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Over the last 26 seasons, the Arizona Coyotes have occasionally gone bankrupt, derelict, a ward of the NHL, the subject of relocation rumors, and more recently a thorny relationship with their home owners. The team has long struggled to lure fans to the suburban rink and has never fought for the Stanley Cup, despite putting hockey’s “GOAT” Wayne Gretzky on the bench for four seasons.
This month, the Coyotes may have reached their lowest level. Glendale, Arizona threatened to kick the team out of the Gila River Arena mid-season because team owner Alex Meruelo owed $1.3 million for unpaid state and city taxes and arena operating costs from last season.
The City of Glendale, which owes about $250,000 in taxes, told Coyotes CEO and chairman Xavier Gutierrez that it would revoke the team’s operating license if the total amount wasn’t paid by December 20.
Before the deadline, however, the Arizona Department of Revenue paid $1.3 million to Meruelo state officials and ASM Global, the company that manages the Gila River Arena for the city, before placing a tax lien on Coyotes’ parent company, IceArizona Hockey LLC.
On December 9, the morning after the Coyotes received a letter from city manager Kevin Phelps, the team released a statement accusing the unpaid bills of “human error.”
However, with the NHL’s most persistent headache and $400 million, Least valuable of 32 franchisesfaces even greater problems. The Coyotes will be homeless at the end of this season with no alternative in sight.
Glendale, a suburb of Phoenix, has made it clear that he’s tired of dealing with unpaid bills since August. Phelps said the relationship between the team and the city ended when his contract expired on June 30, 2022.
“We will continue to work hard to protect the interests of our taxpayers,” Phelps said. “We will not hesitate to use every mechanism and tool we have if they do not fulfill their obligations. I hope the NHL and especially the team know they didn’t think I was bluffing when I said that.”
He said the coyotes’ bills are valid until December, but will owe about $4 million by the end of June.
“We decided not to wait until the kids were out of high school to get the divorce,” she added.
Relocation is more than a practical solution. Quebec City and Houston have previously swam as potential homes for the Coyotes. Both cities have purpose-built arenas. The Toyota Center in Houston is owned by Tilman Fertitta, who is also the owner of the NBA Rockets.
“The Coyotes aren’t going anywhere,” Bettman said last week after the league’s annual board meeting in Palm Beach, Fla. Phoenix area.”
But Bettman, who has long been uncompromising on the issue, said he plans to meet with representatives of the Quebec government in January, but put questions aside.
“I don’t know the details of what they want to talk about other than scheduling the meeting, we can all figure that out after 10,000 feet,” he said.
The Phoenix metropolitan population of nearly five million is the 10th largest population in the United States and 11. biggest Nielsen television market.
Neither an NHL spokesperson nor the league’s deputy commissioner, Bill Daly, responded to emails seeking comment and further clarification on Bettman’s remarks. The Coyotes also declined to comment.
Houston has long been rumored as a relocation destination for the Coyotes, as its metro population is the fifth largest city in the US with 7.1 million people. Fertitta spoke to Bettman about acquiring an NHL team in 2018 but hasn’t said anything recently. A Rockets representative did not respond to an email from Fertitta seeking comment.
The price of an NHL team has increased significantly since the Coyotes arrived in the desert for the 1996-97 season. Nashville Hunters paid $80 million To join the league as an expansion team in 1998. The Vegas Golden Knights paid $500 million in 2017, and it cost the Seattle Kraken $650 million to join the league this season.
However, since Richard Burke, the first owner of the Coyotes, moved the Winnipeg Jets to Phoenix in 1996, relocation has long been seen as a solution to the Coyotes’ problems. sold the franchise to Phoenix real estate developer Steve Ellman in 2001.
Ellman was the first among the underfunded owners whose misadventures kept the team in the headlines for years. This included a period from 2009 to 2013. NHL team financially carried and later bought it out of bankruptcy before selling it to another group with precarious finances.
