What You Should Have Learned About The Phoenix Coyotes Lease Deal

Christian Petersen

Contrary to popular belief, the Coyotes deal isn't as bad for Glendale as some would make you believe. Everyone's favorite twitter troll Ryan Lambert (aka @twolinepass) is at it again, this time with a grossly inaccurate piece on the current state of the Coyotes sale. Join us as we pick apart this laughably inaccurate article.

If you've been reading What We Learned every Monday here on Puck Daddy 
pretty much since the lockout began, you've probably noticed that the 
Phoenix entry each week has more or less served as a chronicle of the 
city of Glendale's woeful fiscal irresponsibility.

If you’ve been reading What We Learned every Monday, you probably haven’t learned anything accurate, but whatever, let’s go with this premise.

Let's take the time, right off the bat, to remind you how broke 
Glendale actually is: very broke. Like, crazily broke for a city of its 
size. The city's outgoing mayor, Elaine Scruggs, left the guy who's 
taking over from her with a deficit— and I can't even believe this is a 
real number — of $1.2 billion. With a frickin' B.

*Not one example of any other city close in population or debt for context. Oh, context? That’s where you use NUMBERS and EXAMPLES to compare similar items. For reference purposes, Glendale's official population of 230,482 (according to the 2010 US Census) makes it the 86th largest city in the U.S., comparable in terms of population to the cities of Winston-Salem and Durham, North Carolina. Another city similar in population and in debt is San Bernardino, California, who recently filed for bankruptcy when their $1+ billion dollar debt became too much to shoulder. Of course, San Bernardino wasn't trying to protect its investment in a major sporting arena. People need to also remember that Glendale (while being its own city with its own debt), will be able to draw outside residents from the millions living in the Phoenix-metro area into their city to contribute sales tax revenues to the city's coffers if the Coyotes stay.

And that's not including the $16 million a year on average over the 
next two decades the city council just voted to give Greg Jamison and 
the Phoenix -- I mean Arizona -- Coyotes. (Scruggs, to be fair,
voted against the deal, along with one councilwoman, though that was a 
reversal of her previous position.)

Correct, to manage a city asset. Last time I checked buildings need people to run and maintain them. The City of Glendale is paying a management company owned by Greg Jamison to manage their arena. If they didn’t pay anyone to manage the arena it would stay dark and the debt would compound with NO revenue streams.

The reason the vote took place now, by the way, is that the current 
mayor and more than half the city council got voted out of office pretty
convincingly. And, in an attempt to pass through unpopular legislation
by a lame-duck legislature not seen since Lincoln hit theaters, they
decided that now was a perfect time to give a bunch of rich dudes
millions of dollars per year in public funds. Which, by the way, they
could ill afford to dole out.

OMG, was that a Lincoln joke? Historical and timely! Only one incumbent, Joyce Clark, was running for reelection. So really, when you say "More than half" you mean, one. But really saying: "One council member got voted out of office pretty convincingly" doesn't really have the same shock value, now does it?

Also whether you feel legislation is popular or not, the current council has been negotiating and working on the Coyotes deal for the past three years. The newly elected council would all have needed to be brought up to speed by the current city manager and city lawyers, delaying the deal even longer. A delay, which by the way would have probably led to the Coyotes leaving. So really, the current council voting on the issue was the rational thing to do.

Out of curiosity, what other teams hand out public dollars? Where’s your righteous indignation about Quebec City firing 500 city workers for an empty arena? Do you do a weekly update about Winnipeg handing out public funds to the Jets?

Because, I don't know, having a hockey team is good for your civic 
self-esteem, even if (relatively) nobody goes to the games or cares 
about them. Libraries and public services not so much.

Civic pride is incredibly important, but it is difficult to keep it up when your city and the hockey team that plays in the city owned arena is constantly being crapped on by media outlets for nearly any decision they make.

Mike Sunnucks, who has absolutely killed it for the Phoenix Business
Journal in covering this entire mystifying debacle, told Marek and
Wyshynski the other day that if the decision to fund the Coyotes with
that much money for that long a period was put to a public vote, it
would have an incredibly hard time passing. Which is why opponents
of the decision, including many incoming city councilors, want to get
it to just such a public referendum.

