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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 December 3, 2021, the State of Arizona’s Department of Revenue (DOR) filed a tax lien against the Arizona Coyotes in the amount of $1.3 million with approximately $250,000 being owed to the City of Glendale for unpaid taxes. The tax lien states the team owes taxes as far back as June 2020 (that’s a year and a half). In the City of Glendale letter sent to Xavier Gutierrez, President and CEO of the Arizona Coyotes, advising the organization if payment on back taxes as well as monies owed to ASM Global, manager of the Gila River Arena, were not paid in full by close of business on December 20, 2021, not only would the organization be locked out of the building, but their Glendale business license would be terminated. See the correspondence below:

 

 

 

 

 

 

 

 

This latest development should come as no surprise if you had read Katie Strang’s Athletic story, Dysfunction in the desert: Finger-pointing, fear and financial woes roil the Coyotes organization published in February 16, 2021. Here is the link: https://theathletic.com/2390146/2021/02/16/arizona-coyotes-investigation-toxic/ . Be forewarned, you must subscribe to the Athletic to read the full article.  It is well researched,   in-depth and a fascinating read. Ms. Strang also provides strong coverage of the organizations’ structural disfunction. Excerpts from her story referring to the organization’s past financial issues include the following:

  • “Meruelo’s acquisition of the Coyotes was supposed to portend a new era for the team. Instead, people within the organization and across the NHL are now wondering if the league erred in approving his purchase.”
  • “In April, the team announced it was furloughing half of its staff due to pandemic-related financial issues. In May, the Arizona Republic reported that promises to pay the arena’s part-time and hourly staff members had not been met. The team and arena management company, in response to the report, said they would ‘finalize our support plan that will be executed within the next 30 days’.”
  • “In September, The Athletic reported that a handful of players did not receive their signing bonuses on time.”
  • “The Athletic identified and spoke with eight vendors with whom the Coyotes had outstanding or past due balances or negotiated their debt to a lower amount.”
  • The Seyfarth Shaw law firm has been retained to investigate various allegations associated with the organization. “Among them, Seyfarth Shaw representatives have asked about:

           The accuracy of financial documents provided to third parties, such as banks and private  lenders, required to meet specific loan obligations. The accuracy of financial reports the organization sent to the league, which reflect team revenues and can potentially impact player salaries and the salary cap.”

It was Ms. Strang who broke the December 8, 2021, Athletic story regarding the Coyotes’ unpaid taxes. Here is the link: https://theathletic.com/news/coyotes-could-be-locked-out-of-home-arena-by-city-of-glendale-for-unpaid-arena-charges-delinquent-tax-bills/ArAVPFTj0LId/ . I imagine Garry Bettman’s (President of the National Hockey League) call to Mr. Meruelo, after the story broke about unpaid taxes was short and sweet…Pay those @#$%&* taxes now!

On December 9, 2021, the Coyotes organization issued the following statement saying they have launched an investigation to determine “how this could have happened.” In their press release they state, “Initial indications are that it appears to be the result of an unfortunate human error. Regardless, we deeply regret the inconvenience this has caused. We will make sure that by tomorrow morning, the Arizona Coyotes are current on all of our bills and owe no state or local taxes whatsoever. And we will take immediate steps to ensure that nothing like this can ever possibly happen again.”

If this sounds familiar, it should. According to Katie Strang’s February 16, 2021, article, when asked about paying players, “Gutierrez described both of these snafus as ‘process’ failures.”

Once again, Gutierrez seems to be pointing the finger at “process failures” implying it wasn’t deliberate but rather a glitch in the system. Maybe if it had happened once and in isolation with no background of financial questions it would be accepted as a plausible answer but there seems to be an ongoing pattern of “process failures.”

It is also no small matter to possibly lose the organization’s business license. It’s not just a matter of possibly being locked out but without a business license even if an alternate venue were found, it couldn’t be used without having a license to do business.

