[News] UPD: City of Glendale to vote on new arena agreement with Coyotes

[cam_wmh]

[troutman]

Where are we now?

It seems COG's argument is strong enough to make IA nervous. No guarantee, but it could be a winnable case for COG.

COG must have been confident in their legal advice. With the clock ticking, they have put a great deal of pressure on IA and the NHL.

The NHL surely does not want years of all the dirty laundry aired.

My odds:

100-1 - midnight move to Quebec
Quebec is ready for Sept 15th, but likely not enough time to pull this off. NHL would prefer to save QUE for expansion fee rather than relocation fee

30-1 - move back to downtown Phoenix
Can IA operate without $15 M AMF fee they get in Glendale? Will attendance revenues improve enough to off-set expenses? NHL likely wants to stay in the Valley, but be out of Glendale. Problem is, only Glendale was desperate enough to under-write expenses.

10-1 - IA and COG renegotiate lease
I imagine COG would accept an AMF of $7.5 M, so losses are neutralized. IA would need new cash injection to make up for that, and exisiting owners have no cash - it is all leveraged. NHL is tired of the circus in Glendale

50-1 - IA sells franchise to city other than Quebec
NHL keeps team in the West (Las Vegas, Portland, Seattle)- saves Quebec as expansion city

1000 -1 - NHL dissolves franchise
I can't think of a scenario where they would do this

100-1 - IA enforces performance of existing lease
This could be tied up in litigation so long that there is too much uncertainty.

[Resolute 14]

The immediate odds depend on whether the city can get the TRO lifted. If they can't, then the Coyotes have a place to play for the year. And in all likelihood, this is the last season for the Coyotes in Glendale.

[Parallex]

Originally Posted by troutman

Where are we now?

I'd say at the death rattle of NHL hockey in Arizona... except I've thought that in the past and they're still there.

I basically foresee three situations outside of a IA court victory...

1: IA drags out litigation long enough that they get through the next season and then they relocate to Vegas or Seattle.

2: Glendale wins and they tough it out for a year in their old non-hockey suitable arena and then they relocate to Vegas or Seattle.

3: They re-negotatiate the lease and stay until they hit the point where they have their out clause.

[troutman]

AZ legal analysts review COG motion:

http://www.foxsports.com/arizona/sto...coyotes-061815

Smith: "While there is some chance the court will defer to the COG, I still believe the Coyotes have the stronger case. I will not be surprised to see the Court take the middle ground and put the dollars in escrow, but that is not a win on the merits."

Lindstrom: "So far, I believe IceArizona has the stronger argument. Glendale provided email strings, but I am not sure if the emails show 'significant' involvement with the agreement under the law. Without more I would argue the few emails are not enough. The law uses the qualifier 'significant,'not just 'any involvement.' "

[automaton 3]

Originally Posted by troutman

Where are we now?

This could be tied up in litigation so long that there is too much uncertainty.

Great post, I see it shaking out the same way.

I would think the Judge will be inclined to order the $ paid into Court as the CoG has requested. This could leave IA in a bad cash/credit available crunch which only serves to ratchet up the pressure.

My guess is that the League quietly extends their line of credit to cover IA for the interim. The other owners must be getting really tired of this side show though.

[Fighting Banana Slug]

I don't see what the COG has provided thus far as particularly damaging, but I agree that it might be enough to have monies paid in to court/tied up that it puts IA in a bad spot.
Either way, I don't see the end-game for COG, other than losing the Coyotes and paying for an empty building. I guess that might be a "win" for them if they lose less money, but... yay?

[Resolute 14]

Originally Posted by Parallex

3: They re-negotatiate the lease and stay until they hit the point where they have their out clause.

I would be pretty shocked if Glendale agreed to another out clause in a new lease, actually.

[Slava]

Originally Posted by Resolute 14

The immediate odds depend on whether the city can get the TRO lifted. If they can't, then the Coyotes have a place to play for the year. And in all likelihood, this is the last season for the Coyotes in Glendale.

I wonder about the impact of that arrangement as well. While the Coyotes would have a place to play for the year everyone would know it was the last year. Fan support would be horrendous I think, and that's in a place where the fan support is already somewhat questionable.

