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In this week’s edition of Coyotes Mailbag Saturday, I attempt to tackle a very good question regarding the Jobing.com Arena lease...
“With all the events that have occurred [a couple weeks ago] involving the submission or dropping of bids for the purchase of the Phoenix Coyotes, a common issue seems to be the lease agreement with the City of Glendale. We've all heard how ridiculously one sided it was written, and that there is no way that a team could turn a profit under the current terms. It would be great to see someone break down the finer points of the current lease agreement so that we could all see exactly what any potential new ownership is up against. Any help that you can provide to shed a little light on this topic would be greatly appreciated. Keep up the good work.”
Coyote_99
Well “Coyote_99,” I did look over the lease. I spent a while looking over the document (which is approximately 150 pages long) and it’s not a very easy read.
As one can probably assume, the document is written in legal speak and quite frankly, parts of the lease can be hard to follow.
Judging by what I read, this is what I got:
Parking: The parking money might be the sticking point. If I can recall the figures correctly, I believe most NHL teams make on average $10 million a season in parking revenue. I think the Coyotes lose on average $10 million a year with parking. That’s a $20 million loss compared to other teams, on average, in parking alone!
Obviously none of us are privileged enough to sit in on these negotiations, but I think many of us could assume that parking is a main issue.
If somehow the team can at least break even on the parking, I think that would be okay for them (that would mean appoximately $10 million in savings).
Partnership: I really didn’t see anything in the lease that demonstrates that it is a huge burden on one side over the other (not to say that such part doesn’t exist), but I am of the opinion that the Coyotes want more of a partnership relationship with the city versus a tenant-landlord relationship.
With all that said, Ice Edge Holdings has told a few different media outlets lately that the group is “very close” to finalizing their bid, which includes a restructured lease agreement with the City of Glendale. It will be interesting to see what changes are in that lease and how much it will help the team in the future.
If you would like to check the lease out for yourself you can do so by clicking these links: part 1, part 2, part 3, part 4.
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