The city of Glendale just agreed to contribute $197 million to keep the Phoenix Coyotes, but it may not have been such a good idea.
The lease deal, spread over six years, calls for Glendale to pay $100 million up front for control of parking around the arena, with continuing payments for arena management.
The problem is that they just gave a 30-year lease to a team that went bankrupt and nearly left the state.
Prospective owner Matthew Hulsizer is on the verge of purchasing the team from the NHL for around $170 million, but according to Forbes’ franchise valuations, the Coyotes are only worth $134 million.
The Coyotes are also drawing a league-low 10,282 fans per game this season and also finished dead last in 2009. Part of that was due to low morale surrounding the uncertain ownership situation, but the Coyotes also finished 29th in 2008, 29th in 2007, 24th in 2006, and 22nd in 2005.
With a stable ownership group in place and a much-improved product on the ice, the Coyotes may be able to creep up a few spots, but the fact is there just isn’t an interested enough fan base to support a hockey team in the southwest of the United States.
Glendale will generate some revenue from the new lease, but only if the team makes money — which right now is not a good prospect.
There’s even some talk that this deal would violate Arizona’s constitution as an illegal subsidy to a private company.
Commissioner Gary Bettman has been adamant about keeping the team in Arizona, but at what cost? A lot of people could lose a lot of money on this deal, and you have to wonder if it would have made more sense to just move the franchise.
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