Today, December 9, 2021, the media is reporting that a short while ago, the Coyotes wired the entire amount to the State DOR. We do not know if they have also paid their arrears with ASM Global. I would advise Glendale to double check and to make sure all unpaid amounts are now current. One would expect no less considering the avalanche of negative publicity they generated yesterday and today.

I suspect there is more to the Arizona Coyotes’ story that will have to unfold shortly. Right now, the most pressing issue is meeting the NHL’s schedule deadline to submit the team’s play dates and their location to the League by a January, 2022 date. This early date is because the League has to juggle all teams’ schedules and craft a League schedule that satisfies all.

Forget the possibility of a new arena in Tempe. The immediate and most critical question is where will the Coyotes play while waiting 3 to 5 years for a new arena? That is, IF Tempe accepts their RFP. The only word coming out of Tempe is that they are doing extensive due diligence.

I have found over the years that a deal is best crafted when both parties can trust each other. That may be the most seminal question that Tempe will have to decide. Can they trust the Coyotes to be good, reliable financial partners?

Let me make clear, the City of Glendale is done with the Coyotes. Their absolute refusal to negotiate a long-term, 20 year lease simply made the City’s decision clear. They will not be playing in Glendale for their 2022-23 season or in any future season. That door is closed.

While Glendale has no interest in where they play in the future, I think it’s fun to speculate and the rest of this blog is pure speculation. It is not based in fact or any insider knowledge.

The only viable location is the Arizona Veteran’s Memorial Coliseum. Keep in mind pursing this location as a temporary venue is dependent upon Tempe’s awarding the RFP to the Coyotes. Then it would make some sense to pursue a lease of the Coliseum. My guess it’s a 50/50 proposition as to whether Tempe accepts the Coyotes’ RFP. What if Tempe declines to award the Coyotes an RFP? For many that is an unthinkable outcome, but it is possible. If that were to happen, there would be no need of a temporary location and I would imagine a sale of the team would be imminent. This is the only play the Coyotes have. Forget all other locations. Each has a solid reason to be unworkable.

Here are the problems with the Coliseum. It’s now December, 2021. The work and the expense involved in renovating the building are extensive and even if work on the building started tomorrow, it is doubtful the building would be ready in a mere 10 months in time for the new season in October of 2022.

According to a recent Craig Morgan story of December 8, 2021, entitled Back to the future: Coliseum makes most sense as Coyotes’ interim arena solution, he, too, thinks the only temporary solution for the Coyotes is the Coliseum. Craig Morgan has always been very friendly and supportive of the Coyotes’ ownership over the years. One can speculate that he has sources within the organization and he is reflective of their thinking process.

The Coliseum has major structural problems. The building needs a need roof, new flooring and an additional ice plant for starters. Even with a new roof it can not accommodate a centrally hung scoreboard. There are no suites and maximum attendance would be in the 13,000 to 14,000 range. If the Coyotes do use the building they will continue to bleed financially.

I had heard that it would cost $40 to $50 million to get the building in shape for hockey but Morgan, in his article, cites a construction expert who said a more realistic number is in the $100 million range.

If Tempe awards the RFP to the Coyotes everything becomes a political calculation from that point forward. We can speculate that the Coyotes will go to Governor Doug Ducey and ask to rent the building (maybe for $1 a year?) and having a great deal of Chutzpah, demand that the state pay the cost of renovating the building for them…and, oh, by the way, you have 10 months to do so. Here’s where it really gets political. Ducey is a lame duck Governor, termed out. There are rumors that he intends to run for the U.S. Senate. He will have to make a political calculation as to how such action would play with his voter base. While he might win the support of 17,000 to 20,000 Coyotes fans there are far more voters that would not take kindly to any kind of financial give away to yet another sports franchise using taxpayer dollars. It could become the albatross that makes him unelectable.

The next few months will be very interesting as we watch this play out. My personal take is that the Coyotes will be sold. Alex Meruelo has become a liability to the NHL and especially to Gary Bettman.

© Joyce Clark, 2021       

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.

