We all know that the Coyotes represent a team in commissioner Gary Bettman’s southern influence zone. Bettman clearly does not want to lose another one of those southern teams (e.g. Atlanta) that he has been defending for the past decade. The problem is that the NHL does not want to own the Coyotes anymore because the team loses over $20 millions annually. As a result, the NHL governors are growing tired of the bottomless pit that the Coyotes have been for the past few years and want the situation to be resolved by the 2012 NHL draft.
During the All-Star Game week-end Bettman addressed the situation and mentioned, without giving many details, that there is a third group interested in buying the team and keeping it in Phoenix. The two groups known to have expressed interest in the Coyotes are one led by former San Jose Sharks president and CEO Greg Jamison, and another by Chicago sports mogul Jerry Reinsdorf. Bettman called the sales process a “work in progress” and hoped to prevent the Coyotes from relocating, albeit no real progress has been made since the beginning of the season.
The problem is that Moody has downgraded the City of Glendale, Arizona’s credit rating on January 20th, 2012, following significant payments to the NHL in order to keep the Coyotes. The $25MM payment the City of Glendale made to keep the team in the desert has strained the city’s financial position and led to a significant decline in general fund reserves in fiscal year 2011. The city drew into its reserve funds to make that payment and, consequently, the funds went from $38.8MM in 2010 to only $11.7MM at the start of 2012. The negative outlook primarily reflects the economic downturn in the area and the near-term risk that the city will be obligated to make additional payments to the NHL in fiscal year 2012 and beyond.
This basically means Glendale is going bankrupt trying to prevent its hockey team from leaving, and that, despite the persistently bleak situation at the gates. After 26 home games, the Coyotes are still dead last in attendance with an average of only 11,685 fans per game (68.2% of the building’s capacity). Now the question is not when, but rather where the Coyotes will move after this season?
Four cities have been mentioned by Gary Bettman as potential locations for a relocation: Seattle, Quebec City, Las Vegas and Kansas City. The Greater Toronto Area has not been mentioned because the Toronto Maple Leafs would object to any relocation whatsoever. In this article, I will have a look at the possibility of the Coyotes moving to the Midwest in Kansas City, Missouri.
While Kansas City boasts a state-of-the-art arena, the Sprint Center, successfully managed and owned by Anschutz Entertainment Group (AEG), there is no potential owner looking to bring a team to the Midwest. Bluntly, AEG’s priority is to build a new football stadium in Los Angeles in order to attract an NFL team. Already owner of the Los Angeles Kings, AEG is clearly not interested in promoting hockey in Kansas City, a sport that is not very popular in the area. AEG has ownership stake in the Los Angeles Lakers, and owns and operates Staples Center which is the home to both the Lakers and Clippers of the NBA.
Ask about the arrival of a new NHL team in Kansas City last September, Tim Leiweke, president of AEG said: “We’re fine like this, we’re probably making more money without a team, and the city too. Right now there is not an urgency,” Leiweke added. “This building is doing phenomenal. When we began this process, if we would have known this building could stand on its own two feet and be one of the top five buildings (for concerts and family shows) without an anchor tenant, we would have been going around telling people, ‘If there is an anchor tenant that makes sense, we’ll get it, but we don’t need it.’”
This statement clearly demonstrates that the Sprint Center’s owner doesn’t want to bring a professional hockey team to Kansas City in a near future, whether Gary Bettman like it or not. But what about another owner? At the moment, there is no local ownership group interested in bringing a team in a market that is primarily focused on baseball (Royals) and football (Chiefs). Not even a local hero like George Brett is interested in participating in such a perilous adventure.
The last NHL team to play in Kansas City were the Scouts from 1974 to 1976. After two catastrophic seasons at the gate (only 2,000 season tickets had been sold for the second year), the team was forced to move to Denver before ending up in New Jersey, where they are still known as the Devils… for now.
Heck, AEC has shown an interest in managing the entertainment component of the new arena that will be built in Quebec City. The giant sports and entertainment company, which manages more than 90 arenas around the world, has shown interest in the Quebec market last year. Quebecor, which reached an agreement with the City of Quebec to manage the activities of the newly-constructed arena and the impending hockey team, would entrust the management of most sports and cultural events to AEG. Pierre-Karl Peladeau, owner of Quebecor, has already met with Bettman about the arrival of an NHL team to Quebec City.
As a matter of fact, a major turnaround will be required in order to see Kansas City welcome the Phoenix Coyotes in time for next season.
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