Absurd battle for Coyotes raised huge questions for sports
Who can own a pro team and where is at the heart of the Coyotes sale
Jim Balsillie was feared for wanting to move a team into another's market
Their sale to the NHL pending, the Coyotes are carrying on with a low budget
Glendale, Arizona, is a lot of things. This sprawling Phoenix suburb is home to the Arrowhead Towne Center mall, the Thunderbird School of Global Management and The Bead Museum. It's Arizona's Antique Capital, the Los Angeles Dodgers' and Chicago White Sox' spring training headquarters, and the site of an annual chocolate festival.
Glendale is not, however, a hockey town. Its NHL team, the Coyotes, reported an average attendance of 11,197 fans last season, more than 2,000 fewer than the New York Islanders, who had the league's second-lowest total. In September, preseason games unfolded before fewer than 5,000 spectators, and the the team's 2009-10 season ticket base is about 4,000 -- among the lowest in league.
After slashing tickets for their October 10 home opener to an unheard of $25 for any seat in the lower bowl (at New York Rangers games in Madison Square Garden, for example, comparable seats ranged as high as $275.50) and $15 in the upper bowl, and thus attracting a sellout at Jobing.com Arena, the Coyotes hosted the St. Louis Blues five nights later in front of 6,899 fans. In one lower bowl section that seats 352, there were 57 fans.
"But they're all paid tickets," Coyotes President Doug Moss says. "We're not going to paper the place by giving out free tickets, out of respect for our season ticket holders.... We're going to do it the right way."
The vast pasture of empty seats, the weak response to pleas for noise over the PA, and the absence of anything resembling enthusiasm until the waning minutes of a tight 3-2 overtime win against the Blues, were manifestations of one of the strangest and richest stories in contemporary sports, a twisting narrative that has involved a BlackBerry billionaire, a mega-millionaire pleading poverty, and a criminal named Boots. The saga caused hockey's singular iconic figure to unceremoniously quit his job, and it has challenged NHL officials to maintain a straight face while asserting, "Hockey belongs in Arizona."
For all its theater-of-the-absurd touches, the story pivots around fundamental issues. Who can own a pro sports team and under what conditions? Why did the NHL, which could surely use the money, thumb its nose at both a billionaire's rich offer and a potentially viable market? And why has the league fought so hard to keep this lightly loved and highly unprofitable team in the desert?
Ice in the Sun
The tale really begins in the mid-1990s. The NHL had recently appointed a new commissioner and damned if Gary Bettman didn't have an idea for how to grow the league. Teams in Canada and the northern United States were fine. But if the NHL wanted to flourish and capture bigger television audiences (and, therefore, rights fees), it needed a presence in the growing, demographically-desirable, sports-minded markets of the Sun Belt. Hockey may not be embedded in the culture, but, the thinking went, it would catch on once there was a local team to support.
So it was that franchises arrived -- sometimes by expansion, sometimes by relocation -- to outposts where ice tends to come most often in cube form. Under Bettman, new teams appeared in, among other places, Anaheim, Miami, Dallas, Phoenix, Raleigh, Nashville and Atlanta.
While the teams in these markets have sometimes been quite strong -- Dallas, Tampa Bay, Carolina and Anaheim have each won the Stanley Cup -- hockey proved to be an acquired taste. Sun Belt franchises often sputtered financially. Ownership changed hands. Arena leases were renegotiated. Attendance was generally bleak. In contrast to the NBA, NFL or MLB, there was little league-wide TV revenue to cushion operating losses. And for these new teams in so-called "non-traditional hockey markets," there wasn't much in the way of regional TV revenue, either.
No team struggled more than the Coyotes, which had moved to Phoenix from Winnipeg in 1996. From the start, they had a tough time drawing fans, and the team was renting space at the US Airways Center, which closed off revenue streams associated with owning a building. Hemorrhaging money, neither moving in 2003 into a brand new arena in Glendale, 18 miles west of downtown Phoenix, nor bringing in Wayne Gretzky as a minority owner, figurehead, and later, coach, enhanced the financial picture.
In fact, the move to Glendale took the team further from its base in suburban Scottsdale, which is a 40-minute drive east of Phoenix. The team signed a misguided 30-year lease that gives Glendale a portion of every ticket sold, and prevents the club from charging for parking, which can be a lucrative revenue stream for suburban sports franchises. According to court documents, the team has never turned a profit.
"[The move] was kind of a shock because I was there the day that we knocked the mall down at Los Arcos in Scottsdale, [where the Coyotes had first planned to build their arena]," says captain Shane Doan. "It was a big move. I mean, you move 35-40 miles, you'll lose some people, for sure, and when you haven't won since you moved, it's going to make it that much harder."
Last season, with the team in dire financial straits -- during the past three years, according to audited filings, the Coyotes lost more than $264 million, much of that debt service owed to creditors -- the NHL began aiding the team. The league scrambled to find someone to buy the franchise from trucking magnate Jerry Moyes.
As the NHL quietly pursued potential ownership groups, Moyes, desperate to unload the team, began meeting secretly with Canadian billionaire Jim Balsillie.
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