In the drama that is the proposed sale of the Phoenix Coyotes, yet another possible sale attempt has been given to the Glendale City Council in documents obtained by The Glendale Star.
The Star has learned that a private company has come forward with a plan that would allow the City of Glendale to present a proposal to help the city buy the Coyotes directly from the National Hockey League. The company has asked to meet with city council to discuss the details of their proposal and how, “…they can make this alternative a reality for the city, the Phoenix Coyotes and the NHL.”
When approached before Friday’s council executive session meeting, Mayor Jerry Weiers said he had not seen such proposal.
“I haven’t seen any new proposals, but I think the city would sit down and listen to any idea that could potentially get the city out of trouble and out of debt,” Weiers said. “If there is a deal that is financially good for us and we can do it at a cost that won’t hurt taxpayers, we would listen.”
The council is in the process of negotiating a deal to pay Renaissance Sports & Entertainment (RS&E) to manage Jobing.com Arena. A source close to the negotiations has confirmed the amount is $14 million per year for 10 to 15 years.
RS&E would then purchase the Coyotes from the NHL for $170 million and use the $14 million per year from Glendale to repay a $120 million loan from Fortress Investment Group, which RS&E would acquire based on the city payments to RS&E.
RS&E would pay the NHL $85 million at closing date with the NHL carrying an $85 million note on the team that RS&E would not have to pay on for five years.
The documents that The Star has acquired state, “...the city has the financial capability, within the proposed construct of its required payment obligations under the RSE proposal to actually acquire the Coyotes franchise directly from the NHL, on behalf of the citizens of the City of Glendale.”
The documents show that the city could deliver closing cash to the NHL of $85 million, with future payments to the NHL in line with the RS&E proposal. The city could finance the down payment itself through bonded debt at a premium interest rate, spread over 20 to 25 years, and the city would, “..ask the NHL to take the other $85 million back on a five-year note as they are doing with RS&E.”
Weiers said he has heard rumors of this before.
“I have not seen this proposal, but I can tell you that I have heard those rumors before,” Weiers said before Friday’s executive session to discuss the RS&E proposal. “But, I don’t think the city is in position to do it and I don’t think we could get the bonding for it.”
According to the documents, the proposed plan would, “..cost the city less and provide it more flexibility while still providing the NHL what it seeks,” a full buy-out within five years.
The NHL has said in the past that it wants to work with the City of Glendale directly and has said it is willing to bend over backwards to work with the city. This proposed offer would allow the city to perform on equal to or greater than the terms than they have agreed to with RS&E. The NHL has stated numerous times that it wants the team to stay in Glendale.
Included in this offer, the city would not be on the hook to split any arena naming rights, parking, or tax money with any owner since it would own both the team and arena.
Then, should the city decide it may not be interested in running the team in a few years, it could have the opportunity to sell the team at a profit.
If executed, the Coyotes could join the Green Bay Packers of the National Football League as the only community-owned major league professional sports team in the United States.
While not discussed in the proposal, if the city were to purchase the Coyotes, it could be run like the Packers. They are governed by a seven-member executive committee, elected from a 45-member board of directors. The committee consists of a president, vice-president, treasurer, secretary and three at-large members. The president is the only paid member, while the other members volunteer.
The committee directs corporate management, approves major capital expenditures, establishes broad policies and monitors management’s performance in conducting business for the corporation.