A few days after he used a carrot to entice the local politicians who will determine the fate of the Phoenix Coyotes, Gary Bettman hauled out a big stick and gave them a mighty whack.
If Glendale city council does not approve the latest arena-management offer from prospective buyer Renaissance Sports and Entertainment, which is headed by Canadian businessmen George Gosbee and Anthony LeBlanc, by its regular public meeting Tuesday, the NHL will move the Coyotes to another city in time for next season.
The NHL commissioner has made this threat before during the many failed efforts to find an owner for the team the league was forced to buy out of bankruptcy in October of 2009. But now there is a date attached – although Bettman was careful to avoid saying July 2 is a definite deadline or the Coyotes will move to Seattle or Quebec City.
“That’s something that needs to be done by July 2,” Bettman said Thursday. “It’s difficult to see why, if council turns this down, we would want to keep this in Glendale any longer. We will have to see the options and there are many.”
Both Bettman and NHL deputy commissioner Bill Daly said there is still enough time left to move the Coyotes in time for the next season. No matter where the team moves, Daly said, it will still play in the Western Conference, at least for 2013-14.
No city was mentioned as a favourite destination, but the NHL’s preference is Seattle – even though Quebec has a new arena under construction and could quickly bring its former NHL arena, Colisée Pepsi, up to scratch.
This week, Bettman told Glendale council, which is demanding revenue guarantees from Gosbee and LeBlanc, if it approves the deal for Jobing.com Arena it can pay the $25-million (U.S.) it owes the NHL in instalments.
This came as a surprise, since it was thought Glendale’s debt was just $5-million.
But the NHL never touched the $20-million Glendale put in an escrow account more than a year ago. The money forms the bulk of Glendale’s commitment to give the NHL $50-million over the 2010-11 and 2011-12 seasons to help with the Coyotes’ annual losses, which have topped $40-million over the years.
Citing another multimillion-dollar budget deficit, Glendale council and former mayor Elaine Scruggs refused to pay the final $5-million owing on the city’s $25-million payment for 2011-12.
When asked why the NHL never collected the $20-million, Glendale spokeswoman Julie Frisoni replied by e-mail: “You would have to ask the NHL that question.”
Bettman said it was, “because we’re nice guys.” Then, he added “it was a sign of good faith as we move through this process.”
But after council showed its reluctance to grant Renaissance the terms it wants, Bettman decided to be a little less nice.
Glendale council plans to discuss the Renaissance deal at a special meeting Friday, but there is still no official word a vote will be held Tuesday at its regular public meeting. Time is getting short to prevent the Coyotes from moving.
The main points of the arena-management agreement with Gosbee and LeBlanc were posted on Glendale’s web site Thursday. It calls for Renaissance to receive $15-million per year over a 15-year lease. But the city budgeted only $6-million for a management fee, plus $500,000 in arena upkeep.
Renaissance wants to bridge that gap by reducing its arena rent to $500,000 per year, and it says it can bring in a little more than $6-million per year from parking revenue, which will be a new charge for Coyotes fans, ticket surcharges, rent and naming rights. Some revenue will be shared with the city. There is also an escape clause, which allows the team to move after five years.
While the final decision will be up to the seven-member city council, at least some of whom seem frightened that losing the Coyotes will mean dire economic consequences for an already financially-strapped city, the acting city manager slammed the deal in a memo to council posted on the city’s website.
Dick Bowers said the Glendale will assume all the risk in the deal because Gosbee and LeBlanc are willing to guarantee only $1.2-million of the potential annual revenue. Bowers said in his memo he does not regard this “as a done deal.”
In other league business, the governors held off formal approval of several rule changes, from mandatory visors to hybrid icing to changing the nets.
Bettman said this was done to accommodate the NHL Players’ Association, which will meet this weekend to issue its own approval of the changes. Once the NHLPA makes its decision, the governors will approve the changes as well.
Bettman said the league and the NHLPA plans to meet in New York on Monday with the International Olympic Committee and the International Ice Hockey Federation to finish an agreement for the NHL to participate in the 2014 Sochi Olympics.