“It hasn’t been the easiest season for fans of the Arizona Coyotes. After poor on-ice performance, the departure of many beloved veterans, and the lingering sideshow of off-ice issues, the 2014-15 campaign has not been for the faint of heart.” This was written and published by Fiveforhowling.com three years ago during what was viewed as the coming “golden age” for the Coyotes under what was presumed to be a new era of stable leadership provided by IceArizona.

There is an old tale of an emperor in a parade. He was wearing no clothes. No one remarked upon this strange scene until the emperor passed in front of a young boy who blurted out, why is the emperor wearing no clothes? Suddenly it became acceptable for everyone to acknowledge that fact.

Under the ownership of IceArizona we experienced a similar situation with everyone fearful to state the obvious for fear of being ridiculed or worse. Glendale has pointed out that this emperor (IceArizona) is wearing no clothes and this concept is now acceptable to voice.

This is from a Dan Bickley Arizona Republic story(http://www.azcentral.com/story/sports/nhl/coyotes/2017/03/09/bickley-gary-bettmans-threats-backfiring-valley/98969022/ ) from 2 days ago, “But sports fans in the Valley are smarter than they look. The Coyotes have failed on their end of the bargain, running their franchise on the cheap while depending on handouts to survive. If this team had consistently exposed Arizonans to the majesty of playoff hockey over the past decade, this conversation would sound much different. Truth is, they haven’t done anything to warrant a second home on our dime.” He went on to say, “The Coyotes didn’t help matters in a press release blaming their current location for alienating their ‘premium ticketholders and ticket sponsors.’ What does that say to the people who currently show up to games with open minds and open hearts?” And open pocket books, I might add.

Even Craig Morgan, darling of the Coyotes organization and often perceived as its unofficial spokesperson, said this yesterday in his arizonasports.com article (http://arizonasports.com/story/1050773/morgan-coyotes-need-the-right-location-to-succeed-its-not-glendale/ ) “The hard truth for the team is that it has produced four winning seasons, three playoffs berths and two playoff series wins in 13 seasons in the West Valley location that welcomed it when nobody else would. Winning sells in any market, but it’s especially important in one as fickle as Phoenix. Repetitive losing is an unwise investment of fans’ dollars and emotions.” Morgan did acknowledge, “The Coyotes’ hirings, and their delay in releasing financial statements to Glendale per their agreement, raise questions about their commitment to the partnership…”

Craig Harris of the Arizona Republic in his story(http://www.azcentral.com/story/news/politics/legislature/2017/03/09/glendale-fires-back-arizona-coyotes-glendale-arena/98967020/?hootPostID=19ace9c56558711ce78486b73ec4649f ) from March 9, 2017 weighed in with this, “The new arena managers run the facility for one-third the cost. The team’s claims that it can’t be successful in Glendale came after the city in 2015 stopped subsidizing the Coyotes through a $15-million annual arena-management deal. “

The mainstream media has finally been willing to acknowledge that the emperor is not wearing any clothes. Certainly it appears that the Arizona legislature realizes that the emperor is wearing no clothes. Sadly, the fans, always the last to give up their allegiance to a team are also beginning to see an emperor with no clothes.

In 2013, everyone rejoiced in the prospect of a new era with IceArizona. Celebrations abounded among Bettman, the new team owners and the fans. Then no one, not Bettman, LeBlanc or the fans, rejected the Glendale/IceArizona deal with commentary that heck, Glendale was a lousy location. How soon we forget. They had a home that they welcomed then. They have a home now… if they only choose to bury the hatchet.

The fans are weary of an eight year drama with seemingly the only end in sight possibly being the relocation of the team outside of Arizona. They are weary of belief in anything the team spokesperson, Anthony LeBlanc, says after a series of incendiary and sometimes misleading public pronouncements. How will they feel if the coming season turns out to be the team’s last in Arizona? Will they bother to attend games? This coming year’s attendance could prove to be the worst one yet. Perhaps ownership will hold off on dropping the bomb until after the next season is completed. Who knows?

Two unanswered questions remain. Has the team paid off the $70 loan from the NHL? And where’s Waldo…er…Anthony LeBlanc?

It’s been a rough season for all…

© 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.

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