $10M with minor investors contributing approximately $4M – $5M each to cover the $35M balance. But those figures total $250M you say…more than the purchase price of $170M. What’s the extra $80M for? To cover losses incurred over several years. Oh, and by the way, RSE doesn’t have to start paying the NHL for five years and they have been assured by the NHL that their revenue sharing will be “healthy.” This is a very, very sweet deal for RSE.

The best analogy I can come up with is this. You buy a $1700 refrigerator. You put $1200 of it on your credit card and you kick in $450 cash. Oh, and by the way, the company you are buying the fridge from doesn’t require payment for 5 years (of course, the interest is piling up) AND it will rebate you $800 that you can use for repairs, etc.

Now, you have three cousins, Darin (Pastor), Greg (Jamison) and Matt (Hulsizer) but the dealer will only offer his spectacular deal to one of the four of you. Darin is willing to pay $500 in cash; Greg is willing to put up $550 in cash and Matt is willing to pay $600 in cash. You would think that one of your three cousins was a lock to get the refrigerator deal but that’s not the case. Perhaps you and the dealer have an “understanding” and you end up with the deal. Go figure.

May 13

26

Is it time for Alvarez to resign?

Posted by Joyce Clark on May 26, 2013
Posted in City of Glendale • Glendale elected officials  | Tagged With: , , | 3 Comments

On May 23, 2013 the Glendale Star ran a Letter to the Editor by Ms. Barbara Garland.  First, a disclaimer: I have known Ms. Garland for over 20 years. She is not just a former constituent of mine. She is a friend. She is not a gad fly who writes Letters to the Editor about anything and everything. She has been a positive contributor to our community. Her service on nearly every city board and commission as well as Glendale Civic Pride and the fire department’s Crisis Response Unit has occurred over that 20 plus year span. Ms. Garland works to better Glendale.

That the Glendale Star ran her Letter to the Editor despite their obvious positive bias toward Councilmember Alvarez’ agenda is surprising.

Norma Alvarez

Norma Alvarez

Ms. Garland made some interesting observations in her Letter as she refers to Councilmember Alvarez’ latest district meeting which was “by invitation” only. In my 16 years as councilmember I never, ever, held a district meeting “by invitation.” All of my meetings were open to one and all. If Alvarez was limiting attendance because she was holding it in her home then she should have changed the location to accommodate any and all who wished to attend.  It becomes more troubling if she was limiting attendance to screen participants and thereby ensure that only those who supported her agenda attended. It also calls into question Alvarez’ call for transparency and open meetings. Where is her outreach to those who do not share or support her point of view?

Ms. Garland calls for Alvarez’ resignation because, among other things, she has said, “She is ashamed to be on city council.” Ms. Garland has a point. Alvarez’ performance as a councilmember receives a failing grade. Her lack of attendance has been an ongoing issue. It was abundantly obvious that when Ms. Alvarez conference called into council workshops and meetings there was someone in the background coaching her. Ms. Alvarez will often state during council meetings that she doesn’t understand and then proceed to offer her opinion.

What is perhaps even more disconcerting is that once council has voted on a policy issue that becomes the public position of the city and is to be supported by its elected officials. If an elected official continues to hold an opposing position on a council majority decided issue, there are guidelines to do so. Either she hasn’t bothered to familiarize herself with the guidelines or she is deliberately ignoring them. A perfect example was her recent opinion piece in the Glendale Star. It was submitted and signed as “Councilmember Alvarez.” It was in direct opposition to majority approved city council policy on the issue of the proposed casino yet not once, did she say that it was her personal opinion or that she was writing as a private individual and not speaking for, or on behalf of, the entire council. That phraseology is standard when a councilmember is expressing a personal position rather than a city position.

Merely disagreeing with a councilmember’s position on the issues is not sufficient cause for resignation but lack of effective representation and leadership is. Is it time for Councilmember Alvarez to resign as Ms. Garland suggests? Yes, it is.

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