HAHAHAHA, Mike Sunnucks KILLED IT? Yet another indication of why you are so vastly unqualified to write about this issue, but sure whatever, get back on that soapbox Lambert. Oh and ask Mike what happened to all that mysterious Saudi Arabian money that’s supposedly funding the team. By the way Prop 457, was billed as the measure to reverse "Coyotes sales tax" by its proponents, it just barely passed... Oh wait that's right it was rejected soundly by a 2 to 1 margin by Glendale voters.

But no seriously, keep citing Mike Sunnucks, AKA Arizona's Dave Shoalts.

Now, you might be wondering just what business a city that's now one 
and a half billion dollars in the red has in giving large sums of money 
to anyone at all, and that's a reasonable enough question. Before any of
this latest flap even started, and before the elections earlier this 
month, the city was planning to cut all kinds of services from its 
budget for a total of $29 million in savings until residents voted to 
increase the city's sales tax temporarily. It's now the highest in the state.

Cuts that should have been made back in 2008, after Maricopa County cut their tax revenue sharing contribution to the city of Glendale by 30%.

"It's now the highest in the state." Not even close.

Oh, and as an aside, just to touch on what put Glendale in debt in 
the first place: The real estate meltdown pretty much crushed the entire
state of Arizona, but Glendale was hit pretty hard as well. Moreover, 
it also has a lot of debt related to a spring training baseball park 
called Camelback Ranch, for which it will have to pay $13 million in 2013.

This aside should be the basis of your article, not the crap you've regurgitated so far. The amount of money owed via Camelback Ranch pales in comparison to paying someone to manage an arena and keep Westgate businesses from being shuttered i.e. JOBS, (you don’t mention jobs much do you Lambert? - is it because it doesn’t fit within your lazy premise?)

Clearly this is a city that's very dedicated to making itself a kind 
of sports hub for the greater Southwest, and that's at least an 
admirable goal if a bit of a misguided one. Again, the desire to keep 
throwing money down the hole on a hockey team with minimal support, even
when it's one of the best teams in the Western Conference, doesn't seem
like the wisest idea. But then, my city has never been in danger of 
losing a hockey team, and I'm not an elected official here trying to 
save face on paying the NHL $50 million over the last two seasons to run the
team because no one else with any kind of money behind them wants to do it.

"A bit of a misguided one." Good Lord, reading this is like jabbing a finger in my eye. You’re like an angry version of Peter King.

Finally something we agree on, giving the NHL $50 Million to run a team, when they can barely run a league at this point is foolish. However it was the only option presented to the city when Jerry Moyes plunged the team into bankruptcy. The call from Gary Bettman to Ed Beasley probably went something like this: "Pay up for our bare minimum arena management services while we search for an owner, or lose the team." *click*

All of which, by the way, is only a problem because the city wants it
to be one. Because of the sales tax hike, the city wouldn't have had to
cut any services or lay anyone off if it had just chosen not to 
continue subsidizing the Coyotes to the tune of $71 million over the 
next five years.

This is an out and out lie. The city is in a dire financial situation, with or without the team. Look at the 20 year projections from the city. Without the Coyotes, the city stands to lose $238 million over 20 years. If the team stays it's losses are projected to be $138 million. This assumption is based on the Coyotes current poor attendance and the current number of bars and restaurants in Westgate. If either of those numbers improve, so do the revenues figure in that 20 year projection.

This is Scruggs giving these numbers, for the record. Not one cut, 
not one layoff. Nothing.

That article, from October 22, was written before this was all discussed in a city council workshop, council executive session, and the city council meeting. It also doesn’t take into account the recent pro-rated first year of the contract, but why bother researching when you’re too busy making Lincoln jokes?

Instead, Glendale is opting to suffer massive cuts to city services, 
including closing two of its three libraries (who needs books anyway?), a
municpally-run [sic] aquatics center, and 250 jobs, mostly impacting 
police and fire department employees.

Those library and pool closures, if they even happen, won't be happening anytime soon. As for the employee layoffs, many are unfilled positions or part time employees, not fire or police officers. These cuts were going to happen sooner or late, and pale in comparison to the potential job losses at the arena and Westgate.

The money quote from after those details: "Councilwoman [Joyce] Clark
maintains keeping the team is in the city's best interest." Clark, who 
seems like a swell lady, voted for the arena deal on Tuesday, as you
might imagine. Her logic is that the city is already paying $10 million a
year in debt on the arena's original construction, so why not throw good
money after bad? The interim city manager estimates that if the team
left the city, it would cost $2.5 million in direct losses.

