Coyotes Update

June 20, 2013

Transcript:

Ted Simons: Good evening and welcome to "Arizona Horizon." I'm Ted Simons. The city of Glendale is considering what could be the final offer to keep the Phoenix Coyotes playing hockey games at Jobbing.com Arena. Here with an update is "Arizona Republic Reporter" Paul Giblin. He's been on this story. It feels like we've been on this story forever, Paul, but it does feel like something's about to happen here. Give us an update.

Paul Giblin: I think you're right. I think this week will be the week when we know whether the Coyotes will stay or go. I think it's going to break one way or the other. There's some important negotiations going on between the group that wants to buy the Coyotes, that's a group called Renaissance Sports and Entertainment and the city. The crux of the deal here is that Renaissance wants to manage Jobbing.com Arena where the Coyotes play. The city wants someone else to manage the arena for them and so the rub is how much will the city pay renaissance to do that.

Ted Simons: Managing that arena has always been kind of the sticking point of previous negotiations. It sounds like the city has budgeted about $6 million for that?

Paul Giblin: About $6 million a year, correct.

Ted Simons: So Renaissance comes in and do we know what they're asking to manage the arena?

Paul Giblin: They're asking about $ million. So that's obviously a gap between the $15 million. And so Renaissance has come up with the idea that they're going to slide a bunch of money back to the city that would equal that gap. So they would do things like ticket surcharges, parking fees, even naming rights from the arena. Theoretically they'll resell the name, it won't be Jobbing.com Arena anymore, it will be named something else, the city will get a piece of that, plus the standard lease.

Ted Simons: Now from what I understand, that would bridge that particular gap so you've got revenue sharing. But is that money guaranteed do renaissance?

Paul Giblin: Good question. Let's ask another question. Why would Renaissance be interested in giving all this money to the city? Why wouldn't they just keep the $6 million management fee and keep all those revenues for themselves? That would be much smoother, it would be much easier. So here's one possible answer to that. Let's suppose that Renaissance is going to borrow $85 million as part of their purchase price to buy the team from the NHL. And let's suppose that their lenders aren't very satisfied with all those speculative sources of money, the parking, the ticket surcharges, depending on people actually filling up the arena. So let's suppose that the lenders want guaranteed money like $15 million from the city of guaranteed money. That makes the lenders feel much better but the city doesn't want to pay $15 million. So now, Renaissance proposes giving all those resources to the city.

Ted Simons: And the city says I would imagine the city would be a little hesitant to guarantee that money because, all of a sudden, the team stinks, something happens or whatever and that money isn't coming in.

Paul Giblin: It begs the question if these smart money lenders don't want to lend that money based on this speculative income, why should the city do it? What guarantees do the city get that these money lenders wouldn't get, the people in the business of lending money? That could have been the snag on Tuesday when there was an executive session meeting. So speculating again, that if the city told renaissance firm up this deal, let's get some guarantees, renaissance theoretically could have added a buck 50 additional surcharge to the surcharge they were already planning, they would put that aside and if these other revenues fall short, they would have that money and the city would tap into that.

Ted Simons: So you're talking tributaries to the revenue streams.

Paul Giblin: Parallel streams or something like that.

Ted Simons: A little geological thing. These meetings, these were closed-door meetings, what's that all about?

Paul Giblin: There's two types of meetings. There's your regular public meeting, which in Glendale, nothing gets done there. It's all done in executive sessions. These are the private meetings. Glendale when people are talking about how to spend taxpayer money, how to spend public money, that gets done in private and so they have these meetings in executive session and they discuss it and it's all done and they're winking and nodding and they trot it out to the public and they say voilÃ , here's the story. The Republic has repeatedly asked for these proposals, for these numbers and they repeatedly tell me it's in process, and I think what happens is they say all right, the Republic wants this so we're going to put about 90 names here and what a coincidence, just a day after we've all shaken hands, that's when the 90th person signs and we release it.

Ted Simons: I see. So it's secret, not so secret but secret nonetheless. Now, apparently quite public is the fact that the NHL has to get an answer here reasonably soon. Give us a timeline of what's going to happen.

Paul Giblin: It's hard to say ted because the NHL is in the business like all professional sports leagues of threatening to move a franchise if they don't get the deal they want, there's Seattle, Seattle's very popular these days with the NHL and the NBA as an alternative location. So they say if we don't get the deal we want, we can move it to Seattle, to Kansas City, we can move it to Houston, something like that. So that's always the threat. It's hard to judge how real that is because all professional teams do that but it is getting kind of close to the end if they want to move a team in time to start the next season.

Ted Simons: The NHL board of governors meeting the 27th or so, then there's some other meeting -- it's -- is there a drop dead anywhere in here?

Paul Giblin: Hard to say again. It's hard to say. This is what we do know: There is a meeting tomorrow on Friday, an executive session in which the polished up deal from renaissance which could have a surcharge on the tickets to make the deal good is going before the city council. The city council is next scheduled to meet in public, a voting meeting this coming Tuesday. So theoretically they could vote on that, however, people have said they probably want to let it air out.

Ted Simons: Is the NHL going to let things air out for about a week?

Paul Giblin: If they get enough reassurances, if they can count the votes ahead of time, they might approve the deal on the 27th, tentative to the city council doing its part and maybe early next month will cement the deal.

Ted Simons: And last question here. The city is still taking offers for running that arena, incorrect? Offers are still coming in absolutely or probably nothing to do with the Coyotes?

Paul Giblin: Sort of. Four proposals came in from non-hockey management companies, two of them got thrown away as not being realistic. So they have two that they're still debating or maybe they're not debating, maybe they're really working with Renaissance and they're just in their back pocket. They might come into play if the hockey team were to leave and you wanted to manage that arena and put Bon Jovi or whoever in there.

Ted Simons: If you want the circus on ice or whatever, that could still happen here. That's got to be a plan b.

Paul Giblin: That's probably plan b. It might not happen. I think there are plenty of members of the city council who want a deal. They would like enough camouflage to hide in. It sounds like Renaissance may have provided enough.

Ted Simons: It sounded like -- are they -- is the city -- is there a sense of urgency going on with this over there?

Paul Giblin: I think there is. I think the city is tired. They've been dealing it with for four years. One other important part, parking fees which Coyotes fans are not used to paying.

Ted Simons: Get used to it, I would imagine. Paul, good stuff, keep in contact with you, you keep us informed.

Paul Giblin: Thank you.