The other night I was surfing, trying to find the Coyotes/Blues game. I’m sure it was there but I simply couldn’t find it. The backup plan had me watching the Glendale City Council meeting. Now that council is allowing citizen comments at the beginning of the meeting we are seeing the usual citizen suspects resurfacing at the podium. Andy and Darcy Marwick, residents of Phoenix and dyed-in-the-wool Coyotes haters, opined on their usual complaints. Not to be missed was Glendale resident Bill Dempsky, a former City of Glendale employee, with his usual lament. Ken Sturgis, a Glendale resident, has also started to use this bully pulpit on a regular basis lately. Later in the council meeting Vice Mayor Knaack commented about these usual suspects and their constant references to past history. She felt it was time to stop referring to the past and she urged these citizens to look to Glendale’s future. She suggested that it was time to go back to the old agenda order and place citizen comments at the end of the meeting. We’ll see if that comes to pass.

Citizen Ken Sturgis offered some rather interesting comments. He referred to a “contract” between the city and IceArizona. He claimed that the city’s payment of $15 million dollars a year for arena management was going directly to Fortress and the NHL with IceArizona as merely a pass-through.. Those are the two groups who lent IceArizona the money to buy the team.

I decided to do some checking. Sure enough, I found the “contract.” Actually it’s a notification letter dated September 4, 2013 from IceArizona to the city declaring that as arena manager it had assigned its rights to Fortress and the NHL. Here is the link:  . It is C-8584. The letter is signed by Daryl Jones, Chief Operating Officer for the team.

In it IceArizona acknowledges that an assignment of the arena manager notice must be given within 30 days. The sale of the team was recorded on August 5, 2013 and we can assume the assignment of rights was executed the same day. IceArizona notified the city one day before the 30 notification period ended requiring Ice Arizona to formally do so.

What does it all mean? Well, Mr. Sturgis was correct. The assignment of rights, including the $15 million a year for arena management, goes to Fortress and the NHL. That raises other questions. If the $15 million a year is going to their lenders and not IceArizona, how is IceArizona earning enough revenue to cover the arena operations and maintenance costs? The money they borrowed from these two entities went to pay the purchase price of the team. That means IceArizona must rely on revenue sources of ticket sales, suite sales, a percentage of the concessions, the first $20K in every event’s parking revenues, NHL revenue sharing (which are rumored to be as much as $20M a year for the team) and media contracts. It will be difficult to plug in the numbers for these revenue streams as some of it is proprietary. We will not get a full picture until after the end of the Fiscal Year, June 30, 2014.  It is generally assumed that annual O&M costs are in the range of $20 million a year. Don’t forget that IceArizona also must come up with $9 million a year to be paid to the city. The city budgeted $6 million a year for arena management, not $15 million and IceArizona has pledged to cover the difference — $9 million a year. That $9M comes from the ticket surcharge, parking revenues after the first $20K per event and if necessary, the supplemental ticket surcharge. Are these revenue sources enough to cover IceArizona’s expenses? We, the public, don’t know. I suspect IceArizona knows.

© Joyce Clark, 2014


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