Winnipeg Free Press - PRINT EDITION
Steal of a deal gets nuttier: Reinsdorf gets $200K if it flops
Not to beat a dead Coyote, but.....
Surprise, surprise. Turns out, as suggested in this space Thursday, the lavish and too-good-to-be-true deal to keep the Phoenix Coyotes in Glendale appears to have more holes than Vesa Toskala.
We're speaking, of course, of a proposed lease agreement that provides Jerry Reinsdorf an unprecedented $165 million over seven years in tax funds to NOT guarantee the Coyotes' future in the desert.
Get this: According to the memorandum of understanding, the city will pay Reinsdorf $200,000 if the deal doesn't come to fruition. We're not making this up.
Stinks, right? Yet most media outlets and pundits across North America pretty much concluded that once the MOU was unanimously passed by Glendale council Tuesday night, selling the Coyotes to Reinsdorf and keeping them in Arizona was pretty much a done deal.
Go figure, however, that as details of the outrageous proposal spread, the disbelief took hold.
"I have worked with dozens of government entities, and I can't think of anyone who would entertain anything like this," Marc Ganis, a sports-business consultant for 20 years and president of Chicago-based Sportcorp Ltd,, told the Arizona Republic. "But the whole bankruptcy situation has been unprecedented."
How does this happen? The City of Glendale, which is leaking tax revenue profusely in a reeling economy, desperately wants the $4 million the Coyotes pay in rent, and they'll also get revenue from parking and a ticket surcharge under the proposal. According to our math, that means the city is prepared to charge a handful of local businesses $47 million a year in taxes to get $4 million-plus in revenue. Isn't that, like, criminal?
Remember, former Coyotes owner Jerry Moyes, before taking the team into bankruptcy court, pleaded with city fathers for concessions, too. Moyes didn't get a sniff.
"If they had given us this deal two years ago, there would not have been a bankruptcy," former Coyotes CEO Jeff Shumway told the Republic. "It's a good deal for Reinsdorf and the NHL, but I don't know how good of a deal it is for the taxpayers."
You know, when a former Coyotes executive is questioning a deal he would have killed for, you've got to seriously wonder what's going down at city hall. After all, these are the same people who built the arena on the taxpayers' backs to the tune of $180 million.
The same politicians ponied up more than $120 million to fund a spring training facility for the Los Angeles Dodgers and Reinsdorf's Chicago White Sox. Now another $165 million for the Coyotes, a team that has lost hundreds of millions of dollars and never turned a dime in profit?
Then there's the most confounding aspect of all: If hockey hasn't worked in Phoenix for 15 years, why does anybody believe now that the financial fortunes of the team will ever change?
Look, we're not kidding anybody here. If the proposal, which will probably be challenged in court, doesn't fly, then the Coyotes probably will, and Winnipeggers could wake up some morning soon and find the NHL in their backyard again. The NHL has very limited options -- a self-imposed deadline of June 30 to either sell the team to a local buyer or relocate -- and already league owners stand to eat at least $20 million in losses on the orphaned team this season alone.
Commissioner Gary Bettman can't afford to cover those losses anymore.
We'll see if the businessmen and residents of Glendale can.
Republished from the Winnipeg Free Press print edition April 16, 2010 C1