[Daradon]

Originally Posted by troutman

Where are we now?

It seems COG's argument is strong enough to make IA nervous. No guarantee, but it could be a winnable case for COG.

COG must have been confident in their legal advice. With the clock ticking, they have put a great deal of pressure on IA and the NHL.

The NHL surely does not want years of all the dirty laundry aired.

My odds:

100-1 - midnight move to Quebec
Quebec is ready for Sept 15th, but likely not enough time to pull this off. NHL would prefer to save QUE for expansion fee rather than relocation fee

30-1 - move back to downtown Phoenix
Can IA operate without $15 M AMF fee they get in Glendale? Will attendance revenues improve enough to off-set expenses? NHL likely wants to stay in the Valley, but be out of Glendale. Problem is, only Glendale was desperate enough to under-write expenses.

10-1 - IA and COG renegotiate lease
I imagine COG would accept an AMF of $7.5 M, so losses are neutralized. IA would need new cash injection to make up for that, and exisiting owners have no cash - it is all leveraged. NHL is tired of the circus in Glendale

50-1 - IA sells franchise to city other than Quebec
NHL keeps team in the West (Las Vegas, Portland, Seattle)- saves Quebec as expansion city

1000 -1 - NHL dissolves franchise
I can't think of a scenario where they would do this

100-1 - IA enforces performance of existing lease
This could be tied up in litigation so long that there is too much uncertainty.

I agree. When I first heard they were trying to get out of the deal, I thought the NHL/Coyotes would eat them alive. After reading the thing in it's entirety, I'm not so sure now. COG does seem to have a case.

As far as relocation fee vs franchise fee, is that really that different anymore? Winnipeg owners paid dearly to get Atlanta. More than any other team to this point I think?

Quick check says they paid 170 million! 60 of which was a relocation fee. Though I guess the 110 was the purchase price/paying off debts? Still, how many assets does a bankrupt team have? Sans building? So yeah, more than others anyway. Good markets in Canada will get hosed, cause they can pay. Shoot, the expansion fee for the second team into Ontario is looking at 500 million, and that's a much bigger cow than Winnipeg. For Winnipeg to pay a third of what a new team in Ontario would pay, that's big potatoes. Relocation or not.

[Daradon]

I do think they play one more year in Phoenix, just cause of the time schedule. But the writing is on the wall. Not sure where they go though.

[automaton 3]

With Barroway pulling out, the only guy with deep pockets has exited stage left. (note: what effect will this have on the CRA issues that was part of the rationale of finding a US majority owner?).

The current ownership group appears to be highly leveraged, with the money primarily fronted by the NHL and Fortress.

The NHL credit line is apparently supposed to be capped at 50% of the team's value - who knows where IA is on that line but they are probably well into it from the purchase alone.

Unless the NHL is willing to further backstop the team indefinitely, the current owners dig into their own pockets or a white knight finally appears after years of searching, it is has to be getting close to game over regardless of the CoG and lease issues.

[CroFlames]

Originally Posted by automaton 3

With Barroway pulling out, the only guy with deep pockets has exited stage left. (note: what effect will this have on the CRA issues that was part of the rationale of finding a US majority owner?).

The current ownership group appears to be highly leveraged, with the money primarily fronted by the NHL and Fortress.

The NHL credit line is apparently supposed to be capped at 50% of the team's value - who knows where IA is on that line but they are probably well into it from the purchase alone.

Unless the NHL is willing to further backstop the team indefinitely, the current owners dig into their own pockets or a white knight finally appears after years of searching, it is has to be getting close to game over regardless of the CoG and lease issues.

Kinda makes me mad the NHL didn't own the old Jets and Nordiques for a couple years till things turned around like they did for Phoenix.

[Resolute 14]

Originally Posted by CroFlames

Kinda makes me mad the NHL didn't own the old Jets and Nordiques for a couple years till things turned around like they did for Phoenix.

Nobody was trying to abuse the courts to force the Jets or Nordiques into another team's market area against the NHL's will.