The team was also upset by Ellman’s decision to reject an arena deal with the City of Scottsdale, next to Phoenix in the East Valley, where most of his wealthy fans live. Instead, he went to the West Valley and Glendale on the other side of Phoenix, and the small city of 250,000 paid for most of the $220 million needed to build the arena, which opened in December 2003. The city also allowed Ellman to set up an entertainment venue. The area around the arena with sales tax revenue assumed to cover the cost of the arena.
For the most part, fans in Scottsdale failed to make the nearly 25-mile drive to Glendale.
Meruelo, 57, bought a majority stake in the team for $300 million in 2019. The California-based businessman is said to be a billionaire dealing with media, real estate and casinos, including Sahara Las Vegas.
But unpaid bills and other financial disputes piled up. The Athletic in February detailed Meruelo’s ownership styleincluding late contract payments to players, unpaid invoices to vendors, and strained relations with corporate sponsors.
Phelps said his first meeting with Meruelo a few months after purchasing the team was forward-thinking.
“We didn’t meet for more than two minutes when he looked at me and said, ‘We’re not going to pay you another dollar to use that arena,'” Phelps said.
In a meeting with arena management company ASM shortly after that, Phelps said Meruelo used pretty much the same phrase. Phelps, like Meruelo and others who did business with company executives, came to believe that their style was to refuse to pay a bill and dare sue the creditor.
“It’s not just by accident,” Phelps said. “The fact that they can wear out a creditor and negotiate a better deal can be embedded in the culture and value of the organization.”
Keeping the coyotes in the Phoenix area will cost a lot of money. Meruelo and Gutierrez’s goal is to finance and build a $2 billion arena and entertainment district with hotels, restaurants, retail and residential components in the city of Tempe, east of Phoenix, for the 2025-26 season. .
Meanwhile, as the Tempe project goes through the approval and construction process, they must find an alternative arena. Alternative venues are either unsuitable or require millions of dollars to be brought up to NHL standards.
The Tempe site is the property of the city and requires the improvement of a large landfill before it can be developed. Phelps thinks it may take up to six years for the arena to be ready.
Meanwhile, the Coyotes, currently the worst team in the NHL with just five wins, need a place to play next season. Robert Sarver, who owns the NBA’s Phoenix Suns, the WNBA’s Phoenix Mercury, and the Footprint Center, the only major arena outside of Gila River, has rejected various approaches to taking on the Coyotes over the years.
The hockey club has two options, both are expensive. They’ve been talking to Major League Baseball’s Arizona Diamondbacks about building a permanent ice rink at Chase Field. The logistics of installing an ice surface in a baseball stadium with a capacity of 48,405 fans is awkward at best; Ask Tampa Bay Lightning.
The other option suggested by the NHL is to build a temporary structure in the East Valley or West Valley.
One thing’s for sure: The Coyotes won’t stay in Glendale. Phelps wants a richer deal than the $500,000 the team currently pays in annual rent, but the city manager said he’s more focused on the value the Coyotes bring.
Realizing that Meruelo and Gutierrez were not interested in a long-term lease on the Gila River, Phelps hired an economist to study the Coyotes’ financial impact in the arena.
The Economist found that the Coyotes crowd was so small that they only generated about $12,000 in sales tax revenue per game in the arena and Westgate Entertainment District, much less than a concert crowd. It was said that if the city added 15 to 20 major concert dates per year, it would replace revenue from 41 Coyotes home games during the regular season.
The average income per Arizona fan is $5, with the Florida Panthers the lowest in the league, according to Forbes. Compare this to Edmonton Lubricants, the league leader with revenue of $43 per fan.
Considering the Coyotes’ lease, where Glendale pays all utilities costs plus operating costs and free rent for team offices, Phelps said, “What we see financially is the City of Glendale’s Coyotes are a tenant.”
“They’re like a tenant in a commercial mall,” he said. “We wish them the best of luck but expect you to get all your belongings and boxes out of the house on June 30th.”
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