Post by swervinmervin on Jun 1, 2013 8:30:01 GMT -5
The stage is set in Glendale.
There is an apparent agreement between the NHL and RSE, who would buy the Phoenix Coyotes and keep them in their current home at Jobbing.com arena in Glendale. The NHL has shown a willingness to accept some continuing risk in Glendale, since it is rumored that a large portion of the sale price will be lent by the NHL to RSE.
It is true that the NHL can ultimately recover this loan in a scenario where the team is moved to another city, with relocation fees covering any NHL losses. However, the NHL must feel that there is a large potential upside to the idea that RSE could actually make this work in Glendale. Perhaps it is a delaying tactic. The NHL has stated in the past that it would ultimately like to expand to 32 teams. The only markets that seem likely to support NHL teams would be Quebec, Toronto, and Seattle. But Seattle isn't ready yet, and might not be ready for several years, while it attempts to achieve its main goal (and main tenant) - an NBA franchise.
But why not move to Quebec now? Quebec is already building a new arena (unlike Markham and Seattle). Le Colisee is reportedly able to become NHL-ready on short notice, until the new arena is constructed. This question is a mystery, for now.
And this is the test - how much does the NHL want to keep the team in Glendale? While RSE is attempting to negotiate a new lease with Glendale, it is surely the NHL that is ultimately making up the game plan. They control the location of franchises, and they will still have the highest dollar amount invested in the team, even after the sale to RSE, according to the Forbes report.
The results of this lease negotiation will tell the tale, from both the NHL's perspective as well as Glendale's point of view. Who will blink first in the negotiation? Or will they both hold out for their bottom line objectives? The NHL still has the greater bargaining power, since they have a superior alternative - i.e. moving the team, recovering all of its investment with immediate cash, and earning a very large profit (or relocation fee, if you wish) on the sale of the team to the new Quebec owners. If the NHL "caves in" and accepts a low management fee (subsidy) from Glendale, then we will know beyond any doubt that the NHL is "married" to the Phoenix Coyotes in Glendale.
If Glendale "caves in" and offers a subsidy (or a fee in excess of the arm's length bids for the arena management), then it is clear that the City of Glendale will pay almost any cost, over a long period of time, to keep the team in Glendale. This, despite a City Council and mayor that was elected on the basis that "the City of Glendale is not your cash register". And, despite having written a prohibition against this in their own city policies. For the record, Glendale could provide a small subsidy of a million or two, and still be consistent with their policies, since they could argue that they will recover that directly from increased sales taxes at the mall where the arena is located. But anything in the multi-millions is likely a big concession by Glendale.
The test is approaching fast. The NHL has said that they want this resolved "expeditiously". Glendale has the arm's length arena management bids in their hands as of last Friday afternoon.
The only thing remaining is how to fill in the answers on the test. The hopes and fears of hockey fans in Phoenix and Quebec depend upon the answers from each of the exam writers.
There is an apparent agreement between the NHL and RSE, who would buy the Phoenix Coyotes and keep them in their current home at Jobbing.com arena in Glendale. The NHL has shown a willingness to accept some continuing risk in Glendale, since it is rumored that a large portion of the sale price will be lent by the NHL to RSE.
It is true that the NHL can ultimately recover this loan in a scenario where the team is moved to another city, with relocation fees covering any NHL losses. However, the NHL must feel that there is a large potential upside to the idea that RSE could actually make this work in Glendale. Perhaps it is a delaying tactic. The NHL has stated in the past that it would ultimately like to expand to 32 teams. The only markets that seem likely to support NHL teams would be Quebec, Toronto, and Seattle. But Seattle isn't ready yet, and might not be ready for several years, while it attempts to achieve its main goal (and main tenant) - an NBA franchise.
But why not move to Quebec now? Quebec is already building a new arena (unlike Markham and Seattle). Le Colisee is reportedly able to become NHL-ready on short notice, until the new arena is constructed. This question is a mystery, for now.
And this is the test - how much does the NHL want to keep the team in Glendale? While RSE is attempting to negotiate a new lease with Glendale, it is surely the NHL that is ultimately making up the game plan. They control the location of franchises, and they will still have the highest dollar amount invested in the team, even after the sale to RSE, according to the Forbes report.
The results of this lease negotiation will tell the tale, from both the NHL's perspective as well as Glendale's point of view. Who will blink first in the negotiation? Or will they both hold out for their bottom line objectives? The NHL still has the greater bargaining power, since they have a superior alternative - i.e. moving the team, recovering all of its investment with immediate cash, and earning a very large profit (or relocation fee, if you wish) on the sale of the team to the new Quebec owners. If the NHL "caves in" and accepts a low management fee (subsidy) from Glendale, then we will know beyond any doubt that the NHL is "married" to the Phoenix Coyotes in Glendale.
If Glendale "caves in" and offers a subsidy (or a fee in excess of the arm's length bids for the arena management), then it is clear that the City of Glendale will pay almost any cost, over a long period of time, to keep the team in Glendale. This, despite a City Council and mayor that was elected on the basis that "the City of Glendale is not your cash register". And, despite having written a prohibition against this in their own city policies. For the record, Glendale could provide a small subsidy of a million or two, and still be consistent with their policies, since they could argue that they will recover that directly from increased sales taxes at the mall where the arena is located. But anything in the multi-millions is likely a big concession by Glendale.
The test is approaching fast. The NHL has said that they want this resolved "expeditiously". Glendale has the arm's length arena management bids in their hands as of last Friday afternoon.
The only thing remaining is how to fill in the answers on the test. The hopes and fears of hockey fans in Phoenix and Quebec depend upon the answers from each of the exam writers.