Joyce Clark is, indeed, a swell lady that has had nothing but the best interests of her constituents in mind during her entire tenure in office. This even includes when she voted AGAINST the Hulsizer deal that was so enthusiastically supported by Mayor Scruggs; you know the one that required the city add an additional $120 million to the city's debt.

Actually the long term analysis (which is how city governments should consider problems like this) has resoundingly indicated that Glendale is better off with the Coyotes. Even Acting City Manager Skeete admitted as much during the same statement where he stated he couldn’t support the deal HE NEGOTIATED. Now, with the reduction of money paid to Mr. Jamison for the current fiscal period, the conditions have improved significantly and Skeete’s objections have been answered.

Oh, and Clark is one of the four lame ducks who got crushed on election day, 
but you probably figured that out for yourself.

She got crushed because the Fire Department union didn’t like her, and out spent her 5 to 1, including contributions from other PACs. That takes someone local to know, but why bother when you can just generalize?

And I guess that brings us to Greg Jamison. Now, you might say that 
if you were a city councilor in Glendale and you thought there was a 
really good chance the team could thrive if it just had the right 
ownership -- which is why you're willing to pay whoever ends up running 
the arena $16 million a year -- then that's all well and good. But 
wouldn't you want that owner to be, I don't know, forthright? Maybe not,
like, totally shady?

Let’s go over Jamison’s qualifications, which I just Googled, (wouldn’t want to interrupt your 450th tweet) in the next few sections.

Well, Jamison doesn't really fit that bill.

From 1996-2010, Jamison served as president and CEO of Silicon Valley Sports & Entertainment, the parent company of the San Jose Sharks. In that role, he oversaw all aspects of the day-to-day business operations and handled all company decisions regarding the San Jose Sharks and its American Hockey League affiliate, the Worcester Sharks, HP Pavilion at San Jose and select HP Pavilion events. But yeah, he "...doesn't really fit that bill."

What we know about the shadowy cadre of people who (maybe) helped him
come up with the $170 million (maybe) necessary to buy the team, is 
pretty much that Jamison, when directly questioned by Scruggs, wouldn't 
name names as to who his investors are.

In 2001, Jamison successfully assembled a group of investors to purchase the Sharks after being personally approached by former team owner George Gund III to conduct a search for potential sale partners. Again, this schmoe obviously doesn't know anything about gathering investors.

As was discussed in Sunnucks' interview on Marek vs. Wyshynski, this 
is fairly common practice in the private business world. Your company 
makes a deal with my company, we don't have to tell anyone anything 
about it. Now, when you're backing up a dump truck full of money and 
leaving it, with the keys in the ignition, next to the zamboni entrace [sic] 
to Jobing.com Arena, you might, as a city councillor [sic], want to make 
sure one of the backers isn't the second coming of Boots Del Biaggio,
or the third John Spano, if you want to get technical.

Private entities don't normally name their investors. Jamison's group is not a publicly-traded company, and not subject to SEC rules. So really it doesn't matter if the city was giving him $3 or $300 million, he doesn't have to say a word. However if that was a contingent in the contract, then he would; since its not, this argument is moot.

But now it seems Jamison is positioned to actually buy the Coyotes 
(unless he doesn't actually have the money, which would be incredible),
and has to do so by mid-January so none of these incoming city
councillors [sic], who might have their heads firmly on their shoulders
when it comes to giving failing professional sports teams lots and lots
of money for no reason, can prevent the deal from going through.

The money is in escrow, it has been reported in multiple places, including your pal Mike Sunnucks; he 'killed it' on this article, btw. (and I know I broke my own rule of citing Bleacher Report, but it was more for the transcript of the Shane Doan phoner)

Actually he has until January 31st, per the contract, to close the deal with the NHL. The new council could all start tomorrow and the date for closing would still be January 31st.

People act like this is all out-of-the-woods stuff for the Coyotes and 
that Jamison doesn't still have a fight on his hands, and when it
comes to buying the team, that may well be true (possibly). The only hurdle that's left to clear is getting people to give half a crap about
the team and actually show up. Which might be the toughest part of
all of this.

True he does still have a few minor challenges, like making time to meet with NHL executives between CBA negotiations.

As for "...getting people to give half a crap about the team and actually show up." having an attentive owner who actually cares about the fans and the product on the ice will go a long way. Just ask the folks in Chicago.

Oh and getting the lockout solved. That too.

Yep.

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