[troutman]

Documents show Coyotes, Glendale have fought for months

http://www.tsn.ca/documents-show-coy...onths-1.312907

The Arizona Coyotes and city of Glendale have been at odds over a controversial arena management contract since at least January, according to documents obtained by TSN.

Emails between city staff and Coyotes executives document a contentious relationship over the past six months, during which time the Coyotes allegedly opposed the city’s move to hire professional sports executive Tony Tavares to oversee an audit of the NHL team, and bickered over whether the team was purposely delaying that audit.

The emails also reveal that the city has made Coyotes officials aware as early as March of their concerns that Coyotes lawyer Craig Tindall might inappropriately use information he obtained while previously working for the city to help the Coyotes.

The emails – which were among 307 pages of documents obtained by TSN through the U.S. Freedom of Information Act – contradict public statements made by the Coyotes last month. After several Glendale city councillors told TSN in interviews that they wanted to undo the arena contract – a deal in which the city pays the team $15 million per year – Coyotes part-owner Anthony LeBlanc scolded councillors for going to the media instead of raising their concerns privately. LeBlanc later said he was blindsided when Glendale city council scheduled a vote to terminate the contract.

[troutman]

Monica Lindstrom ‏@monicalindstrom J: City’s position is not frivilous @ArizonaCoyotes @KTAR923 @AZSports #Glendale


Monica Lindstrom ‏@monicalindstrom Plain English- City has make $3.75M payment but @ArizonaCoyotes has to increase bond from $250k to $1M #middleoftheroad @AZSports @KTAR923

Monica Lindstrom ‏@monicalindstrom I would say both @ArizonaCoyotes and #Glendale won and lost. Bond is increased but City has to make payment @AZSports @KTAR923

Monica Lindstrom ‏@monicalindstrom July 31 is the start of the preliminary injunction hearing to determine if the TRO will last for the remainder of the case @zooten4

[troutman]

Judge orders Glendale to pay Coyotes $3.75 million

http://www.azcentral.com/story/news/...otes/29478355/

Judge Dawn Bergin denied the city's motion to withhold the payment or hold it in an escrow account because of the contract dispute with the Coyotes.

But Bergin increased the Coyotes' required bond from $250,000 to $1 million.

"What I need to do is protect the city if they prevail," she said.

Coyotes President Anthony LeBlanc said the team was "pleased with the ruling and will continue to pursue our rights."
Glendale officials also expressed pleasure with the ruling.

"We're satisfied with the outcome," said Dick Bowers, Glendale's acting city manager. "We've said all along that our primary obligation is to our citizens. The judge's ruling enforcing an increase in the bond payment is an assurance for our taxpayers that we're looking out for their best interests."

The two sides will start with depositions July 7 and the first evidentiary hearing is set for July 31.

[Resolute 14]

I may be reading this wrong, but I think Glendale's spin on this one is no better than John Garrett's on the Eddie Lack trade.

The judge said they have to pay the $3.75 million, but only increased the bond by $750k. So even if they "protect the interests of the citizens" by winning, they are still out another $3 million.

Question Trout - if the judge felt the city was likely to win on the merits, would she not have put the money into escrow? Or am I reading too much in thinking that, while the city's argument is not frivolous, that this is a sign she is currently leaning in the team's direction?

[troutman]

I think it was an easy matter for the Judge to order payment of the $3.75 M, because that was for services already rendered. On-going payments might be more difficult to enforce.

Probably this Judge had only enough information to conclude that the COG case is not "frivilous" (may have merit). Therefore, IA had to increase the bond as security for COG in case they are ultimately successful.

Surely, the Coyotes will play in Glendale this season. Beyond that, IA should consider if it makes sense to renegotiate the lease with COG (ie can they operate with a lesser AMF?). They can't be 100% confident they can win this case.

I just don't understand why they want to be there in the first place. They can sell for a huge profit or move right now.

[Resolute 14]

Well, it's too late to move "right now", everything is already set. That's almost certainly why COG acted when it did. The only real alternative for this season to Glendale is Phoenix proper. So at least in the short term, IA has to fight it in the courts to try and hold on to what they have now.